NAMI again wishes to congratulate and thank NAMI members for their constant effort in advocating for the removal of barriers to work for people with serious brain disorders. This historic federal legislation adds greatly to the continuing momentum of positive change in the lives of consumers and family members brought about by grassroots advocacy.
SUMMARY OF THE TICKET TO WORK AND WORK INCENTIVES IMPROVEMENT ACT (HR 1180)
Overview of TWWIIA
The first thing to keep in mind when analyzing the Ticket to Work and Work Incentives Improvement Act (TWWIIA) is that it is both complicated and incremental. Its complexity grows out of the fact that the rules governing Social Security's income support and health care programs are very cumbersome and, too often, unfair. Any effort to enact meaningful reforms, by its very nature, is going to be complicated.
The incremental nature of the new law stems from the strict limits imposed by congressional budget rules governing changes to entitlement programs such as SSI, SSDI, Medicare and Medicaid. Under the Budget Act, legislative changes to entitlement programs are required to be "offset" by cuts in other programs in order to be "budget neutral" (i.e., no net addition to future federal spending over 5 and 10 year intervals). Since these offsets are so hard to come by (offsetting cuts by their very nature result in some constituency or interest taking a hit), Congress and the Clinton Administration were forced to limit the scope of the bill to less than $800 million over 5 years (a very small amount given the scope of federal entitlement spending). Thus, simple long-term solutions to the unfairness of Social Security's programs - sliding scale declining cash benefits in the SSDI program, a national Medicaid buy-in, permanent Medicare extension - were too expensive and unrealistic for Congress to enact in a single bill.
Nevertheless, TWWIIA contains many positive changes for consumers. The new law allows recipients of certain Social Security disability benefits (including adults with severe mental illnesses on SSI and SSDI) to seek vocational rehabilitation and employment services from providers of their choice and to return to work while retaining their government-sponsored health insurance.
Currently, after a nine-month trial work period, a disabled worker who receives SSDI benefits but earns more than $700 per month will lose his or her cash benefits and Medicare health coverage after 39 additional months. Generally, workers who receive SSI disability benefits will lose their Medicaid coverage once earnings make them ineligible for cash benefits. The new law will allow workers with disabilities the option to work and keep their health coverage. It also creates consumer choice in employment preparation and placement services to reduce the dependency on government assistance and a new payment system to reward results by paying service providers part of the benefit savings when disabled individuals leave the rolls for work. It also creates options for individual states to allow the working disabled to purchase Medicaid coverage.
A more detailed analysis of the bill can be found at http://www.ssa.gov/legislation/legis_bulletin_120399.html
The full text of the new law can be found at http://thomas.loc.gov/cgi-bin/query/D?c106:5:./temp/~c106Zg5fcG::
The Conference Report for TWWIIA can be accessed at http://thomas.loc.gov/cgi-bin/bdquery/z?d106:HR01180:@@@M
Access to Health Care Coverage
For adults with severe mental illnesses on SSI and SSDI, the extended health care coverage provisions in the new law are perhaps the most important reforms designed to help consumers enter the workforce. These sections of the new law cover both Medicaid and Medicare.
1. Expanding Medicaid Coverage Options
TWWIIA establishes two new optional eligibility categories to allow states to expand Medicaid coverage to workers with disabilities. Effective October 1, 2000, these options build on previous reforms including a recent provision enacted in the 1997 Balanced Budget Act (P.L. 105-33). The BBA permitted states to offer a Medicaid buy-in for those with incomes up to 250 percent of the poverty level who would be eligible for SSI, except for their income. These buy-ins are intended to allow people who are ineligible for Medicaid because they earn too much the option to remain eligible if they pay for all or part of their coverage.
The first option builds on the BBA provision by allowing states to offer a Medicaid buy-in to people with disabilities who work and have earnings greater than 250 percent of the poverty level. Participating states will be allowed to set income limits and require cost-sharing and premiums, based on income, on a sliding scale up to requiring the individual to pay the full premium amount. States may require individuals who earn between 250-450 percent of the poverty level to pay 100 percent of the Medicaid premium as long as the premiums do not exceed 7.5 percent of their total income. In addition, states must require payment of 100 percent for individuals with adjusted gross incomes greater than $75,000 unless states choose to subsidize the premium using their own funds. States will also be allowed to cover people who continue to have a severe medically determinable impairment, but lose eligibility for SSI or SSDI because their medical condition improves.
NAMI is now in the process of preparing model state legislation designed to implement each of these buy-in programs for SSI and dual eligible (SSI and SSDI) beneficiaries with severe mental illnesses. NAMI state affiliates will be urged to use this model legislation to persuade their governor, legislature, Medicaid director, mental health commissioner and other key state officials to undertake buy-in programs. However, it is important to note that in some states, passage of legislation may not be necessary (i.e., only an amendment to the state Medicaid plan is needed).
2. Continuation of Medicare Coverage
The new law establishes a 4.5 year extension beyond the current four year maximum Medicare coverage for disabled people who return to work and earn more than the substantial gainful activity (SGA) level (currently $700 per month). Under current law, SSDI beneficiaries may continue to receive Medicare coverage after returning to work for 39 months beyond the 9-month Trial Work Period (TWP) and Extended Period of Eligibility (EPE), but afterwards must pay the full Medicare premium. After 30 work credit quarters, they are eligible to receive Medicare at a discounted Part A premium, so long as their impairment persists. In many cases, individuals who leave SSDI to return to work do not have access to employer-based health insurance and they tend to find policies in the individual insurance market overly expensive or with benefit packages that discriminate against coverage for severe mental illnesses.
Previous versions of TWWIIA had substantially longer extended periods for Medicare coverage (as long as 10 years). The extended period in the final bill was scaled back in order to deal with cost concerns. NAMI remains concerned that the 4.5 year extension in the new law, when coupled with the current 39 months of coverage available through the TWP and EPE may not be sufficient for people with severe mental illnesses to achieve the requisite number of work credit quarters needed to qualify for the discounted Part A premium. This is especially the case for consumers with intermittent work histories who may experience acute episodes of symptoms that require them to leave the workforce. This is likely to occur since the 4.5 year extension in the new law will run regardless of whether earnings in any given year or quarter are above SGA. NAMI is already working on legislation to bring the extended Medicare provision in the new law back up to pervious versions of TWWIIA (10 years).
Finally, with regard to Medicare it is important to note that the new law does nothing to reform the discriminatory nature of the Medicare benefit for severe mental illness. As NAMI members know first-hand, Medicare currently has no outpatient prescription drug benefit and 50 percent co-payment requirement for outpatient services. Thus, Medicare reform - especially parity and outpatient prescription coverage - will be a critical next step in work incentives reform.
3) Infrastructure Grants
TWWIIA establishes a grant program (effective October 1, 2000), to make funds available to states to design, establish, and operate an infrastructure to support working individuals with disabilities. This provision "delinks" state participation in the grant programs from adoption of Medicaid optional eligibility categories. States that do not choose to take up the optional Medicaid eligibility category-permitting expansion to individuals with disabilities with incomes up to 250 percent of poverty level are subject to a maximum grant award established by criteria developed by the HHS Secretary (consistent with the limit applied to states that do take up the option). For those states that do take up the option, the maximum award will be 10 percent of what the state spends under the Medicaid buy-in option (rather than the 15 percent included in the House bill).
4) Medicaid Demonstration Program
TWWIIA establishes a time-limited demonstration program, (available starting October 1, 2000), to allow states to extend Medicaid coverage to workers who have a disability that, without health care coverage, will become severe enough to qualify them for SSI or SSDI. The demonstration will provide new information on the cost effectiveness of early health care intervention in keeping people with disabilities from becoming too disabled to work. $250 million is authorized for this Medicaid demonstration. States will be allowed to delink eligibility for demonstration funds from adoption of Medicaid optional eligibility categories. States' definitions of workers with potentially severe disabilities can include a range of disorders and impairments, including severe mental illnesses, as well as disabilities that can be traced to congenital birth defects or serious injuries in childhood or adulthood.
Ticket to Work and Self-Sufficiency Program
The new law creates a Ticket to Work and Self-Sufficiency program to authorize the Social Security commissioner to provide SSDI and SSI disabled beneficiaries with a "ticket" which they may use to obtain vocational rehabilitation services of their choice from an employment network to enable them to enter the workforce. It provides state vocational rehabilitation agencies with the option of participating in the program as an employment network or remaining in the current reimbursement system. State vocational rehabilitation agencies that participate must be reimbursed under current law provisions for those beneficiaries who began receiving services prior to program election.
The new program authorizes payments to employment networks through one of two payment systems: (1) an outcome based payment system that provides a percentage of the average monthly disability benefit for each month benefits are not payable to the beneficiary due to work (but not for more than 5 years), and (2) an outcome-milestone payment system that provides early payments based on the achievement of one or more milestones towards permanent employment.
NAMI put forward a proposal similar to the ticket program in 1997 as part of a report documenting the ineffectiveness of the public vocational rehabilitation program in serving adults with severe mental illnesses (the executive summary of the report "Legacy of Failure" can viewed at http://www.nami.org/update/legacy.htm ). While NAMI strongly supports key aspects of the ticket program (promoting consumer choice, incentives for rehabilitation providers to provide flexible long-term workplace supports, etc.) there is concern that the structure of the program may discourage providers from serving SSI beneficiaries that need high cost support services. In response to these concerns, Congress has directed SSA to develop an alternative payment system for individuals with intensive service needs.
The effective date of the new ticket program is the first month following 1 year after enactment - January 2001. However, the law also allows SSA to implement the program in graduated phases at various sites selected by the Commissioner to ensure refinement of the program processes prior to full implementation. Congress expects the program to be fully operational nationally no later than 3 years from now.
SSA will also be required to assess the cost-effectiveness and effects of the program and report findings to Congress. A new federal advisory panel, consisting of experts representing consumers, providers of services, employers, and employees, will be set up to advise the SSA Commissioner and report to Congress on program implementation and suggested refinements.
TWWIIA contains a number of protections for beneficiaries who elect to take the risks inherent in transitioning off of cash benefits. The most important of these protections relate to continuing disability reviews (CDRs). First, the new law will prohibit the use of work activity as a basis for a CDR for SSDI beneficiaries - so long as they have been in the program for at least 2 years. The new law however will still allow for CDRs on a regularly scheduled basis that are not triggered by work activity. Likewise, termination of cash benefits will still occur if a beneficiary has earnings that exceed SGA. These CDR protections are effective January 1, 2002.
A second key beneficiary protection relates to expedited reinstatement of cash benefits. This provision will allow individuals, whose prior entitlement to disability and health care benefits had been terminated as a result of earnings from work activity, to request immediate reinstatement of benefits without filing a new application. This expedited reentry provision will require that such individuals are unable to continue working on account of their medical condition. Beneficiaries will also be required to file a reinstatement request during the 60-month period following the month of termination. While SSA is making a determination (by applying a medical improvement review standard) on the reinstatement request, individuals will be eligible for the payment of provisional benefits for a period of not more than 6 months. If SSA makes a favorable determination, the individual's prior entitlement to benefits would be reinstated. This provision is effective in January 2001.
This provision is designed to assist individuals with episodic disabilities, such as severe mental illness, who need to get cash benefits restored quickly for a short period of time without having to reinitiate the cumbersome application and disability determination process all over again.
Work Incentives Outreach and Assistance Programs
TWWIIA creates a new outreach program to provide information on work incentives to individuals with disabilities and an assistance program to help people access work incentives. Specifically, $23 million is authorized annually (through FY 2004) for SSA to provide grants to states or private organizations for the outreach program. The new law also authorizes the SSA Commissioner to make grants of up to $7 million annually (through FY 2004) to advocacy organizations (including P&As) to provide information to individuals to obtain vocational rehabilitation and employment services.
Demonstration Projects and Studies
TWWIIA authorizes demonstration projects that gradually reduce cash benefits as earnings increase. Current law eliminates all benefits when earnings exceed $700 per month after the end of the 9-month trial work period. Under this demonstration, SSDI benefits would be reduced by $1 for each $2 earned above a level to be determined by the Social Security commissioner. Additionally, the new law renews SSDI demonstration project authority (for projects involving applicants and beneficiaries) for five years. The measure requires the Congressional General Accounting Office (GAO) to study 1) the effectiveness of current tax credits and other disability-related employment incentives under the Americans with Disabilities Act; 2) the effectiveness of SSA benefits for people who are entitled to both SSI and SSDI benefits; 3) the effects of the SGA level on work incentives; and 4) SSA's efforts to conduct disability demonstrations.
As was noted above, all future costs associated with the new law must be "offset" with corresponding cuts in other entitlement programs. In total, these offsets are worth $800 million over 5 years, and more than 1.5 billion over 10 years. It is important to note that none of these offsets would directly harm most SSI and SSDI beneficiaries, although some may have an indirect impact. For example, the new law authorizes state and local prisons that provide inmate lists to the SSA to receive up to $400 per inmate found to be collecting Social Security disability benefits illegally. SSA also must provide the inmate lists to other benefit programs to help determine eligibility. Additionally, the new law will restrict payments of OASDI benefits to prisoners who are convicted of a criminal offense and are confined - for more than 30 days - to a penal institution; another institution if found guilty but insane; or are sex offenders who, upon completing a prison term, remain confined in a public institution because they are a danger to others. It is important to note that these same restrictions have applied to SSI beneficiaries for the past 3 years. In addition, NAMI fought hard for the exemption protecting adults with severe mental illnesses who incarcerated for less than 30 days.
Another key offset provision will permit Social Security to charge an assessment of 6.3 percent on attorneys who successfully represent disability claimants in their appeals for SSI and SSDI benefits. SSA originally put forward this proposal as a "user fee" to cover the cost of withholding, processing, and forwarding an attorney's fee directly to the attorney. A provision in the new law will prohibit attorneys from passing this assessment on to their claimant/client.
Other offsets in the new law: 1) create a two-year "window of opportunity" to allow clergy members who initially revoked Social Security coverage to be eligible again, 2) allow states to permit employers to submit wage reports annually for domestic workers, 3) extend the authority of state Medicaid fraud control units to investigate and prosecute fraud in other federal health programs, 4) change the index for the special allowance paid to lenders for participation in the federal Family Education Loan Program from 91-day Treasury bills to that for three-month commercial paper, 5) amend the schedule for reimbursements by states to the SSA for state supplement payments administered by the SSA under the SSI program, 6) apply provisions incorporated in the Agriculture Department appropriations laws for FYs 1999 and 2000 to FYs 2001 through 2009 for the amount of spending required on commodities used in the School Lunch program, and 7) clarify the definition of foster child for purposes of the Earned Income Credit Program. Finally, an unrelated provision added immediately prior to final passage delays the effective date of a final rule by the HHS on the organ procurement and transplantation network until 90 days after enactment of this bill.