Medicaid Buy-In

Overview

Available in more than 40 states, Medicaid Buy-In programs allow SSDI beneficiaries to work without worrying about Medicaid eligibility. These programs allow workers with disabilities to obtain or retain Medicaid at state-determined income limits. These limits often exceed $60,000 per year (after applying earned income exclusions).

States Create Their Own Medicaid Buy-In (MBI) Rules

No two state MBI programs look exactly alike. This tool provides a general framework for understanding MBI programs, but it probably does not cover the details of your state’s plan. Also, the case studies may not fully reflect what would happen in your state. Be sure to check your state Medicaid agency website for details about MBI in your state.

What Is Medicaid?

Medicaid is often referred to as Medical Assistance (or by another name unique to your state). It is federally supported health insurance made available through states. All states offer at least a basic Medicaid program. Some Medicaid services are mandated by the federal government, but a state has options when designing its Medicaid program.

For a person with a disability, the federal share of Medicaid costs, through the Centers for Medicare & Medicaid Services (CMS), can be 50% or higher, depending on the state.

The Medicaid Buy-In for Workers with Disabilities

The MBI program was created by Section 4733 of the Balanced Budget Act Amendments of 1997. Significant options were added to the program in Section 201 of the Ticket to Work and Work Incentives Improvement Act of 1999. (A few states, including Massachusetts, have created an MBI program through the federally authorized Section 1115 Medicaid waiver process. We do not discuss the waiver options in this tool.)

More than 40 states operate an MBI program, and most of these programs were created through the Ticket legislation’s authority. Many of these states have a countable income limit for the Buy-In at 250% of the Federal Poverty Level. Other states have a lower income limit, some have a higher income limit, and some have no limit.

When a beneficiary is approved through their state’s MBI program, they become eligible for all services offered through their state’s unique Medicaid program. They are eligible for the same services as all other Medicaid beneficiaries in their state.

MBI Has Different Names in Different States

The words “Medicaid Buy-In” may appear in the program’s name (e.g., Medicaid Buy-In for Workers with Disabilities in Ohio or Medicaid Buy-In for Working People with Disabilities in New York), but not always.

Other program names include:

• Apple Care for Workers with Disabilities (Washington State)
• Health First Colorado Buy-In Program for Working Adults with Disabilities
• Medicaid for Workers with Disabilities in Montana
• Health Benefits for Workers with Disabilities in Illinois

Be cautious when searching online for “Medicaid Buy-In” programs because states often use that term to refer to Medicare Savings Programs (see Tool 6 for details). Also, more recently Medicaid Buy-In has been used for new state Medicaid initiatives that allow higher income workers, not necessarily people with disabilities, to pay a premium to obtain Medicaid. (See Washington State Tries a Public Health Option.)

To find your state’s MBI program (if there is one), try searching on “Medicaid Buy-In for Workers with Disabilities”, along with the name of your state. Or, try calling your local Work Incentives Planning and Assistance (WIPA) project.

Note: Your state may offer a Medicaid Buy-In for Workers with Disabilities but with a name that does not include “Medicaid” or “Buy-In.”

Each State MBI Program Is Different

States may charge a premium for participation in the Buy-In, set their own countable resource limits, and determine which resources are counted and which are exempt.

States are required to determine countable income using the SSI earned income exclusions. This means, for example, that the first $65 of earned income and half the remaining earned income is excluded. In addition, Impairment-Related Work Expenses (IRWEs), Blind Work Expenses (BWEs), and PASS deductions can be used to reduce countable income (see our SSI at Work Toolkit, Tool 4). For states such as New York, New Jersey, and Iowa, which allow countable income up to 250% of the Federal Poverty Level, in 2024 an applicant’s gross earned income could be as high as $73,908 per year if the only income to consider is their earned income. This is based on a 2024 monthly countable income limit of $3,037, which could equate to a monthly gross of $6,159.

For MBI programs based on the Ticket legislation, the income limit can be much higher or not exist. Some states limit how much unearned income the applicant can have. Also, some states include spousal income in the eligibility calculation.

Understanding State MBI Programs

Although each state is different, it is still useful to understand how MBI programs work generally. This is especially true for counselors and for people who are considering a move to a different state.

The basic features of MBI programs come from the Balanced Budget Act of 1997. They are listed here.

• The individual must meet the SSI definition of disability but need not have ever received SSI. If they are not a current SSI or SSDI beneficiary, the state must make a disability determination.
• Eligible workers must be in a family (a single person is a family of one) with countable income of less than 250% of the Federal Poverty Level—but see below for what Section 201 of the Ticket legislation allows.
• All SSI exclusions apply to the determination of family income, including the SSI earned income exclusions.
• If a person’s earnings are above or below SGA level is not considered for MBI eligibility.
• States can increase resource limits to as high as $14,000—but see the list below of what Section 201 of the Ticket legislation allows.
• States may charge premiums and other cost sharing expenses.

MBI Basic Coverage Group

A few years after the Balanced Budget Act of 1997, Section 201 of the Ticket legislation created an MBI Basic Coverage Group. As of 2001, states MBI plans can have these features:

• Eligible individuals can have countable income at any level the state establishes, or the state may opt for a program with no income limits. (Most states set income limits between 250% and 450% of the Federal Poverty Level.)
• Eligible individuals can have countable resource at any level the state elects to establish. Or the state can opt to not have a resource limit. (Most states set resource limits between $2,000 and $20,000.)
• If a state chooses to charge a premium, the premium cost can be set on a sliding scale, based on individual income. Individuals can be required to pay the full premium so long as it does not exceed 7.5% of their total income.

MBI Medical Improvement Group

If a state creates a Basic Coverage Group through the Ticket legislation, it can also create a Medical Improvement Group as a second option. To qualify for continued MBI coverage as medically improved, the individual must:

• Lose eligibility for the Basic Coverage Group due to medical improvement but retain a severe medical impairment, and
• Be engaged in paid work, working 40 or more hours per month and earning at least the federal minimum wage.

Ask These Questions about Your State’s MBI Program

Thinking about MBI in your state? Be sure to ask these questions:

• The countable income limit is generally expressed as a percentage of the Federal Poverty Level. Look for how unearned income is treated (some states limit unearned income to the SSI federal benefit rate) and how spousal income is treated.
• What is the resource limit? Is it an individual limit or a couple limit? The general range is between $2,000 and $20,000, but a few states have a higher limit.
• Does your state exclude savings in retirement accounts? For example, New York ignores them.
• Does your state offer coverage under the Medical Improvement Group?
• Does your state charge a premium? If yes, how do they determine the premium amount?
• Does your state allow your MBI to continue if you are laid off or must stop work for a disability-related reason? This is called work stoppage protection. States that offer this protection typically provide a grace period from 2 to 12 months.

Spread the Word about the Medicaid Buy-In Program

MBI programs are a wonderful work incentive that allow many SSDI beneficiaries with severe and continuing disabilities to attempt work at significant earnings levels. If you are a beneficiary, we hope this tool helps you understand MBIs.

If you are a counselor, get the word out about your state’s MBI program to individuals with disabilities, their families, and the service providers that work with them:

• If good promotional materials exist, distribute them to clients. Link from your agency’s website to the Medicaid agency’s website section that explains your state MBI program.
• If promotional materials do not exist, consider creating them or establishing a modest funding source to allow a capable community agency to create them.

If you work at a VR agency that funds benefits planning services—either through its own staff or through fee-for-service relationships with outside providers—include assistance with MBI program eligibility and enrollment as service categories for benefits planners.