1. Medicaid Buy In
Enhancing Earnings & Employment for People with Psychiatric Disabilities
Summary of a Research Synthesis by
The Center for Psychiatric Rehabilitation at Boston University
Boston University Center for Psychiatric Rehabilitation, Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

2. Contributors
Medicaid Buy-In Study Group and Lead Reviewers: Brigitte Gavin, Marci McCoy of Roth of McCoy-Roth Strategies
Additional Reviewers: E. Sally Rogers, Vasudha Gidugu, of the Center for Psychiatric Rehabilitation

3. Table of Contents Research Synthesis Background
What is Medicaid Buy In?
Why is Medicaid Buy In Needed?
Findings: Earnings
Factors Influencing Earnings
Impact of MBI Earnings on State Budgets
Findings: Employment
Other Findings
Findings Summary
Lessons Learned

4. Background
This report summarizes the “Effectiveness of State Medicaid Buy-In Initiatives on Earnings & Employment for People with Psychiatric Disabilities.”
Conducted by Center for Psychiatric Rehabilitation at Boston University in 2010.
Supported by the National Institute on Disability & Rehabilitation Research.
30 National and State Studies thoroughly reviewed.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

5. Medicaid Buy-In: An incentive for going back to work
Federal program for people with disabilities designed to increase entry and continuance in employment.
Enables continued Medicaid access for people with disabilities who want to work and earn more than is generally allowed under other Medicaid categories.
Adopted by 45 states as of July (Alabama, Colorado, Florida, Hawaii, Oklahoma, Tennessee, & District of Columbia do not participate.)
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

6. Why is Medicaid Buy In Needed?
High unemployment for adults with psychiatric disabilities … so many hurdles
Fear of losing medical benefits if they enter the labor market.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

7. Findings: Earnings 40% of participants increased their wages.
Overall, enrollment in the Medicaid Buy-In program appears to result in increased earnings
40% of participants increased their wages.
Average increase in wages after one year of enrollment, adjusted for inflation, was $2,582 higher than the previous year; an almost 50% increase.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

8. Factors Influencing Earnings
Participant concerns about losing Supplemental Security Income (SSI)
and/or Social Security Disability Insurance (SSDI) cash benefits:
Participants are allowed to earn more than the annual limit for SSI/SSDI disability and retain health care benefits even though they lose their cash benefits.
Program participants rely on SSI/SSDI to supplement their earned income, so they keep their income down to prevent losing SSI/SSDI.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

9. Factors Influencing Earnings
State Program Structures: Allowable Minimum & Maximum Earned Income
Participants have higher average earned income in states that have a high minimum earned income to gain eligibility and/or maximum earned income to retain eligibility, i.e., both the “floor” and the “ceiling” for earned income are higher.
Connecticut, New Hampshire, & Massachusetts have income floors & participant earnings are some of the highest in the country, and significantly higher than the average participant earnings in neighboring states.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

10. Factors Influencing Earnings
State Program Structures: Grace Periods
The shorter the “grace period” established by the state, i.e., allowable period to not be working and still retain eligibility, the higher % of participants employed and earning wages.
2006 data show that the mean earned income of MBI participants in Wisconsin, a state that allows lengthy grace periods, was $4,727, while South Carolina enrollees, participating in a program that allows no grace periods, earned an average of $17,780.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

11. Factors Influencing Earnings
Individual Participant Characteristics: Age
The younger the participant, the higher the earnings. (For every one-year increase in age, the average MBI participant earns $91 less.)
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

12. Factors Influencing Earnings
Individual Participant Characteristics: Previous Recipient of Medicaid or SSI
Participants who have not previously been a Medicaid or SSI recipient are likely to earn more and to exceed the annual earnings threshold for SSI and/or SSDI eligibility.
Increased earnings of Washington state participants who had not received Medicaid benefits was 97% higher than those who had.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

13. Factors Influencing Earnings
Individual Participant Characteristics: Non-white
Nonwhite earners are more likely to be among the top earners in the MBI program. 
Nonwhite participants make up only 20 % of MBI enrollment, but 38 % of the program's top earners.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

14. Factors Influencing Earnings
Individual Participant Characteristics: Primary Mental Illness Disability
Earnings tend to be lower than other MBI participants, but more likely to earn wages (80 versus 69 %).
Wages rise more rapidly (46 % had higher earnings in the second year after enrollment, as compared to 35 % of other participants).
A 2 % greater frequency of earning above the Substantial Gainful Activity (SGA) amount than the average MBI participant.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

15. Factors Influencing Earnings
Individual Participant Characteristics: Participation in SSI work incentive programs
39 % of participants with no participation in SSI work incentive programs experience an earnings increase vs. 57 % for participants enrolled in both Ticket to Work & Trial Work Period.
Participation in work incentive programs increases in states that have higher earnings limits. (Nebraska has no earned income limit and its participants are the biggest users of work incentive programs.)
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

16. Factors Influencing Earnings: Summary
Lower Earnings
Participant concerns about losing Supplemental Security Income (SSI) and/or Social Security Disability Insurance (SSDI) cash benefits.
Previous recipient of Medicaid or SSI.
Primary Mental Illness Disability.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

17. Factors Influencing Earnings: Summary
Higher Earnings
High Allowable Minimum & Maximum Earned Income.
Shorter Allowable period to not be working and still retain eligibility (grace period).
Younger participants.
Non-white participant.
Participation in SSI work incentive programs.
Higher Rate of Earnings Increase & Frequency Earning above Substantial Gainful Employment Amount
Primary Mental Illness Disability

18. Impact of MBI Earnings on State Budgets
Increased income tax revenue
Kansas calculated that, between 2003 and 2006, MBI participants sharply increased the amount of state income taxes from an average of $74 in 2003 to $123 annually in 2006.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

19. Impact of MBI Earnings on State Budgets
Increased economic activity
In New Hampshire, that state’s evaluators calculated the aggregate earnings of its MBI participants as $20 million from 2002 to 2006, $11 million more than what would have been in the state’s economy without the MBI program.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

20. Impact of MBI Earnings on State Budgets
Reduced demand for social services
Washington State participants with prior Medicaid coverage reduced dependency on the Supplemental Nutritional Assistance Program (SNAP) by $217 per month; those without prior Medicaid coverage reduced SNAP dependency by $300 per month.
Kansas frames the reduced dependence in terms of participant losses—the state found that 20 % of its MBI enrollees have lost income-support benefits such as energy assistance as a result of increased income.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

21. Impact of MBI Earnings on State Budgets
Reduced medical expenditures & health costs
In Kansas state medical expenditures had decreased 45 % per person between 2004 and 2007, and in Michigan, the state realized a 53 % direct savings in reduced healthcare costs, a reduction in average costs per person from $947 to $446.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

22. Impact on State Budgets: Summary
Increased income tax revenue
Increased economic activity
Reduced demand for social services
Reduced medical expenditures & health costs
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

23. Findings: Employment
MBI participants work and work more than before enrollment as compared to control groups.
Nationally, the average employment rate of all MBI participants stood at 69 % in 2006 and range from a low of 40 % in Iowa, to a high of 100 % in Rhode Island.
As with increased earnings, both increased employment & more hours worked are associated with state program structures - short grace periods, high income limits, and work verification policies.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

24. Other Findings
In most states, MBI enrollment has increased at rates higher than anticipated.
Between 2001 and 2006, MBI enrollment nationwide more than tripled, from 29,398 to 97,491 participants.
Even with increased enrollment, reaching the total population of MBI-eligible participants remains a challenge, e.g., In New York, 5,677 persons were enrolled in 2007, but more than 472,000 persons were potentially eligible.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

25. Other Findings
Participants experience improved health outcomes.
Kansas found that MBI participants had greater access to critical health services.
Early results from much-anticipated experimental studies also show participants experiencing improved health outcomes.
In Kansas, 59% of Working Healthy participants reported improved mental health status.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

26. Other Findings
Premium structures of state MBI programs vary drastically.
In Michigan in 2006, no single participant paid a premium because the threshold for premium payment was set at 250 % of the federal poverty threshold (approximately $48,000 at the time).
Washington State’s MBI participants pay an average of $90 per month in premiums, primarily determined by a sliding income scale.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

27. Findings: Summary
Overall, enrollment in the MBI program appears to result in increased earnings.
MBI participants work and work more than before enrollment as compared to control groups.
In most states, MBI enrollment has increased at rates higher than anticipated.
Participants experience improved health outcomes.
Premium structures of state MBI programs vary drastically.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

28. Lessons Learned
There is a trade-off between continuous enrollment in the program and higher employment and earnings averages.
While shorter grace periods are the design feature most strongly associated with improved outcomes, longer grace periods are associated with continuous enrollment, which is linked with an increased sense of financial security and improved long-term income.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

29. Lessons Learned
Targeting younger participants, & improving linkages to other SSI work incentive programs can improve the likelihood of participants earning more.
Shorter grace periods and strict work verification policies increase earnings, but leave more persons with disabilities with the difficult decision to choose between working for employment and critical health care.
Reaching out to younger participants can result in improved earnings and greater employment.
States with higher-than-average numbers of participants using work incentive programs have more enrollees earning above the SGA threshold.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

30. Lessons Learned
States can recoup some of the costs of MBI programs if premium structures are properly designed.
Washington State participants pay an average premium of $90 per month but, no participants in Michigan have yet paid a premium because the income threshold at which premium requirements kick in is quite high.
Wisconsin and Michigan are exploring creating two tier premium options that trade off higher premiums for higher allowable earnings limits.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

31. Lessons Learned
States should improve their capacity for program communication and support strategies.
New York conducts a needs assessment using Census or other demographic and income data and geographically tailors MBI marketing material to increase participation among those eligible, but unaware of the program.
Rather than focusing on increasing enrollment numbers, the goal can be improving program understanding and utilization of those already enrolled by increasing clarity and decreasing complexity.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

32. Lessons Learned
States should improve their capacity for program communication and support strategies.
A more person centered approach may be more effective at engaging consumers, e.g., capitalizing on consumer preference for favorable sources of information. (Participants in Michigan view Centers for Independent Living as dependable resources for information, as compared to other agencies.)
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)

33. Lessons Learned: Summary
There is a trade-off between continuous enrollment in the program and higher employment and earnings averages.
Targeting younger participants, and improving linkages to other SSI work incentive programs can improve the likelihood of participants earning more.
States can recoup some of the costs of MBI programs if premium structures are properly designed.
States should improve their capacity for program communication and support strategies.
Compiled by the Medicaid Buy In Study Group at Boston University Center for Psychiatric Rehabilitation.  Innovative Knowledge Dissemination & Utilization Project for Disability & Professional Stakeholder Organizations/ NIDRR Grant # (H133A050006)