Working Healthy Participants: Earning More and Costing Less

March, 2009

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University of Kansas Medicaid Intrastructure Change Evaluation Project
Number 12, March 2009

WORKING HEALTHY PARTICIPANTS: EARNING MORE AND COSTING LESS
By Jean P. Hall, Ph.D. and Noelle K. Kurth, M.S.

INTRODUCTION

The Kansas Medicaid Buy-In program, Working Healthy, was implemented in July of 2002 with the goal of providing an incentive for Kansans with disabilities to work or work more. To do so, Working Healthy allows Kansans with disabilities to maintain Medicaid coverage even if their earnings and assets exceed those generally allowed by Medicaid, with the requirement of paying a premium for that coverage when countable income exceeds 100% of the federal poverty level. When the program started, advocates,providers, policy makers and consumers all hoped that enrollees would earn more, and thus pay more taxes. Some people were concerned, however, about the cost of expanding Medicaid to an additional group of people.

This Policy Brief summarizes research findings about the earnings, taxes paid, and Medicaid expenditures of people enrolled in Working Healthy using recently published data (Kurth, Fall, & Hall, 2008). In a nutshell, participants’ earnings increased, as did the amounts of taxes and premiums they paid, while Medicaid costs per person decreased over time.

 


DATA

Both administrative data and self-reported survey data were used to look at trends in earnings and medical expenditures. University of Kansas evaluation staff has conducted annual Satisfaction Surveys with Working Healthy participants since the program’s inception, allowing for repeated measures of self-reported income levels. In addition, aggregated data from the Kansas Department of Revenue were used to track adjusted gross income and Kansas taxes paid by individuals continuously enrolled in Working Healthy. Finally, Medicaid and Medicare claims data from the Kansas Medicaid Management Information System (MMIS) and the federal Centers for Medicare and Medicaid Services (CMS) were used to analyze per person expenditure trends over a four year period.

 

FINDINGS

Since 2004, the Satisfaction Survey has queried respondents about their hourly wage. The mean self-reported hourly wage from 2004 through 2007 consistently increased from $6.94 to $7.69 (see Figure1), well exceeding the federal minimum wage. To further understand earnings trends, an analysis of income taxes paid by people who remained continuously enrolled in Working Healthy from 2004 through 2007 is presented in Figure 4; this analysis is based on Kansas Department of Revenue aggregate income and tax data for this sub-group of Working Healthy enrollees. In general, people who remain enrolled in Working Healthy demonstrate consistent increasesin income and the amount of state income taxes they pay. Because their earnings are increasing, the percentage of Working Healthy enrollees who pay a premium and the average premium paid have also
trended upward. In 2007, about 70% of enrollees paid premiums, averaging $73.20 per month. Even as their contributions to state revenues increased, medical expenditures for the same group of individuals continuously enrolled in Working Healthy decreased. Adjusting for inflation, Medicaid expenditures per person per month for this group declined over time, dropping 45% from 2004 to 2007 (see Figure 5). In addition, total medical costs,i.e., Medicaid and Medicare combined, also declined.

 

Figure 1 Information
Title: Mean Hourly Wage Earned by Working Healthy Enrollees, Self-Reported by Year
2004 (n = 192): Federal minimum wage = $5.15; mean hourly wage = $6.94
2005 (n = 279): Federal minimum wage = $5.15; mean hourly wage = $7.16
2006 (n = 307): Federal minimum wage = $5.15; mean hourly wage = $7.51
2007 (n = 317): Federal minimum wage = $5.85; mean hourly wage = $7.69
citation: Kurth, Fall, & Hall (2008)
data source: Annual Working Healthy Program Satisfaction Surveys

 

Figure 2 Information
Title: Aggregate Federal Adjusted Gross Income of Continuously Enrolled Working HealthyEnrollees, 2003-2007
2003 (n = 218): income = $1,338,175
2004 (n = 221): income = $1,476,689
2005 (n = 220): income = $1,626,089
2006 (n = 227): income = $1,747,566
2007 (n = 228): income = $1,751,351
citation: Kurth, Fall, & Hall (2008)
Data Source: Kansas Department of Revenue Income Tax Data


Figure 3 Information
Title: Aggregate Kansas State Income Taxes Paid by Continuously Enrolled Working HealthyEnrollees, 2003-2007
2003 (n = 218): taxes = $16,102
2004 (n = 221): taxes = $19,941
2005 (n = 220): taxes = $25,189
2006 (n = 227): taxes = $27,945
2007 (n = 228): taxes = $27,945
citation: Kurth, Fall, & Hall (2008)
Data Source: Kansas Department of Revenue Income Tax Data


Figure 4 Information
Title: Mean Federal Adjusted Gross Income of Continuously Enrolled Working Healthy Enrollees Compared to Annual Substantial Gainful Activity (SGA), 2003-2007
2003 (n = 218): mean federal AGI per person = $6,138; annual SGA (non-blind) = $9,600
2004 (n = 221): mean federal AGI per person = $6,682; annual SGA (non-blind) = $9,720
2005 (n = 220): mean federal AGI per person = $7,391; annual SGA (non-blind) = $9,960
2006 (n = 227): mean federal AGI per person = $7,699; annual SGA (non-blind) = $10,320
2007 (n = 228): mean federal AGI per person = $7,681; annual SGA (non-blind) = $10,800
citation: Kurth, Fall, & Hall (2008)
Data Source: Kansas Department of Revenue Income Tax Data

 

Figure 5 Information
Title: Total Medicaid Inpatient and Outpatient Expenditures for Continuously Enrolled Working Healthy Participants, per Member per Month, 2004-2007 (n = 254)
2004: expenditures = $517
2005: expenditures = $469
2006: expenditures = $401
2007: expenditures = $282
citation: Kurth, Fall & Hall (2008)
Data Source: Kansas Medicaid Management Information System (MMIS)
Note: Expenditures were adjusted to 2007 prices using the Consumer Price index for medical care.

 

 

DISCUSSION

When the Ticket to Work/Work Incentives Act (P.L. 106-170) was passed in 1999, establishing an option for states to implement Buy-In programs, one congressional finding listed in the law was that “For individuals with disabilities, the fear of losing health care and related services is one of the greatest barriers keeping the individuals from maximizing their employment, earning potential, and independence.” For participants in Working Healthy, access to Medicaid has allowed them to increase earnings and independence in addition to having the opportunity to pay taxes and premiums that offset some of their costs to Medicaid. Numerous studies (e.g., Lynch, Kaplan & Shema, 1997) have demonstrated the relationship between poverty and poor health status. The work presented here shows that, as Kansans with disabilities work more and earn more, their health status may indeed improve, as reflected in decreased medical expenditures.

 

REFERENCES

Kurth, N.K., Fall, E.C. , & Hall, J.P. (2008). Working Healthy Data Chartbook: Evaluation of the Kansas Medicaid Buy-In 2002-2007. Lawrence,
KS: University of Kansas Center for Research on Learning. Online:http://www.workinghealthy.org/downloads/WorkingHealthyDataChartbook_Jan09.pdf

Lynch J, Kaplan G, Shema, S. Cumulative impact on sustained economic hardship of physical, cognitive, psychological and social functioning. New England Journal of Medicine 1997;337(26):1889-1895.

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This Policy Brief is published by the KU-CRL Division of Adult Studies in cooperation with the Kansas Health Policy Authority.

Additional copies and copies in alternate formats are available upon request by calling 
1-800-449-1439 or emailing pixie@ku.edu
KU Research Team
Jean P. Hall, Ph.D., Principal Investigator
Noelle K. Kurth, M.S., Project Coordinator

Shawna Carroll, Graduate Research Assistant

Emily Fall, Graduate Research Assistant

Kansas Health Policy Authority
Mary Ellen O'Brien Wright, Working Healthy Program Director
Nancy Scott, Benefits Specialist Team Leader


ABOUT WORKING HEALTHY


Many people with disabilities want to work but worry that doing so could jeopardize their vital health and long term care coverage. Working Healthy offers people with disabilities who are working or interested in working the opportunity to get or keep Medicaid coverage while on the job. Through Working Healthy people can earn more, save more, achieve their career goals, and still maintain their health coverage.

Working Healthy is a Medicaid program. To qualify for this program, a person must:

  • Have a disability determined by Social Security;
  • Be no younger than 16 and no older than 64;
  • Be employed;
  • Have total income of less than 300% of the Federal Poverty Level;
  • Not be receiving Home and Community Based Services;
  • Not be living in a nursing facility; and
  • Have resources that are less than $15,000.

More information about the Working Healthy program can be found at:http://www.kdheks.gov/hcf/workinghealthy

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