Erica Carter’s job is her passion.
For more than a decade, she has worked as a finance manager for the Omaha Nation School District in Nebraska. It’s in one of the lowest income counties in the state.
On a cold winter day, Carter pointed out one of the school’s windows to a 7-acre, student-run garden.
“We've written grants to be able to pay these kids throughout the summer to come to work,” she said. “Every day it's hard work. They're out in the sun. They're watering plants. They're out doing physical labor, and for them, it's the first time they get a paycheck in their life.”
Carter is proud that she gets to help students succeed at school. But in late 2023, she suddenly faced a really tough decision that threatened her career with the district.
Carter lives over the state border in Sioux City, a 40-minute drive from her job. She received a letter from Iowa officials saying her income was too high to stay on Medicaid. She was at risk of losing her benefits immediately unless she took drastic action.
“Cut your salary in half, or pay out of pocket,” she said.
For Carter, the decision was a no-brainer.
“We're finally making headway in the school, and I like getting up and going to work every day, and I really like what I do. Why would I throw that away?” she said.
Carter is paralyzed from the chest down following an accident in her early 20s.
Choosing to stay at her job full-time and losing her Medicaid coverage means she now pays $35,000 a year for services that her employer-sponsored health coverage won’t pick up. These are services that were covered under Medicaid, like home health aides and wheelchair repairs.
Carter’s picked up extra jobs and burned through her retirement savings within a year just to keep her full-time job without Medicaid.
“I had the motors go out on my wheelchair, and insurance wouldn't cover it. So that was like $4,000 to fix," she said. "My insurance on my vehicles, because they're adaptive vehicles, is $5,000 a year."
‘They are going to increase Medicaid spending’
Situations like Carter’s are the reason disability rights advocates say state lawmakers should remove income and asset limits from the Medicaid for Employed People with Disabilities program.
According to state data, 11,640 Iowans were on the special program as of late January.
The Medicaid buy-in program allows working disabled Iowans to pay a premium to get coverage, but it caps income at 250% of the federal poverty level, which is $39,900 a year for a household of one. It also has an asset cap of $12,000 for an individual and $24,000 for a married couple, which excludes some things like a primary home and vehicle.
These limits stop working disabled Iowans from earning as much as they can at a time when federal and state lawmakers have also approved minimum work requirements for many others on Medicaid, said Carlyn Crowe, the public policy manager at the Iowa Developmental Disabilities Council.
The limits can prevent disabled Iowans from reaching their goals, Crowe said.
“Perhaps work full-time and be able to buy a house, live in the community, buy a car,” she said. “Things now that are very difficult because those limits placed on what they can earn and save are keeping them from doing that.”
Advocates have been pushing lawmakers for three years to remove these caps and instead set Medicaid premiums at 6% of income, Crowe said.
Most states have Medicaid buy-in programs. Six states, including neighboring Minnesota, have no income or asset limits on their programs, according to an analysis by health policy nonprofit KFF.
Tennessee passed a law in 2024 creating a buy-in program with no income or asset limits. Iowa advocates said it’s a model for what they would like to see the state do, but the program has been delayed while Tennessee waits for permission at the federal level.
At the Iowa Statehouse last session, a House committee passed a bill unanimously that would have done just what advocates were asking for, but that legislation stalled this year.
One problem, experts said, is states are now facing nearly a trillion dollars in reductions to Medicaid spending under President Donald Trump’s One Big Beautiful Bill Act, which was signed into law last summer.
It’s making state lawmakers more hesitant to do things like remove these limits, even though they’ve previously gotten bipartisan support, said Alice Burns, an associate director of KFF’s Program on Medicaid and the Uninsured.
“The issue is that they are going to increase Medicaid spending. The premiums charged are nowhere near close to the expected costs of covering people,” she said.
But some argue focusing on this initial cost increase isn't taking into consideration possible long-term economic benefits of allowing disabled people to work more. It could increase income tax revenue and allow them to transition off other government assistance programs, like the Supplemental Nutrition Assistance Program.
”I don't always know that that's taking into account that three, five, seven years from now, you may be recouping those expenses by having people be able to work their way off,” said Daniel Van Sant, the director of disability policy at the Harkin Institute at Drake University.
Falling through the cracks
This session, Iowa Republican lawmakers have instead proposed to raise the program’s income limit to 300% of the federal poverty level. A Senate bill added pension accounts to the list of assets that are excluded from being counted. House Republicans have also added a similar change to Gov. Kim Reynolds’ wide-ranging health bill.
“I want to caution people about asking too much and trying to do too much all at once,” Sen. Mark Costello, R-Imogene, said at a subcommittee hearing last month.
The bill passed a Senate committee unanimously. It would make Iowa’s income limit one of the highest in the country for a buy-in program, according to KFF.
The Iowa Department of Health and Human Services estimated the change will cost the state $3 million for the upcoming 2027 fiscal year, $5 million for the 2028 fiscal year and close to $10 million a year for the 2029 fiscal year, which would be the first year the pension account exclusion would apply,
Former Sioux City City Council member Alex Watters, who was paralyzed from the chest down after a diving accident, told lawmakers it’s a step in the right direction, but it’s not enough.
“I fear that we're going to lose people to other states. My parents — I grew up in Okoboji, Iowa — I can move 10 miles north of their home, and I would not have any income limits on the same program in Minnesota. I'm considering I'm going to have to do that soon to advance my career,” he said.
Back in Sioux City, Carter is also worried that disabled people like herself will continue to fall through the cracks if the caps remain. She would still not qualify for Medicaid with the increased income limit, which amounts to about an $8,000 increase under this year’s federal poverty guidelines.
“I'm happy to pay my own way. I want to pay my own way. I don't mind paying taxes, like it's not a thing I want to get out of it. I don't want to hide my income,” she said. “I just want an option, like, I have no options right now.”
Carter has no intention of leaving her job. She said her plan is to keep working multiple jobs seven days a week so she can continue managing grants for her school.
