Expenditures and use of wraparound health insurance for employed people with disabilities

The Affordable Care Act (ACA) provides health insurance to many working-age adults with disabilities, but we do not expect the new coverage or existing insurance options to fully meet their employment-related health care needs. Wraparound services have the potential to foster employment among people with disabilities.

We use Massachusetts, which implemented health care reform in 2006, as a case study to estimate the wraparound health care expenditures and use for workers with disabilities.

We identified a group of employed, working-age people with disabilities whose primary health insurance is Medicare or private insurance and who use the Medicaid Buy-In Program for wraparound coverage. We analyzed claims to estimate expenditures and use.

Wraparound expenditures averaged $427 per member per month. Community-based services for both mental and non-mental health, which are generally not covered by Medicare or private insurance, accounted for 63% of all expenditures. The number who used community-based services was low, but the expenditures were high. The majority of the remaining expenditures were for services usually covered by primary insurance including: inpatient and outpatient, pharmacy and professional services. Expenditures were higher for people with Medicare compared to private insurance.

This case study suggests that, from a total program cost perspective, wraparound demand is greatest for community-based services. From a member utilization perspective, the demand is greatest for coverage that alleviates out-of-pocket costs for services provided by primary insurance. Additional analysis is needed to further assess the design options for wraparound programs and their feasibility.