Benefits and Cost-Sharing for Working People with Disabilities in Medicaid and the Marketplace
Nearly 27% of working-age people with disabilities were employed in 2013, and an additional almost 15% were unemployed but actively seeking work.1 Programs such as the Social Security Administration’s Ticket to Work2 for people who receive Social Security Disability Insurance or Supplemental Security Income benefits, as well as state vocational rehabilitation agencies,3 offer job search, training, and other services to support the employment of people with disabilities. However, access to affordable health insurance that meets their needs for medical and long-term services and supports (LTSS) remains essential to the ability of people with disabilities to seek and maintain employment.
Medicaid has long been an important source of health insurance for people with disabilities. The Affordable Care Act (ACA) created new coverage options, effective January 1, 2014, that benefit people with and without disabilities.4 The health reform law expanded Medicaid to adults with incomes up to 138% of the federal poverty level (FPL, $16,105 per year for an individual in 2014), many of whom previously were ineligible for coverage. (Due to the Supreme Court’s ruling on the ACA, the Medicaid expansion is effectively a state option.5) The Medicaid expansion establishes a uniform level of financial eligibility, which promotes continuity of coverage when workers change jobs or move interstate, to the extent that states have expanded coverage. In addition, there are several optional coverage groups that allow working people with disabilities to buy in to Medicaid coverage by paying a premium.
The ACA also provides for qualified health plans (QHPs) that people without access to employer-sponsored or other coverage that meets federal minimum standards can purchase through new health insurance Marketplaces. QHP benefit packages are based on a benchmark commercial insurance plan and therefore are similar to employer-sponsored insurance. To make Marketplace coverage more affordable, the ACA provides for premium tax credits for people with incomes from 100% to 400% FPL ($11,670 to $46,680 per year for an individual in 2014) and cost-sharing reductions for people with incomes from 100% to 250% FPL ($11,670 to $29,175 per year for an individual in 2014). In addition, the ACA includes private insurance market reforms that improve access to coverage for people with disabilities. These include a provision for guaranteed issue, which prevents health insurers from denying coverage to people for any reason, including pre-existing conditions, and a provision requiring community rating, which allows health plans to vary premiums based only on age, geographic area, tobacco use, and number of family members, and thereby prohibits plans from charging higher premiums based on health status or gender.
As people’s incomes fluctuate, they may move between Medicaid and Marketplace coverage and, because different rules apply to the two programs, face changes in their benefits and out-of-pocket costs as a consequence. This issue brief uses hypothetical examples of working people with disabilities to illustrate the kinds of experiences they are likely to have with Medicaid and Marketplace coverage in four states – California, Kentucky, New Jersey, and Ohio – with a focus on benefits typically important to people with disabilities, including mental health and substance use treatment services, prescription drugs, rehabilitative and habilitative services and devices, and LTSS. All four states have implemented the ACA’s Medicaid expansion. However, they have made different decisions about how to design their Medicaid benefit packages for newly eligible adults, and how to set up and administer the Marketplace that serves their state. Key themes identified from this analysis reveal the potential impact of various state and plan decisions on working people with disabilities and can help inform policymakers’ future choices in designing Medicaid and Marketplace benefit packages and cost-sharing rules.Executive Summary Background