Medicaid expenditures for the disabled under a work incentive program.

Congress enacted Section 1619 of the Social Security Act to enable the disabled receiving Supplemental Security Income (SSI) to obtain jobs and still retain Medicaid health benefits. Congress intended this work incentive to remove the fear of the severely disabled that by obtaining employment they would lose Medicaid benefits. Based on data from 11 States, our analysis found that Medicaid expenditures for Section 1619 enrollees were relatively small and only one-half the average Medicaid expenditure for the disabled. Retaining Medicaid appears to provide a significant work incentive because Medicaid expenditures represent 13 percent of Section 1619 enrollees' earnings.