This paper describes the Medicaid work incentives and how they are being implemented at the state level. It explores the major issues involving Medicaid and work incentives, including the state fiscal crises, horizontal equity across states and groups, coverage of needed services, defining disability, and the interaction between Medicaid and Social Security Disability Insurance and Medicare. In addition, the article also analyzes more technical design issues related to the Ticket to Work and Work Incentives Improvement Act work incentives, including definition of employment, age restrictions, and use of premiums.