For adults with disabilities, Medicaid expansion works

For adults with disabilities, Medicaid expansion works
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Newly minted lawmakers in Congress and in state legislatures across the country who want to grow the workforce should look at how Medicaid expansion increases employment for Americans with disabilities. Lessons learned within this population could also have implications for the entire U.S. labor market. 

Consider Aerius, a 32-year-old father of three with cerebral palsy living and working in Idaho. He would like to earn more and build up his savings, but he has to keep his earnings and assets low enough to keep his Medicaid coverage. That’s because Aerius is currently enrolled in the federal Supplemental Security Income (SSI) program.

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SSI offers very modest cash benefits, but the associated Medicaid coverage is invaluable.  “If I lose SSI, I lose my Medicaid,” he explains. “Money’s the easy part, I’ve always made money, but it’s the [health] benefits — knowing that I can go to the doctor and not worry about a bill.” He hopes the ballot initiative to expand Medicaid eligibility, passed by Idaho voters in November, will provide new and better alternatives.

Until the Affordable Care Act (ACA) was implemented in 2014, enrolling in SSI was the only way for millions of working-age Americans with disabilities to obtain the Medicaid coverage they needed. Like Aerius, they maintained their insurance eligibility by carefully restricting their earnings and assets, or dropping out of the workforce entirely. Some SSI beneficiaries compared the situation to “being trapped inside a little box.” 

The ACA opened another door to Medicaid for working-age adults. The original law required all states to offer Medicaid to everyone under age 65 with incomes below 138 percent of the federal poverty level, regardless of disability or employment status, but a 2012 US Supreme Court ruling made expanded eligibility optional. 

Currently, 33 states and the District of Columbia have chosen to expand Medicaid eligibility, but at least three other states will join the expansion in 2019. They should see a real and sustained economic benefit from this change.

Research from the Collaborative on Health Reform and Independent Living shows that employment rates for workers with disabilities rose in Medicaid expansion states (from 41.3 percent to 47.0 percent) but declined in non-expansion states (from 43.5 percent to 41.4 percent) after ACA implementation.

Unfortunately, some of these states are enacting new barriers to Medicaid eligibility, including work, school, training, or volunteer requirements. These so-called “personal responsibility” requirements are burdensome for beneficiaries and expensive for states to monitor.

In June, Arkansas became the first state to implement work requirements for adults under age 50.  As a result, more than 8,400 residents have lost their Medicaid coverage. We don’t know exactly how many of these former Medicaid beneficiaries have disabilities, but we know that they are all now at greater risk of impoverishment, preventable illness and premature death than they were before.

If they are sicker as a result, it will be even harder for them to get work. And if their health problems become severe, they will wind up in hospital emergency rooms, where they will be treated at a higher cost, with taxpayer dollars.

Incidentally, unemployment in Arkansas was only 3.8 percent in June. Employers in many states are experiencing workforce shortages, but policies that force people with disabilities to choose between their health and work don’t help.

A better policy option is already available. Arkansas, like 44 other states, allows working-age adults with disabilities to purchase Medicaid, even if their earnings or assets exceed eligibility thresholds, as long as they meet Social Security Administration disability criteria. These so-called Medicaid buy-in programs have empowered tens of thousands of Americans with disabilities to enter the workforce at a meaningful level.

Participants in these programs report better physical and mental health and improved ability to live independently. As one said, “We are trying to better our lives. We don’t want to be labeled as living on [welfare]. We want to be working members of society and living the American dream.”

Reliable and affordable health insurance can allow people to work, even when they have disabling health conditions. If states want to increase workforce participation, they should expand Medicaid eligibility — not restrict it. And, if Congress wants to see continued drops in the unemployment rate, they should explore policies that allow all low-income Americans to purchase Medicaid coverage.

Dr. Jae Kennedy, a professor at Washington State University, and Dr. Jean Hall, a professor at the University of Kansas,  are co-investigators for the nonpartisan Collaborative on Health Reform and Independent Living, a research project funded by the National Institute on Disability, Independent Living, and Rehabilitation Research. The opinions expressed here are solely those of the authors and not their academic institutions or funding agencies.