Press Release

Nearly 40 Percent of Medicaid Buy-In Participants Increase Their Earnings After Enrolling
Mathematica^® Study Also Notes Substantial Differences in Rate of Earnings Growth Based on Participant Characteristics and Across States

Contact: Cheryl Pedersen, (609) 275-2258

WASHINGTON, D.C. (June 14, 2007)—Promoting employment for people with disabilities is an important policy objective for the nation. The fourth policy brief in a new Mathematica series examining the Medicaid Buy-In program compares annual earnings among first-time Buy-In participants before and after their initial enrollment in the program. The brief notes that approximately 40 percent of new Medicaid Buy-In participants increased their earnings after they enrolled in the program. For those whose earnings rose, the median increase was $2,582.

The program, a key component of the federal effort to help people with disabilities return to work without losing health insurance coverage, allows adults with disabilities to earn more than would otherwise be possible and still keep their Medicaid coverage. In return, they “buy into” the Medicaid program, typically by paying premiums based on income. Without the program, many would have limited health insurance options, despite the fact that they need adequate coverage to enter or remain in the work force. As of December 2006, 33 states had Medicaid Buy-In programs with total nationwide enrollment of 80,871.

Additional findings include:

• Younger participants were more likely to increase their earnings. Sixty-five percent of participants under age 21 increased their earnings after enrollment. The percentage steadily declined to 47, 33, and 30 percent for those ages 21 to 44, 45 to 64, and 65 and older, respectively.
• Factors other than lack of health insurance, such as the risk of losing disability cash benefits, may constrain Buy-In participants from working or improving their earning potential. In addition, participation in Supplemental Security Income (SSI) 1619 programs, which promote work and reduce dependency on SSI benefits, before enrollment was also related to earnings increases.
• The share of people with increased earnings differed substantially across states, from 58 percent in Nebraska to 20 percent in New Mexico. These differences may reflect state labor market and policy environments, as well as state-specific program features, which affect the characteristics of participants.

“Many Medicaid Buy-In participants face barriers to employment. The program alone may not be enough to foster big increases in their employment,” said Su Liu, co-author and a researcher at Mathematica. “How they use other work-related programs may suggest ways to coordinate initiatives to enhance the employment, earnings, and independence of persons with disabilities.”

Mathematica's researchers built data files for the study from state enrollment records linked with the Social Security Administration's Master Earnings File, which contains annual earnings information reported on tax forms to the IRS from nearly all workers in the U.S. These data are part of a new longitudinal person-level database on Buy-In participants that also contains information from the SSI and Social Security Disability Insurance programs, and from Medicaid and Medicare programs. The database was made possible through a broad interagency effort to build a comprehensive system for monitoring the employment, health care, and public program participation of people with disabilities.

Printed copies of “Do Participants Increase Their Earnings After Enrolling in the Medicaid Buy-In Program?” by Su Liu and Bob Weathers are available from Publications, (609) 275-2350. Previous briefs from the study, conducted for the Centers for Medicare & Medicaid Services, looked at participant characteristics, overall earnings, and federal initiatives that help workers with disabilities access health insurance. Read more about the study.

Mathematica, a nonpartisan firm, conducts policy research and surveys for federal and state governments, foundations, and private-sector clients. The employee-owned company, with offices in Princeton, N.J., Washington, D.C., and Cambridge, Mass., has conducted some of the most important studies of disability, health care, early childhood policies, welfare, education, employment, and nutrition programs in the U.S. Mathematica strives to improve public well-being by bringing the highest standards of quality, objectivity, and excellence to bear on the provision of information collection and analysis to its clients.

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