Keeping Medicaid limits income

Restriction on earnings 'forces you to be poor'

David Montero, Rocky Mountain News

Published September 15, 2007 at midnight

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Carrie Ann Lucas graduated ninth in her class at the University of Denver law school and passed the bar exam on her first try.

Typically, that would equal a job in a high-powered law firm with high-profile clients and high-end salaries in the six-figure range. Despite the legal pedigree, Lucas makes less than $40,000 a year - less than what some area paralegals get. And she has three children.

The reason Lucas makes so little?

She has a neuromuscular disease that has her in a wheelchair and she requires long-term, in-home care - the kind of medical needs only Medicaid will cover.

To keep Medicaid, however, the 35-year-old can earn no more than $22,000 a year - with waivers built in for the amount she spends on medical care annually. That is what allows her salary to be higher. But if she were to exceed her earnings cap, she would lose all the medical benefits that essentially keep her alive.

"The system is set up that way," Lucas said. "It forces you to be poor."

Now there is a massive movement to change the system in the way every legal resident of Colorado would get health care. This year, the Blue Ribbon Commission for Health Care Reform began tackling ways to cover the more than 780,000 uninsured state residents.

In the course of the reform, four plans have emerged and a fifth is being debated. The first draft of that fifth plan is due Sept. 24.

There is hope in the disabled community that, if reform comes, it will tackle one of the depressing realities Lucas and others has discovered, and that, in the future, they won't have to turn down raises, promotions or job opportunities just to keep their Medicaid benefits.

"I would love to purchase my own insurance," Lucas said. "But no private carrier would insure me."

Well-known equation

The math for earnings potential is calculus that many disabled can recite by heart. It starts with qualification numbers.

The most basic way to qualify for state Medicaid as a disabled person is via the Supplemental Security Income standard - $632 per month, or, if you qualify for home- and community-based services, three times that amount. If met, you can access Medicaid. If not, you're out of luck.

Irvin Davis, an accountant in Greeley, thinks it's a ridiculous equation.

He became a quadriplegic when he was 22. At the time, he worked highway construction, but after an accident, he had to find a job he could do confined to a wheelchair - and get the home health care he needed.

Davis enrolled at the University of Northern Colorado and got his degree in accounting. But because of the earning limitations, the 47-year-old couldn't start his own business and had to find a place that wouldn't pay him above his earning ceiling.

"That's what is frustrating," Davis said. "You get a degree, put four or five years in school, and then reality hits you that you've wasted your time."

He landed a job with Connections for Independent Living as a bookkeeper. His boss, Beth Danielson, quickly learned about the frustration of employing bright, disabled people.

She tried to give him raises, but he had to turn them down. She tried to give him promotions, and he couldn't accept them. Because he is Home and Community Based Services eligible, he's stuck at making about $1,900 a month.

Danielson said the system hamstrings her as well - not allowing her to reward employees who do a good job.

"Our society and my business would all be a lot better off if he can earn to his maximum potential," Danielson said. "People should be allowed to work to whatever degree they can."

A single segment

The blue-ribbon commission is tackling many aspects of health-care reform, and the disabled are just one slice in the overall discussion.

But Mark Simon, a blue-ribbon commissioner, said one positive step for the disabled community would be changing the qualification standard for Medicaid from SSI to the federal poverty level - which currently stands at $10,210 for an individual.

The plans, however, vary on how they address that issue.

The single payer would allow individuals to earn to their ability with benefits under the new program similar to Medicaid.

A plan written by health-care providers does change qualification from SSI to the federal poverty level and allows working persons with disabilities to buy into the Medicaid program on a sliding-fee scale if they make up to 300 percent of the federal poverty level

The Service Employees International Union plan puts a policy into place to prevent premature nursing-home placement by allowing likely Medicaid eligibles to begin using services before final Medicaid eligibility is determined.

The plan written by insurance underwriters allows that disabled working adults making under 250 percent of the federal poverty level could qualify for benefits. The fifth proposal isn't complete.

Simon said data show it actually saves society money to allow the disabled to earn to their potential.

"The average person with a disability in a public-benefits program will cost taxpayers $1 million through their lifetime," Simon said. "Return them to work and in program savings and tax contributions and contributions to the economy, they represent an annual value of $65,000 per year."

Restrictions on assets

Whatever the reform looks like, however, there are other obstacles for current Medicaid qualifications - one of the biggest being a person's inability to save money.

The restriction on saving only allows a Medicaid recipient to have $2,000 per month in assets. That means you can't put money away for retirement.

It drives Kevin Williams crazy.

A colleague of Lucas - as well as a lawyer - at the Colorado Cross-Disability Coalition, Williams said he would love to earn enough, and eventually save enough, to retire at a house on the beach somewhere.

But under the current rules, he can't keep that money on hand. He can't save. And retirement doesn't even appear as an option.

"You know what my retirement plan is? Death," he said. "I'll just have to work until I die."

What's next

• Sept. 24: The Blue Ribbon Commission on Health Care Reform finalizes the first draft of its fifth proposal.

monterod@RockyMountainNews.com or 303-954-5236

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