Background

Eligibility for benefits under SSI, DI, Medicare, and Medicaid programs for  individuals with disabilities is determined in part on whether an individual  has a disability as defined in the Social Security Act. For purposes of  these programs, a person is disabled if he or she has a medically  determined physical or mental impairment that (1) has lasted or is  expected to last at least 1 year or result in death and (2) prevents the  person from engaging in substantial gainful activity (SGA). As of January  2003, SGA is defined as countable earnings—generally gross earnings less  the cost of items that, because of the impairment, a person needs to  work—of more than $800 per month. The Social Security Administration’s  (SSA) interpretation of disability specifies that for a person to be  determined to be disabled, the impairment must be of such severity that  the person not only is unable to do his or her previous work but,  considering the person’s age, education, and work experience, is unable to  do any other kind of substantial work that exists in the national economy.
The Ticket to Work and Work Incentives Improvement Act of 1999 allowed  states to expand the availability of Medicaid coverage for individuals with  disabilities who work, even though they earn more than the SGA level.  States that implement Ticket to Work Buy-In programs may consider as  disabled those individuals who, except for the fact that they are earning  more than the SGA $800 monthly amount, otherwise would meet the  Social Security Act definition of disabled.

		Individuals with Disabilities Qualify for Medicaid Primarily through SSI or DI Eligibility

Individuals with disabilities become eligible for Medicaid in a variety of  ways but primarily through SSI or DI eligibility (see table 1). Individuals  with disabilities, however, must also meet Medicaid income and asset  requirements in order to obtain Medicaid coverage. Both the SSI and DI  programs contain work incentive provisions designed to assist individuals  with disabilities to achieve gainful employment while retaining some  eligibility for health care coverage.
Individuals receiving SSI also are assured eligibility for Medicaid in 39  states and the District of Columbia. The remaining 11 states (known as  209(b) states) may use different standards for disability, income, or assets;  thus, SSI beneficiaries in these 11 states may not have assured eligibility  for Medicaid. Work incentives under SSI allow individuals to (1) have  their SSI cash benefits gradually reduced as earnings increase, rather than  having cash benefits removed entirely once earnings exceed the SGA limit,  and (2) maintain their Medicaid coverage up to an income limit that varies  across the states (from $15,049 (170 percent of the FPL) in Arizona to  $39,228 (443 percent of the FPL) in New Hampshire as of 2002).
Individuals receiving DI also may become eligible for Medicaid under  certain circumstances. By virtue of their DI disability determination, they  meet one of the categorical eligibility requirements for Medicaid.  However, they must also meet Medicaid’s income and asset requirements  as defined by each state. DI beneficiaries can “spend down” their income  on medical expenses in order to meet state-determined income limits for  the medically needy eligibility category, if a state provides this optional  coverage. While DI beneficiaries receive health care coverage through  Medicare, eligibility for the medically needy category provides Medicaid- covered services that are not covered by Medicare, such as most  outpatient prescription drugs. Work incentives under DI are structured  such that if an individual’s work activity increases to a level where he or  she is no longer deemed disabled, the individual loses DI eligibility, and in  turn, Medicaid eligibility.

		Medicaid Buy-In Program Designed to Expand Coverage for Working Individuals with Disabilities

The Ticket to Work Medicaid Buy-In builds on an earlier effort to expand  Medicaid eligibility for individuals with disabilities who desire to work.  Through the Balanced Budget Act of 1997 (BBA) (Pub. L. No. 105-33, 111  Stat. 251), the Congress gave states the option of implementing a coverage  category for working individuals with disabilities. For these individuals,  the BBA authorized states to extend Medicaid coverage to those who meet  the SSI definition of disability and exceed the SSI income eligibility limit  but whose income remains under 250 percent of the FPL. States electing  the BBA option may require beneficiaries to pay premiums or may use  other cost-sharing provisions as long as they are set on a sliding scale  based on income. As of December 2002, 12 states had implemented a BBA  option for working individuals with disabilities.
The Ticket to Work Medicaid Buy-In legislation expands the availability of  Medicaid coverage for individuals with disabilities who desire to work by  allowing them to gain or maintain Medicaid eligibility as they enter the  workforce or to increase their earnings if they are in the workforce. The  Ticket to Work Buy-In builds on the BBA option by giving states unlimited  flexibility to set higher income and asset levels for two new eligibility  groups—Basic Coverage Group and Medical Improvement Group—for  working individuals with disabilities. (For a comparison of the two  programs, see table 2.)
The Basic Coverage Group allows states to cover people aged 16 to 64  who, except for the amount of their earned income, would be eligible to  receive SSI benefits. States may establish their own income and asset  standards or elect to have no standards at all. As with the BBA option,  states electing the Basic Coverage Group may require participants to pay  monthly premiums or may impose other cost-sharing mechanisms if they  are set on an income-based sliding scale. However, for individuals with  annual incomes less than 450 percent of the FPL, states may not impose  premiums that exceed 7.5 percent of income. Additionally, if the  individual’s adjusted gross income for federal income tax purposes  exceeds $75,000, the state must require the individual to pay the highest  amount of premiums that an individual would be required to pay under the  state’s premium structure, although a state is allowed to subsidize this cost  with its own funds. While the Basic Coverage Group Buy-In participants  must have earnings, the Ticket to Work legislation does not specify a  minimum level of employment for this group. Since states cannot adopt  rules defining employment for this group that are more restrictive than  those in federal law, states cannot establish requirements such as  minimum earnings or hours worked.
The Medical Improvement Group allows states to cover working  individuals who lose Medicaid eligibility under the Basic Coverage Group  because their conditions have improved to the point that they no longer  meet the SSI definition of disability but still have “a severe, medically  determinable impairment.” The same premium requirements apply as for  the Basic Coverage Group. If a state elects to cover the Medical  Improvement Group, it must also cover the Basic Coverage Group. While  the Ticket to Work legislation does not set an employment standard for the  Basic Coverage Group, it provides a definition and also allows a state to  define employment for the Medical Improvement Group. According to the  legislation, an individual qualifying for the Medical Improvement Group is  considered employed if the individual is earning at least the minimum  wage and working at least 40 hours per month. Alternatively, a state may  use hours of work, wage levels, or other measures to define employment if  the Secretary of Health and Human Services approves the definition.

	Individuals with Disabilities Had Lower Employment, Education, and Income—and More Insurance Coverage— than the General Population

Compared with the rest of the working-age population, the estimated 6.7  million working-age individuals with disabilities nationwide were more  likely to be not working, have less education, and have incomes below the  FPL. Specifically, 82 percent of working-age individuals with disabilities,  or about 5.5 million individuals, reported that they were not working. (See  fig. 1.) Nearly three-fourths of working-age individuals with disabilities  reported they had a high school education or less. Furthermore, these  individuals were nearly three times more likely than individuals without  disabilities to have incomes below the FPL. At the same time, individuals  with disabilities were less likely to be uninsured compared with the rest of  the working-age U.S. population, with just 9 percent of those with  disabilities reporting being uninsured, compared with 15 percent for the  rest of the working-age population. Nearly half of individuals with  disabilities who reported having health insurance obtained coverage  through public sources, such as Medicaid and Medicare.
Working-age individuals with disabilities were far more likely to have  public health coverage than working-age individuals in the general  population. Specifically, working-age individuals with disabilities were  about eight times more likely to have public health insurance coverage  than other working-age individuals. Generally, the lower the income level,  the more likely an individual with disabilities was to have public health  insurance coverage. For example, 75 percent of individuals with  disabilities who had incomes below the FPL had public health insurance,  while fewer than 20 percent of those with incomes at or exceeding 400  percent of the FPL had public coverage.
The extent of their health care costs underscores the need for individuals  with disabilities to maintain some type of health insurance coverage to  help cover the costs of their care. Health care expenditures for working- age individuals with disabilities were about five times the expenditures for  other working-age individuals, annually averaging about $7,600 and $1,500,  respectively.

	States’ Buy-In Programs Expanded Eligibility and Increased Cost Sharing for More Workers with Disabilities

The 12 states that opted to implement the Ticket to Work Medicaid Buy-In  program as of December 2002 set income and asset levels for eligibility  that provided new opportunities for working individuals with disabilities  to secure and maintain Medicaid coverage. DI-eligible individuals  benefited particularly because states’ broader eligibility categories under  the Buy-In allowed individuals to become eligible for Medicaid without  spending down their incomes and to remain eligible when their incomes  rose to higher levels. In addition to expanding income eligibility and asset  limits, all states took advantage of the flexibility of the statute to charge  premiums or copayments to ensure that Buy-In participants shared in the  cost of their health care coverage.

		Twelve States Expanded Medicaid Eligibility Levels for Working Individuals with Disabilities

Across the 12 states that opted to implement Ticket to Work Medicaid  Buy-In programs, all set eligibility requirements that expanded eligibility  for working individuals with higher incomes or more assets than usually  allowed under their Medicaid programs. As of December 2002, the number  of Buy-In participants for the 12 states totaled 24,258, ranging from 3  participants in Wyoming to almost 8,500 participants in Missouri. (See  table 3.) Eleven of the 12 states set Buy-In eligibility limits for income at  twice the FPL or higher—or $17,720 per year for an individual in 2002— thereby expanding opportunities for individuals to secure and maintain  Medicaid coverage. Buy-In programs also allowed participants to retain  more assets than usually allowed in states’ Medicaid programs. Of the 12  states, 7 states set asset limits that ranged from $10,000 to $30,000 for  individuals, couples, or both. Three states— Missouri, Indiana, and  Arkansas—opted for asset requirements of $4,000 or less for an  individual, while the remaining two states—Washington and Wyoming— imposed no asset limits.
States generally allowed Ticket to Work participants to exclude certain  assets from the asset limits. In addition to excluding the value of certain  assets that applied to most individuals with disabilities in the Medicaid  program when determining eligibility, 10 of the 12 states allowed Buy-In  participants to save money in retirement accounts such as Individual  Retirement Accounts, Keoghs, and 401(k)s; medical savings accounts; or  special accounts that allow individuals to save for expenses such as  modifications for job or home and education costs. These accounts are not  considered when determining asset limits for participants. Two states— Arkansas and Indiana—set $10,000 and $20,000 limits, respectively, on the  amount of savings participants can accumulate in these accounts. State  officials in a few states said allowing participants to exclude these  retirement accounts and other assets helped support states’ goals of  affording working individuals with disabilities greater independence and  self-sufficiency. For example, under these rules, participants can save to  buy cars or homes and can set aside money for retirement.

		Buy-In Programs May Offer Greatest Benefit to DI Participants

In most of the 12 states, the Buy-In programs were especially beneficial for  DI-eligible individuals who, in contrast to most SSI individuals, were not  always eligible for Medicaid coverage. Prior to the Ticket to Work  legislation, DI individuals in 11 of the 12 states could qualify for Medicaid  by spending down their incomes to specified levels (Wyoming did not offer  a spend-down option). In these 11 states, the spend-down income  eligibility levels ranged from 15 percent to 100 percent of the FPL. Under  the new Buy-In programs, the income eligibility levels significantly  exceeded those established under the spend-down categories (see fig. 2),  thus allowing individuals to qualify for the Medicaid Buy-In directly— rather than spending down their incomes to qualify for Medicaid coverage.  For example, an individual receiving DI in Arkansas could obtain Medicaid  coverage through the Buy-In program with an income up to 250 percent of  the FPL; prior to the Buy-In, the individual would have had to incur  medical expenses that reduced his or her income to approximately 15  percent of the FPL in order to qualify for the spend-down category of  Medicaid. This allows an individual with disabilities in Arkansas to  maintain an income of up to $22,150 per year under the Buy-In, whereas  that person would have had to spend down to an income of $1,300 a year  to qualify for Medicaid.
Buy-In programs afforded DI beneficiaries more immediate—and  sometimes expanded—Medicaid coverage. In addition to relieving  individuals of the requirement to spend down their income to qualify for  Medicaid, DI individuals, who are not entitled to receive Medicare  coverage until they have been receiving DI cash benefits for 24 months,  also received more immediate health insurance coverage through the  Medicaid Buy-In. Buy-In participants may also have access to a more  expanded benefit package than individuals who receive Medicaid through  a state’s medically needy program.
However, when considering participation in the Buy-In program, DI  beneficiaries must weigh the benefits of the higher earnings allowed under  the program against the possible loss of DI cash benefits and Medicare  coverage if their earnings increase beyond a certain threshold.  Specifically, after a 9-month trial work period and a 36-month extended  period of eligibility, if a DI beneficiary’s earnings increase over the SGA  limit in any month, the individual loses DI eligibility entirely. Additionally,  DI beneficiaries who earn more than the SGA level after the initial 9-month  trial period could lose Medicare coverage after 8-1/2 years. The loss of  entitlement for Medicare may be of concern for those individuals with  disabilities who would not reach age 65 by the end of the 8-1/2-year time  period. To the extent that a state reduced its Medicaid Buy-In eligibility  level, or discontinued its Buy-In program, these former DI-eligible Buy-In  participants could potentially be without health care coverage until they  reached age 65.
In contrast, SSI beneficiaries have different considerations than those  weighed by DI beneficiaries in deciding whether to enroll in the Medicaid  Buy-In program. Most SSI beneficiaries were assured eligibility for  Medicaid and thus did not need the Buy-In program or to spend down their  incomes in order to qualify for Medicaid. SSI beneficiaries in Medicaid  would receive the same benefit package as those in a Buy-In program.  Even SSI beneficiaries who worked could remain eligible for Medicaid as  participants in a work incentive program, which allowed individuals to  increase their incomes while maintaining their Medicaid coverage. In 5 of  the 12 states, Buy-In income eligibility levels were lower than the Medicaid  eligibility levels for individuals in the SSI work incentive program, and  Buy-In eligibility levels only slightly exceeded those for the SSI work  incentive beneficiaries in another 5 states. Additionally, beneficiaries in  SSI’s work incentive program are not subject to premium payments in  Medicaid, while Buy-In programs generally have imposed premium  requirements for participants.

		All States’ Buy-In Programs Required Cost Sharing

States may require Buy-In participants to share in the cost of their health  care coverage. All 12 states adopted cost-sharing mechanisms, primarily  premiums or copayments, for Buy-In participants. States calculated  premiums for Buy-In participants using various methods. For example,  Pennsylvania and Washington set premiums as a percentage of allowable  income, while Indiana and Kansas established varying premium levels for  different incomes. (See table 4.) Generally, states assessed premiums  when income was at 100 percent of the FPL or higher. Among states that  charged premiums in 2002, the percentage of participants whose incomes  were high enough to be charged premiums varied significantly across the  states, from 12 percent of participants in Connecticut to all or nearly all  participants in Illinois, Pennsylvania, Washington, and Wyoming. Average  monthly premiums ranged from $26 to $82, with nearly half of the states  setting premiums from $40 to $60. Two states—Arkansas and New  Jersey—did not charge premiums as of December 2002. Stating that  premiums were difficult to administer and collect, Arkansas chose not to  impose a premium requirement. New Jersey has a premium requirement  for participants with incomes greater than 150 percent of FPL; however,  the state did not assess premiums because only about 5 percent of  beneficiaries owed a payment.
Three states—Connecticut, Indiana, and New Hampshire—reported  discounting the Buy-In premium if participants also paid premiums for  Medicare part B, for employer-sponsored insurance coverage, or for  individual insurance coverage. For example, New Hampshire deducted the  Medicare part B premium from a participant’s total Buy-In premium. If a  Buy-In participant were paying a Medicare part B premium of $54 a month,  his or her Medicaid Buy-In premium would be discounted by that amount.  Thus, if a participant’s Buy-In premium were $80 a month, the monthly  premium for the Buy-In program would be discounted to $26 a month. In  Connecticut, any amount that participants pay for Medicare part B  premiums, employer-sponsored coverage, or other out-of-pocket medical  insurance is deducted from their premium liability. For example, if a  participant owes a Buy-In premium of $100 a month and also is paying an  employer $80 a month for private coverage, the individual’s Buy-In  premium liability would be reduced to $20.
Participants in 8 of the 12 states also were required to pay copayments for  health care services, such as $0.50 to $3 for an office visit or prescription  drugs. Copayments for inpatient hospital care generally varied from $3 per  day in Illinois to $48 per hospital stay in Kansas. In 7 of these states,  copayments were the standard cost-sharing requirements for Medicaid.  The remaining state—Arkansas—imposed a two-level copayment system  for participants. Arkansas Buy-In participants with incomes below 100  percent of the FPL had the same copayment requirements and were  charged the same amounts for pharmacy and inpatient hospital services as  usually prescribed under the state’s Medicaid program. Participants with  incomes of 100 percent of the FPL or greater were charged additional  copayments for services and equipment such as physician services ($10  per visit), outpatient mental and behavioral health services ($10 per visit),  and prosthetic devices (10 percent of the maximum Medicaid payment).

	Buy-In Participants in Four States Generally Had Prior Medicaid Coverage and Worked in Low-Wage Jobs

In the four states in which we conducted more detailed work— Connecticut, Illinois, Minnesota, and New Jersey—Buy-In programs  enrolled many individuals who previously were enrolled in Medicaid, often  in eligibility categories with more restrictive income limits, such as the  medically needy category. Buy-In participants in the four states generally  also had Medicare coverage. Across the four states, few Buy-In  participants had coverage from private insurance at the time of their  enrollment in the Medicaid Buy-In programs. Based on the limited  participation in private insurance, officials in several states did not believe  that “crowd-out”—the substitution of newly available public coverage for  private health insurance—was a concern for the Medicaid Buy-In  programs. The limited employment information available for participants  from two of the four states—Connecticut and Minnesota—showed that  Buy-In participants generally were employed in low-wage jobs—many  making less than the SGA threshold, which at the time was $780 per  month. These four states, however, had little information regarding the  extent to which the Buy-In programs fostered employment among  individuals with disabilities.

		Buy-In Participants Often Had Previous Coverage under Medicaid and Medicare

Across these four states, the share of Buy-In participants with previous  Medicaid coverage was 53 percent in Connecticut, 81 percent in Illinois, 61  percent in Minnesota, and 58 percent in New Jersey. Whereas previous  Medicaid coverage was largely due to eligibility through spend-down  provisions, Buy-In participation allowed them to retain more of their  income or assets and still qualify for Medicaid. Of those who switched  from existing Medicaid coverage to the Buy-In program, Illinois and  Minnesota estimated that 79 percent and 51 percent of participants,  respectively, were beneficiaries who originally had spent down their  income to qualify for Medicaid. While not offering a specific estimate, a  New Jersey official indicated that most of the Buy-In participants who  were enrolled in Medicaid before switching to the Buy-In category also  had spent down their income to qualify for Medicaid. Buy-In eligibility was  particularly beneficial for individuals in New Jersey because the state’s  Medicaid coverage for medically needy beneficiaries did not include  prescription drugs or community-based long-term care services, both of  which were covered under the Buy-In.
In three of the four states—Connecticut, Minnesota, and New Jersey— more than 80 percent of Buy-In participants also received health care  coverage through Medicare. (See table 5.) State officials reported that  those with Medicare relied on the Medicaid Buy-In for purposes of  obtaining outpatient prescription drug coverage since Medicare generally  does not cover this benefit. Few participants—less than 10 percent of  participants in any of the four states—reported having employer- sponsored coverage at the time of their enrollment into the Medicaid Buy- In programs. For example, Connecticut, which requires Buy-In applicants  who have access to employer-sponsored insurance coverage to apply for  this coverage, found that less than 6 percent of Buy-In applicants had  health care coverage through their workplace. For Buy-In participants  with private health insurance coverage, which often has more limited  benefits than those covered by Medicaid, the Buy-In can serve as a “wrap  around” to private coverage by providing such services as home health and  personal care, and items such as durable medical equipment.
According to officials in several states, crowd-out was not a concern for  Buy-In programs because most participants did not report having private  health insurance coverage at the time of their enrollment into the Medicaid  Buy-In programs. For example, Minnesota and New Jersey state officials  said they did not view crowd-out as a significant issue for this population  because many of the participants worked part-time and were rarely  offered private insurance coverage. Additionally, both Minnesota and  Connecticut required individuals to either enroll or remain enrolled in  employer-sponsored coverage if it was offered. As of December 2002,  these states had not formally analyzed whether Buy-In participants  withdrew from private health insurance coverage prior to obtaining  Medicaid coverage. New Jersey officials plan to monitor whether  employees are deciding to or are being urged to pursue the Buy-In  program rather than their employer-sponsored coverage.

		Available Employment Information Shows Participants Worked in Low-Wage Jobs and Experienced Minimal Increases in Earnings

In the three states with data available, working individuals with disabilities  who qualified for the Medicaid Buy-In program generally worked in low- wage jobs. (See table 6.) While one purpose of the Ticket to Work  legislation was to enable individuals with disabilities to reduce their  dependency on federal cash benefit programs through earnings from  work, available data from Connecticut, Illinois, Minnesota showed that  few participants earned more than the SGA limit, which was $780 in  December 2002. Sixty-four percent of participants in Connecticut, 61  percent of participants in Illinois, and 77 percent of participants in  Minnesota had earned income well below the SGA limit. None of these  states had asked participants to identify their occupation or the industry in  which they were employed on their Medicaid Buy-In applications;  however, some states may conduct broader analyses of participants’  employment as part of required evaluations under a related Ticket to Work  grant program.
Two of the four states we reviewed could identify whether participants  had increased their earnings once enrolled in the Buy-In. Forty percent of  Minnesota participants and 28 percent of Connecticut participants  increased their earnings between the time of initial enrollment and  December 2001, the most recent date for which these data were available.  Average monthly increases over previous earnings were $306 in Minnesota  and $332 in Connecticut. New Jersey and Illinois were not able to provide  this information. Minnesota found that 64 percent of those in the state’s  Buy-In program as of December 2001 earned wages for at least one 3- month period in the 2-year period prior to enrollment. Minnesota officials  cautioned that the analysis was limited by the lack of detail in the state  database; for example, they did not know whether participants were  disabled during this entire period, or whether individuals were  consistently employed.

	Agency and State Comments

We provided a draft of this report for comment to CMS and the 12 states in  our sample. In its comments, CMS said that, in addition to the states with  existing BBA and Ticket to Work Buy-In programs, at least three more  states are planning to implement a Medicaid Buy-In program within the  coming year, which would result in over half of the states offering health  insurance to workers with disabilities. CMS noted that the expansion of  Medicaid coverage to these individuals is encouraging particularly because  states are experiencing fiscal budget constraints. CMS also said that it is  collecting information on Medicaid Buy-In participants’ earnings and  Medicaid costs for the first 2 years of operation. In addition, CMS expects  to complete an extensive study of states’ experiences for 2001 and 2002  with the Buy-In programs authorized under both the BBA and the Ticket to  Work and Work Incentives Improvement Act of 1999 in the fall of 2003 and  to report its findings in 2004.
CMS also suggested that, in view of general concerns over racial  disparities and access to care in rural areas, it might be helpful for us to  comment on these demographic factors as part of our findings. We did not  include these factors in our scope of work, even for the four states where  we did more detailed work, and therefore cannot comment on them. CMS  provided technical comments, which we have incorporated as appropriate.  The full text of CMS’s written comments appears in appendix II.
Eleven of the 12 states responded with technical comments, which we  incorporated where appropriate.
We will send copies of this report to the Administrator of the Centers for  Medicare & Medicaid Services and other interested parties. We also will  make copies available to others upon request. In addition, the report will  be available at no charge on the GAO Web site at http//www.gao.gov.
If you or members of your staffs have any questions regarding this report,  please contact me on (202) 512-7118 or Carolyn Yocom at (202) 512-4931.  Other major contributors to this report were Catina Bradley, Karen Doran,  Kevin Milne, and Elizabeth T. Morrison.

Appendix I: Methodology for Developing Estimates and Characteristics of Working- Age Individuals with Disabilities

To develop a national estimate and compare the characteristics of  working-age individuals with disabilities with those for working-age  individuals in the rest of the population, we analyzed data available from  the Medical Expenditure Panel Survey (MEPS) household component,  which provides data on individuals’ demographics, employment, health  characteristics, and medical spending.
MEPS, conducted by the Agency for Healthcare Research and Quality  (AHRQ), consists of four surveys and is designed to provide nationally  representative data on health care use and expenditures for U.S. civilian  noninstitutionalized individuals. For our analysis, we used one of the four  surveys—the Household Component. The Household Component is a  survey of individuals regarding their demographic characteristics, health  insurance coverage, and health care use and expenditures. The 1997 and  1998 versions of the MEPS Household Component were the most recently  available at the time of our analysis that had both (1) a pooled estimation  file published by AHRQ that allows pooling 2 or 3 years of data, and (2)  complete demographic, health insurance, and health care expenditure  data. We pooled data from 1997 and 1998 in order to increase our sample  sizes for individuals with disabilities. Using the Medical Care Consumer  Price Index from the Bureau of Labor Statistics, we inflated 1997 medical  care expenditures to 1998 values.
Our estimate of working-age individuals with disabilities includes  individuals aged 16 to 64 with one or both of these conditions: (1) needing  help or supervision in performing activities of daily living (ADL) or  instrumental activities of daily living (IADL) because of an impairment or a  physical or mental health problem or (2) being completely unable to work  at a job, do housework, or go to school.
Our analyses of working-age individuals with disabilities are based on a  sample size of 1,680, representing a population of 6.68 million individuals  with disabilities. Table 7 shows the unweighted and weighted sample sizes  on which our analyses are based.

Appendix II: Comments from the Centers for Medicare & Medicaid Services

Summary:
Why GAO Did This Study

Over 7 million individuals with disabilities rely on medical and supportive services covered by Medicaid. However, if working-age individuals with disabilities desire to increase their self-sufficiency through employment, they could jeopardize their eligibility for Medicaid coverage, possibly leaving them without an alternative for health insurance. In an effort to help extend Medicaid coverage to certain individuals with disabilities who desire to work, Congress passed the Ticket to Work and Work Incentives Improvement Act of 1999. This legislation authorizes states to raise their Medicaid income and asset eligibility limits for individuals with disabilities who work. States may require that working individuals with disabilities "buy in" to the program by sharing in the costs of their coverage--thus, these states' programs are referred to as a Medicaid Buy-In. The act also required that GAO report on states' progress in designing and implementing the Medicaid Buy-In. GAO identified states that operated Buy-In programs as of December 2002 and analyzed the income eligibility limits and cost-sharing provisions established by those states. GAO also assessed the characteristics of the Buy-In participants in four states that were among the most experienced in implementing the program.

What GAO Found

As of December 2002, 12 states had implemented Medicaid Buy-In programs under the authority of the Ticket to Work legislation, which was effective October 1, 2000, enrolling over 24,000 working individuals with disabilities. These states used the flexibility allowed by the legislation to raise income eligibility and asset limits as well as cost-sharing fees. Across the 12 states, income eligibility levels ranged from 100 percent of the federal poverty level (FPL) in Wyoming to no income limit in Minnesota, with 11 states setting income eligibility limits at twice the FPL or higher. In addition to increasing income and asset levels, these states required participants to buy in to the program by charging premiums, ranging from $26 to $82 a month, and co-payments, generally ranging from $0.50 to $3 for office visits and prescription drugs. In detailed analysis of four states--Connecticut, Illinois, Minnesota, and New Jersey--GAO found that most Buy-In participants had prior insurance coverage by Medicaid and Medicare, few had prior coverage by private health insurance, and many earned low wages--most making less than $800 per month. In commenting on a draft of this report, the Centers for Medicare & Medicaid Services noted that it expects to report in 2004 on its current study of states' experiences in 2001 and 2002 with the Medicaid Buy-In programs.