The Ticket to Work and Self-Sufficiency program (TTW) was designed to enhance the market for services that help disability beneficiaries become economically self-sufficient. To do so, the program gives beneficiaries more choices for obtaining services and gives employment-support service providers new financial incentives to serve beneficiaries effectively. It also modifies the rules for the Disability Insurance (DI) and Supplemental Security Income (SSI) programs in order to give beneficiaries more incentives to participate.
To date, the Social Security Administration (SSA) has successfully begun the market enhancement process by putting the core elements of the TTW program in place across the country. At the end of the program rollout in September 2004, SSA had mailed Tickets to more than 11 million disability beneficiaries, inviting them to use their Tickets as a way to obtain help getting meaningful employment. It also implemented new SSI and DI program rules that allow beneficiaries to attempt to work without fearing that SSA will review their disability status while they are in the TTW program. Finally, SSA and its TTW Program Manager had enrolled all state vocational rehabilitation agencies (SVRAs) and more than 1,300 service providers, or employment networks (ENs), that offer beneficiaries new choices for providers and service mixes.
While getting these core elements in place represents a major accomplishment, the market has had several serious problems. As discussed in the earlier TTW evaluation reports (Livermore et al. 2003; Thornton et al. 2004, 2006), beneficiary participation rates have risen continuously since the early months of rollout, but remained very low relative to the number of beneficiaries who express interest in work. The earlier reports noted that by March 2004, only 1.1 percent of eligible beneficiaries in the early implementing states (those included in the Phase 1 rollout) had assigned their Tickets to a service provider, although 26 percent of disability beneficiaries see themselves working for pay in the next five years and 15 percent see themselves earning enough to stop receiving benefits. Also, only a third of the ENs had taken any Tickets, and there were signs that all types of providers (ENs and SVRAs) were losing interest in the program. This loss of interest appeared to reflect concern over several operational features of TTW, including (1) substantial financial risks for ENs, (2) administrative procedures viewed by ENs and SVRAs as excessively burdensome, and (3) a lack of incentives for beneficiaries who become gainfully employed to supply their service providers with earnings documentation that would enable the providers to receive payments over extended periods of time.
Early impact results suggest that TTW slightly increased beneficiary enrollment in employment-support programs during the first rollout year (2002), particularly among providers other than SVRAs. Essentially, enrollment in employment support programs increased for beneficiaries in the early rollout states relative to beneficiaries in the states where the rollout had not yet started, by a statistically significant amount.1 Furthermore, the changes in relative enrollment across the early and later rollout states observed in 2002 were a clear departure from historical trends.
The early impact results for beneficiary earnings and benefit receipt, however, are inconclusive. During the first two years of TTW rollout, the differences in earnings and benefit receipt observed for beneficiaries in the early and later rollout states are statistically indistinguishable from the differential trends in these outcomes that occurred in the years prior to the rollout. As a result, it is not possible to tell if TTW had an effect on these outcomes or if TTW was merely rolled out first in states that had systematically different trends in beneficiary earnings and benefit receipt. We therefore conclude that while TTW did increase enrollment in employment-support programs, it is not possible to identify conclusive evidence about the effects TTW may have had on employment and benefit receipt.
Impacts for 2004 and later may be larger. Payment data show that some beneficiaries who assigned their Tickets before 2004 earned enough income to generate Ticket payments only after the end of 2003, and survey data show that many participants in 2003 expected to earn enough to leave the rolls. Participation rates continue to increase, and many non-participants say they plan to assign their Tickets. Economic growth since 2003 might also help participants attain greater employment success.
Nevertheless, analysis of trends in TTW payment data suggests that the program will not generate the level of exits from the rolls envisioned by Congress unless there are major shifts in beneficiary behavior. In particular, meeting that goal will require that participation increase substantially and that a larger share of participants earn enough to exit the rolls.
SSA is trying to foster the required changes in beneficiary and provider behavior by revising the regulations that determine how the TTW market works and to help the program reach its full potential. These efforts have been underway almost since the beginning of the program and were anticipated by the authorizing legislation that provided for the SSA Commissioner to assess the program as it rolled out, making changes that would help to achieve program goals more effectively (or recommending changes when legislation would be required). Some attempted solutions—such as producing information to help ENs find operating capital and introducing a different payment claims process—appear to have had little positive impact overall. Recognizing the need for more sweeping revisions, SSA (2005) published a set of proposed new regulations for TTW on September 30, 2005. Those regulations are still under review, but SSA hopes to issue final regulations in 2007.
This report updates and extends the work presented in earlier evaluation reports to cover the first three years of the TTW program. The evaluation findings are organized into six parts that reflect the major components of the market for employment support services that TTW tries to enhance. This first part (Chapter I) provides an overview of TTW and discusses how the program attempts to create a better marketplace in which beneficiaries can obtain employment assistance services. Part 2 (Chapters II through VIII) focuses on beneficiaries’ demand for those services as reflected in their participation in TTW, the activities of those who assign Tickets, and the perspectives and characteristics of those who do not. Part 3 (Chapters IX through XII) addresses the supply of employment services as indicated by provider involvement in the program and the financial incentives TTW gives providers to actively recruit beneficiaries. Part 4 (Chapter XIII) describes the efforts of SSA and the Program Manger to create a well-functioning market for employment assistance services. The last two parts offer a more summative view of the program. Part 5 (Chapters XIV and XV) presents preliminary estimates of the effects TTW has on beneficiary service use, employment, and benefit receipt. Part 6 (Chapter XVI) offers our overall conclusions about TTW at this stage of its development and its potential to achieve its intended goals.A. Ticket to Work and the Market for Employment Support Services
The TTW program, together with other initiatives created by the Ticket to Work and Work Incentives Improvement Act (Ticket Act), represents a new approach to an old problem:2 while many persons with disabilities work, relatively few who receive DI or SSI disability benefits have ever left the rolls as a result of working. The vast majority of beneficiaries have not attempted to secure a job once they are on the rolls. Historically, less than 3 percent of any DI or SSI enrollment cohort has ultimately left the rolls due to work, and less than 0.5 percent of all beneficiaries on the rolls at a point in time has left due to work (Newcomb et al. 2003; Berkowitz 2003).
The TTW program’s new approach addresses this problem by relying on the marketplace to increase the level and mix of employment support services. Rather than setting up a single training program, TTW establishes payment mechanisms designed to induce employment-service providers to increase the supply of programs and the range of approaches. TTW also tries to increase beneficiary demand for employment support services by modifying program rules to encourage work and by providing beneficiaries with more information to help them understand and navigate the complex program rules. In this way, TTW relies on the creativity and knowledge of many service providers and beneficiaries to find the right mix of services to help beneficiaries find jobs that allow them to earn their way off the rolls and toward economic self-sufficiency.
Thus, TTW marks a substantial departure from earlier years when SVRAs were for many disability beneficiaries essentially the only option for obtaining employment support services. From 1981 until 1996, SSI and DI beneficiaries who were deemed good candidates for rehabilitation—potentially capable of supporting themselves through work earnings—were referred exclusively to SVRAs. The Alternate Participant Program, created in 1996, was intended to give more options to beneficiaries, but for various reasons this initiative enrolled extremely few individuals. Alternate providers filed just over two dozen payment claims from 1999 to 2001.
The remainder of this section lays out the key aspects of the TTW program that stimulate beneficiary demand for services, increase the supply of employment-support service providers, and ensure the overall operation of the market.
1. Efforts to Stimulate Beneficiary Demand for Employment Support Services
The Ticket Act was intended to increase demand for employment and employment support services by changing several SSI and DI program features that may discourage work efforts.
Continuing Disability Review Protections. While beneficiaries are using their Ticket, they are not subject to any medical continuing disability reviews (CDRs), which are checks to determine whether they remain medically unable to work. As a result, beneficiaries will not have to worry about SSA reviewing their medical disability status while they are participating in TTW. Furthermore, for long-term DI beneficiaries, starting to work will no longer trigger a medical disability review (even for those not participating in TTW).
Expedited Reinstatement. The Ticket Act provided for an expedited reinstatement policy that allows beneficiaries who leave the disability rolls for employment to have their benefits (and any associated health insurance) reinstated without a new application should they return to cash assistance within five years.
Benefit Counseling. The Ticket Act required SSA to establish a network of Benefit Planning, Assistance, and Outreach (BPAO) providers that would help beneficiaries get a better understanding of DI and SSI work incentives. 3 The act also established a network of protection and advocacy providers who could help beneficiaries negotiate the system successfully.
Extended Medicare Coverage. Medicare coverage for DI beneficiaries who return to work and leave the DI rolls was extended substantially, from 39 months under earlier rules to 93 months at present, and when that period ends, beneficiaries will be able to purchase Medicare coverage.
Medicaid Buy-In Option. The Ticket Act made it easier for states to establish programs that allow persons with disabilities to purchase Medicaid coverage on a sliding-fee basis. In 1999, 8 states had a Buy-In program; there are now 30 states with such programs (White et al. 2005; Black and Ireys 2006).
In addition to removing some work disincentives, TTW also greatly expanded the types of organizations that SSA will pay to support beneficiaries’ job search efforts. TTW allows virtually any kind of entity to sign up as an EN. ENs can come from any of the three sectors of the economy: private for-profit, public nonprofit, and private nonprofit. Any private business—from a large corporation to a sole proprietorship—can be an EN. Likewise, any public agency—a municipal office, a school district, a regional council, a state bureau, a federal department, etc.—can be an EN, whether or not its mission concerns vocational services or persons with disabilities. Virtually all private nonprofit organizations can become ENs, from faith-based groups to charitable foundations to private colleges to social service agencies. Furthermore, there are virtually no barriers to entry for interested entities. There are essentially no application costs and the general eligibility requirements are apparently easy to meet.4 Entities signing up as ENs are not required to have any prior experience serving persons with disabilities. An organization that might someday hire even just one Ticket holder at a level that would take him/her off cash benefits can sign up as an EN.
Also, TTW gives beneficiaries and the providers who serve them considerable flexibility to choose the services that will be provided. Providers and beneficiaries must agree on an individualized work plan (IWP) before a Ticket can be put into use, but SSA imposes almost no requirements for the services and arrangements to be covered by such plans. This plan could, at least in theory, include a wide array of services such as job training or placement, information to help beneficiaries better understand relevant program rules, assistance in overcoming employer misperceptions, and technology or other services to support beneficiaries after placement. TTW could also be used to provide beneficiaries with a wage subsidy by rebating some of the outcome payments to the former beneficiaries who generated those payments.
Finally, the TTW program is more consumer-driven than the old system. All eligible beneficiaries get a Ticket and may decide what to do with it, and participation is completely voluntary. Also, TTW eliminated the prior process under which the Disability Determination Services—the entity determining whether an SSI or DI applicant is disabled—would refer beneficiaries exclusively to SVRAs. It thereby tried to open up the market and allow all providers that wished to become an EN to serve beneficiaries. It also increases beneficiaries’ choices by allowing all eligible beneficiaries to decide whether and when to seek employment services.
2. Increasing the Supply of Employment Support Service Providers
The employment support system for beneficiaries that predated TTW was viewed as problematic (see Berkowitz 2003). Under that system, the Disability Determination Service in each state determined which beneficiaries were good candidates for rehabilitation and referred them to the SVRAs.5 SSA would then reimburse SVRAs for the cost of services that resulted in a beneficiary’s working at the level of “substantially gainful activity” (currently set at $900 per month for most individuals) for 9 months during a 12-month period. This system was viewed as problematic because (1) it limited beneficiaries’ choice of providers to SVRAs, and (2) the reimbursement system paid for an intermediate outcome—9 months of substantial gainful activity (SGA)—rather than for the outcome of ultimate interest to SSA: movement into sustained employment and exit from the disability benefit rolls.
The TTW program sought to increase provider interest in helping disability beneficiaries gain economic self-sufficiency by introducing two new payment options that aim to give providers a stronger performance incentive. While the new options can provide some payments early in a beneficiary’s job tenure, they require that a beneficiary earn enough to no longer receive cash benefits for 60 months before the provider receives full payment. The first option, the outcome-only system, provides slightly higher payments than the second option, but only when the desired outcome is achieved—in other words, when a beneficiary leaves the rolls because of work. The second new option, the milestone-outcome system, provides smaller outcome payments but can also provide up to four larger payments while a beneficiary is still receiving benefits if he or she beneficiary achieves specified earnings targets, or “milestones.” ENs cannot use the traditional payment system; they must elect to be paid under either of the new payment systems. SVRAs can act as ENs by using the new payment systems, but they can also decide to serve some beneficiaries under the traditional system.
To make employment-support service providers familiar with TTW and its new options, SSA contracted with a Program Manager to recruit providers to become ENs. The Program Manager used mailings, conference presentations, and its call-in center to contact more than 50,000 potential providers as TTW was rolled out. SSA also disseminated information about the program through presentations by its regional and field office staff and its website.
While the new payment system offers providers some new incentives to help beneficiaries earn their way off the rolls, it also includes some constraints. Unless they have other funding, providers must limit their expenditures on beneficiary services to a level that fits within the payments they expect to receive and their assessment of whether the services they can provide are likely to result in a beneficiary leaving the rolls. Providers can refuse to serve beneficiaries whom they think are not likely to leave the rolls and thus unlikely to trigger outcome payments. In particular, beneficiaries who want to work only at an earnings level that would enable them to retain part or all of their benefits will generally not be attractive clients to providers operating in the new TTW payment systems.
3. SSA’s Efforts to Enhance Market Functioning
SSA has the job of establishing the TTW program and helping it to extend the market for employment support services. After a planning period, SSA rolled out TTW in three phases. Phase 1, which began in February 2002, saw the program introduced in 13 states around the country. Phase 2, which began in November 2002, extended TTW to 20 more states and the District of Columbia. Phase 3, which began in November 2003 and ended in September 2004, completed the rollout in the remaining 17 states and U.S. territories. At present, beneficiaries in all states are sent a Ticket as they become newly eligible for the program. Appendix A gives a complete timeline for TTW and lists the states included in each phase.
TTW leaves decisions about participation and service delivery to individual beneficiaries and providers, but gives SSA several key roles in the market. In particular, SSA, along with the Program Manager, runs the TTW payment systems. This involves both the processing of payment requests from providers and the ongoing DI and SSI operations that determine whether beneficiaries have left the rolls due to work. The latter determination is key to triggering outcome payments to ENs.
SSA also promoted beneficiary knowledge about TTW by mailing Tickets and conducting other outreach. It also established the BPAO program and helped to facilitate the protection and advocacy providers.
Finally, SSA monitored overall TTW operations in order to determine whether changes are warranted in the program. It has done so since the start of the program in February 2002. In September 2005, SSA proposed the most sweeping changes to date. If implemented, these changes would increase milestone payments dramatically. They would also separate the traditional payment system for SVRAs from the new payment systems for ENs. In doing so, the new regulations would let beneficiaries use SVRA services to move into a job and then assign their Ticket to an EN that would help them maintain that job. These proposed changes are still under review.
B. The Ticket to Work Evaluation
Given the size, complexity, and significance of TTW, Congress mandated that SSA conduct a comprehensive evaluation to provide both short-term feedback that could help to improve program implementation and a long-term assessment of the program’s effects. The evaluation began in mid-2003 and will continue for five years. By the time it is complete, the evaluation will have addressed seven major questions:
Did TTW significantly reduce dependence on SSA benefits through increased beneficiary employment and earnings?
What was the impact of TTW on earnings, employment duration, SSA benefits, and beneficiary income?
Did TTW produce net SSA program costs or savings? How much? What were the costs and benefits of the TTW program to SSA?
Did TTW produce net social costs or benefits? What were the social costs and benefits of the TTW program?
Who did and did not participate in TTW?
What groups were adequately served under the TTW program and what groups were underserved?
What aspects of the program improved or reduced program success?
The evaluation will address these questions in five annual reports. The initial evaluation report (Thornton et al. 2004) and the second evaluation report (Thornton et al. 2006) focused on program operational issues, primarily the program rollout and the participation by beneficiaries and providers (questions 5, 6, and 7). This report touches again on those issues, but adds information on the impacts of TTW on beneficiaries (questions 1 and 2). Future reports, scheduled for 2007 and 2008, will cover all these issues as well, and will also examine the costs and benefits of TTW (questions 3 and 4).
C. Data Sources for This Report
This report is based on the data sources listed below. Together, they provide a qualitative and quantitative perspective on TTW operations and effects.
SSA Administrative Records. We developed several analysis files—collectively referred to as the Ticket Research File (TRF)—from extracts obtained from SSA administrative databases. The TRF contains longitudinal data on the more than 17 million disability beneficiaries who received benefits between January 1996 and September 2004 (the data cover the slightly longer period of January 1994 through December 2004). We used the TRF to analyze trends in SSI and DI participation, Ticket assignments, payments to ENs and SVRAs, and the impacts of TTW on beneficiary service use, employment, earnings, and benefit receipt.
National Beneficiary Survey (NBS). We used data provided by the almost 7,500 beneficiaries who responded to the NBS to examine their knowledge of TTW, expectations about work, functioning, health, participation in TTW, employment, and other issues. In an effort to ensure that the survey represents the full range of beneficiary perspectives, the survey was fielded using procedures that accommodate the needs of respondents with all kinds of disabilities. The survey was fielded between February and October 2004. Responses from approximately 1,000 beneficiaries who assigned or used their Ticket in 2003 enabled us to examine their participation in and satisfaction with TTW. Appendix B summarizes the survey methodology and provides some supplemental tabulations. The NBS tabulations included in this report have been weighted to correct for non-response.
Rehabilitation Services Administration (RSA) Data. We used public use files from RSA to analyze trends in beneficiary participation in vocational rehabilitation. We also used individual-level data on SVRA case closures provided by RSA and linked to SSA administrative data to analyze the extent to which TTW affected the use of employment services.
The specific populations and number of individuals included and the time periods covered are presented in Exhibit I.1.
|Database||Population||Time Period Covered||Approximate Number of Individuals|
|Ticket Research File||All disability beneficiaries who received a benefit at some time between January 1996 and October 2004||January 1994 to December 2004||17,000,000|
|TTW Participation||All beneficiaries who have assigned a Ticket||Start of TTW (February 2002) through May 2005 (because of lags in processing Ticket assignments, these data accurately capture enrollment though December 2004)||84,000|
|Ticket Payment Data||Beneficiaries who have received milestone and outcome payments made to ENs or SVRAs (total number of payments)||Start of TTW (February 2002) through July 2005||1,300 individuals (encompassing 7,800 payments)|
|National Beneficiary Survey (NBS)|| Representative sample of disability beneficiaries age
18 to 65 Representative sample of beneficiaries who assigned their Tickets
|Status in 2004 (at time of interview) and TTW experience in 2003||6,500 1,100|
|Process Analysis||Selected representatives of SSA, the PM, ENs, SVRAs, and other federal agencies with programs that interact with TTW||Interviews conducted June-August 2005 (focus on Phase 3 rollout and current operations)||50|
|Impact Analysis||All TTW-eligible beneficiaries who received benefits for the entire year prior to the start of TTW and were under 57 years old||1997-2003 (for the early cohort, 2003 is the first year following the year in which they were mailed a Ticket); analysis excludes new beneficiaries who came onto the rolls after TTW started||4,700,000|
1 The estimation process uses a fixed effects approach that controls for differences among beneficiaries that pre-existed the TTW rollout. Chapter XIII and Appendix D provide more details about the estimation methods the evaluation used and those that were considered, but proved to be inappropriate. (back)
2 Readers interested in more extensive background information on the TTW program or the evaluation should see the initial evaluation report ( Thornton et al. 2004) or the preliminary process analysis (Livermore et al. 2003). In addition, Mashaw and Reno (1996) present the basic ideas that underlie the TTW program. (back)
3 As of September 30, 2006, these organizations are known as the Work Incentives Planning and Assistance Programs. (back)
4 See Livermore et al. 2003, pp. 10-11. (back)
5 Beneficiaries could also apply on their own, without a referral. (back)