New Freedom Initiative -- Medicaid, Employment, and Affordable Housing for Disabled Persons

As I continue to learn about the economics of health policy and the politics of entitlement programs, I contemplate the intersection and disconnect of various safety-net and hand-up programs.

On February 1, 2001, President Bush announced the New Freedom Initiative - a comprehensive program to promote the full participation of people with disabilities in all areas of society... On July 27, 2007, the White House released the 2007 Progress Report on the New Freedom Initiative which is President George W. Bush's plan to tear down barriers to full integration into American life that remain for many of the 54 million Americans with disabilities.


As part of the New Freedom Initiative, DisabilityInfo.gov, a federal one-stop online resource and collaborative effort among twenty-two federal agencies, connects people with disabilities to the information and resources they need to actively participate in the workforce and in their communities. While perusing the website, I found the legislative foundation of Virginia's Medicaid Works program I discussed previously.

Enacted on December 17, 1999, the Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA) includes several incentives and opportunities for successful work experiences for people who receive Social Security disability benefits who want to go to work. This landmark legislation modernizes the employment services system for people with disabilities and makes it possible for millions of Americans with disabilities to no longer have to choose between taking a job and having health care.

The Virginia Work Incentive (WIN) program, Medicaid Works, is a Medicaid Buy-In program available to disabled enrollees, under 65, who are employed or wish to be employed. To qualify for Medicaid Coverage, an individual's income must be below 80% Federal Poverty Level (FPL) which equates to $8168 for an individual in 2007 and $10,952 for a couple. Initial eligibility also requires the applicant to have resources limited to $2000 for individual or $3000 for couple.

Continued participation in Medicaid Works requires that all earned income be deposited into a WIN account, maintaining $2000 minimum balance. Any amounts deposited into IRS-approved accounts do not count against resource limits and will not affect continued eligibility. Examples of IRS-approved accounts include IRA, MSA, MRA, education accounts or independence accounts.

According to the Medicaid Works Handbook, the Virginia program allows the disabled Medicaid recipient to earn income up to $40,905 and to accumulate resources up to $27,577 which far exceed general Medicaid limits. Following are the Principles for Development of the Medicaid Buy-In Program in Virginia. Consider carefully the bold statements [my emphasis].

1. To remove barriers to employment in order to allow Virginians with disabilities to maximize their potential for personal growth and independence.

• Persons with disabilities should have the option and opportunity to work and boost their self-sufficiency. Fear of losing health insurance coverage has been identified as a barrier to employment for individuals with disabilities. No one should have to choose between going to work and having health insurance coverage, nor should taking a job put you at greater financial risk than remaining unemployed.

2. To provide opportunities for persons with disabilities to increase their financial security and independence by accumulating assets.

• Enable individuals with disabilities to increase their financial independence through accumulated assets that make it possible for them to respond to short term emergencies, to save for retirement or for their families’ needs. It is important for all Virginians to have the opportunity to participate in the American dream. People with disabilities who go to work should have the opportunity to save and plan for the future just like everyone else.

3. To promote a coordinated and integrated program/process that positively impacts the workforce and the community, and assures the consumer that no harm will result from participation in the program.

• Keep the program simple and easy to understand. Enable a smooth transition both to and from the program, including safeguards to ensure participants who acquire resources/savings (e.g., increased resource limits) will not adversely impact their eligibility for Medicaid in the event their employment ends. The Buy-In will encourage people with disabilities to enter the competitive workforce, thus, expanding the labor pool for employers with willing, capable individuals who will work hard, pay taxes, and be further engaged in community life.

4. To encourage and support Virginians with disabilities who engage in gainful employment in a competitive environment.

• Provide individuals with the opportunity to retain vitally important health care coverage so that they may confidently participate in the workforce without fear of financial instability due to personal health care needs. However, the purpose of this program must include the expectation that buy-in participants are engaging in meaningful work with earnings that will help in meeting their financial needs as well. Virginia's Medicaid Buy-in should promote the idea that individuals with disabilities can compete in the workplace and earn sufficiently to gain a measure of true independence.

5. To create a fiscally responsible system that benefits Virginians with disabilities.

• It is important to ensure that Virginia’s MBI program is economically feasible. The Advisory Committee, and all partners in the development of our State’s program, should be thorough and examine all program options carefully, to ensure that Virginia does not experience unintended consequence (i.e., enrollment/costs that far exceed projections, or a program so restrictive that few people take advantage of it). Assist in developing a system that supports people in going to work, rather than one that merely expands Medicaid. The MBI Program should be a true “buy-in” for participants, wherein individuals will share in the cost of health care coverage, at a reasonable level that still makes it possible for them to provide for other needs.

I especially enjoy the ideology behind these statements although I do not fit the criteria to participate in Medicaid Works:

• It is important for all Virginians to have the opportunity to participate in the American dream.
• No one should have to choose between going to work and having health insurance coverage, nor should taking a job put you at greater financial risk than remaining unemployed.
• The MBI Program should be a true “buy-in” for participants, wherein individuals will share in the cost of health care coverage, at a reasonable level that still makes it possible for them to provide for other needs.

Although it is not the same thing, Bob Laszewski discusses a Medicare Buy-In program over at Health Care Policy and Marketplace Review.

For individuals and families with low- to moderate-income, home ownership is often the part of the American dream which remains a dream. After being denied the additional assistance I needed in 2006 for prescription medication, I looked into local programs designed to assist low- to moderate-income individuals in achieving home ownership. What I discovered was that I didn't earn enough income to qualify.

The City of Falls Church Housing and Human Services (HHS) Division establishes income limits for the Affordable Dwelling Unit (ADU) Program based on the U.S. Department of Housing and Urban Development (HUD) Area Median Income for the Northern Virginia/DC Metro Area. In 2007, the Median Family Income (MFI) in the Northern Virginia MSA is $94,500 for family of 4. $60,000 qualifies as low-income for a family of 4 and $42,000 for an individual according. HUD defines very low-income as 50% Median Income which becomes $33,100 for an individual and $47,250 for family of 4. The lowest range for HUD is 30% Median Income which is $19,850 for an individual and $28,350 for family of 4.

As of April 23, 2007, the City of Falls Church Affordable Housing Income Limits are $33,075 - $52,920 for an individual, $37,800 - $60,480 for family of 2, and $47,250 - $75,600 for family of 4. These numbers correlate to minimum income at 50% Median Income and maximum income at 80% Median Income. Current available Affordable Dwelling Units in Falls Church include seven 1-bedroom units at $98,229 each and eight 2-bedroom units at $136,168 each in the Pearson Square complex located less than 1/2 mile from where I live. Also available are three 1-bedroom units at $113,876 each and five 2-bedroom units at $146,412 each in the Spectrum at Falls Church complex only 1 mile away.

Now here's the irony. If I were declared disabled by Social Security Administration, I could take the risk of allowing my income to fall to $8168 while depleting personal savings to $2000 to qualify for participation in the Medicaid Works program. Then I could earn up to $40,905 (400% FPL or 61.7% MI), have Medicaid coverage, save for retirement and maintain personal savings of $27,577, and qualify to purchase an affordable housing unit within the community I live and work.

However, that is a risk I am not brave enough to take.