Health Insurance–Motivated Disability Enrollment and the ACA

 

Jae Kennedy, Ph.D., and Elizabeth Blodgett, M.H.P.A.  September 5, 2012 (10.1056/NEJMp1208212)

The United States relies on employer-based health insurance to cover working-age adults and their families. As a result, Americans who are unable to engage in full-time work because of a chronic health condition must not only seek out wage replacement but also pursue alternative sources of health insurance.

We believe that HIMDE is an important driver of the unsustainable growth in enrollment in public assistance programs for people with disabilities. The Social Security Administration currently has programs — such as the Ticket to Work and Medicaid Buy-In programs — that address this problem by preserving health insurance benefits for disability-program enrollees who return to work. These programs cannot address the system wide cost and structural factors contributing to HIMDE, but certain reforms included in the Affordable Care Act (ACA) do address such factors — meaning that stabilization of federal disability programs through a reduction in HIMDE is an unacknowledged but important benefit of the ACA.

Although Medicare and Medicaid funds are not as immediately vulnerable as SSDI, and the cost of these programs is a perennial concern. Unsustainable enrollment growth in disability programs contributes to this cost because Medicare and Medicaid coverage are closely linked to receipt of SSDI and SSI: SSDI beneficiaries receive Medicare 24 months after their financial benefits start, and most new SSI beneficiaries are simultaneously deemed eligible for Medicaid coverage.

In addition to making the private insurance market more accessible, the ACA will also change the public insurance landscape for disabled workers. The law originally required all 50 states to provide Medicaid coverage for persons with incomes below 138% of the federal poverty level, but the Supreme Court has ruled that such an expansion is not mandatory.4 The effect of Medicaid expansion on HIMDE will therefore vary by state. States that currently have very low income-eligibility thresholds or do not cover childless adults will dramatically increase the number of adults eligible for Medicaid if they opt to expand their programs. Adults with potentially work-limiting disabilities residing in these states will be able to obtain Medicaid without first obtaining SSI through disability eligibility.

The current process of directing applicants to SSI and/or Medicaid for benefits creates added bureaucracy and eligibility also requires asset determination as well as prior income from Medicare employment contribution.

The system is ‘rigged’ against those who never or could not gain enough credits to be eligible for SSDI.