Deficit Reduction Act

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Deficit Reduction Act (DRA)-Positive and Negative Implications

The good, the bad, and the ugly are all a part of the recent Deficit Reduction Act (DRA) passage. On February 8, 2006, President Bush signed the Deficit Reduction Act of 2005 (Public Law No. 109-171). The legislation addresses ways to reduce spending on issues such as housing, education, Medicare, Medicaid, Temporary Assistance for Needy Families (TANF), and State Children’s Health Insurance Programs (SCHIP).

Disability advocates are most concerned about the provisions in the DRA that may make people ineligible for Medicaid or limit the benefits available to them through the program. Some of the DRA provisions that concern advocates are cost sharing options, transfers of assets, outpatient prescription drug coverage, home and community based waivers, and citizen documentation. The Congressional Budget Office estimates that the DRA will reduce federal Medicaid spending by $7 billion over the 2006-2010 period and $28 billion over the 2006-2015 period. An extensive overview of the DRA was developed by the National Health Law Program (NHLP) and the National Disability Rights Network’s (NDRN) Training and Advocacy Support Center. The document in its entirety can be viewed with the link below. http://www.ndrn.org/policy/Deficit%20Reduction%20Act%20and%20Medicaid/Advocacy%20Tips%20for%20Responding%20to%20DRA%20final%20_NHELP_.pdf

The Epilepsy Foundation is working in coalition with the broader disability community to monitor how states will implement the DRA- as the law now allows states greater flexibility to limit benefits to Medicaid beneficiaries. In fact, as a result of the DRA, West Virginia has just approved a State Plan Amendment (SPA) that appears to limit Early and Periodic Screening, Diagnostic and Treatment Program (EPSDT) benefit for children. Another concern for people with disabilities is the citizen documentation provision under the DRA.

Citizenship Documentation

The DRA also establishes a new requirement that all citizens provide proof of their citizenship in order to continue to receive Medicaid benefits or to qualify for benefits for the first time. Since there are no exceptions to this rule, this will affect every child, pregnant woman, “dual eligible” (those eligible for Medicare and Medicaid), and all other Medicaid beneficiaries as well as applicants. The requirement will go into effect on July 1, 2006, meaning states have just a few weeks to implement this new regulation or chance losing their state match. Individuals may be denied benefits or have their benefits delayed. The DRA also contains an inadvertent, yet serious drafting error that will exacerbate the impact of this citizenship documentation provision on both states and beneficiaries unless this error is addressed. Many national groups in Washington, DC, including the Epilepsy Foundation are working to urge Congress to pass a technical corrections bill to fix the error in the DRA.

The error concerns the citizenship documentation of elderly and people with disabilities who are “dual eligibles” and those who are receiving Supplemental Security Income (SSI). The DRA uses the word “alien” in one key place where it should have said “individuals.” Because of this error, states will not be able to carry out Congress’s clear intent to exempt seniors and people with disabilities participating in Medicare and/or SSI from proving their citizenship unless the error is fixed.

The Epilepsy Foundation is working through the National Health Council (NHC) and the Consortium for Citizens with Disabilities (CCD) to bring this issue to Congress’s attention and to ask Health and Human Services Secretary Leavitt to use his discretion to craft flexible, workable documentation requirements. Many people with disabilities may not have a valid passport, driver’s license, or even a valid birth certificate, or may not have knowledge of or access to these documents. More information on how you can help and what you should know will be available soon on our website.

The Good News-Passage of the Family Opportunity Act (FOA)

Fortunately, there is some good news that came from the passage of the DRA- after more than six years of waiting- the Family Opportunity Act (FOA) has finally passed! In large part this is due to the advocacy efforts of the disability community who kept the pressure on Congress to pass this important piece of legislation. While most of the provisions in the DRA reduce Medicaid benefits, the Family Opportunity Act is a notable exception.

Senator Charles Grassley (R-IA) and Ted Kennedy (D-MA) were the lead sponsors of the FOA which addresses a critical need - allowing parents of children with disabilities the opportunity to work and earn above poverty wages without losing Medicaid coverage for their children. Prior to FOA, parents of children with disabilities who worked lost Medicaid eligibility for their children if they had income and resources above the poverty level. Many were forced to turn down jobs, raises, overtime pay, and were unable to save money for the future in order to keep their child from losing coverage. FOA builds on the Ticket to Work and Work Incentives legislation that helped adults with disabilities go to work without losing health coverage. It expands Medicaid options for States, allowing them to be able to offer Medicaid coverage to children with disabilities living in middle income families through a Medicaid buy-in program, phased-in over four years.

How will FOA work?

FOA will allow states to expand Medicaid coverage to children with disabilities up to age 18, who would be eligible for SSI disability benefits but for their income or resources. These provisions permit states to offer a Medicaid buy-in for children with disabilities who would be eligible for SSI disability benefits but for their income, who are in families earning up to 300% of poverty ($58,500 for a family of four).

In order for a family to participate in the Medicaid buy-in for their child with a disability, a state must require a parent to take employer-offered insurance within the following guidelines: (1) the employer offers family coverage under a group health plan, and (2) the employer contributes at least 50% of the total cost of the annual premium for the coverage.
If such coverage is attained by the family, the state is required to reduce the premium charged for the buy-in, in an amount that reasonably reflects the parent’s premium contribution for private coverage for their child with a disability.
Participating states may charge premiums up to the full cost of the premium as long as that premium does not exceed 5% of family incomes up to 200% of the poverty level and 7.5% of family incomes between 200-300% of the poverty.
The state may waive payment of a premium in any case where the state determines that requiring a payment would create an undue hardship.

Program Phase-In

Eligible children will be phased-in over a four year period

0-6 year olds — 2008

7-13 year olds — 2009

14-18 year olds — 2010

Additional Provision to FOA: Access to Health Information and Resources

Establishing Family to Family Health Information Centers- FOA provides funds for establishing health information centers to assist and support families of children with disabilities and special health care needs. These centers, staffed by both parents of children with special needs and professionals, will provide technical assistance and accurate information to other families on various health care programs and services available and appropriate for children with special needs, including identifying successful health delivery models. In addition, these centers will act as a resource to healthcare insurers, providers, and purchasers in developing ombudsman models for collaboration between families of children with special needs and health care professionals. The Congressional Budget Office estimated that FOA will give 115,000 children with disabilities access to Medicaid, an expansion that is expected to cost $872 million over five years.

Read Senator Kennedy’s Statement on the Family Opportunity Act:

http://www.tedkennedy.com/content/659/senator-kennedys-statement-on-the-family-opportunity-act

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