Medicaid income and asset caps leave some working disabled people choosing between jobs and benefits
Some working people with disabilities say Medicaid "buy-in" program rules — including income and asset caps — force them to choose between advancing their careers and keeping their health coverage. Congress authorized states to create Medicaid buy-in programs in the 1990s to encourage people with disabilities to work; 47 states now offer them. Federal law is adding new pressure on these programs as states prepare to implement work requirements and absorb estimated cuts of more than $900 billion over 10 years under the One Big Beautiful Bill Act.
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Erica Carter, 41, a paralyzed finance manager for the Omaha Nation public school district in Nebraska, received a letter in November 2023 from Iowa's Department of Health and Human Services saying her $110,000 salary exceeded Iowa's income limit for its Medicaid buy-in program — then $36,450 for a single person — and that she could lose her benefits within two weeks. Carter chose to keep her job and leave the program, a decision she described as unavoidable but financially painful.
Without Medicaid, Carter said she now spends approximately $35,000 a year out of pocket on expenses her previous plan covered, including a nurse who visits three times a week, car modifications, and wheelchair repairs. "I want to pay my own way," she said. "I just want an option. I have no options right now." Over the following year, she took on extra jobs and withdrew from retirement savings to cover the costs.
Iowa's current income cap, set at 250% of the federal poverty level, stands at $39,900 for an individual. An asset cap of $12,000 for individuals and $24,000 for couples also applies, excluding primary homes and vehicles. Carlyn Crowe of the Iowa Developmental Disabilities Council said these limits prevent disabled Iowans from buying homes, building savings, or working full-time without penalty. Disability rights advocates have pushed Iowa legislators to remove the caps entirely, proposing instead a model in which participants pay 6% of their income — an approach modeled after a 2024 Tennessee law that created a buy-in program with no income or asset limits.