Ticket to Work Evaluation (January 2006)

CHAPTER 1
Introduction

The Ticket to Work and Self-Sufficiency program (TTW) has been rolled out across the country with a mix of operational achievement and unfulfilled potential. As of September 2004, SSA had implemented all aspects of the program nationwide, including mailing Tickets to more than 10 million beneficiaries. In addition, more than 85,000 beneficiaries have used their Ticket to obtain employment assistance by assigning it to a service provider. Nevertheless, enrollment remains very low: just over one percent of eligible beneficiaries are using their Ticket. Also, interest in TTW among service providers appears to be waning; it has become increasingly difficult to recruit new providers, and most registered providers are not accepting Tickets.

Despite this disappointing news, it appears that there is still untapped potential to help beneficiaries find work and become more economically self-sufficient. Participation rates in TTW have risen continuously, albeit slowly, since the early months of the program, and they have yet to level off. Evidence from the first round of the National Beneficiary Survey, completed in October 2004, suggests that the program has not yet reached even 10 percent of the beneficiaries who aspire to earning their way off the rolls in the next two years. Also, there are small pockets of success within the program, including some participant subgroups that participate at rates well above average and some providers who are generating profits from their TTW operations.

This kind of mixed success in the early stages of the program was envisioned by Congress when it passed the Ticket to Work and Work Incentives Improvement Act (Ticket Act). Specifically, the legislation provided for the 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).

This report, the second in a series from the Ticket to Work Evaluation, provides an interim look at the program during its second two years of operation, 2003 – 2004, in order to facilitate the program refinement process. The report focuses on operations in Phases 1 and 2 states. It contains some implementation information about the Phase 3 rollout, which was in progress when data for this report was collected, but most of the report’s statistics pertain only to Phases 1 and 2. The analyses reported here draw primarily on information collected or compiled during 2004, including SSA administrative records, a national survey of disability beneficiaries, and interviews with SSA staff, the Program Manager, and representatives of ENs and SVRAs. It uses this new information to examine the program from the perspective of TTW-eligible beneficiaries (Chapters II through IV), service providers (Chapters V and VI), and SSA (Chapter VII). Also examined are two broad policy issues that are central to the design and success of TTW: the extent to which TTW gives providers a strong financial incentive to serve disability beneficiaries (Chapter VIII) and the extent to which TTW seems to be including the full range of beneficiaries, particularly those who may need more intensive supports or assistance to succeed in the labor market (Chapter IX). Overall conclusions and recommendations are presented in the final chapter.

The TTW program, together with a few other initiatives created by the same legislation, represents a new approach to an old problem.¹ The problem is that while many persons with disabilities work, relatively few who receive disability benefits from SSA ever leave the rolls as a result of working, and even some who want to work may not do so—or may not succeed in the workplace—for a variety of reasons.

Disability beneficiaries who want substantial employment may face four barriers. First, the Supplemental Security Income (SSI) and Disability Insurance (DI) programs have policies that reduce or offset the financial gain from employment by reducing benefits as earnings increase. This lowers, in net terms, the incentive to pursue gainful employment. Second, beneficiaries may have a limited understanding of not only the provisions designed to encourage and reward work, but also the services available to help them find a job and keep it. Third, beneficiaries may have neither the skills nor the attitudes that would increase their chances of succeeding in the workplace; or they may require certain accommodations to help them overcome impairments and remain productively employed. Fourth, employers may misunderstand beneficiaries’ abilities or even discriminate against such individuals.

The Ticket Act provided a new means to help beneficiaries address these barriers and become employed and financially self-sufficient. In particular, it introduced a new financing system for service providers that added two payment options to the traditional system that SSA has used to pay state vocational rehabilitation agencies (SVRAs) for rehabilitation services provided to beneficiaries. The traditional system reimburses an agency’s costs, up to a limit, if a beneficiary’s earnings reach at least the substantial gainful activity level (currently set at $830 per month for most beneficiaries) for 9 months in a 12-month period. Both of the new payment options try to give providers a stronger performance incentive insofar as they require a beneficiary earn enough so that they no longer receive cash benefits for 60 months before the provider receives full payment. Of the two new systems, the first option, the “outcome-only” system, provides higher payments but only when the desired outcome is achieved, i.e., when a beneficiary leaves the rolls because of work. The other 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 the beneficiary achieves specified earnings targets, or “milestones.” ²

In addition to the new payment system, TTW also greatly expanded the types of organizations that SSA will pay to support beneficiaries’ job search efforts. In addition to SVRA’s, these organizations include a range of public and private providers, called employment networks (ENs), that have signed a contract with SSA to offer work-related services. In addition, TTW gives service providers and beneficiary’s considerable flexibility to choose the services that will be provided. In fact, providers and beneficiaries must agree on an individualized work plan before a Ticket can be put into use. This plan could, in theory, include a wide array of services designed not only to help beneficiaries overcome barriers related to their knowledge of the service system and the labor market but also to address their need for new or enhanced job skills as well as employer misperceptions of their abilities.

Service delivery in TTW is constrained, however, by two main factors: the providers’ desire to limit service expenditures 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. In fact, providers can refuse to serve beneficiaries whom they think are not likely to trigger outcome payments because they are not likely to leave the rolls. 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 TTW system.

Finally, the Ticket Act addressed some of the SSI and DI program features that may discourage work efforts. First, while beneficiaries are using their Ticket, they are not subject to continuing disability reviews (CDRs), which are recurring checks to determine whether they remain medically unable to work. Second, for long-term DI beneficiaries, starting to work will no longer trigger a medical disability review (even for those not participating in TTW). Third, an expedited reinstatement policy gives beneficiaries a five-year period after they leave the disability rolls for employment, during which their benefits (and any associated health insurance) will be reinstated, without a new application, should they go back on cash benefits. Fourth, Medicare coverage for DI beneficiaries who return to work 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. Finally, 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; at present, about 30 states have these Medicaid Buy-In programs (White et al. 2005).

After the Ticket Act was passed, TTW was rolled out in three phases. In Phase 1, which began in February 2002, the program was made available in 13 states across the country. Phase 2 began in November 2002 and extended the program to an additional 20 states plus the District of Columbia. Phase 3, which began in November 2003 and ended in September 2004, rolled out the program in the remaining 17 states and U.S. territories. At present, new beneficiaries in all states are sent a Ticket when they become eligible for the program. Appendix A gives a complete timeline for TTW and lists the states included in each phase.

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 long-term data on 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 questions:

1. Did TTW significantly reduce dependence on SSA benefits through increased beneficiary employment and earnings?
   
   
2. What was the impact of TTW on earnings, employment duration, SSA benefits, and beneficiary income?
   
   
3. Did TTW produce net SSA program costs or savings? How much? What are the costs and benefits of the TTW program to SSA?
   
   
4. Did TTW produce net social costs or benefits? What were the social costs and benefits of the TTW program?
   
   
5. Who did and did not participate in TTW?
   
   
6. What groups were adequately served under the TTW program and what groups were underserved?
   
   
7. What aspects of the program improved or reduced program success?

The evaluation will address these questions in five annual reports. The initial evaluation report, completed in February 2004, and this report focus on program operational issues, primarily the rollout and the participation by beneficiaries and providers (questions 5, 6, and 7). Future reports, scheduled for early 2006, 2007, and 2008, will cover these issues as well but will focus primarily on the effects of TTW on beneficiary employment and self-sufficiency, and program benefits and costs (questions 1 through 4).

This report is based on a diverse range of data sources.

• SSA Administrative Records. Many of the program statistics in this report were completed using the Ticket Research File that we developed using extracts from several SSA administrative databases. This research file contains data on the more than 15 million disability beneficiaries who received benefits since 1996. We use it to analyze trends in SSI and DI participation, Ticket assignments, beneficiary employment and earnings, and payments to ENs and SVRAs. Appendix B provides background on these data along with some supplemental detailed tables.
  
  
• National Beneficiary Survey. We used data provided by the almost 7,500 beneficiaries who responded to the National Beneficiary Survey to examine their knowledge of TTW and their expectations about work. The survey, which was fielded between February and October 2004, included a group of approximately 1,000 beneficiaries who assigned their Ticket in 2003, and we used their responses to examine their participation in and satisfaction with TTW. A more extensive analysis of the survey data will appear in the next evaluation report (scheduled for early 2006). Appendix C summarizes the survey methodology and provides some supplemental tabulations.
  
  
• Rehabilitation Services Administration (RSA) Data. We used public use files from RSA to analyze trends in beneficiary participation in vocational rehabilitation. We will examine these trends in more detail using individual-level data from SSA linked to individual-level data from RSA and document them in future reports.
  
  
• Interviews with Providers, the Program Manager, and SSA Staff. Qualitative information on program implementation and provider operations was obtained though interviews with officials from 29 current ENs; 10 former ENs; 8 SVRAs; 14 organizations that considered becoming ENs but decided against it; SSA staff in the central, regional, and field offices; and the Program Manager. These interviews, conducted during the summer of 2004, supplement dozens of similar interviews conducted for the initial evaluation report in 2003 and for the preliminary process analysis in 2002.

¹ 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). Return to Text.

² After this report was drafted, SSA proposed changing these payment options (SSA 2005). These changes will be examined further in future evaluation reports. Return to Text.