Medicaid Employment Initiatives

The Center for Medicare & Medicaid Services (CMS) recognizes that employment is a fundamental part of life for people with and without disabilities. Employment provides a sense of purpose, how we contribute to our community and are associated with positive physical and mental health benefits. Meaningful work is part of building a healthy lifestyle as a contributing member to society and essential to individual's economic self-sufficiency, self-esteem and well-being. All individuals, regardless of disability and age, can work and has access to pre-vocational services, education and training opportunities that build on strengths and interests. Individually tailored and preference based career planning, job development, job training, and job support recognizes each person's employability and potential contributions to the labor market.

The Medicaid Buy-In program is an optional State Medicaid benefit group for workers with disabilities who have earnings in excess of traditional Medicaid rules. Individuals with disabilities who would be ineligible for Medicaid because of earnings can work and access the services and supports they need. Ideally, it means workers with disabilities do not need to choose between healthcare and work.

CMS partners with Department of Labor (DOL)/Office of Disability Policy (ODEP) to provide resources and outreach for Leveraging State Employment First (E1st) Policy Alignment Efforts to Support Employment Outcomes of Individuals benefiting from Money Follows the Person (MFP) grant program.

Ticket to Work

CMS supports the competitive employment of workers with and without disabilities by providing Medicaid services to eligible individuals that enable workers with disabilities to gain and maintain employment. Optional Medicaid eligibility groups, such as the Medicaid Buy-In, allow workers with disabilities to have higher earnings and maintain their Medicaid coverage as more than 150,000 individuals in 42 States were covered under this new eligibility group.

Medicaid Buy-In. Section 201 of Ticket to Work and Work Incentives Improvement Act (TWWIIA) governs the provision of health care services to workers with severe disabilities by establishing a Medicaid state plan buy-in optional eligibility groups. In addition, the Balanced Budget Act of 1997 (BBA) created a separate optional Medicaid eligibility group for working individuals with disabilities. Currently, 46 States provide Medicaid eligibility through the TWWIIAA Buy-in, the BBA Buy-in, or a Section 1115 waiver. Over the past decade more than 400,000 individuals with disabilities have taken part in the Medicaid Buy-In program. Total earnings among all Medicaid Buy-In participants in 2011 were about $1.15 billion.

Today the Medicaid Buy-In program continues to provide workers with disabilities an opportunity to improve their economic well-being and achieve a better life. Inspired through the independent living movement, the Medicaid Buy-In program is an optional State Medicaid benefit group for workers with disabilities who have earnings in excess of traditional Medicaid rules. So people with disabilities who would be ineligible for Medicaid because of earnings can work and access the services and supports they need. Ideally, it means workers with disabilities do not need to choose between healthcare and work.

Research has shown that the program is not just good for beneficiaries and employers; it is also good policy for Medicaid. An analysis of expenditures and services used showed Medicaid Buy-in participants incurred lower annual Medicaid costs than other adult disabled Medicaid enrollees. In a University of Kansas study, findings indicated Medicaid Buy-In participants had a better quality of life while Medicaid expenditures were less.

Employment & HCBS

States can provide specific employment supports to individuals through Home and Community Based Services (HCBS) under Section 1915(c) waivers or Section 1915(i) State-plan services1915(c) waivers provide long-term care for individuals who would receive institutional care without a waiver. 1915(i) services provide HCBS to individuals who meet State-defined criteria.

Services available through HCBS are more comprehensive than those available in standard Medicaid benefits packages. HCBS services provide States with the opportunity to offer services that specifically support an employment goal or outcome, through what are called habilitation services. Habilitation services are covered as part of HCBS in both 1915(c) and 1915(i) benefits. Supported employment services may be furnished as an expanded habilitation service under the provisions of §1915(c)(5)(C) of the Act. It may be offered to any target group for whom the provision of these services would be beneficial in helping them to realize their goals of obtaining and maintaining integrated community employment.

CMS defines habilitation as "services designed to assist participants in acquiring, retaining and improving the self-help, socialization and adaptive skills necessary to reside successfully in home and community-based settings." Habilitation services are flexible in nature, and can be specifically designed to fund services and supports that assist an individual to obtain or maintain employment. It is important, however, to note that employment services available to an individual through other programs, such as Vocational Rehabilitation ( cannot be provided through Medicaid.

In the Self-directed service delivery models can also be used to provide employment supports. In a self-directed model, individuals may hire their own job coaches and employment support staff, rather than relying exclusively on agency based staffing models. This may be particularly useful as individuals seek to expand the pool of people who can provide employment supports and services to include friends, family members, co-workers and other community members that do not view themselves as part of the traditional Medicaid agency based employment supports workforce.

Employment Services

Below are a variety of services that are covered through Medicaid that support employment related needs.

  • Personal Assistance Services. Personal Assistance services are a range of services, provided by one or more persons, designed to assist an individual with a disability to perform daily activities on and off the job that the individual would typically perform if the individual did not have a disability. Such services shall be designed to increase the individual's control in life and the individual's ability to perform activities on and off the job. [Ticket to Work and Work Incentives Improvement Act of 1999, Pub. L. No. 106-170, § 203 (b)(2)(B)(ii)].
  • Supported Employment. Supported employment is assistance in obtaining and keeping competitive employment in an integrated setting. CMS sponsored a Promising Practices in Home and Community Based Services Issue Brief on Supported Employment.
  • Peer Support Services. Peer support providers are a distinct provider type for the delivery of counseling and other support services to Medicaid eligible adults with mental illnesses and/or substance use disorders. CMS recognizes that the experiences of peer support providers, as consumers of behavioral health care services, can be an important component in a State's delivery of effective treatment. CMS issued guidance about peer support services in the State Medicaid Directors Letter #07-011, dated August 15, 2007
  • Other Medicaid Services. Medicaid also provides other medical services that are essential to treating a condition or illness and enabling individuals to work in the community. These can include clinic services, rehabilitation, pharmaceutical, and other medical benefits that some individuals require in order to obtain or maintain employment