Advocacy and Public Policy

Freedom to Work Medicaid

Since passage of the Freedom to Work for Individuals with Disabilities Act of 2003, eligible people with disabilities in Michigan have been able to work and increase their income beyond the usual cut-off amount, and keep Medicaid coverage. The eligibility criteria for Freedom to Work Medicaid (FTW) are:

The individual is determined to be disabled under the Federal Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) programs, or would be found to be disabled if not for excess earnings above Federal guidelines
The individual is between the ages of 16 and 64
The individual’s unearned income (such as stock dividends or trust fund income) is not more than the Federal poverty guideline ($9,800 annually for 2006)
The individual already gets Medicaid, or is eligible for it, but not through a “spend down”
The individual is employed

The applicant's spouse's income and assets will not be considered in determining the applicant's eligibility for FTW. Once an individual is determined eligible for this program by a Department of Human Services (DHS) Medicaid worker, he or she gets Medicaid coverage free until his or her countable net earned income exceeds 250% of poverty for one person. Once earnings are more than that amount, a recipient may stay on Medicaid by paying a monthly premium to the state toward the cost of Medicaid coverage. With allowable exclusions, this means the recipient may make approximately $4,000 per month in 2006 before he or she needs to pay premiums.

The monthly premium starts at $50 ($600 per year) and increases on an income-based sliding scale. The premium will be adjusted annually based on changes in the federal poverty level and the average cost per person to the state for Medicaid. There is no limit on earned income for people in the program.

Monthly premiums are sent to the Department of Community Health. Premiums not received by the due date each month will initiate a grace period during which the beneficiary is notified of case closure. There will be a "lock out" period of ineligibility if closure results from failure to pay premiums.

An individual in the program may also:

Save up to $75,000 (a house and vehicle don't count toward the $75,000)
Accumulate savings in retirement and individual retirement accounts without limits
Have breaks in employment up to 24 months due to medical necessity or involuntary layoff

Once a person is on Medicaid (without a spend down) Freedom to Work is triggered either by earning more than the applicable Medicaid income limit or by saving more than $2,000. This should happen automatically without the need to “sign up”.

Once you earn above a certain amount, your SSI check will stop. Earning more than the SSI amount has led to problems for some FTW enrollees who have mistakenly been cut off of Medicaid. Because they now make too much money, their DHS worker assumed they no longer have a disability despite the fact that there has been no change in their medical condition. This is NOT the intent of the law. The MiJob Coalition, which helped write and obtain passage of the law, is working to remedy this error. If you have mistakenly been put on spend down Medicaid when you should be enrolled in FTW, or if you have been receiving Medicaid coverage through FTW and have been cut off, contact Michigan Protection and Advocacy at (800) 288-5923.

If you think you qualify for the Freedom to Work program, speak with a staff person at your county Department of Human Services. When speaking with or writing to a DHS worker, be sure to refer to PEM 174, a category in the Program Eligibility Manual. If you are denied FTW, you have the right to appeal the decision to an Administrative Law Judge.

Updated March 2007

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