The Medicaid Buy-In and Social Security Disability Insurance (DI) Beneficiaries: Lessons for the 2014 Medicaid Expansion and Proposals to Reform DI

Abstract

Evidence from the Medicaid buy-in program, a series of large Medicaid expansions targeted to workers with disabilities, can inform the expected effects of the 2014 Medicaid expansions and current proposals to reform Social Security Disability Insurance (DI). In states with low income thresholds for Aged, Blind, Disabled Medicaid, expanding Medicaid through the buy-in program resulted in large increases in Medicaid eligibility for DI recipients. Using those states with little to no increase in Medicaid eligibility as comparison states, I find expanding access to Medicaid yields large take up rates among DI recipients. However, these large responses are only expected to occur in a few states following the 2014 expansion because of the interaction between existing buy-in programs, Aged, Blind, Disabled Medicaid, and the set of states enacting the 2014 expansion. Evidence from the buy-in program also informs proposals to increase work among DI recipients. Rewarding work is shown to increase the employment of DI recipients, but there is no evidence of increased earnings.