CHAPTER 9
Adequacy of Incentives

In passing the Ticket Act, Congress acknowledged that the TTW program might not be equally accessible to all disability beneficiaries. Of particular concern was the possibility that the performance-based payment system might lead providers to serve mainly beneficiaries who are most ready to return to work and to largely ignore beneficiaries requiring more intensive or long-term support to become successfully employed. Such client selection practices could make the program efficient in the sense that savings generated by beneficiaries who go off the rolls would offset payments to ENs. On the other hand, selective practices could also make the program inequitable in the sense that some beneficiaries who want to work may be unable to obtain the TTW-financed services that would enable them to succeed.

To address the issue of equity in the program, Congress mandated an adequacy of incentives (AOI) study, the objective of which was to determine how TTW could be used to increase employment among beneficiaries with significant support needs.1 According to the Ticket Act, beneficiaries who could have trouble obtaining services in the performance-based TTW environment include individuals who:

  • Group 1: Beneficiaries who require ongoing support and services to work

  • Group 2: Beneficiaries who require high-cost accommodations to work

  • Group 3: Beneficiaries who work, but earn only a subminimum wage

  • Group 4: Beneficiaries who work and receive partial cash benefits


This chapter updates the findings presented in the initial evaluation report for groups 1 and 2 and provides a new analysis of information about groups 3 and 4. All of the findings are based on SSA administrative data that enable us to identify groups that overlap substantially with those defined in the legislation but that are, nevertheless, only approximations. Our planned analysis of data from the National Beneficiary Survey in the next evaluation report will enable us to conduct a more accurate analysis.

At this stage of the evaluation, our analysis of the AOI groups suggests that they may, in fact, assign their Tickets at higher rates than other beneficiaries. However, this encouraging finding can be misleading for several reasons. First, in order to identify groups 1 and 2 using only administrative data, we had to use disabling condition to predict the need for ongoing support services or high-cost accommodations. It would have been far more accurate to identify the groups on the basis of their functioning, but such data will not be available until the full survey database becomes available in the next report. Thus, our current analysis probably includes in groups 1 and 2 many beneficiaries who function sufficiently well that they do not need supports or accommodations and, as a result, probably overstates the extent to which the group described in the legislation actually assigns their Tickets. Second, assigning a Ticket is only a first step toward employment and economic self-sufficiency. We will have to wait until we see the data on employment outcomes and program impacts to know whether the higher rates of Ticket assignment translate into receipt of all required services and employment success.

Finally, it is important to note that our analysis of the financial incentives TTW gives ENs (Chapter VIII) suggests that the program offers little financial incentive for most ENs to serve any beneficiaries. In addition, we have collected considerable anecdotal evidence indicating that many ENs are using screening criteria that exclude beneficiaries who are interested in receiving partial benefits while they work. Thus, those beneficiaries who will need intensive services to become employed or who appear to have little chance of leaving the rolls are not likely to be enrolled by a TTW provider unless that provider has other sources of funding and a mission to serve such individuals.

 

 

A. INDIVIDUALS WHO NEED ONGOING SUPPORT AND SERVICES OR HIGH-COST ACCOMMODATIONS (AOI GROUPS 1 AND 2)

In analyzing these two AOI groups, we continue to face the same limitations described in the initial evaluation report: the administrative data available at this time are inadequate for identifying these groups accurately. In particular, we are limited to using information about disabling conditions to make inferences about whether a person will require ongoing supports or high-cost accommodations. While condition and functioning are likely to be correlated, they are clearly different concepts and using only information on conditions will lead us to inappropriately include beneficiaries in groups 1 and 2 who could work without special supports or accommodations. Nevertheless, we report tabulations based on our conditions-based definition to give an early indication of the participation patterns in TTW. The next evaluation report will have survey data that we can use to identify beneficiaries in these two groups more accurately.

For group 1, beneficiaries who require ongoing supports, our condition-based definition follows the plan set out by Stapleton and Livermore (2002) to include beneficiaries that have impairments that are likely to result in:

  • A frequent need for personal assistance or coaching (e.g., cognitive disabilities, autism, other developmental disabilities, traumatic brain injury, other severe cognitive disorders, quadriplegia)

  • A tendency to be able to work only episodically (e.g., psychiatric disorders)

  • Possible disruptions of a person’s work activity (e.g., uncontrolled seizure disorders)

  • Gradual reduction of an individual’s functional capacity over time so that long-term employment retention may be difficult (e.g., multiple sclerosis, degenerative arthritis)


For group 2, those that require high-cost accommodations to work, the condition-based definition includes beneficiaries with impairments that suggest that assistive technologies, workplace modifications, job coaching, personal assistance services, or interpreter or reader services might be necessary for successful employment. Thus, the definition includes impairments that result in the inability to use two or more limbs, severe neurological impairments (e.g., spinal cord injuries), deafness and severe auditory impairments, and blindness and severe vision impairments. As before, we have made the definitions of groups 1 and 2 mutually exclusive, even though there are undoubtedly some beneficiaries who may require both ongoing supports and high-cost accommodations in order to succeed at work. Appendix C of the initial evaluation report details the relevant sections from SSA’s lists of impairments used to construct these definitions, along with the associated SSA impairment codes.

Applying these definitions to the updated datasets used in this report produces results that are essentially the same as those reported in the initial evaluation report.2 We find that taken together, AOI groups 1 and 2 account for more than half of all beneficiaries and that they assign their Tickets at a higher rate than other beneficiaries (Figures IX.1 and IX.2). Furthermore, we continue to find that the two groups of beneficiaries identified with the preliminary definitions differ from each other and from all other beneficiaries (Table IX.1). While the differences are generally small, beneficiaries we included in the group needing high cost accommodations (group 2) are more likely to be male and to be receiving only DI benefits than those in group 1 or in neither of these two AOI groups. Both of these two AOI groups were similar to other beneficiaries in terms of the very small percentage that have requested communications from SSA to be provided in any language other than English.

 

Click for Figure IX.1. Ticket-Eligible Beneficiaries in AOI Groups 1 and 2, March 2004 (Opens in new window)

 

Click for Figure IX.2. Distribution of Assigned Tickets for Beneficiaries Who Need Ongoing Support and Who Need High-Cost Accommodations, March 2004 (Opens in new window)

 

Table IX.2 provides additional information on the Ticket assignment rates of AOI groups 1 and 2. In all three phases, beneficiaries who need accommodations (group 2) were more than twice as likely as those who need ongoing support (group 1) to have assigned their Tickets, and nearly three times as likely as all other beneficiaries to have done so.

Among beneficiaries who have assigned their Tickets, those we have included in AOI groups 1 and 2 are more likely than other beneficiaries to have assigned their Ticket to an SVRA (Table IX.3). Correspondingly, members of these two AOI groups are also more likely than other beneficiaries to have assigned their Tickets under the traditional payment system.

 

Table IX.1. Characteristics of Beneficiaries Who Need Ongoing Support, High-Cost Accommodations, and Other Beneficiaries (Percent)

Characteristic
Eligible Beneficiaries
Needs Ongoing Support (AOI Group 1)
Need High-Cost Accommodations
(AOI Group 2)
All Others
Disability Program
DI Only
55
64
59
Concurrent
14
12
13
SSI Only
31
24
29
Sex
Female
52
43
48
Male
48
57
52
Age
18-24
7
8
3
25-29
5
5
3
30-34
7
7
5
35-39
9
9
8
40-44
12
11
12
45-49
14
13
14
50-54
15
15
17
55-59
17
17
21
60-64
13
14
17
Language Requested for SSA Communications
English
96
96
96
Spanish
4
3
3
Other
0
1
0
Number of Beneficiaries in the Analysis
3,345,395
367,665
3,156,916

Source: Ticket Research File data on beneficiaries eligible as of March 2004.
Note: These data are not directly comparable to a similar table in the initial evaluation report, as more precise data on beneficiary eligibility were available by March 2004.

 

Table IX.2. TTW Participation Rates for Beneficiaries Who Need Ongoing Support and Who Need High-Cost Accommodations (Percent)

Overall Ticket Assignment Rates
Eligible Beneficiaries
Needs Ongoing Support (AOI Group 1)
Need High-Cost Accommodations
(AOI Group 2)
All Others
Total
0.63
1.46
0.54
Phase 1 States
1.01
2.35
0.84
Phase 2 States
0.44
1.01
0.38
Phase 3 Statesa
0.31
0.80
0.27

Source: Ticket Research File data on beneficiaries eligible as of March 2004.
Note: These data are not directly comparable to a similar table in the Initial Evaluation Report, as more precise data on beneficiary eligibility were available by March 2004.
aNot all beneficiaries in Phase 3 states had received a Ticket by March 2004
.

 

Table IX.3. Ticket Assignments to Different Provider Types and Payment Systems for Beneficiaries Who Need Ongoing Support and Who Need High-Cost Accommodations (Percent)
 
Assigned Tickets
Needs Ongoing Support (AOI Group 1)
Need High-Cost Accommodations
(AOI Group 2)
All Others
Provider Type
SVRA
91
96
88
EN
9
4
12
Payment System
Tradtional payment system
85
91
83
Outcome-only
3
2
4
Milestone-outcome
12
8
13

Source: Ticket Research File data on beneficiaries eligible as of March 2004.

 

 

B. INDIVIDUALS WHO EARN A SUBMINIMUM WAGE OR WHO WORK AND RECEIVE PARTIAL CASH BENEFITS (AOI GROUPS 3 AND 4)

As with groups 1 and 2, beneficiaries in group 3, those who work at subminimum wage, cannot be identified accurately in the SSA administrative data used for this report. We can, however, identify beneficiaries who work at very low levels and who may therefore be seen by ENs as having a low attachment to the labor force and a correspondingly low chance of leaving the rolls and generating outcome payments. We can identify beneficiaries in group 4 more accurately because the administrative data for SSI beneficiaries clearly indicate those who receive partial benefits because of earnings. We find that both of these groups tend to assign their Tickets at higher rates than other beneficiaries. In essence, it seems that working, even at very low levels, is associated with Ticket assignment, or stated another way, not working appears to be associated with not assigning a Ticket.

1. Individuals with Very Low Earnings

The Ticket Act identified beneficiaries who work at subminimum wages as a group that might have a hard time assigning their Tickets. This appears to reflect a sense that ENs would view such beneficiaries as being unlikely to move into the regular labor market and earn enough to leave the rolls and generate TTW payments. Beneficiaries with subminimum wages are likely to be working in sheltered employment and a high proportion of them are likely to have cognitive disabilities. The administrative data available at this point in the evaluation cannot identify beneficiaries who work at subminimum wages, but those data can be used to identify beneficiaries with very low earnings. While most subminimum-wage individuals will be among our group with very low earnings, some of the very low earners will not pose the same challenge to ENs as those in sheltered employment, especially those with cognitive disabilities. Still, analyzing the experiences of very low wage earners is the best we can do at this point to roughly approximate the experiences of subminimum wage earners.

Specifically, we use data from SSA’s Master Earnings Record, which includes annual earnings information for all workers who pay FICA taxes. These data let us identify beneficiaries with very low earnings in the year prior to getting their Ticket among those beneficiaries who were mailed Tickets by August 2003.3 For this group, we selected beneficiaries with earnings in the bottom quartile of all beneficiaries who had any annual earnings at all in the year before they received Tickets (2001 or 2002).4 Among beneficiaries who received Tickets in 2002, only 24 percent had any earnings in the previous year, and the bottom quartile of this subset earned just $995 or less (as shown by the estimates for 2001 in Figure IX.3). Among beneficiaries mailed Tickets by August 2003, only 19 percent had any prior year earnings, and the bottom quartile of this subset included those who earned $727.50 or less per year. Many among the very low earners in these bottom quartiles probably earn a subminimum wage, but some may have worked for brief periods at higher wages. Nevertheless, all exhibit a weak attachment to the competitive labor market and would be seen by many ENs as difficult to serve.

 

Click for Figure IX.3. Earnings of Beneficiaries with Any Earnings in the Year Prior to Ticket Eligibility (Opens in new window)

 

Table IX.4 compares selected demographic characteristics of individuals in the low annual earnings group with those of beneficiaries who had higher earnings and with those who had no earnings in the year before they received a Ticket.5 None of the differences are dramatic. Beneficiaries with low annual earnings are slightly less likely than are beneficiaries with no earnings to receive only DI benefits, and they are much less likely than beneficiaries with higher annual earnings to receive only DI benefits. Furthermore, beneficiaries with low annual earnings are, on average, somewhat younger than both other beneficiaries who earn more and those who had no earnings.

Beneficiaries with earnings are much more likely than those without earnings in the prior year to assign their Tickets (Table IX.5). For both those with low earnings and those with higher earnings, assignment rates in all phases are approximately three times as high as for those without earnings. The presence or absence of earnings in the previous year does not appear to make a substantial difference in whether beneficiaries assign their Tickets to an EN or SVRA (Table IX.6). Overall, it appears that having low earnings in the year prior to receiving a Ticket does not seem to be a barrier to Ticket assignment.

2. Individuals Who Work and Receive Partial Cash Benefits

In contrast to the other AOI groups, we can use administrative data to identify SSI and concurrent beneficiaries who work and receive partial benefits (AOI group 4). We did so by including all beneficiaries who received SSI benefits in the month they were mailed their Tickets and who also had positive countable earnings—that is, earnings that exceeded any disregard or exemption for which they were eligible—in that month or in either of the two months prior to that. We focused on beneficiaries who were eligible for SSI benefits in August 2003 or earlier and who were mailed their Tickets by the end of October 2003 and were still eligible for TTW in March 2004. When considering our findings, readers should bear in mind that, by definition, AOI group 4 contains no DI-only beneficiaries.

 

Table IX.4 Characteristics of Beneficiaries by Annual Earnings Level (Percent)

Characteristic
Eligible Beneficiaries
Low Annual Earnings
Others with Earningsa
Others without Earningsa
Disability Program
DI Only
52
70
55
Concurrent
17
15
13
SSI Only
30
15
32
Sex
Female
46
46
50
Male
54
54
50
Age
18-24
13
7
4
25-29
8
7
4
30-34
9
8
5
35-39
11
10
8
40-44
12
13
12
45-49
12
13
14
50-54
12
14
17
55-59
13
17
20
60-64
9
11
15
Language Requested for SSA Communications
English
98
98
94
Spanish
2
2
6
Other
0
0
1
Number of Beneficiaries in the Analysis
319,008
856,594
4,504,979

Source: Ticket Research File data through the end of March 2004 for beneficiaries eligible in March 2003 who had entered DI or SSI in or before August 2003 who had also been mailed a Ticket by the end of 2003, and SSA Summary Earnings Record.
aThe two “other” categories include all beneficiaries not in the low earnings group, including those who may fall into AOI groups 1, 2, or 4.

 

Compared with other beneficiaries, those in AOI group 4 beneficiaries are, on average, more likely than others to be male and younger; they are also more likely to request SSA communications in English (Table IX.7).

 

Table IX.5. TTW Participation Rates for Beneficiaries by Annual Earnings Level (Percent)
Overall Ticket Assignment Rates
Eligible Beneficiaries
Low Annual Earnings
Others with Earnings
Others without Earnings
Total
1.54
1.61
0.51
Phase 1 States
2.04
2.03
0.72
Phase 2 States
0.94
1.10
0.31
Phase 3 Statesa
1.78
1.86
0.52

Source: Ticket Research File data through the end of March 2004 for beneficiaries eligible in March 2003 who had entered DI or SSI in or before August 2003 who had also been mailed a Ticket by the end of 2003, and SSA Summary Earnings Record. Note: The two “other” categories include all beneficiaries not in the low earnings group, including those who may fall into AOI groups 1, 2, or 4.
aNot all beneficiaries in Phase 3 states had received a Ticket by March 2004.

 

Table IX.6 Ticket Assignments to Different Provider Types and Payment Systems by Annual Earnings Level (Percent)
 
Assigned Tickets
Low Annual Earnings
Others with Earnings
Others without Earnings
Provider Type
SVRA
92
90
90
EN
8
10
10
Payment System
Tradtional payment system
87
84
85
Outcome-only
3
4
3
Milestone-outcome
11
12
12

Source: Ticket Research File data through the end of March 2004 for beneficiaries eligible in March 2003 who had entered DI or SSI in or before August 2003 who had also been mailed a Ticket by the end of 2003, and SSA Summary Earnings Record.
aNote that the two “other” categories include all beneficiaries not in the low earnings group, including those who may fall into AOI groups 1, 2, or 4.

 

Beneficiaries in AOI group 4 are far more likely than other beneficiaries to have assigned their Tickets. In all three rollout phases, the Ticket assignment rate of AOI group 4 individuals was at least three times that of other beneficiaries, and in Phase 3 states, the assignment rate for group 4 was nearly five times the rate for other beneficiaries (Table IX.8). Thus, as we saw in the analysis of low- and high-earners, it appears that working is highly correlated with assigning a Ticket. This high participation rate among beneficiaries in AOI group 4 is also consistent with the finding in Chapter 2 of this report that beneficiaries in 1619a (a work incentives program that allows certain SSI beneficiaries to continue receiving cash benefits after they are earning at the SGA level) have higher participation rates than those not participating in the 1619 work incentives programs.

 

Table IX.7 Characteristics of AOI Group 4 Beneficiaries (Percent)
 
Eligible Beneficiaries
AOI Group 4
Others b
Disability Program
DI Onlya
0
0
Concurrent
43
31
SSI Only
57
69
Sex
Female
50
58
Male
50
42
Age
18-24
21
10
25-29
15
8
30-34
14
9
35-39
13
11
40-44
12
13
45-49
10
14
50-54
7
13
55-59
5
13
60-64
3
9
Language Requested for SSA Communications
English
98
91
Spanish
2
8
Other
0
1
Number of Beneficiaries in the Analysis
12,583
2,096,951

Source: Ticket Research File data through March 2004 for beneficiaries eligible in March 2004 who had entered DI or SSI in or before August 2003 and who had been mailed a Ticket by October 2003.
aTitle II-only beneficiaries were ineligible for the AOI Group 4 classification.
bNote that the “Others” category includes all beneficiaries not in AOI group 4, including those that may fall into groups 1, 2, or 3.

 

Like all other beneficiaries who have assigned their Tickets, the vast majority of those in AOI group 4 did so with an SVRA and correspondingly are being served under the traditional payment system (Table IX.9).

 

Table IX.8. TTW Participation Rates for Group 4 and Other Beneficiaries (Percent)

Overall Ticket Assignment Rates
Eligible Beneficiaries
Work and Receive Partial Cash Benefits (AOI Group 4)
Other Beneficiaries
Total
2.62
0.74
Phase 1 States
3.34
1.01
Phase 2 States
1.62
0.48
Phase 3 Statesa
1.76
0.37

Source: Ticket Research File data through March 2004 for beneficiaries eligible in March 2004 who had entered DI or SSI in or before August 2003 and who had been mailed a Ticket by October 2003.
aNot all beneficiaries in Phase 3 states had received a Ticket by March 2004.

 

Table IX.9 Ticket Assignments to Different Provider Types and Payment Systems for AOI Group 4 and Other Beneficiaries (Percent)
 
Assigned Tickets
Work and Receive Partial Cash Benefits (AOI Group 4)
Other Beneficiaries
Provider Type
SVRA
93
91
EN
7
9
Payment System
Tradtional payment system
88
85
Outcome-only
2
2
Milestone-outcome
9
12

Source: Ticket Research File data through March 2004 for beneficiaries eligible in March 2004 who had entered DI or SSI in or before August 2003 and who had been mailed a Ticket by October 2003.

 

 

C. PLANS FOR FUTURE ANALYSES

The next evaluation report will document findings from additional analyses conducted as part of the Adequacy of Incentives study. First, we will describe our methodology for creating AOI groups using the National Beneficiary Survey data to more precisely identify beneficiaries who may be in one of the four groups. Then, we will present a similar analysis with these newly created groups, producing a clearer picture of the size, characteristics, and Ticket assignment rates for each group than was possible using administrative data alone.


1 The statute also requires SSA to identify and implement a payment system that would encourage providers to offer services under TTW to this population. The commissioner is mandated to report to Congress on recommendations for a method or methods of adjusting payment rates to ENs to ensure equitable participation. Return to Text.

2 Our updated data have a more precise way of identifying the phase in which a beneficiary received a Ticket. This new method affects our estimates related to the AOI groups, but does not change our overall conclusions. Return to Text.

3 In order to be included in our analysis of very low earners, these eligible beneficiaries must have been mailed their first Tickets before the end of December 2003. We applied this restriction because annual earnings data were only available through 2002 so we do not have earnings data for the pre-enrolled year for those beneficiaries who received their Tickets in 2004. Return to Text.

4 For this analysis, SSA indicated whether each beneficiary was in the bottom quartile of earnings, and produced a table of the percentage of beneficiaries with annual earnings in categories of $1,000 (for Figure IX.3). Consistent with SSA and IRS policy, MPR did not access individual-level earnings data. Return to Text.

5 Because the data used to select the low earnings group come from a different time period than the data used to select AOI groups 1 and 2, we cannot compare the former group with the latter two. Return to Text.