Pay limits raised for disabled workers

New state rules let people earn more before losing Medicaid insurance. In the long run, taxpayers will win, too

For Richard Miller, a crucial rung on the financial ladder is no longer missing.

Under a new state program called Health Coverage for Workers with Disabilities, Miller, 30, can increase his hours and pay at a hotel switchboard in downtown Raleigh without losing the Medicaid health insurance that pays for his kidney dialysis.

The idea behind bending the usually strict Medicaid income limits is to nudge capable people with disabilities toward working, and eventually into paying for more of their health-care costs, social service experts said.

"If you can allow me to make more income and still receive some benefits, that's going to be a great situation," Miller said Tuesday.

An outgrowth of the Clinton-era "Ticket to Work" legislation, the new Medicaid guidelines will affect an estimated 1,200 North Carolinians and cost $1.2 million statewide in the first year. As other benefits are threatened by shrinking state revenues, the Medicaid changes are expected to cost $7.4 million by the program's fifth year, even including offsetting fees and deductibles to be charged people with higher incomes.

"The bottom line is that people feel that it is the right thing to do," said Kathleen Thomas, a researcher at the Cecil G. Sheps Center for Health Services Research at UNC-Chapel Hill who studied the program as it developed.

"For people with disabilities, the expectation of having a career is an important part of community involvement. In the long run, they should have employment that results in their paying taxes and also participating in the cost of their care."

Under guidelines in effect until Nov. 1, Miller and other people with disabilities could earn only $10,400 a year before making too much to qualify for Medicaid. Those limits could prevent qualified people from taking better-compensated jobs, or in Miller's case, from working more hours.

"What changed for me was my amount of work that I was doing, which caused me not to qualify any more," Miller said.

The new limit is $15,600 for a single person.

For taxpayers, a partial payback will come in a year or so, if and when earners with disabilities such as Miller start making even more money. At an annual income of $20,800, such recipients would start paying premiums and co-pays for the health insurance.

"You might have someone who is paraplegic but might be able to go to work, say, in the computer field, and still qualify for Medicaid," said Carolyn McClanahan, chief of the state Medicaid Eligibility Unit.

Counties are still getting the word out about the eligibility changes, but Miller and about 20 people with disabilities have already qualified. Dozens more have applications in the pipeline, McClanahan said.

Elizabeth Scott, director of adult economic services for Wake County Human Services, said the new program covers workers ages 16 to 64.

"The idea is to try to allow people who are able to work to do so without the fear of losing their benefits," Scott said.

"Medical benefits are not easy to replace -- a lot of jobs may not offer them.

"If they lost eligibility for full Medicaid, they would have had to meet a deductible, and that could be thousands of dollars over a six-month period."

More than three dozen other states already have Medicaid buy-in programs, but North Carolina's was held up because of required state legislation and technical difficulties in processing payments in the Medicaid system.

President Bill Clinton signed the Ticket to Work and Work Incentive Improvement Act into law Dec. 17, 1999, laying a foundation for states to extend Medicaid coverage for working people with disabilities.

In North Carolina, the new standards also allow Medicaid recipients with disabilities to hang onto a higher level of holdings without "spending down" as other recipients must.

"If someone is disabled and they want to go try to go work to improve their situation, they should be able to do it," McClanahan said.