5 Key Facts about Medicaid Coverage for People with Disabilities
Options under consideration in Congress to reduce Medicaid spending by up to $2.3 trillion, nearly one-third over ten years, could have major implications for people with disabilities. Medicaid is the primary program providing comprehensive health and long-term care coverage to one in three with disabilities, including 2.3 million children, 8.8 million working-age adults, and 4.4 million adults ages 65 and older. Although some people with disabilities qualify for Medicaid because they receive Supplemental Security Income, most are eligible for Medicaid through other pathways, including the Affordable Care Act (ACA) expansion group.
Policy changes under consideration include imposing a per capita cap on federal Medicaid spending, reducing the federal government’s share of costs for the ACA expansion group, and imposing Medicaid work requirements, among other changes. Such policy changes would fundamentally alter how Medicaid financing works and federal spending reductions of this magnitude would put states at significant financial risk, forcing them to make tough choices about reducing the number of people covered, covering fewer benefits, or reducing payment rates for physicians, hospitals, nursing homes, and other providers. It is unknown how much Medicaid pays for people with disabilities because health care claims data do not include information about disabilities unless they are also a diagnosis code associated with the medical care being provided. However, Medicaid enrollees who are eligible because of disability or being over age 64 account for over half of Medicaid spending but less than a quarter of enrollees on account of their higher costs. That group includes most non-elderly adults with disabilities who qualify for Medicaid through regular eligibility pathways, such as the ACA expansion.
Because they have high levels of health care spending, people with disabilities may be particularly vulnerable if federal spending is capped. Loss of Medicaid coverage or benefits poses unique challenges for seniors and people with disabilities, many of whom live on fixed incomes, face barriers to employment and accessing private health coverage, have high health care needs and spending, and rely on Medicaid for coverage of long-term care and other services not available in other health coverage.
1. Medicaid is a major source of health coverage for people with disabilities.
More than 1 in 3 people with disabilities (15 million) have Medicaid (35%). In comparison, only 19% of people without disabilities have Medicaid (Figure 1). Disability is defined as having any of the following difficulties: hearing, vision, cognitive, ambulatory, self-care, or independent living. The difference in coverage rates stems from lower rates of employment and employer-based coverage among working age adults with disabilities. Among working age adults with disabilities, almost half of people with disabilities do not work at all and only one third work full time (defined as 35 or more hours per week). In comparison, over 64% of adults without a disability work full time and only 16% do not work at all. Lower rates of employment result in lower rates of employment-based coverage among working age adults with disabilities: Only 33% have insurance through an employer compared with 64% among working age adults without disabilities.
2. More than one in five Medicaid enrollees have a disability, many of whom are non-elderly adults.
Over 1 in 5 Medicaid enrollees have a disability, with the rate of disability among Medicaid enrollees rising steeply with age (Figure 2, Tab 1). Only 8% of children have a disability compared with 22% of adults ages 19 to 49 and 43% of adults ages 50 to 64. Over half of Medicaid enrollees ages 65 and older have a disability. Because disability incidence rises with age, Medicaid enrollees with disabilities tend to be older than those without (Figure 2, Tab 2). Among Medicaid enrollees with a disability, over 50% are ages 50 and older compared with less than 20% of Medicaid enrollees without disabilities.
3. Among Medicaid enrollees with disabilities, more than half have multiple difficulties.
Nearly 60% of Medicaid enrollees with disabilities have two or more difficulties and 16% have four or more difficulties (Figure 3, Tab 1). Among the over 15 million Medicaid enrollees with disabilities, 53% report difficulties with cognition, which is defined as difficulty concentrating, remembering, or making decisions; 48% report difficulties with ambulation (defined as difficulty with walking or climbing stairs); 44% report difficulties living independently (defined as difficulty doing errands alone such as visiting a doctor’s office or shopping); and 24% report difficulties with self-care (defined as difficult dressing or bathing). Fewer than 1 in 5 enrollees report difficulties with hearing or vision (Figure 3, Tab 2).
4. Two thirds of Medicaid enrollees with disabilities do not receive Supplemental Security Income (SSI).
Although federal statutes generally require states to enroll people who receive SSI in Medicaid, only one third of Medicaid enrollees with disabilities receive SSI income (Figure 5). That rate varies from a low of 18% in North Dakota to a high of 44% in Texas (Appendix Table 1). SSI is a disability program that provides monthly income to people who are unable to work on account of a disability and who have income and financial resources below federal limits. Receipt of SSI increases with age: Only 15% of children ages 15-19 receive SSI but close to 40% of adults ages 50 and older do. Medicaid enrollees ages 19-64 who do not receive SSI are eligible for Medicaid through other eligibility pathways, and many adults could be subject to Medicaid work and reporting requirement policies (Appendix Table 2). A smaller number of Medicaid enrollees with disabilities are eligible for Medicaid through pathways that relate to their disability or need for long-term care. Those pathways have more complex eligibility requirements than coverage for children and non-elderly adults. Most Medicaid enrollees with disabilities qualify for Medicaid under regular adult pathways, including the ACA expansion group.
5. Medicaid enrollees with disabilities are likely to comprise most of the people who use Medicaid long-term care.
Nearly half of Medicaid enrollees with a disability (47%) report having a difficult with self-care or independent living, disabilities that frequently require long-term care. Medicaid is the primary payer of long-term care because it is generally not covered by Medicare or private health insurance. KFF estimates that nearly 6 million people use Medicaid long-term care and spending for those people is much higher than spending for other enrollees, with the costs of enrollees who use institutional care nearing $50,000 each year. In comparison, average Medicaid spending for enrollees who do not use long-term care is under $5,000. Because of the higher spending, enrollees who use long-term care comprise 6% of Medicaid enrollment but 34% of Medicaid spending (Figure 5).