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Work Incentives Improvement Act Introduced In House, NAMI Testifies Before House Ways And Means Committee


Contact:
Chris Marshall
703-524-7600
For Immediate Release
19 Mar 99

On March 18, a bipartisan group of nearly 50 members introduced a House companion bill to the Jeffords-Kennedy-Roth-Moynihan Work Incentives Improvement Act (S 331). The new House bill (HR 1180) is identical to the bill that was reported out by the Senate Finance Committee on March 4. This legislation would provide extended health coverage (including outpatient prescription drugs) to SSI and SSDI beneficiaries who want to enter the workforce. As many NAMI members know first-hand, the current system creates numerous disincentives to work including the threat of losing health coverage through Medicare and Medicaid if someone takes a job. HR 1180 also contains the "ticket to independence" proposal that would provide a voucher to consumers on SSI and SSDI to allow them to select their own employment or rehabilitation provider.

Among the key House leaders sponsoring HR 1180 are Representatives Rick Lazio (R-NY), Henry Waxman (D-CA), Tom Bliley (R-VA), John Dingell (D-MI), Nancy Johnson (R-CT), Bob Matsui (D-CA), Mike Bilirakis (R-FL), Sherrod Brown (D-OH), Jim Ramstad (R-MN), Ben Cardin (D-MD), Jim Greenwood (R-PA), Tammy Baldwin (D-WI), Dave Camp (R-MI), Pete Stark (D-CA), Chip Pickering (R-MS), Frank Pallone (D-NY), Mark Foley (R-FL), Sander Levin (D-MI), John Tanner (D-TN), Brain Bilbray (D-CA), Lloyd Doggett (D-TX), John Murtha (D-PA) and others. Each are members of key House committees that have jurisdiction over SSI, SSDI, Medicare and Medicaid.

ACTION NEEDED

NAMI members and advocates are urged to contact their Representative and encourage them to cosponsor HR 1180 and remove the barriers to work for people with disabilities, including people with severe mental illnesses. If your Representative is already a cosponsor, please thank them for their support and encourage them to ask their colleagues to sign on. All members of Congress can be reached through the Capitol Switchboard at 202-224-3121. Email addresses can be obtained by going to the policy page of the NAMI website at www.nami.org and click on "Write to Congress."

ADDITIONAL HOUSE PROPOSAL

A separate House bill (HR 1091) has also been introduced in the past week by Representative Kenny Hulshof (R-MO). HR 1091 differs in that it excludes the 10 year demonstration for extended Medicare for SSDI beneficiaries who go to work that is contained in HR 1180/S 331. In addition, HR 1091 does not include several beneficiary protections that are in "ticket" provisions in HR 1180/S 331: a bar on Social Security performing medical continuing disability reviews (CDRs) on beneficiaries who go to work and a new expedited process for getting back on cash benefits in cases of an acute episode of a disabling illness. NAMI is urging support for HR 1180/S 331 because of its more comprehensive approach to extended health coverage and its more extensive beneficiary protections.

SENATE UPDATE

As was noted above, S 331 was reported out of the Finance Committee on March 4. NAMI and our allies in the disability community are currently urging Senate leaders (including Senators Lott and Nickles) to bring the bill to the floor for a vote. S 331 now has 69 cosponsors – more than enough to overcome a possible filibuster or budget "point of order." Updated lists of cosponsors for all three of these bills are available through the Thomas website at http://thomas.loc.gov. by locating the individual bills. NAMI urges advocates to thank members of their state’s congressional delegation who are already cosponsoring the Work Incentives Improvement Act and push members who are not to sign on to this important bill.

NAMI TESTIMONY

On March 11, NAMI board member Jim McNulty testified before the House Ways and Means Committee in support of reforming the SSI, SSDI, Medicare and Medicaid programs to stop penalizing adults with severe mental illnesses who take the risk of entering the workforce. A copy of his statement is included below:

On March 11, NAMI board member Jim McNulty testified before the House Ways and Means Committee in support of reforming the SSI, SSDI, Medicare and Medicaid programs to stop penalizing adults with severe mental illnesses who take the risk of entering the workforce. A copy of his statement is included below.

STATEMENT OF JIM McNULTY
OF BRISTOL, RHODE ISLAND,

ON BEHALF OF THE NATIONAL ALLIANCE FOR THE MENTALLY ILL

BEFORE THE SUBCOMMITTEE ON SOCIAL SECURITY COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES

"BARRIERS TO EMPLOYMENT FOR PEOPLE WITH DISABILITIES"

MARCH 11, 1999

Chairman Shaw and members of the Subcommittee, I am Jim McNulty of Bristol, Rhode Island, and I serve on the Board of the National Alliance for the Mentally Ill (NAMI). I am also a president of the Manic Depressive and Depressive Association of Rhode Island. At the outset I would like to thank you for holding this hearing on barriers to employment for people with disabilities in Social Security’s programs. This issue is critically important for people with severe mental illnesses – the fastest growing population represented on Social Security’s disability programs.

I, myself, have been living with manic depressive illness and for the last nine years have worked with many other Rhode Islanders suffering from severe mental illnesses, including schizophrenia, manic depression, and depression. Over this period I have found an almost universal, visceral desire on the part of people with disabling mental illnesses to return to meaningful, gainful employment. We want to be able to partake as fully as possible in the privileges and responsibilities of being citizens of the United States.

Sadly, for many of us the very system that is designed to help us when we are at an ebb in our health and require the social safety net will not allow us to recover dignity by helping us return to work. As you know, the current "all or nothing" approach to income support and health security operates as a massive barrier to work for millions of Americans with severe disabilities who seek to achieve greater independence and dignity through employment. The dream of the Americans with Disabilities Act (ADA) is full integration of people with disabilities into the mainstream of American society. Reform of the current system is absolutely essential to achieving this important national objective.

NAMI believes that we offer a unique perspective on the critical issues of work incentives, income supports, and employment for people with severe mental illnesses, which are brain disorders. NAMI is the nation’s largest organization representing people with severe mental illnesses and their families. Through our nearly 1,200 affiliates and chapters, NAMI represents over 208,000 consumer and family members and works to promote greater public understanding of serious brain disorders such as schizophrenia, major depression, bipolar disorder, obsessive-compulsive disorder, and panic disorder. Our major activities include research, education, and advocacy aimed at reducing stigma and promoting independence for people with brain disorders.

NAMI has a strong interest in the issue of work incentives, income supports, and employment for people with disabilities. We share your vision of restoring fairness to the Social Security Administration’s (SSA) disability programs by enabling those who are truly disabled to receive benefits quickly and stopping payments to persons who have fully recovered. Work is extremely important to people with severe mental illnesses and their families. Yet the supports necessary to achieve employment and independence are simply not in place for most people with these brain disorders who want to leave the Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) rolls and join the workforce.

As I noted above, people with severe mental illnesses are the fastest growing population within both the SSI and SSDI programs. More importantly, SSA data reveal that people with mental illnesses are coming on to the disability rolls at an earlier age than their counterparts with other disabilities. Given how difficult it is to get off the rolls through employment – less than one percent successfully do so – it becomes imperative to enact reforms that end the severe penalties for those who are willing to take the tremendous risks inherent in entering the workforce.

However, as important as promoting work is to so many adults with severe mental illnesses, NAMI also believes that we should not lose sight of how important Social Security’s disability programs are as fundamental safety net protections. We should bear in mind that both SSI and SSDI have the highest standard of eligibility for any public disability programs in the world – that an individual be totally disabled and unable to attain substantial gainful activity (SGA) in any job in the American economy. Because of this strict definition, most of the adults on these programs have severe disabilities and are some of the most vulnerable citizens in our society.

For the vast majority of SSI and SSDI beneficiaries, the cash assistance they receive meets basic everyday needs on a week-to-week basis. Most have no savings, and depend on cash benefits for food, clothing and shelter. For them, SSI and SSDI are programs that are successful in preventing complete destitution and keeping them out of a state hospital or an institution (and considerably higher cost to taxpayers). Thus, while NAMI strongly supports the goal of promoting work and independence, we believe that these reforms should keep the basic structure of SSI and SSDI in place in order to protect the most disabled and vulnerable beneficiaries.

What are the major barriers to employment for people with disabilities?

Recent studies (including those from the General Accounting Office, the National Council on Disability, and the National Academy of Social Insurance) point to five principal barriers to the employment of individuals with severe mental illnesses who are SSDI or SSI beneficiaries. These barriers are: 1) the loss of health benefits; 2) the complexity of the existing work-incentives system; 3) financial penalties of working; 4) lack of choice in employment services and providers; and, 5) inadequate work opportunities. NAMI believes that all of these barriers must be resolved to empower beneficiaries to go to work.

The current SSI and SSDI programs themselves too often serve as barriers to work. While the existing work incentives in the Social Security Act do make it easier for some people receiving SSI or SSDI payments to go to work, most people with severe mental illness either do not know about, or do not understand, the provisions and therefore do not utilize these work incentives. This is true, both for the so-called SSDI trial-work-period provisions and the SSI 1619(a) and 1619(b) programs. For too many people with mental illness there is a pervasive fear that employment will result in the immediate cut-off of cash benefits and the concurrent loss of critically important medical benefits. NAMI believes strongly that the episodic nature of mental illnesses justifies the need to maintain a basic safety net of assistance for people experiencing acute occurrence of severe symptoms.

Mr. Chairman, as you well know, after certain income disregards, some SSI beneficiaries lose 50 cents in benefits for every $1 in labor earnings, or a 50-percent implicit tax rate on earned income. By contrast, SSDI beneficiaries lose access to cash assistance after reaching substantial gainful activity (SGA) for nine months (not necessarily consecutively), plus a three-consecutive-month grace period. (After losing cash benefits, beneficiaries may have their SSDI benefits restored for any month they don’t work at the SGA level for an additional 36 month period). However, even in cases where people with mental illness decide to use existing Social Security work incentives, they still face the loss of medical coverage even if they are able to retain limited cash benefits after reaching SGA.

The issue of access to medical coverage is absolutely critical to people with serious brain disorders, especially coverage for prescription drugs. This issue generates a high level of concern among NAMI members. Without coverage for the newest and most effective medications and other treatments for disorders such as schizophrenia and major depression, many people find it hard to maintain a stable life in the community, let alone achieve complete independence through employment. Moreover, for many people with severe mental illnesses, the first step in the process toward competitive employment is supported employment or low-wage, service-sector jobs. Few of these opportunities offer employer-provided health insurance, especially insurance that adequately covers someone with a serious brain disorder. And, even when people have access to private health insurance through employment, most of these policies do not provide adequate coverage for treatment of severe mental illnesses.

Some of the proposals now before Congress would begin the process of eradicating these disincentives by addressing head-on the loss of health insurance coverage for people who want to move away from dependence on public programs through work. NAMI strongly supports the goal of making the SSI and SSDI programs more responsive to needs of people with serious brain disorders who want to leave the benefit rolls for employment.

Why kind of reform does NAMI support?

1) It should expand individual choice through enactment of a "ticket to independence" program for beneficiaries who need employment and rehabilitation services.

2) It should address head-on the issue of extended health coverage in a way that recognizes the unique treatments of people with severe disabilities, including people with severe mental illnesses.

3) It should begin the process of reforming the severe penalties in the SSDI program that wipe out cash benefits just as beneficiaries begin moving toward independence.

4) It should address the overly complicated and often conflicting rules involved in each of these public programs.

5) It should do no harm to those beneficiaries who are either not ready to go to work or who try to work and fail.

6) It must benefit all Americans – taxpayers, employers, and families – by furthering the goals of the ADA by promoting empowerment and independence.

I would like to address these issues individually:

1) Promoting consumer choice through implementation of a "ticket to independence" program

The "ticket to independence" program was the linchpin of last year’s House bill (HR 3433). As members of the Subcommittee know, this legislation passed the House on June 4, 1998, by a margin of 410 to 1. NAMI strongly supports the policy underlying the "ticket" program. Giving individuals a return-to-work ticket and placing them in control of their own return-to-work plan will be putting consumers in the driver’s seat for the first time. Providers will be forced to compete for business on the basis of how well they meet the individual needs of consumers. State vocational rehabilitation (VR) agencies will no longer be in control of the resources directed towards helping people with disabilities achieve work and independence.

NAMI believes that the current public VR system is failing people with severe mental illnesses. How? The problems associated with VR result of the basic structure of VR being inconsistent with the employment and training needs of people with severe mental illnesses. VR is directed almost exclusively toward a single goal: case closure. For VR agencies and counselors, the process ends once a client is placed in a job for the required time period and a file can be marked closed. This inflexible goal fails to take into account the fact that illnesses such as schizophrenia and manic depression are episodic and intermittent. Moreover, for many people with severe disabilities, this "closure" is only the beginning of the process.

Ongoing supports and services are oftentimes critical to one’s ability to stay in a job over the long-term. The current VR system spends too much time testing and assessing clients prior to employment instead of actually placing people in jobs and providing the ongoing supports and services that will help them stay employed, get of the rolls, and (eventually) reach full independence. People with severe mental illnesses typically need assistance that is both flexible and ongoing to help them live with their disability in a way that will promote, rather than inhibit, work.

By giving individuals a return-to-work ticket and placing them in control of their own return to-work plan, you will be putting consumers in the driver’s seat for the first time. Providers will be forced to compete for business on the basis of how well they meet the individual needs of consumers. State VR agencies will no longer be in control of the resources that are directed towards helping people with disabilities achieve work and independence.

With a "ticket" program, individuals will be able to skip the laborious testing and assessment process within state VR programs. By receiving a ticket directly, consumers will be able to select a provider on the basis of their relative experience in serving people with severe mental illnesses and their record in placing them in jobs. Moreover, extending payments to providers for up to 60 months, based upon whether a consumer stays in the workforce, will result in increased access to support and follow-up services in the workplace.

By contrast, the current public VR system abandons clients after a few short months on the job. NAMI urges that Congress resist any effort to remove from last year’s bill the provisions repealing a) priority referral by Social Security to state VR agencies and b) benefit deductions for persons refusing to accept VR services. While the ticket program will not fix every problem in the current system, when coupled with extended health coverage it offers a very positive step forward.

2) Extended health coverage

Health security is central to the lives of people diagnosed with a severe mental illness. Without access to coverage for treatment, any attempt to enter the workforce is doomed to failure. Despite all the progress made in scientific research on the brain, we still have no "cure" for diseases such as schizophrenia and manic-depressive illness. Most treatments are palliative in nature; i.e., directed toward the control of symptoms that allows an individual to lead a normal life. The most advanced treatments for severe mental illnesses involve medications such as new atypical anti-psychotics and selective serotonin reuptake inhibitors (SSRIs) that can be very expensive.

Even in cases where consumers and their families have access to private health insurance coverage, such coverage typically falls short of meeting the real needs of someone diagnosed with a severe and episodic illness such as schizophrenia or bipolar disorder. Many policies still have discriminatory copayments and deductibles or lower treatment limits that can exhaust coverage and resources as a result of a single hospitalization. While we are making real progress in rooting out this discrimination – through the federal Mental Health Parity Act of 1996 and the 19 state parity laws across the country – more work needs to be done. The reality is that too many people with severe mental illnesses have been forced onto public disability programs as a result of insurance discrimination. Despite efforts to stay in the workforce, too many consumers are pushed out of their jobs once their health coverage has been exhausted or simply becomes unaffordable. Once coverage for essential treatment is gone, consumers are faced with no alternative but to go into poverty to qualify for Medicaid.

The need to spend down resources to qualify for Medicaid results not only from the disability and poverty, but also because Medicare (available to SSDI beneficiaries after 24 months) does not include an outpatient prescription drug benefit. This gaping hole in the Medicare program is a major concern for NAMI in trying to reform these programs. Consumers and their families should no longer be forced to go into poverty to ensure continued access to treatment and some measure of income security. The problems associated with the mental illness benefit within Medicare are also the reason that so many adults with severe mental illnesses are now "dual eligible" for both SSI and SSDI.

Mr. Chairman, NAMI recognizes that this Subcommittee does not have jurisdiction over the Medicare program. Further, we also understand that the Ways and Means Committee’s shares jurisdiction over Medicare with the Commerce Committee, which also has exclusive jurisdiction over the Medicaid program. NAMI respects the need for standing committees in the House to respect jurisdictional boundaries when developing major legislation such as this. Nevertheless, NAMI believes that any attempt to reform Social Security’s disability programs to promote work must forcefully address the issue of access to health care coverage.

Addressing disincentives relative to cash benefits and increasing access to employment and rehabilitation services will not achieve the goal of getting more beneficiaries into the workforce. More importantly, any system that creates a new inducement to move toward employment is likely to fall short if healthcare coverage is left out. Put simply, few consumers will be willing to place their health coverage at risk, no matter how effective a reformed system is in meeting their unique employment and rehabilitation needs. Thus, inclusion of meaningful extended health coverage will ensure that your efforts to reform these programs meets both your expectations and the aspirations of the disability community. NAMI therefore urges you to work with your colleagues on the full Ways and Means Committee and the Commerce Committee to ensure that extended health coverage is made available to SSI and SSDI beneficiaries willing to take the risks inherent in moving off of cash assistance and into employment.

What kind of health coverage is needed? For SSDI beneficiaries, Medicare coverage needs to extended far beyond the 39 months (under Social Security’s existing trial-work period and extended period of eligibility programs). The legislation approved last week by the Senate Finance Committee (S 331) extends Medicare for 10 years for SSDI beneficiaries going to work. Such an approach appears generous, but it is needed to ensure that people stay in the workforce over an extended period.

NAMI also believes that states should be allowed the option of expanding Medicaid eligibility to outpatient prescription drug coverage available to individuals who can and want to work, but need coverage for medications to get into (and stay in) a job. This coverage would be made available to individuals who meet Medicaid eligibility standards on the basis of their disability, but who would likely fall above Medicaid income standards. Such a policy would "catch people on the way down" by filling the gaps in both private plans and Medicare so that they will not have to permanently leave employment and go into poverty to ensure health security. This is a critical protection needed for individuals living with an episodic illness of the brain that too often fails to follow a predictable course.

Critics may charge that extending subsidized Medicare to people in the workforce and extending Medicaid eligibility beyond current income restrictions is either fiscally irresponsible or unfair to current and future beneficiaries who elect not to enter the workforce. At the same time, we have to recognize that without a change in policy, every disabled beneficiary who might take advantage of these options for extended coverage would be receiving the same health benefits if current law is kept in place. In other words, leaving the status quo in place will, in all likelihood, result in the same individuals staying on public assistance.

Moreover, the empowerment and increased self-esteem that can result from being gainfully employed rather than dependent on cash benefits is likely to have the added effect of actually limiting future health care costs. Such a beneficial impact may not be readily assessed as part of a Congressional Budget Office "score," but it something tangible that many people with severe disabilities (including serious mental illness) and their families experience everyday.

3) Reforming the SSDI "cash cliff"

Last year’s House-passed legislation HR 3433 required Social Security to conduct a demonstration of a sliding-scale reduction in SSDI cash benefits. This study is critically important for moving us toward an income-security system that meets the needs of SSDI beneficiaries in the 21st century. NAMI believes that the ultimate solution to the problem of the "cash cliff" in the SSDI program is a "2 for 1" cash offset for earnings above SGA. Under current law, SSDI beneficiaries earning above the artificially low SGA level can lose eligibility for cash benefits all at once. This barrier to work strikes consumers just at the point when they are beginning to achieve the rewards of work and independence. It sends a terrible message to consumers and their families when case managers and Social Security field office staff tell consumers that they are better off quitting their part-time job or severely cutting back their hours.

The time is now to put in place a sliding-scale "2 for 1" offset that gradually reduces benefits as earnings rise. Such a system would reward, rather than penalize, work. NAMI is deeply troubled that Congress has been prevented from enacting this fundamental reform because of concerns about the budgetary impact of such a change in federal policy. It is important to note that these estimates, in NAMI’s opinion, are based not on a careful evaluation of data generated from actual experience of declining cash assistance on a sliding-scale basis. Rather, these estimates appear to be based on untested assumptions regarding "induced entry" or "woodworking" among persons not currently in the SSDI program. NAMI believes that such assumptions about the behavior of workers under a reformed SSDI work-incentive program are simply invalid.

The experience of NAMI’s consumer and family membership is clear: there is no way that otherwise eligible consumers would leave the workforce for a period as long as 36 months (the duration of the disability determination process for many consumers) to eventually take advantage of sliding-scale cash benefits. The experience of the 1619(a) and 1619(b) programs bears this out. NAMI is confident that a properly designed "2 for 1" offset demonstration program will reveal that the fiscal burden is minimal and probably a benefit to taxpayers in the long run.

4) Simplifying the process for consumers and families

One of the most common complaints among NAMI members about the current work-incentive structure is the Social Security bureaucracy. When trying to get straight answers about one’s own benefits and possible opportunities for work incentives (including PASS), consumers often find that SSA field offices and headquarters staff give conflicting and confusing answers. No doubt, this flows from the complexity of the programs, especially in the case of PASS and 1619(a) and (b) for SSI beneficiaries. However, this complexity does not excuse wrong or misleading answers to basic questions and the (too often) complete lack of effective counseling about what the real options are. Making work incentive specialists available to beneficiaries will go a long way toward helping consumers cope with this new program. More importantly, these work-incentive specialists should not be employees of SSA so that the advice they give consumers is independent and free of the biases that we often see in SSA field staff.

5) Beneficiary protections

NAMI feels strongly that any legislation designed to reform the current SSA work-incentive programs should first ensure that it does no harm to vulnerable beneficiaries with severe mental illnesses and other severe disabilities. No individual with a severe mental illness who is receiving SSDI or SSI should have his or her benefits jeopardized by enactment of these badly needed reforms. Several proposals in Congress in recent years have contained important protections ensuring that persons who take the risk and go to work will not be subject to an unscheduled continuing disability review (CDR).

The reality is that there are many people with mental illnesses who are currently part of the SSI and SSDI programs who are experiencing symptoms that are so severe that they cannot be reasonably expected to enter the workforce over the short-term. They should not be forced to participate in a work-incentive program until they are ready. Likewise, participation in this program should not be used as evidence that an individual no longer meets the standards of eligibility for SSI or SSDI. Participation in this program should operate independently of the current CDR requirement for beneficiaries, both in terms of timing and the evidentiary standard for future eligibility.

Finally, NAMI urges that serious consideration be given to adding protections for both the ticket and healthcare coverage elements of a reform package so that consumers can seamlessly move on and off of these programs. The episodic nature of serious brain disorders such as schizophrenia, manic-depressive illness, and major depression requires that these programs be flexible enough to accommodate consumers who may experience severe, though brief, episodes of acute illness.

6) Benefits for all Americans

Congress is poised make important improvements in Social Security’s disability programs that will enable SSDI and SSI beneficiaries to work to the greatest extent of their abilities. It is important for SSA disability programs to begin the process of evolving from their original purpose of serving as early retirement programs for injured workers. They must start moving toward including a new purpose of supporting individuals with disabilities in the workforce. In this way SSA’s disability programs can be transformed from a safety net into a trampoline so that they not only catch people with disabilities as they fall out of work, but also give them a boost back into work when they are ready.

These reforms have the potential to be a win-win situation for all Americans. It can help beneficiaries by enabling them to return to or enter the workforce as wage earners. It can help employers by adding skilled workers to the labor pool. It can help employment service providers by enabling them to serve more participants. Finally, reform offers tremendous long-term potential benefit for taxpayers by assisting workers with disabilities to begin, or continue, paying taxes.

Conclusion

Mr. Chairman, millions of people like me who live with a serious brain disorder are able to work and be productive. We are taxpaying members of our communities. With access to effective treatment through healthcare coverage, people with severe mental illnesses who are on the SSI and SSDI rolls can move toward greater independence. Unfortunately, the current structure of the system, including both the pervasive work disincentives in the SSDI program and the unresponsive nature of the state-federal VR program, make work a frequently unachievable goal. Put simply, the current system is hostile toward work for people who can and want to work, but whose disability prevents them from moving rapidly and permanently to full employment. More important, the system has the perverse effect of trapping people in poverty. The status quo cannot remain in place if we are to achieve the important national goal of full participation and integration into the mainstream of American society for all people with disabilities.

Finally, work and independence are also vital to our ongoing efforts to eradicate the stigma that is so closely associated with severe mental illnesses. Reform of these outdated and unfair programs will continue the path of progress Congress established with the ADA and the MHPA. Thank you for this opportunity to share NAMI’s views on this important legislation.

 


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