Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. State Options


Advocates for persons with disabilities argue that the work incentive provisions have not been widely used for several reasons. First, receipt of SSI benefits is the gateway to Medicaid--both for health and long-term care services. Because there is an absolute income cap for Medicaid eligibility--however high that limit may be--there is an absolute drop-off point at which increased additional earning will result in a loss of Medicaid. Second, low asset limits mean that working persons with disabilities are unable to increase their savings without jeopardizing their Medicaid eligibility.

Congress addressed some of these Medicaid access problems with laws enacted in 1997 and in 1999.33 The 1997 provision allows states the option of expanding eligibility for persons with disabilities who have countable income from all sources up to 250 percent of the Federal poverty level--$27,075 for an individual, $55,125 for a family of four in the year 2010. These individuals need not ever have received SSI but they must--except for the level of their work earnings--meet SSI disability criteria.

The 1999 provision gives states the option to cover individuals with disabilities who currently work without regard to their earnings, and to raise or even eliminate eligibility limits on income from other sources and/or limits on assets. States that have elected this option can also elect to continue coverage for persons (eligible under this option) whose disability remains severe--but whose medical condition has improved to a point that they no longer meet the usual Medicaid eligibility criteria defining disability. For these higher income enrollees, states have the option to impose a monthly premium or other cost-sharing obligations for their Medicaid benefits using a sliding scale based on income. States choosing the 1999 option are required to charge 100 percent of the premium for those with an adjusted gross income (AGI) greater than $75,000 (AGI as defined for Federal income tax purposes).34 The term “buy-in” is used to describe these options. The state, not the Social Security Administration, makes the eligibility determination for these state work incentive options.

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