Working Healthy Participants: Earning More and Costing Less

March, 2009

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.


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.


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.


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.


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.


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. 

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.

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


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