Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Reducing Financial Barriers to Employment for Persons with Disabilities


Any benefit program that uses an income cutoff to determine eligibility contains a major disincentive for beneficiaries to work, if the earnings from that work would put them above the financial eligibility level for benefits. To the extent that Medicaid coverage is needed for essential health care, the problem becomes an absolute barrier to employment rather than simply a “disincentive.”

In order to preserve the incentive for persons with disabilities to work as much as they are able without fear that doing so will cause them to lose their medical coverage, Federal law mandates states to disregard certain earnings amounts in determining eligibility for Medicaid. States have additional options to protect the earnings of people with disabilities who have higher earning potential.

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