[House Hearing, 106 Congress]
[From the U.S. Government Printing Office]



 
              THE WORK INCENTIVES IMPROVEMENT ACT OF 1999

=======================================================================

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                         HEALTH AND ENVIRONMENT

                                 of the

                         COMMITTEE ON COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                                   on

                               H.R. 1180

                               __________

                             MARCH 23, 1999

                               __________

                           Serial No. 106-15

                               __________

            Printed for the use of the Committee on Commerce


                                


                      U.S. GOVERNMENT PRINTING OFFICE
 55-643CC                    WASHINGTON : 1999
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                         COMMITTEE ON COMMERCE

                     TOM BLILEY, Virginia, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    RALPH M. HALL, Texas
FRED UPTON, Michigan                 RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
CHRISTOPHER COX, California          PETER DEUTSCH, Florida
NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California         BART STUPAK, Michigan
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
GREG GANSKE, Iowa                    THOMAS C. SAWYER, Ohio
CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma              GENE GREEN, Texas
RICK LAZIO, New York                 KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
HEATHER WILSON, New Mexico           BILL LUTHER, Minnesota
JOHN B. SHADEGG, Arizona             LOIS CAPPS, California
CHARLES W. ``CHIP'' PICKERING, 
Mississippi
VITO FOSSELLA, New York
ROY BLUNT, Missouri
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland

                   James E. Derderian, Chief of Staff
                   James D. Barnette, General Counsel
      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                 Subcommittee on Health and Environment

                  MICHAEL BILIRAKIS, Florida, Chairman

FRED UPTON, Michigan                 SHERROD BROWN, Ohio
CLIFF STEARNS, Florida               HENRY A. WAXMAN, California
JAMES C. GREENWOOD, Pennsylvania     FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia                 PETER DEUTSCH, Florida
RICHARD BURR, North Carolina         BART STUPAK, Michigan
BRIAN P. BILBRAY, California         GENE GREEN, Texas
ED WHITFIELD, Kentucky               TED STRICKLAND, Ohio
GREG GANSKE, Iowa                    DIANA DeGETTE, Colorado
CHARLIE NORWOOD, Georgia             THOMAS M. BARRETT, Wisconsin
TOM A. COBURN, Oklahoma              LOIS CAPPS, California
  Vice Chairman                      RALPH M. HALL, Texas
RICK LAZIO, New York                 EDOLPHUS TOWNS, New York
BARBARA CUBIN, Wyoming               ANNA G. ESHOO, California
JOHN B. SHADEGG, Arizona             JOHN D. DINGELL, Michigan,
CHARLES W. ``CHIP'' PICKERING,         (Ex Officio)
Mississippi
ED BRYANT, Tennessee
TOM BLILEY, Virginia,
  (Ex Officio)

                                  (ii)



                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Auerbach, Roger, Administrator, Oregon Seniors and Disabled 
      Services Division..........................................    48
    Bangsberg, T. Jeff, Interim Public Policy Director, Courage 
      Center.....................................................    23
    Bergman, Allan I., President and CEO, Brain Injury 
      Association................................................    37
    Cooley, Steven R., Fellow, American Board of Disability 
      Analysts...................................................    45
    Deeley, Harold, father of Tom Deeley.........................    26
    Deeley, Tom..................................................    29
    Gennaro, Mary, Director of Federal-State Relations, National 
      Association of Developmental Disabilities Councils.........    30
    Gray, Craig E., Director, Services for Independent Living....    53
    Lazio, Hon. Rick, a Representative in Congress from the State 
      of New York................................................     7
    Richardson, Sally, Director, Center for Medicaid and State 
      Operations, Health Care Financing Administration...........    12
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California........................................     9
    Williams, Hon. Anthony A., Mayor, District of Columbia.......    19

                                 (iii)



              THE WORK INCENTIVES IMPROVEMENT ACT OF 1999

                              ----------                              


                        TUESDAY, MARCH 23, 1999

                  House of Representatives,
                             Committee on Commerce,
                Subcommittee on Health and the Environment,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:42 p.m., in 
room 2322, Rayburn House Office Building, Hon. Michael 
Bilirakis (chairman) presiding.
    Members present: Representatives Bilirakis, Upton, Coburn, 
Lazio, Cubin, Bryant, Brown, Waxman, Green, Barrett, Capps, and 
Eshoo.
    Staff present: Tom Giles, majority counsel; Jason Lee, 
majority counsel; John Manthei, majority counsel; Penn 
Crawford, legislative clerk; Brigett Taylor, minority counsel; 
Karen Folk, minority presidential management intern, and 
Brendan Kelsay, minority research assistant.
    Mr. Bilirakis. I call this hearing on H.R. 1180, the Work 
Incentives Improvement Act of 1999, to order.
    The subcommittee's consideration of this legislation today 
is an important step in improving the quality of life for 
millions of Americans who live with disabilities. H.R. 1180 was 
introduced last week by two of our colleagues and members of 
this subcommittee, Congressman Rick Lazio and Henry Waxman. I 
commend their efforts and I was proud to be an original co-
sponsor of the bill. This proposal has strong bipartisan 
support, including our subcommittee's ranking member, Mr. 
Brown; the full committee chairman, Mr. Bliley, and the 
committee's ranking member, Mr. Dingell.
    The Senate companion bill, S. 331, was unanimously approved 
by the Finance Committee earlier this month. Working together 
on a bipartisan, bicameral basis, I believe that we can enact 
this important major legislation into law this year, and 
hopefully, earlier in the year.
    The need for the bill is clear. A recent survey found that 
72 percent of Americans with disabilities want to work, but 75 
percent are currently unemployed. The disparity exists because 
the current system forces people to choose between work and 
health care. Under current law, the Social Security Disability 
Insurance, SSDI, and Supplemental Security Income, SSI, 
programs provide cash benefits to persons with disabilities. By 
qualifying for SSDI and SSI benefits, individuals also become 
eligible for health coverage through Medicare and Medicaid. 
These two programs provide comprehensive services that persons 
with disabilities need, but often cannot obtain through 
employer-provided coverage. However, SSDI and SSI benefits are 
not available to any person engaged in substantial gainful 
activity that results in earnings of $500 or more per month. By 
going to work, therefore, individuals with disabilities also 
risk losing their health coverage under Medicare and Medicaid.
    H.R. 1180 would allow States to expand Medicaid coverage to 
persons with disabilities through two optional programs. The 
bill creates a 10-year trial program to extend Medicare Part A 
benefits to SSDI recipients. In addition, it provides 
infrastructure and demonstration grants to assist the States in 
developing their capacity to run these expanded programs.
    And finally, the bill creates a new payment system for 
vocational rehabilitation programs that serve individuals with 
disabilities. This change will reward successful efforts to 
obtain employment. Similar provisions were included in the 
Ticket to Work and Self-Sufficiency Act approved by the House 
of Representatives last year. The bill before us removes 
barriers for individuals who want to work. By encouraging work 
over welfare, it also promotes personal dignity and self-
sufficiency. Simply put, H.R. 1180 will help people help 
themselves.
    Our witnesses today include two of our subcommittee 
colleagues, industry representatives, and Federal, State, and 
local government officials. We will also hear from several 
Americans who live with disabilities about the challenges that 
they have faced. I believe they make the most compelling case 
for passage of H.R. 1180, and I hope members will pay 
particular attention to their testimony. I want to thank all of 
our witnesses for their time and effort in joining us today.
    I yield to Mr. Brown for his opening statement.
    Mr. Brown. Thank you, Mr. Chairman.
    First, I would like to ask unanimous consent to enter into 
the record Mr. Dingell's opening statement and opening 
statements of anyone on either side.
    Mr. Bilirakis. Without object, the opening statements of 
all members of the subcommittee on either side can be made a 
part of the record.
    [The prepared statement of Hon. John D. Dingell follows:]
    Prepared Statement of Hon. John D. Dingell, a Representative in 
                  Congress from the State of Michigan
    Last week, I joined Congressman Rick Lazio, Congressman Henry 
Waxman, Chairman Tom Bliley, Subcommittee Chairman Mike Bilirakis, and 
ranking minority member Sherrod Brown in cosponsoring the Work 
Incentives Improvement Act of 1999. I am pleased that the Commerce 
Committee is holding a hearing on this bill today, and I hope that we 
take the additional steps that are necessary to enact this bill into 
law.
    Over the past few decades, many people with disabilities have 
benefitted from tremendous developments in assistive technologies, more 
sophisticated medical care, and improved access to public facilities 
and public transportation. However, one area of life that has not 
improved for many people with disabilities is the opportunity to earn a 
living. While nearly 80% of non-disabled adults of working age are 
employed full- or part-time, less than 30% of disabled adults of 
working age hold full- or part-time jobs. This gap between the disabled 
and non-disabled population in the area of employment has not improved 
since the passage of the Americans with Disabilities Act earlier in 
this decade.
    Almost three-quarters of people with disabilities who are not 
employed say that they want to work. Yet many adults with disabilities 
know that earning a paycheck may disqualify them from receiving 
Medicaid or Medicare health benefits, which are absolutely necessary 
for keeping them healthy enough so that they are able to work. Many 
people with disabilities, quite understandably, choose health benefits 
over a job.
    This bill would ensure that people with disabilities no longer have 
to choose between working and getting health care. States would have 
additional options to extend Medicaid coverage to working adults with 
disabilities. In addition, the bill would lengthen the current period 
of extended eligibility for Medicare for disabled beneficiaries who 
return to work.
    This bill is sound public policy. It has strong bipartisan support 
in both the House and the Senate, and the Administration has included 
the bill in its budget proposal. I hope that we in Congress will act 
swiftly to pass the Work Incentives Improvement Act, which would 
provide people with disabilities with the opportunity they deserve--the 
opportunity to earn a living.

    Mr. Brown. Mr. Chairman, thank you and thank you especially 
to Congressman Waxman and Congressman Lazio for taking the lead 
on this very important bill.
    In 1990 Congress passed the Americans With Disabilities 
Act. The objective behind ADA is to wipe out discriminary 
practices, active and passive, that undermine equal opportunity 
for disabled individuals. Other major laws, including IDEA, the 
1998 Workforce Investment Act, and the newly reauthorized 
Rehabilitation Act, also promote full participation of disabled 
Americans in the community and in the workforce. Yet, less that 
.5 percent of the 7,500,000 Americans receiving Social Security 
Disability benefits ever return to jobs that could supplant 
those benefits. There is a straightforward reason for this and 
it is not the loss of a monthly disability check. SSI and SSDI 
provide subsistence level benefits, if that. Full or even part-
time work would be the clear economic choice if not for an 
impossible tradeoff, access to health coverage.
    For many disabled individuals, the ability to work may 
hinge on reliable healthcare for personal attendant services. 
Yet, under current law, working means losing access to these 
very services. By providing continued access to Medicare and 
Medicaid, the Work Incentives Improvement Act eliminates this 
Catch-22. In addition, H.R. 1180 provides for enhanced job 
training and job placement services. It empowers disabled 
individuals to shop for the public and private career services 
that best fit their talents and their aspirations.
    Finally, H.R. 1180 would bolster outreach and assistance 
programs that help disabled individuals negotiate the red tape 
associated with reentering the workforce. H.R. 1180 taps into 
tremendous human potential and takes us closer to a time when 
equal opportunity for disabled individuals is no longer an 
objective; it is a fact.
    I am proud to be the original co-sponsor and I yield back 
my time.
    Mr. Bilirakis. And I thank the gentleman. The Chair now 
yields to the vice chairman of the subcommittee, Dr. Coburn.
    Mr. Coburn. I have no opening statement, Mr. Chairman.
    Mr. Bilirakis. Ms. Eshoo, for an opening statement.
    Ms. Eshoo. Thank you, Mr. Chairman. I'll try to be as brief 
as possible.
    First of all, thank you to our two distinguished colleagues 
that are here today. It is always a source of pride to me as a 
Member of the House when some of the great bills that come 
before us are originated and brought to us by members of our 
committee and our colleagues. So, thank you for doing this. I 
am pleased, and I am proud to be a co-sponsor of the 
legislation.
    The fact that over 70 percent of Americans with 
disabilities want to work, yet three-quarters of them remain 
unemployed, I think that we have failed America when we see 
these numbers, but, happily, we have the solution before us in 
the very fine piece of legislation that Representatives Lazio 
and Waxman have placed before the Congress and I think that--I 
mean, the idea that we would be forcing Americans with 
disabilities to be choosing between working and health benefits 
is absolutely absurd. If someone were to come in here and 
propose that kind of system, we'd all vote against it, and yet 
that is the system that we have right now.
    So, I think that we have a great, great opportunity. Not 
only to hear from the original sponsors, the carriers, the 
introducers of the legislation, but from the noble Americans 
that are going add their eloquent voices. And I think that this 
is a bill that deserves, not only the support of everyone from 
both sides of the aisle, but that it should make its way right 
to the rose garden and we will all celebrate when it does.
    Thank you, and I yield back.
    Mr. Bilirakis. I thank the gentlelady.
    Mr. Upton, for an opening statement.
    Mr. Upton. Thank you, Mr. Chairman. I'm going to insert my 
lengthy opening statement into the record. I just want to 
compliment my friends, Mr. Lazio and Mr. Waxman, for this piece 
of legislation. I, too, join as a co-sponsor of the 
legislation. I know plenty of folks in my district that really 
do feel like they are prevented from working and feeling good 
about the services that they do because of the lack of adequate 
health care, and it is with great joy that I join as a co-
sponsor and look forward to this legislation moving swiftly in 
a bipartisan matter to this awesome committee.
    I yield back the balance of time.
    [The prepared statement of Hon. Fred Upton follows:]
  Prepared Statement of Hon. Fred Upton, a Representative in Congress 
                       from the State of Michigan
    Mr. Chairman, thank you for holding this hearing today on the Work 
Incentives Improvement Act, launching this landmark legislation on its 
way through the House legislative process. I want to commend my 
colleague and friend Rick Lazio for his leadership in developing this 
comprehensive measure. It will benefit not only people with 
disabilities, but our nation as a whole by removing the substantial 
barriers in the way of persons with disabilities who wish to enter or 
re-enter the workforce. We will all benefit from the contributions they 
are eager to make to our nation's economy and future.
    If I had to make one recommendation for a change in this bill, I'd 
recommend changing its title from the Work Incentives Improvement Act 
to the Work Empowerment Act. Persons with disabilities don't need 
incentives to join the workforce. The vast majority are eager to do so. 
As one of our witnesses will testify, a Harris poll found that 72 
percent of people with disabilities age 16 to 64 who are not employed 
would prefer to be working. They want the chance to share their skills, 
talents, and dedication in the workforce.
    But they face tremendous barriers. Chief among them is the loss of 
Medicare and Medicaid coverage. Another is loss of income. They and 
their families are often worse off if persons with disabilities go to 
work. They are caught in the proverbial ``catch-22'' situation.
    The plight of one of my constituents brought this situation home to 
me in a way statistics can't. She is a middle-aged, talented lady who 
suffers from post-polio syndrome and has limited mobility. She is 
receiving Supplemental Security Income and Medicaid. Because she wants 
very much to use her talents and give back to the community, she serves 
as a volunteer receptionist for their local Disabilities Resource 
Center and provides excellent assistance. As much as she would like to 
get a paying job, she cannot, because in all likelihood she would earn 
too much to keep her SSI and hence her Medicaid coverage and too little 
to pay out of pocket for the housekeeping assistance and medical care 
she needs to remain in her own home.
    That is why I see this as an empowerment act. It will ensure that 
working doesn't cost people with disabilities the very health and 
social services that enable them to work. It will empower them to 
choose the rehabilitation services, public or private, that best meet 
their unique needs and talents.
    In enacting the Americans with Disabilities Act a decade ago, we 
ensured that persons with disabilities would not experience 
discrimination in the workforce. Now, we need to knock down the 
barriers keeping them from entering or trying to enter the workforce. 
The legislation we are considering today will do that.

    Mr. Bilirakis. He knows what to say, doesn't he?
    Ms. Capps for an opening statement.
    Ms. Capps. Thank you, Mr. Chairman.
    Thank you for holding this hearing. I want to welcome----
    Mr. Upton. If I could just ask unanimous consent to see if 
my friend from Florida might have an extra ticket in St. 
Petersburg for the Michigan fans down there?
    Monday night.
    Mr. Bilirakis. Without objection, you can ask, but the 
answer is no.
    Ms. Capps. Thank you. I want to add my word of welcome and 
admiration for my two colleagues for initiating this 
legislation. I am in the process of becoming a co-sponsor. I am 
going to submit my full statement for the record, but I want to 
just highlight for you and for myself now to recall a high 
moment in my short legislative career, but a high moment in my 
life.
    Last winter I had the privilege of providing a key note 
address to a group of about 200 consumers of a regional center 
in my State, the Tri-Counties Regional Center. This is an 
organization which is serving, but also comprised of, the 
disabled community in Santa Barbara. The goal of the group is 
to help this population, developmentally and physically 
disabled, to become fully participating and productive members 
of society. In fact, the title of the event was Leadership and 
Community Involvement for the Disabled and they invited their 
soon-to-be elected representative to come to share legislative 
ideas. It was an amazing inspirational group of people who 
refused to let their disabilities keep them from attaining 
their goals and held me to a commitment, which I was pleased to 
give--the commitment that I would do something about this.
    This is a part of my obligation today; to be able to hear 
your testimony; to be a part of this hearing; and now to be 
able to go back to that same group and say, ``Yes, we are 
beginning to work.'' There are a counterpart organization in 
San Luis Obispo County. SLO-CO access is also deeply involved 
in the challenge of getting disabled clients into the 
workforce. The key message in this day-long conference repeated 
over and over again to me was ``we want to work. You, in the 
government, are preventing us from being able to exercise our 
full potential as citizens. We want to work.'' They chanted it 
to me. I can't get it out of my mind. So, I'm here today 
thanking you for giving me something now to carry back to my 
constituents.
    I yield back the balance of my time.
    Mr. Bilirakis. Thank you, Ms. Capps.
    Ms. Cubin for an opening statement.
    Mrs. Cubin. Thank you, Mr. Chairman.
    It is no secret that the vast majority of Americans with 
disabilities would like to work. Congress has an obligation, I 
think, to look at the legal barriers that force persons with 
disabilities to rely on cash benefits.
    I want to thank all of you for coming here today. I 
appreciate your time and I look forward to hearing your unique 
perspective and insights on this issue. I also want to thank my 
little buddy, Congressman Lazio, and my other buddy, 
Congressman Waxman, for introducing this legislation.
    As with any legislation, there could be some haggling over 
the details, but I think the fact that we are discussing this 
today is vitally important and will help all of us on the 
subcommittee to fully understand this issue. Removing the 
barriers to employment is a common goal among all of us, and I 
expect that today's hearing will help us accomplish this goal. 
So, thank you again.
    Mr. Bilirakis. Thank you. I think that completes the 
opening statements from up here.
    [Additional statements submitted for the record follow:]
 Prepared Statement of Hon. Nathan Deal, a Representative in Congress 
                       from the State of Georgia
    Thank you, Mr. Chairman, for holding this important hearing today 
regarding the Work Incentives Improvement Act. I am supportive of the 
intent of this legislation. We must enable people with disabilities to 
assume greater control over their lives and allow them to contribute 
more fully to society. Rapid advancements in technology continue to 
provide important new tools to help individuals with disabilities 
become more independent and participate in activities related to home, 
school, work, and community. However, current health care programs 
create barriers to individuals with disabilities trying to increase 
their independence and productivity through work. I thank you and look 
forward to hearing the testimony from our witnesses.
                                 ______
                                 
Prepared Statement of Ed Bryant, a Representative in Congress from the 
                           State of Tennessee
    Thank you Mr. Chairman. Good morning.
    First of all I would like to thank Chairman Bilirakis for holding 
this hearing today.
    I believe this legislation is very important in terms of removing 
the governmental disincentives that make it very difficult--if not 
impossible--for so many individuals with disabilities to return to work 
or go to work.
    It is troubling that nearly 75 percent of people with disabilities 
are unemployed, yet surveys show that the vast majority of these people 
want to go to work and be productive members of society. I also find it 
troubling that every year only one-half of one percent of individuals 
with disabilities successfully make the transition from unemployment to 
employment.
    I look forward today to examining the current situation and 
proposed legislation aimed at breaking the cycle of dependency on 
government. I appreciate the time and energy that went into crafting 
this bill, and I am eager to work with my colleagues on both sides of 
the aisle in taking a closer look at it.
    Finally, I would like to thank the witnesses who are with us today 
for their time and testimony. I look forward to hearing from each of 
you.
    Thank you, Mr. Chairman. I yield back the remainder of my time.
                                 ______
                                 
  Prepared Statement of Hon. Gene Green, a Representative in Congress 
                        from the State of Texas
    Thank you Mr. Chairman for scheduling this important hearing.
    I also want to thank Mr. Waxman and Mr. Lazio for taking the lead 
on this issue which I believe will give disabled individuals the chance 
to choose work over dependency.
    I am a cosponsor of H.R. 1180 because I believe it strikes at the 
core of human dignity and represents the proper balance of government 
support for independent living.
    A recent study showed that nearly three quarters of disabled 
individuals want to work. Yet \3/4\ of this same population are 
unemployed.
    How is this possible and what can Congress do to help?
    Well, the answer to the first part of the question is that disabled 
individuals have unique health care needs that often times can only be 
met by Medicaid or Medicare.
    The answer to the second part of the question is pass H.R. 1180.
    This bill gives disabled Americans the opportunity to gain 
employment and continue to receive the medical care they need and 
deserve.
    While it is an expensive proposal, I believe it is money well 
spent. The cost in dollars will pale in comparison to the sense of 
accomplishment and independence thousands of Americans will get from 
supporting themselves and their families.
    Again, I want to thank Chairman Bilirakis for scheduling this 
hearing so quickly. Hopefully, this fast-track process will allow this 
bill to become law very soon.

    Mr. Bilirakis. The Chair is very proud to introduce our two 
colleagues, the writers of this legislation, and I'm going to 
start off with the man who was here first. I was going to 
extend to you the courtesy.
    All right, at his request, we'll introduce Rick Lazio, a 
member of this committee. Rick, we appreciate so very much the 
job you've done on this. Please tell us more about it.

STATEMENT OF HON. RICK LAZIO, A REPRESENTATIVE IN CONGRESS FROM 
                     THE STATE OF NEW YORK

    Mr. Lazio. Thank you very much, Mr. Chairman.
    Let me begin by thanking you and the ranking member, Mr. 
Brown for the opportunity to appear before the committee. I'd 
like to also send a special thanks to both of you for co-
sponsorship of this bill and appearing at the press conference 
which sent an enormously strong message to the advocacy 
community and to all Americans about the prospect for passage 
this year. You are two very important players. I want to thank 
the rest of the members here and my friends, and in particular, 
Mr. Waxman, who is appropriately on my left, who is my partner 
in this, and I am very appreciative of him.
    The Work Incentives Improvement Act has one goal and one 
goal only: enabling individuals with disabilities to pursue, if 
they want, work. Over the past decade, we have made dramatic 
improvements in removing many of the barriers that have kept 
people with disabilities out of the mainstream of American 
life. The Americans With Disabilities Act, for example, 
successfully helps people with disabilities lead more active 
and integrated lives. But the ADA did not complete the work of 
removing all barriers. In fact, it not even remove all Federal 
Government barriers. Access to healthcare coverage remains an 
enormous hurdle confronting people with disabilities who want 
to work.
    Let me tell you about a man from my district. He is a Navy 
veteran from Bay Shore, New York. Several years ago he worked 
on Wall Street with the hopes of becoming a stockbroker. 
Unfortunately, an accident left him a quadriplegic and he 
relies on a tracheostomy to help him breathe and to speak. He 
requires nurses or caregivers to clean his tracheostomy and 
requires 24-hour home care to assist him with activities of 
daily living.
    His physical challenge, however, does not inhibit his 
ability to be a stockbroker. Years after his tragic accident, 
he successfully passed the Series 7 test, a grueling 6-hour 
exam to become a licensed stockbroker. And I would add, Mr. 
Chairman, with the diversity of technology that is now 
available, the folks who are challenged with disabilities have 
even more employment opportunities. He would like to open up 
his own firm and hire people with disabilities. Nothing is 
stopping him in pursuing his American dream except us, the 
Federal Government.
    His predicament is replicated all across this country by 
the millions. According to the report of the National 
Organization on Disability, 72 percent of Americans with 
disabilities want to work. Yet, less than .5 percent of 
disabled Americans are able to move from disability benefits to 
employment and self-sufficiency. What is the problem? The 
problem is that Federal benefit programs, such as SSDI and SSI, 
provide benefits, including healthcare coverage through 
Medicare and Medicaid. Services that many disabled workers 
require are often not covered by employer healthcare. So, when 
a disabled American secures a modest job and earns income, he 
or she risks losing their Government benefits, including health 
coverage.
    Mr. Chairman, this is very important and not hard to 
understand. Disabled Americans must choose between working and 
surviving. The sad reality is that access to healthcare makes 
all the difference when it comes to people with disabilities 
moving from the Government roles into the workplace.
    This is why together we have introduced the Work Incentives 
Improvement Act. The Federal Government should remove existing 
barriers and allow these individuals to work. Like all other 
Americans, disabled Americans deserve economic opportunity. 
They deserve the satisfaction that only a paycheck can bring. 
They deserve to be in control of their lives and have the peace 
of mind of independence and personal security. They deserve to 
follow their own American dream.
    The Work Incentives Improvement Act takes significant steps 
toward reforming Federal disability programs, improving access 
to needed services, and releasing the shackles of dependency. 
We, in Congress, have an obligation to help people with 
disabilities make this leap and become more productive 
citizens.
    I know that some members of this committee might have some 
reservations about the Medicaid and Medicare provisions in the 
bill, especially at a time when these programs face a looming 
crisis as the baby-boom generation ages, but we all must keep 
in mind that these Medicaid expansions are options for the 
States, not mandates. Our bill will give States maximum 
flexibility in designing initiatives to promote work for people 
with disabilities. And more importantly, these options under 
Medicaid are not freebies. States can require people with 
disabilities, depending on their income levels, to pay up to 
100 percent of premium costs. Likewise the 10-year Medicare 
demonstration for SSDI recipients would be available only to 
people who would otherwise be eligible for the program. Why not 
allow them to get the coverage they need and work at the same 
time?
    Last week at our press conference, Angelo Bianco, an Air 
Force veteran from Jackson Heights, New York, who fought in 
Operation Desert Storm, spoke for a few minutes. Angelo has a 
spinal cord injury he suffered during his service in the 
Persian Gulf. Angelo spoke about how the two most miserable 
years of his life were the time he spent at home after the war. 
Fortunately, he is now working for the Eastern Paralyzed 
Veterans Association and is a productive member of society. I 
know, Mr. Chairman, how dedicated you are to the veterans 
community, so I know you can relate to this. We need to pass 
this bill to enable many more Americans with severe 
disabilities to follow Angelo's lead and to move into the 
workforce and the mainstream of American life.
    I want to thank you again, Mr. Chairman, and the ranking 
member, Mr. Brown, and all the members for their supportive 
comments and for working in the bipartisan fashion for helping 
to move us one major stride forward to ensuring that we have 
financial independence for those who have disabilities.
    Thank you.
    Mr. Bilirakis. Thank you, Rick.
    The Chair now calls upon our colleague, Mr. Waxman. First, 
I would say that the mayor of the District of Columbia, Mr. 
Williams, is scheduled to be here. We are, of course, very 
pleased to have him testify at his request, but he hasn't 
arrived yet. So, Henry, take your time.

STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Mr. Chairman, and my colleagues, I thank you 
very much for this chance to speak with you and to join with 
Congressman Lazio in supporting this legislation. It is clear 
that, from the opening comments, all the members of this 
subcommittee understand the importance of this bill, and if not 
all of you, certainly most of you, are already on as co-
sponsors.
    This is an important proposal and it is an unusual one. 
It's unusual because of the extraordinary degree of bipartisan 
support the bill has. It is, of course, supported by the 
chairman, the ranking member of the subcommittee, the chairman 
and ranking member of the full committee. It has the 
endorsement of the administration. Indeed, it was singled out 
by the by the President in his State of the Union Address.
    It already has passed the Senate Finance Committee, again, 
with the sponsorship of the chairman and the ranking member of 
that committee. It has support at the State level, as well as 
here in Washington. This bill has this degree of support, I 
believe, because it is such a common-sense piece of 
legislation. It is moderate in costs. It offers benefits in 
terms of productiveness and self-respect for people who are 
determined to work and become taxpaying, contributing members 
of society.
    I want to make just two points about his bill, and if the 
mayor doesn't come, I'll soon make three or four additional 
ones.
    First, it provide States with options to allow them to use 
their Medicaid programs to cover people with severe 
disabilities who can work if their healthcare coverage is 
continued. I, myself, would have preferred a mandate, but if 
we----
    I only said that to see your reaction.
    But I think it is important, at least, to have options 
available to the State and I expect the States will respond 
favorably to that. And the bill provides options and allows 
States to use their Medicaid program to cover people with 
severe disabilities who can work if their healthcare coverage 
is continued. And it authorizes an extremely important 
demonstration program to allow States to provide Medicaid 
coverage at a stage that will prevent people from having their 
disability become so severe that they end up on SSI. Truly, 
that is one of the most sensible things we can do.
    This bill also lets people with disabilities who have been 
covered by Medicare keep that coverage if they are able to 
return to work. Again, this is absolutely critical. This 
provision allows people to work. It makes a great deal of 
common sense. No one benefits if we bar the door to returning 
to work by taking away the healthcare support necessary for a 
person with a disability to be able to work. When you look at 
how much sense this bill makes, the only real question is, why 
haven't we done this sooner?
    Let's remedy the fact that this is not yet law. Let's move 
as quickly as possible. Let's do it in a bipartisan way. Let's 
have an initiative to improve healthcare coverage for 
Americans. May this be the first of many bills that this 
committee will author and move forward with bipartisan, 
overwhelming support, so that we can show the American people 
that we are willing to, and actively anxious to, address 
problems that really mean something to them in their lives.
    Thank you.
    Mr. Bilirakis. Well, thank you, Henry. Very well put in 
most respects.
    We have a history over the last few years of working out 
some pretty tough issues on a bipartisan basis, and I am very 
hopeful that this is going to continue as far as this 
legislation is concerned.
    And you and I very briefly chatted about managed care, 
sitting down and try and work that out. I don't know why in the 
world we can't do that. Of course, it has all come about 
because everybody has been willing to give and take a little 
bit because we know that is what it is all about, and because 
of the great cooperation on the part of my ranking member, Mr. 
Brown.
    Mr. Brown, do you have any questions of this panel? Any 
questions from any member of the panel?
    Ms. Eshoo. I just have a curiosity question. I just can't 
see how anyone would not support this. There are those that you 
might not get to co-sponsor, but I can't help but think that 
this really should go to the House on the suspension calendar. 
How many co-sponsors are there so far?
    Do we know? Forty, and we've just introduced it.
    Mr. Bilirakis. Yes, we just introduced it.
    Ms. Eshoo. I really think this should be our collective 
goal, and that you turn this subcommittee, since we have the 
original jurisdiction on this as the whips from both sides of 
the aisle to go out and get our colleagues. An eloquent 
statement would be made by the House of Representatives if we 
could bring this to the floor, and I think that we can on the 
suspension calendar.
    For those of you that don't know what the term means, it 
means that there are 218 people that have signed on and that 
there isn't any controversy. So, that is the majority of the 
House.
    Mr. Waxman. This bill is in our committee, but it is also 
in the Ways and Means Committee, and to give credit where it is 
due, the Ways and Means Committee did some of the pioneering 
work on this legislation.
    Ms. Eshoo. That is great. So we shouldn't be too self-
congratulatory here?
    Mr. Waxman. No, but I think we need to compliment them for 
their initiatives and to impress upon them that we have now 
added on some very important features. The healthcare features 
are essential, not just the financial assistance to people, but 
healthcare and Medicaid is in our jurisdiction as well as 
Medicare, which they share with us. So, I hope that----
    Ms. Eshoo. We'll join with them?
    Mr. Waxman. We will not only work on a bipartisan basis, 
but that our two committees will move together.
    Mr. Bilirakis. Sometimes it is more difficult to work with 
the other committee than it is on a bipartisan basis.
    Ms. Eshoo. Not on this one, though. Not on this one. Right.
    Mr. Waxman. I never experienced that, Mr. Chairman.
    Mr. Bilirakis. You have never?
    All right, Henry.
    Barbara, any questions?
    The mayor is not here yet. Should he arrive--he was 
scheduled to be here about 5 minutes to 3--we'll work him in 
somewhere along the line, if he has the time to wait a while.
    Mrs. Cubin. Mr. Chairman, I do have a bill in Resources 
Committee that I could educate the committee on, if--Never 
mind.
    Ms. Bilirakis. You mean just to take up the time.
    Mrs. Cubin. Sure.
    Mr. Waxman. I can tell you about the activities in the 
Government Reform Committee, so you don't think everything is 
bipartisan or harmonious.
    Mr. Brown. Speaking of bipartisanship.
    Mr. Waxman. Well, it is appropriate this is the first 
hearing post-Hershey.
    Mr. Bilirakis. Well, thanks. Thanks guys. We are going to 
do this. We are going to do this together.
    Mr. Lazio. Thank you very much, Mr. Chairman.
    Mr. Bilirakis. The second panel.
    I tell you, we don't usually see or hear very much applause 
on this committee. The press conference the other day was, I 
think, the first that I've experienced in quite a while, and 
that was really great. So, we appreciate it again today.
    The second panel consists of Ms. Sally Richardson, the 
Director--is she here?
    Ms. Richardson. Yes, sir.
    Mr. Bilirakis. Oh, there she is. Sally, I'm sorry.
    Ms. Richardson. That's all right.
    Mr. Bilirakis. Director of the Center for Medicaid and 
State Operations with HCFA, Ms. Richardson. We're turning the 
clock to 10 minutes, but just tell us what it is you want to 
tell us.

 STATEMENT OF SALLY RICHARDSON, DIRECTOR, CENTER FOR MEDICAID 
   AND STATE OPERATIONS, HEALTH CARE FINANCING ADMINISTRATION

    Ms. Richardson. Well, the first thing I would like to do, 
Chairman Bilirakis, and Congressman Brown, and the rest of your 
distinguished subcommittee members, is to thank you for asking 
me to discuss the very strong----
    Mr. Bilirakis. Why don't you pull that closer to you 
[referring to microphone], if you will please?
    Ms. Richardson. [continuing] oh, I'm sorry--to discuss the 
very strong support of the Clinton administration for the Work 
Incentives Improvement Act of 1999. We would also like to thank 
you, Chairman Bilirakis and Congressman Brown, for your 
leadership in building bipartisan support for this important 
legislation, along with Chairman Bliley, Congressman Dingell, 
Lazio, Waxman, and Senators Roth, Moynihan, Jeffords, and 
Kennedy. It is a wonderful, wonderful example of Congress 
joining together to fill a real need.
    The Health Care Financing Administration and the Clinton 
administration have been working diligently to improve the 
lives of people with disabilities. We recognize that they 
deserve to be treated with dignity. They deserve to be able to 
contribute their talents and skills to our communities in our 
society, and they deserve to have broad options for obtaining 
the care and the services that they need.
    The threat of not having health coverage should never allow 
them or us to be able to discourage capable individuals from 
returning to work. We believe it is both prudent and fair to 
extend Medicare and Medicaid benefits to disabled individuals, 
as you have proposed in the Work Incentives Improvement Act, in 
order to remove this threat.
    The Work Incentives Improvement Act will help people with 
disabilities take fuller advantage of the technological 
advances that have opened doors for them to the workplace. 
Under current law, a person as you know with a disability who 
takes a job can become ineligible for Medicare and Medicaid 
because of their income or their ability to work. The private-
sector coverage that is available to many employees of private 
companies is very often unavailable or unaffordable for 
disabled people, specifically because of their disability. The 
Work Incentives Improvement Act will help States do something 
about that. It allows States to lift or relax current 
eligibility limits on assets and income for this population, 
building on the provision that you passed in the Balance Budget 
Act of 1997. It allows States to charge premiums on a sliding 
scale. It allows States to let the working disabled buy 
Medicaid coverage when they would otherwise lose eligibility 
due to medical improvement. It gives States $150 million for 
infrastructure grants to help develop programs and systems that 
can support the working disabled moving into work and also 
provide assistance supporting home and community-based services 
for people who are served currently in institutions.
    It provides Medicare Part A coverage during the 10 years 
following the enactment of this bill for those disabled 
individuals who lose Social Security due to their ability to 
earn a living. This is a provision that will provide relief for 
individuals in those States that may not choose the Medicaid 
expansions in the bill.
    And it authorizes a demonstration, a test, so that we can 
measure the value of providing Medicaid to individuals with 
conditions like diabetes and HIV that, left untreated, can lead 
to disability. The bill is included in the President's fiscal 
year 2000 budget, and it is part of a broader administration 
agenda for helping disabled individuals return to the 
workforce.
    We are really proud to be among a wide bipartisan array of 
supporters for this legislation. We look forward to working 
with you to help pass this bill and to help bring disabled 
individuals into the workforce. I especially appreciate, as I 
said when I began, your holding this hearing and your asking us 
to be part of it. And I am very happy to answer questions that 
you have.
    [The prepared statement of Sally Richardson follows:]
Prepared Statement of Sally Richardson, Director, Center for State and 
       Medicaid Operations, Health Care Financing Administration
    Chairman Bilirakis, Congressman Brown, distinguished subcommittee 
members, thank you for inviting me to discuss the strong support of the 
Clinton Administration for the Work Incentives Improvement Act of 1999. 
We would like to thank Chairmen Bilirakis and Bliley, Congressmen 
Dingell and Waxman, and Senators Roth, Moynihan, Jeffords and Kennedy 
for their leadership in building bipartisan support for this prudent, 
fair, and necessary legislation.
    The Health Care Financing Administration is working diligently, in 
concert with the President's goals, to improve the lives of people with 
disabilities. These individuals deserve to be treated with dignity, to 
be able to contribute their talents and skills to society, and to have 
broad options for obtaining the care and services they need. Now, more 
than ever, given innovations in technology and the historic strength of 
the economy, people with disabilities can and should be able to work 
and pay taxes.
    One way we are working to meet these goals is by encouraging States 
to offer more Medicaid home and community-based services. This involves 
allowing funds for care and services to ``follow the person,'' instead 
of dictating that services will be funded only in specific settings 
like nursing homes. And, based on results of a University of California 
San Francisco study we commissioned, we are changing Medicaid rules to 
encourage care in home and community-based settings.
    However, some policy changes needed to improve the lives of people 
with disabilities require legislation. The Work Incentives Improvement 
Act is one such piece of needed legislation.
    We need this legislation so people with disabilities can take 
fuller advantage of technology advances that have opened doors to the 
workplace for them. We must ensure that people with disabilities can 
engage in gainful employment without losing public health care coverage 
that they often cannot replace in the private sector. We must also give 
young people with disabilities the opportunity to go from education to 
employment without ever receiving cash assistance in order to gain 
health care coverage. This bill will do so.
    The President, HCFA and a wide, bipartisan array of Congressional 
leaders strongly support this bill. It is included in the President's 
fiscal 2000 budget, and is part of a broader Administration agenda for 
helping disabled individuals return to the workforce.
    Currently three out of four people with disabilities are not 
working. The unemployment rate among disabled people is exacerbated by 
existing law, which can make a person with a disability who takes a job 
ineligible for Medicare and Medicaid because of their income or ability 
to work. Private sector coverage is often unavailable or unaffordable 
for disabled people specifically because of their disability.
    The Balanced Budget Act enables States to provide Medicaid coverage 
to the working disabled with incomes up to 250 percent of the federal 
poverty level if they meet the unearned income eligibility criteria and 
definition of disability for the Supplemental Security Income program. 
We have encouraged States to take advantage of this opportunity, and 
have approved Oregon's plan to do so. Several other States have 
proposals under consideration, but too few States have taken advantage 
of this BBA provision.
    The Work Incentives Improvement Act will improve upon the Balanced 
Budget Act in a number of ways. It expands State options for providing 
Medicaid coverage to the working disabled. It allows States to lift or 
relax current eligibility limits on assets and income for this 
population. States would be able to set limits on assets and income, 
and they would be able to charge premiums on a sliding scale. States 
could also allow the working disabled to continue to buy Medicaid 
coverage when they would otherwise lose eligibility due to medical 
improvement.
    The Work Incentives Improvement Act will provide $150 million over 
five years in grants to participating States to help them develop 
programs and systems that support working individuals with 
disabilities, build the capacity to provide home and community-based 
services, and conduct outreach campaigns to connect individuals with 
services. This money should help States facilitate coverage for 
optional eligibility groups and increase the likelihood that they will 
choose to provide this coverage.
    The Act will also provide Medicare Part A coverage (for inpatient 
hospital and related acute care needs) to any individual who remains 
disabled but loses Social Security during the 10 years following 
enactment of this bill due to their ability to earn a living. This will 
provide important relief for the working disabled in States that do not 
choose the Medicaid expansions.
    And it provides for a $300 million demonstration program over five 
years that would allow participating States to provide Medicaid to 
individuals with health conditions that have not yet rendered them 
disabled, but that can be expected to cause the level of disability 
required to qualify for disability income. This demonstration would 
test the cost effectiveness of providing coverage and consequent care 
needed to prevent disability and related costs. And it will provide 
important data that private insurers can use in crafting new coverage 
policies for disabled workers.
    The bill also includes a series of non-health provisions that 
target individuals receiving Social Security disability benefits, 
including:

 a ``Ticket to Work'' public-private partnership program that 
        would allow beneficiaries to go to either a public or private 
        participating provider for employment-related services, with 
        payment to providers based on employment outcomes;
 restrictions on employment as the sole basis for continuing 
        disability reviews;
 expedited eligibility determinations for beneficiaries who 
        have left disability rolls to return to work but then must 
        reduce or stop work due to their impairments; and
 outreach and assistance programs to provide information on 
        work incentives.
    The President has proposed to broaden the outreach and assistance 
grant programs in the bill to include ``one-stop shopping'' assistance 
for people who need help navigating the bureaucracies involved in 
returning to work. The proposal would provide grants to ensure that 
one-stop centers, established by the Workforce Investment Act of 1998, 
are focused on integrating services that are essential for people with 
disabilities. We hope that you will consider this broader grant program 
in this bill or other legislative proposals.
    The threat of no health coverage should not be allowed to 
discourage capable individuals from returning to work. It is both 
prudent and fair to extend Medicare and Medicaid benefits to disabled 
individuals under the Work Incentives Improvement Act in order to 
remove this threat.
            administration support for the working disabled
    As mentioned above, support for the Work Incentives Improvement Act 
is part of broad Clinton Administration support for efforts to improve 
the lives of people with disabilities and facilitate their employment. 
President Clinton established the President's Task Force on Employment 
of Adults with Disabilities by executive order on March 13, 1998. This 
task force is working to coordinate national policy to bring adults 
with disabilities into the workforce at a rate that is closer to the 
general population.
    The President's fiscal 2000 budget includes a three-part initiative 
that will invest more than $2 billion over five years to encourage 
employment among disabled individuals. The first part of that 
initiative is enactment of the Work Incentives Improvement Act. On 
January 13, 1999, the President announced his support for this 
legislation as part of his larger initiative to improve economic 
opportunities for Americans with disabilities.
    The President's fiscal 2000 budget's working disabled initiative 
also includes a proposed $1,000 annual tax credit for workers with 
disabilities to help defray the costs of transportation, adaptive 
equipment or other job assistance. It also includes a $15 million or 50 
percent increase for assistive technology activities authorized under 
the Assistive Technology Act of 1998, and expanded access to 
information and communication technological advances that help disabled 
individuals function on the job. Workers with disabilities also will 
benefit from the President's multi-faceted long-term care initiative 
that includes a number of provisions targeted toward adults with 
disabilities.
    Also, to further provide States flexibility to offer more home and 
community-based services, the Vice President recently unveiled a new 
proposal to allow States to expand home and community-based care to 
individuals with incomes up to 300 percent of the Social Security 
Income limit. That is the same income limit for providing care in 
nursing homes. This would provide another State option to enable 
families with long term care needs to stay in the community. The 
initiative would cost $110 million over five years, and is paid for in 
the Administration's balanced budget.
                               conclusion
    The Work Incentives Improvement Act is prudent, fair, and necessary 
to ensure that disabled individuals can participate fully in the job 
market without fear of losing health care coverage. We are proud to be 
among a wide, bipartisan array of supporters for this legislation. We 
look forward to working with you to secure passage of this bill and 
other Administration proposals to help bring disabled individuals into 
the workforce and to increase the availability of Medicaid services in 
home and community-based settings. I thank you for holding this 
hearing, and I am happy to answer your questions.

    Mr. Bilirakis. Thank you very much, Ms. Richardson, and we 
are very pleased that you were willing to come here because, 
again, when we talk bipartisanship, we should mean including 
the other portions of government in the process.
    Let me ask you, and I guess this is more curiosity on my 
part, but I think it is also pretty significant. BBA 1997 
allowed States to increase the Medicaid buy-in for workers with 
disabilities up to 250 percent of the poverty level. Yet, as I 
understand it, only one State, Oregon, has exercised this 
option. Why do think this is?
    Ms. Richardson. With all due respect, Mr. Chairman, BBA 
gave the States a good deal to think about and to work for that 
they hadn't expected, so to speak. And I think the Children's 
Health Insurance Program which expanded healthcare coverage to 
5 million additional children in this country, changes in the 
Medicaid Managed Care Program which, obviously, concerns all 
the States since most of them have some form of managed care 
now operating in their State--I think these were all things 
that they felt had to be addressed. I think that these were 
more immediate concerns, as you know. CHIP was initiated or had 
to be implemented by the first of the fiscal year, and Medicaid 
Managed Care, as I said, has been very much on their plates. We 
now have another 11 States that are talking to us about the 
provision in BBA 1997----
    Mr. Bilirakis. Good.
    Ms. Richardson. [continuing] and looking toward submitting 
plans to us to be able to implement it. Sometimes because this 
is a very complex area and this is a very complex policy for 
States, it takes longer to put it together than States might 
imagine at the beginning.
    And you're going to hear from Mr. Auerbach today, who has 
implemented this provision or is implementing this provision in 
the State of Oregon, and he will be able to either confirm or 
expand on what I think are the reasons why States have not 
immediately taken this up.
    Mr. Bilirakis. Right, well, let me ask you, then, a thought 
in that same vein. I was very curious why more States hadn't 
taken advantage of it and your answers are very good. I just 
wonder, though, is the language in BBA 1997 a problem in terms 
of interpretations, definitions? Since I think we all intended 
to give the States this authority and we all think it was a 
good idea, is there something that we can do regarding the 
language of BBA 1997 to maybe spur this on somewhat?
    Ms. Richardson. Well, I think----
    Mr. Bilirakis. In your opinion?
    Ms. Richardson. I think that you have done that in this 
legislation by lifting the 250-percent cap and also by giving 
States the explicit authority to set income and assets levels, 
also to set premium levels on sliding scales. We have had some 
concerns, and I think Mr. Auerbach will talk to you about 
those, about the fact that there are concerns about 
statewideness. There are some of the concerns that States have 
about the definition of working in this population.
    Mr. Bilirakis. Good. Well, we need to know more about that 
because we might be able to be very helpful, and should be able 
to be very helpful in that regard.
    Thank you very much.
    Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman.
    Ms. Richardson, welcome back to our subcommittee. 
Understanding your expertise is specifically--``especially,'' I 
should say, rather than specifically--Medicaid, I wanted to ask 
you a couple of questions. You've always been able to go 
further than that in answering questions. I wanted to ask you a 
couple of questions about Part A Medicare.
    As you know, we've talked during the meetings of the 
Medicare Commission, and much of that is centered around 
solvency, the Part A trust fund, and we got good news last week 
when CBO extended the period to 2010, two more years, rather 
than 2008. Critics of the bill argue, however, that we should 
not be extending or this whole idea, critics say, we should not 
be extending Medicare coverage to anyone. What is your response 
to people who say that doing this and extending Medicare to 
more people will unduly drain the trust fund?
    Ms. Richardson. I think that the estimates are, for this 
particular bill, that it would have negligible impact on the 
trust fund. It is something we could do now. It is in the 
President's 2000 budget, and as I said, it is an insignificant, 
very negligible----
    Mr. Brown. Negligible means how much?
    Ms. Richardson. I think it's less than a percent, maybe 
two. They told me to give you a graphic example and I forgot.
    It is basically less--certainly way less than a month's 
expenditures in the trust fund is what it would have on the 
solvency of the trust fund over the long run.
    Mr. Brown. So, if the solvency is 2010, then this would be 
2009 and 11-plus months. It is that insignificant in terms of 
solvency of the trust fund?
    Ms. Richardson. Yes, that's right.
    Mr. Bilirakis. Okay. The bill makes SSDI recipients who 
return to work permanently eligible for Medicare Part A without 
having to pay Part A premiums. My understanding is, under 
present law, there is some trial period that people in SSDI may 
receive Medicare for up to, I believe, 4 years----
    Ms. Richardson. It is 4 years.
    Mr. Brown. [continuing] if they sort of pass the hurdles, 
without paying Part A premiums. Why do we need this then? What 
is the real difference?
    Ms. Richardson. Most people who enter into that program, 
basically, don't ever finish it. Our figures show that only 
about 7,500 a year actually successfully complete that extended 
period of eligibility, and our figures also show that we have 
only about 170 people who have actually bought into Medicare 
following their extended period of eligibility.
    The thought for most people of losing their Medicaid 
eligibility even at the end of 4 years is, particularly, 
because it takes so long for them to get back into Medicaid--
I'm talking Medicaid; I should be saying Medicare--because it 
takes them so long to get back into Medicare. Basically, it is 
an enormous threat after what, basically, is their physical 
liability.
    Mr. Brown. So making that permanent would sort of change--
it would mean those people, rather than falling short on 4 
years, might be able to with some permanence, without having to 
pay Part A premiums, with some permanence, would be able to 
stay with it and keep getting the benefit?
    Ms. Richardson. To stay with it, and to not have the fear 
that they are going to at any point have to sit out 2 years 
without any Medicare insurance.
    Mr. Brown. Okay, thank you, Ms. Richardson. Thank you, Mr. 
Chairman.
    Mr. Bilirakis. I thank the gentleman. Mr. Lazio.
    Mr. Lazio. Thank you very much. I appreciate very much your 
supportive comments on behalf of the administration.
    I have two questions I want to ask. First of all, some 
people who have disabilities do go back to work. They may have 
employer-paid healthcare, but there is a concern that many of 
those benefit options, that coverage, does not provide the type 
of coverage that folks need who have disabilities.
    Could you speak to that issue and why is it that it is just 
not good enough to rely on employer-paid healthcare premiums 
for folks that have disabilities?
    Ms. Richardson. With the new assistive technologies that 
are available to individuals, a much broader array of 
individuals are able to go back to work if they would have the 
kind of coverage that could pay for things that they 
particularly need. I think probably the most frequent need that 
they have that Medicaid covers, but that private insurance 
doesn't, is personal-assistant services. There are a number of 
services of that same nature that, basically, private insurance 
doesn't cover. In addition to that, many of the assistive 
devices that they actually need to be able to work are not 
covered by private insurance, but are covered by the Medicaid 
program.
    Mr. Lazio. And so on top of the actual coverage, this bill 
does include infrastructure money, $150 million?
    Ms. Richardson. It includes infrastructure, $150 million, 
and then an increasing amount in the out 5 years based on the 
CPI.
    Mr. Lazio. Let me ask you in terms of scoring because we 
are so cost-sensitive: You were involved, as I understand it, 
in working with CBO to come up with a score on this and--am I 
right?
    Ms. Richardson. Well, our agency was.
    Mr. Lazio. We can change that. One of the concerns that I 
have, though, in achieving this scoring or the estimate of 
costs for this bill, is that it appears as though the costs 
associated with staying on a public subsidy, on SSI or SSDI, 
indefinitely, including reliance on perhaps housing assistance, 
section 8 housing assistance or food stamps or other issues, 
was not really taken into account in terms of developing a cost 
estimate. Nor, I might add, was the sort of sense of what type 
of Federal dollars would be created by people going back to 
work and paying taxes and contributing to the economy. I know 
some of this is very difficult to calculate, but even on the 
example that I used with a stockbroker that technology is now 
opening up huge vistas to people with disabilities that even a 
few years ago would not have been possible. And I can't help 
but thinking about people like Steven Hawking and others with 
enormous genius and brilliance who are challenged with 
disabilities, but their potential for income is enormous.
    Could you speak to why you think that came out that way, 
and do you think that those ailments need to be included in an 
understanding of what the costs might be?
    Ms. Richardson. Basically, I think it has not been the 
practice at the Federal level to estimate costs in relationship 
across components and across programs. It is a very, as you 
said, quite difficult thing to do, and I think it just has not 
been the practice to do. We certainly have discussed it within 
our own agency in talking about programs for the duly eligible, 
for instance. But it has not been something that anyone has 
been willing to take on as a new concept for consideration.
    Mr. Lazio. In your experience, though, would you say that 
common sense would dictate that there would be a savings as 
people with disabilities go back to work.
    Ms. Richardson. Well, there certainly are going to be 
additional costs, and there are going to be additional savings 
that would be put into the successful, particularly if you 
really want to reach out and enable all of the people who could 
go to work through the Work Improvement Act. There will be 
other costs----
    Mr. Bilirakis. The gentleman's time has expired. I also 
want to announce--what is our yearly budget here in the United 
States of America and in the Congress? But this machine is not 
working and the clock is not working.
    So I am going to have to just estimate.
    Ms. Richardson. Are you Y2K compliant?
    Mr. Bilirakis. I did want to announce that his honor the 
mayor is here. I understand there will be a series of votes 
when they finally finish up with the suspension that is on the 
floor right now. I would ask for brevity from the committee in 
terms of questioning Mrs. Richardson, because I think it would 
be a good idea if we could hear the mayor's testimony before we 
break for the series of votes; otherwise, he is going to be 
cooling his heels for quite some time.
    Ms. Eshoo. Mr. Chairman, can I just make a suggestion that, 
if any of us do have questions, that we have unanimous consent 
to submit them to Ms. Richardson?
    Mr. Bilirakis. Well, I like that suggestion. Is there any 
objection to that?
    Ms. Eshoo. Well, I'm asking for unanimous consent for that.
    Mr. Upton. May I get my tickets?
    Mr. Bilirakis. Unanimous consent has been asked that all of 
the questions be forwarded to Mrs. Richardson in writing, and, 
of course, there will be other questions that may arise or we 
would ask at this point in time. The questions asked by Mr. 
Lazio are obviously very pertinent and very significant, and 
there will be others. Basically, what we are saying is, help us 
to be able to get this bill through as quickly as we can.
    Ms. Richardson. We are really--at HCFA, we are really, and 
the administration--really committed to getting this bill done. 
As much help as we can give you, we will.
    Mr. Bilirakis. Great. Well, we are all looking forward to 
it. Thanks again so very much, Ms. Richardson, for being here 
today.
    The Chair now will call upon Mayor Anthony Williams to come 
forward.
    Mayor Williams served as the Chief Financial Officer for 
the District of Columbia from October 1995 to June 1998. He was 
appointed by former Mayor Marion Barry to assist the agencies 
and balance the city's budget. This put the District on a track 
for the return to self-government 2 years earlier than 
projected, and delivered a surplus of $185 million in fiscal 
year 1997. Having stabilized the city's financial management, 
Mr. Williams resigned as CFO in June to run for mayor. As we 
know, he was most successful.
    Mr. Williams brought extensive experience in management and 
strategic planning to his role as the District's independent 
CFO, and, of course, to his work now as mayor. Under his 
leadership, the District achieved significant improvement in 
case management, budget execution, and revenue collections.
    He has a very impressive resume. He served in the United 
States Air Force. I, too, an am alumnus of the Air Force, sir. 
He holds a bachelor of arts degree in political science from 
Yale, where he graduated magna cum laude, a juris doctorate 
from Harvard Law School, and a master's degree in public policy 
from the Kennedy School of Government.
    Mayor Williams, thank you so much for gracing this 
subcommittee with your presence. Please proceed to talk about 
the need for this legislation in your own words.

   STATEMENT OF HON. ANTHONY A. WILLIAMS, MAYOR, DISTRICT OF 
                            COLUMBIA

    Mr. Williams. Well, Mr. Chairman, and I also thank Chairman 
Bliley, and thank the members of the committee for allowing me 
to come up to the Hill and testify in support of H.R. 1180. I 
believe that this bill very much complements what we are trying 
to do in our city, which is to promote work and preserve the 
family, to build community, and to show that by building 
community and supporting all in our city, and giving them a 
hand-up into fulfillment, we show that democracy can work in 
our city. And I do believe that the Work Incentives Improvement 
Act will serve as a major step forward for those members of our 
society and city who want to participate fully in the 
workforce, but simply need support to do so.
    We face a challenge not like that of other jurisdictions. 
Although we've entered into a period of economic and financial 
recovery, too many of our citizens are being left behind. We 
believe that we will not have true economic recovery until we 
have extended the benefits of economic prosperity to all of our 
citizens, black and white, rich and poor, young and old, sick 
and healthy. One group that has fared worse than others are our 
disabled citizens, the overwhelming majority of whom want to 
join the workforce, but have, until this point, been faced with 
many disincentives. We have to do better by these citizens.
    I believe that this legislation is in keeping with what we 
are trying to do here in the District, our Nation's capital. I 
want to get this city moving again, and to do that, we need to 
have all of our citizens onboard. As I have said many times, to 
really get our city moving, everyone has to be at work, out of 
the stands, doing color commentary, and down on the field. I 
think this legislation helps get everyone on the field, and 
helps everyone become a vital and active part of our economy. I 
also believe that it promotes work and helps people realize 
their true potential. It is about not giving up on people just 
because they have a disability. It is recognizing the 
contributions that every citizen can make.
    I believe that it complements an initiative that we are 
undertaking in our city to provide healthcare insurance to 
39,000 of our citizens who currently go without coverage. Much 
like those who will be positively affected by this act, these 
individuals, members of the working poor, are struggling to 
survive under difficult economic circumstances. They are 
working; they are often supporting families, but if they get 
sick, they face personal and financial ruin. By providing 
insurance and, very importantly, giving our citizens a choice 
of where they get their healthcare, we help them to attain 
financial security and personal fulfillment. Most importantly, 
we help them find true independence.
    The District, like other jurisdictions across the country, 
is in the process of moving thousands of people off the welfare 
rolls. But simply moving someone off the welfare rolls is not 
an accomplishment if we have not put the infrastructure in 
place to move these citizens meaningfully and fully into the 
world of work. This means investing in job training, child 
care, and, yes, healthcare for disabled and working poor.
    Now, I have often said that I am the product of the civil 
rights movement, the product of activist government, in a 
useful way, and the product of loving parents. I have been 
fortunate in life, but I would not be here today without the 
support of government programs that serve essentially as a 
hand-up in our climb toward personal fulfillment. I think this 
legislation is legislation that all Members of Congress can and 
should support. I thank the chairman for holding these hearings 
and taking the first step toward helping a segment of society 
that has been, for too long, overlooked, and must not be 
ignored. So thank you, Mr. Chairman, and members of the 
committee, for offering this testimony to you.
    [The prepared statement of Hon. Anthony A. Williams 
follows:]
    Prepared Statement of Hon. Anthony Williams, Mayor, District of 
                                Columbia
    Chairman Bliley, Subcommittee Chairman Bilirakis, Members of the 
Committee, thank you for the opportunity to testify before you today in 
support of HR 1180--The Work Incentives Improvement Act. This important 
legislation will serve as a major step forward for those members of our 
society who want to participate fully in the workforce but simply need 
support.
    The District of Columbia faces a challenge not unlike that of other 
jurisdictions: although we have entered into a period of economic and 
financial recovery, too many of our citizens are being left behind. We 
will not have true economic recovery until we have extended the 
benefits of economic prosperity to all of our citizens--black and 
white, rich and poor, old and young, sick or healthy.
    One group that has fared far worse than others are our disabled 
citizens, the overwhelming majority of whom want to join the workforce, 
but have until this point been faced with disincentives. We must do 
better by these citizens.
    This legislation is in keeping with what we are trying to do here 
in the District of Columbia, our Nation's capitol. I want to get this 
city moving again. To do that, we need to have all of our citizens on 
board. We cannot afford to leave anyone on the sidelines.
    This legislation promotes work and helps people realize their true 
potential. This legislation is about not giving up on people just 
because they have a disability. It is about recognizing the 
contributions each citizen can make.
    This legislation will complement an initiative I am undertaking 
here in the District to provide insurance to 39,000 of our citizens who 
currently go without coverage. Much like those who will be positively 
affected by this act, these individuals, members of the working poor, 
are struggling to survive under difficult economic circumstances. They 
are working, often supporting families, but if they get sick, they face 
personal and financial ruin. By providing insurance, we help them to 
attain financial security and personal fulfillment. Most importantly, 
we help them find true independence.
    The District, like other jurisdictions across the country, is in 
the process of moving thousands of people off the welfare rolls. But 
simply moving someone off the welfare rolls is not an accomplishment if 
we have not put the infrastructure in place to move these citizens into 
the world of work. That means investing in job training, child-care, 
and yes--health coverage for the disabled and working poor.
    I have been fortunate in life, but I would not be where I am today 
without the support of government programs, such as this, that serve as 
essentially a hand-up in our climb toward personal fulfillment.
    I think this is legislation all Members of Congress can support. I 
thank the Chairman for holding these hearings, and taking the first 
step toward helping a segment of our society that has been too long 
overlooked.

    Mr. Bilirakis. Well, thank you, thank you so much. Your 
honor, I think that you probably have said it better than any 
of us could, in terms of proper philosophy--a Republican 
philosophy, a Democratic philosophy, really an American 
philosophy. We appreciate very much you being here, and it is 
going to be a big factor in our moving this legislation forth.
    Mr. Williams. And I thank the chairman, and if the chairman 
or any members of the committee would like to submit written 
questions, or anything you would like to know about what we are 
doing in our city and how this legislation would be supported, 
we would be more than happy to provide----
    Mr. Bilirakis. Well, without objection, questions might be 
afforded to you for response, which would be very helpful in 
the continuation of this legislation. I don't really want to 
cut anyone off, as far as asking any questions at this point in 
time.
    Ms. Eshoo. You just did.
    Mr. Bilirakis. But I did. Do you want to make your comment?
    Ms. Eshoo. Just very quickly. Thank you for coming up to 
the Hill in support of this. You spoke eloquently to it, and we 
appreciate it. I just wanted to say, as a during-the-week 
resident in the District, I think you have passed your first 
major test. The roads were cleared when the snow fell. Thank 
you.
    Mr. Williams. Thank you very much. I appreciate that, 
Congresswoman.
    Mr. Bilirakis. Mayor, I was up here back in the early 
1960's, as an engineer before my current life. I remember when 
it snowed then, everything froze, everything just died. I'm not 
sure that has changed very much. But I think there has been 
some improvement over the last couple years.
    Mr. Williams. Thank you very much. Thank you all very much.
    Mr. Bilirakis. Thank you very much for coming. Well, I 
guess I will introduce the next panel. It might be a good idea 
in the interest of time, and then we'll break. We have, as far 
as I know, three votes coming up; there may be four. So, you 
know, we're probably talking a good 40-45 minutes before all of 
those are disposed of. But, I'm going to introduce the next 
panel, although they are free, of course, after we recess, to 
walk around.
    The next panel will consist of Mr. Jeff Bangsberg, Interim 
Public Policy Director for the Courage Center. Jeff is here 
from Minnesota. We heard him speak the other day, he is very 
eloquent, and we look forward to hearing from you again, Jeff. 
Mr. Tom Deeley, the CEO of Mark Hall, Vice President of 
Business Development, Fairfax Opportunities Unlimited, 
accompanied by Harold Deeley. Mary Gennaro, Director of 
Federal-State Relations, National Association of Developmental 
Disabilities Councils here in DC; Alan Bergman, President and 
CEO of the Brain Injury Association, here from Alexandria; 
Steven R. Cooley, Fellow with the American Board of Disability 
Analysts, from my area of Clearwater, Florida; Roger Auerbach, 
Administrator, Oregon Senior and Disabled Services Division. I 
know Roger is expecting us to inquire a little more in terms of 
why Oregon is the only State that seems to have taken advantage 
of the BBA 1997 language. And Mr. Craig Gray, Director of 
Services for Independent Living, UNUM Life Insurance, from 
Portland, Maine.
    Ladies and gentleman, I would ask you--you now are 
officially the third panel, but we are going to recess until we 
finish up with those three, possibly four votes. Well, 4:15 or 
earlier, I'm going to ask members to get here right after those 
four votes. They're not voting until 4:15? See how things 
change up here?
    I would ask the third panel to come forward at this time.
    Mr. Bryant. Mr. Chairman?
    Mr. Bilirakis. Yes?
    Mr. Bryant. Do we have unanimous consent to submit----
    Mr. Bilirakis. Yes, we've already done that, by all means.
    Mr. Bryant. Thank you.
    Mr. Lazio [presiding]. Again, good afternoon. Let me again 
thank the third panel for coming forward and for submitting and 
preparing testimony. All of that testimony will be included in 
the record by unanimous consent requested. Without objection, 
that is so ordered.
    We're going to move first to hearing the testimony of Jeff 
Bangsberg. I want to welcome you, Jeff, and thank you again for 
your appearance and your eloquence at the press announcement. 
Without further delay, let me recognize you for your statement. 
You can summarize it, because, as I say, the rest of the 
written comments will be included in the record.

    STATEMENTS OF T. JEFF BANGSBERG, INTERIM PUBLIC POLICY 
DIRECTOR, COURAGE CENTER; TOM DEELEY; HAROLD DEELEY, FATHER OF 
TOM DEELEY; MARY GENNARO, DIRECTOR OF FEDERAL-STATE RELATIONS, 
 NATIONAL ASSOCIATION OF DEVELOPMENTAL DISABILITIES COUNCILS; 
ALLAN I. BERGMAN, PRESIDENT AND CEO, BRAIN INJURY ASSOCIATION; 
    STEVEN R. COOLEY, FELLOW, AMERICAN BOARD OF DISABILITY 
  ANALYSTS; ROGER AUERBACH, ADMINISTRATOR, OREGON SENIORS AND 
   DISABLED SERVICES DIVISION; AND CRAIG E. GRAY, DIRECTOR, 
                SERVICES FOR INDEPENDENT LIVING

    Mr. Bangsberg. Thank you, Mr. Chairman. It is my honor to 
be here today, and thank you for heading up this effort. Mr. 
Chairman, and members of the committee, my name is Jeff 
Bangsberg, and I am here on behalf of Minnesotans with 
disabilities, which includes the great Governor, Jesse Ventura.
    It is no exaggeration that the Work Incentive Improvement 
Act of 1999 is as significant as the Americans with 
Disabilities Act. Thanks to the ADA, many people with 
disabilities are being offered jobs, but they cannot take 
advantage of those jobs, because barriers remain in the way. 
First and foremost is the loss of health coverage. Although 
employer-based insurance pays for acute and primary care, it 
generally does not cover specialized medications, personal 
assistant services, and other long-term care health needs.
    Last spring, we conducted a survey on healthcare barriers 
to employment for people with disabilities in Minnesota. Almost 
1,200 persons with disabilities completed this survey, and this 
survey is attached in the testimony that I have before you. The 
majority of the respondents indicated that they would go to 
work or increase their employment if their healthcare benefits 
were not affected.
    Mr. Lazio. Could you suspend for a minute? May I have some 
order, please, for Mr. Bangsberg? Thank you. You can continue.
    Mr. Bangsberg. In addition to worrying about healthcare, 
people with disabilities often face the prospect of losing cash 
assistance before they can earn enough to make up for the 
benefits they lose. In particular, the SSDI program's all-or-
nothing approach leaves many people who go to work with less 
money than when they were unemployed.
    Now let's talk about the complexity of the system as it 
exists today. People with disabilities who want to work are 
faced with a maze of complex, complicated government rules and 
regulations. Many people have college degrees, some of them are 
even rocket scientists, but nothing can prepare them to find 
their way through this particular bureaucracy. The beauty of 
the Work Incentives Act is that it takes a comprehensive 
approach in addressing all of these programs.
    I would like to tell you about a few people in Minnesota 
who are being helped by this legislation. Tom is a young man in 
his early 30's who is paralyzed from the chest down, like I am. 
Tom was a pipefitter prior to his accident, and his employer is 
willing to re-train him. Tom cannot accept this offer because 
he needs costly personal care services that are available 
through the Medicaid program. Current regulations require him 
to impoverish himself to retain Medicaid. Tom lives in an 
apartment with the elderly, and hates being on public 
assistance, but he has no choice under the current system. 
According to Tom, being able to go back to work and make a 
living, as he was before his injury, would be the best medicine 
ever out there.
    A woman named Deb is faced with some of the similar issues. 
Deb works and has been offered raises, but has been unable to 
take them. If her wages increased, her Medicaid would increase. 
Her rent, which is based on gross income, would also increase. 
After taxes, she ends up with less to live on than before her 
raise. She lives in subsidized housing because she can't afford 
market rate rent. She drives a 1979 van and cannot afford to 
replace it. Because of her Medicaid and the $3,000 asset limit, 
she cannot participate in the matched savings retirement plan 
available through her employer.
    Then there is Charles, a man with severe cerebral palsy, 
who developed an accounting partnership with another disabled 
individual. He would be more than happy to pay his fair share, 
if it was affordable to him, or as long as it is affordable to 
him.
    On a personal level, I was only able to work my way off of 
Medicaid because I married a woman who was able to provide the 
personal care assistance that I need. Not everybody is that 
fortunate. Paying out of pocket for caregiving would cost me 
over $30,000 a year. If my wife hurts her back doing transfers, 
or becomes ill, we would have to divorce, and I would once 
again have to impoverish myself to qualify for Medicaid.
    Passage of the Work Incentives Act is both the right thing 
to do, and the fiscally responsible thing to do. It is 
important to remember that most people with severe disabilities 
who want to work already receive Medicare and Medicaid, so 
these costs are already incurred today.
    There are a few other examples to the government if more 
people with disabilities are able to work. Acute and primary 
costs would be reduced for individuals on Medicaid and Medicare 
who get employer-based insurance. Social Security cash payments 
to people with disabilities would also decrease as they work 
their way off the benefits. Other programs, such as HUD and 
food stamps, would be reduced as well. Everybody benefits from 
removing policy barriers to employment. Employers also benefit 
from an extended pool of employees in a shrinking labor market. 
And under the Work Incentives Improvement Act, employers would 
not be expected to pick up more healthcare costs than they do 
for non-disabled employees.
    Finally, taxpayers benefit as people with disabilities 
reduce their dependence on government programs. More people 
with disabilities will become taxpayers themselves. People with 
disabilities across the country are anxiously awaiting passage 
of the Work Incentives Act of 1999, so they can go back to 
work. Thank you very much.
    [The prepared statement of T. Jeff Bangsberg follows:]
           Prepared Statement of T. Jeff Bangsberg, Minnesota
    My name is Jeff Bangsberg and I'm here on behalf of Minnesotans 
with disabilities. I represent Courage Center, a rehabilitation center 
headquartered in Minneapolis. I also serve as co-chair of the Work 
Incentives Committee of the Minnesota Consortium for Citizens with 
Disabilities (known as Minnesota CCD).
    It is no exaggeration to say that the Work Incentives Improvement 
Act of 1999 is as significant as the Americans with Disabilities Act 
(ADA). Thanks to the ADA, many people with disabilities are being 
offered jobs, but they cannot take advantage of those jobs because 
barriers remain in their way.
    First and foremost is the loss of health coverage. For some, 
employer-based coverage is unavailable because they are self-employed 
or because their disabilities prevent them from working full-time. For 
others, coverage may be unaffordable due to co-pays or co-insurance for 
repeated, ongoing treatments. For those who have affordable employer 
insurance, coverage is often inadequate. Although employer-based 
insurance pays for acute and primary care, it generally does not cover 
specialized medications, equipment and supplies, personal assistance 
services and other long term health needs.
    Last spring, Minnesota CCD and the Minnesota Work Incentives 
Coalition conducted a survey on health care barriers to employment of 
people with disabilities. Almost twelve hundred persons with 
disabilities completed the survey. The majority of respondents 
indicated they would go to work or increase their employment if their 
health care benefits would not be affected.
    In addition to worrying about health care, people with disabilities 
often face the prospect of losing cash assistance before they can earn 
enough to make up for the benefits they lose. In particular, the SSDI 
program's ``all or nothing'' approach leaves many people who go to work 
with less money than when they were unemployed. After a nine-month 
trial work period, someone who has an $800 SSDI check will lose their 
whole check as soon as they earn $501 dollars per month. The ability to 
deduct work-related expenses may cushion the blow, but for many, the 
figures simply don't compute.
    Now let's talk about the complexity of the system as it exists 
today. People with disabilities who want to work are faced with a maze 
of complicated, government rules and regulations, as well as a barrage 
of acronyms and incomprehensible terms. You've got your TWP, your EPE, 
your SGA, your FBR and your IRWE's. Then, you've got your MA 
spenddowns, your 1619(b) thresholds, your Pickles and your Iamarino's. 
Many people with disabilities have college degrees--some of them are 
even rocket scientists--but nothing can prepare them for trying to find 
their way through the bureaucracy.
    The beauty of the Work Incentives Improvement Act is that it takes 
a comprehensive approach in addressing all of these problems. I'd like 
to tell you about a few of the people in Minnesota who would be helped 
by this legislation:
    Tom is a young man in his early thirties who is paralyzed from the 
chest down like I am. Tom was a pipefitter prior to his accident. His 
employer is willing to re-train him to do computer-aided drafting or 
dispatching. Tom cannot accept this offer because he needs costly 
personal assistance services that are only available through the 
Medicaid program. Current regulations require him to impoverish himself 
to retain Medicaid. The more he earns, the more he has to give back to 
the government.Tom lives in an apartment building for the elderly and 
hates being on public assistance, but he has no choice under the 
current system. According to Tom: ``Being able to go back to work and 
make a living as I was before my injury would be the best medicine ever 
out there.''
     A woman named Deb is faced with the same issues. Deb works and has 
been offered raises, but is unable to accept them. In Deb's words: ``If 
my wages increased, my Medicaid spenddown, which is based on gross 
income, would increase. My rent which is also based on gross income, 
would increase. After taxes, you end up with less to live on than 
before your raise . . . I had been taught growing up that the American 
Dream was to work hard, get ahead, and make a better life for yourself. 
But the financial disincentives for working people with disabilities 
make that impossible. I cannot strive for what everyone else wants out 
of life. I cannot afford to have a house of my own. I live in 
subsidized housing because I cannot afford market rate rent. I drive a 
1979 van that I cannot afford to replace. I couldn't afford car 
payments or an increase in automobile insurance. Because of my Medicaid 
spenddown and the $3000 asset limit, I cannot participate in the 
matched savings retirement plan available through my employer. I want 
financial security for my retirement years.''
    Then, there's Charles, a man with severe cerebral palsy who 
developed an accounting partnership with another disabled individual. 
They landed a significant contract with a local school district, but 
can't keep much of what they earn. Charles asks: ``I was under the 
impression that the state wanted everyone to work their way off of 
assistance. But, how can one do so, when the laws are this way, and by 
the time all of the bills are paid, we are so broke we barely have 
enough to buy groceries? I would be more than happy to pay my share as 
long as it remains a reasonable and livable amount a month.''
    On a personal level, I was only able to work my way off of Medicaid 
because I married a woman who is able to provide most of the personal 
care assistance I need. Not everybody is that fortunate. Paying out of 
pocket for my caregiving would cost over $30,000 per year. If my wife 
hurts her back or becomes ill, we would have to divorce and I would 
once again have to impoverish myself to qualify for Medicaid.
    Passage of the Work Incentives Improvement Act is both the right 
thing to do and the fiscally responsible thing to do. It is important 
to remember that most people with severe disabilities who want to 
return to work already receive Medicaid and Medicare, so these costs 
are already being incurred.
    Here are a few examples of potential savings to the government if 
more people with disabilities are able to work:
 Acute and primary care costs will be reduced for every 
        individual on Medicaid or Medicare who gains employer-based 
        insurance.
 Social Security cash payments to persons with disabilities 
        will also decrease, as individuals work their way off those 
        benefits.
 Other federal expenditures will decline as people with 
        disabilities move off of programs such as Food Stamps and HUD-
        subsidized housing.
    Everyone benefits from removing policy barriers to employment. 
People with disabilities will no longer be forced into poverty to 
secure the long term health coverage they need. Employers also benefit 
from an expanded pool of employees in a shrinking labor market. Under 
the Work Incentives Improvement Act, employers would not be expected to 
pick up more health care costs than they do for non-disabled employees.
    Finally, taxpayers benefit as people with disabilities reduce their 
dependence on government programs. More people with disabilities will 
become taxpayers themselves.
     People with disabilities across the country are anxiously awaiting 
the passage of the Work Incentives Improvement Act of 1999 so they can 
go to work. Congress can't afford not to pass the Work Incentives 
Improvement Act this year. Thank you.

    Mr. Lazio. Thank you very much, Jeff. And a special thanks 
also to your Congressman, Jeff Ramstad, for his hard work in 
moving this bill forward.
    Mr. Brown. Mr, Chairman, for a moment?
    Mr. Lazio. Yes?
    Mr. Brown. Can I ask unanimous consent for--because these 
two panels were combined--that we would get two rounds of 
questions if we break for a vote? So people know when they come 
back, that we would, if there was unanimous consent, that we 
would get a second round of questions?
    Mr. Lazio. Yes, I think, without objection, as long as 
members wish to ask additional questions, and unless anybody's 
got a particular time problem, we will try to accommodate 
that--if one of the witnesses' have a time problem--but barring 
that, that is so ordered.
    Let me now turn to Tom Deeley, who is accompanied by his 
father, Harold Deeley, and thank them very much for their 
commitment in being here. Without any further delay, let me 
recognize both Mr. Deeleys.

                   STATEMENT OF HAROLD DEELEY

    Mr. Harold Deeley. Thank you, Mr. Chairman, and the other 
members of the committee. My name is Hal Deeley. I am 73 years 
old, and I am a former United States naval officer and a former 
government patent attorney. I live in Annandale, Virginia, with 
my wife, Sally, and our two sons, Tom, age 39, who is seated 
here besides me, and Joe, age 34. Tom and I are here today as a 
team, to express our support for H.R. 1180, the Work Incentives 
Improvement Act, that is now being considered by this 
committee. Our goal is to briefly tell you that, based on our 
own life experience, working within the Social Security 
Disability Income, SSDI, system, we believe that this Act 
contains many needed improvements and deserves passage in the 
106th Congress.
    We are here today to urge you to support this legislation, 
which will enable individuals with disabilities to improve 
their employment status while maintaining needed healthcare 
benefits that are not otherwise available. How will Tom be 
impacted by the passage of the Work Incentives Act? First, Tom 
is developmentally disabled, which is a more appropriate term 
for those who, in the past, have been characterized as mentally 
retarded. Today, if an individual with a developmental 
disability works and earns enough to reach the ``gainful 
employment'' income level, that worker will lose eligibility 
for SSDI health benefits. That level is now set at only $500 
per month. Because of the low income restrictions that are now 
in place, most recipients of SSDI benefits are forced to work 
part-time and remain underemployed. This is certainly true for 
my son. Under the current SSDI system, the benefits of working 
full-time, earning full-time wages, and becoming fully 
productive members of society are lost to many with 
developmental disabilities, because of the potential to lose 
needed healthcare benefits.
    The country also loses the benefit of including many 
individuals into the full-time workforce that could become 
productive taxpayers as well. Loss of healthcare benefits could 
cause catastrophic consequences for many individuals with 
developmental disabilities, and their families across America. 
This is the case with my son. Tom now holds a part-time job 
working at a Javits-Wagner-O'Day program performing custodial 
services at the Defense Logistics Agency at Fort Belvoir, 
Virginia. Tom is limited to working 2 days a week because of 
the income limitations under SSDI, that, if violated, will have 
an adverse impact on his health benefits. While working at the 
DLA, Tom is fortunate to receive job supports from Fairfax 
Opportunities Unlimited, a community rehabilitation service 
provider, headquartered in Alexandria. I am also affiliated 
with Fairfax Opportunities as a volunteer member of the 
company's board of directors.
    Many who know Tom will tell you that he is a hard worker 
who is very eager to work full-time. Tom has been the recipient 
of his company's employee of the year award for his work at the 
DLA. When Tom was recently offered a cash award of $200 for his 
work performance, he was forced to consider an alternative 
award because of the impact of additional earnings. Of course, 
Tom cannot accept a pay raise, because it would place him over 
the income threshold to retain his current health benefits. I 
hope that you will agree with me that this would be a 
tremendous disincentive for any American in similar 
circumstances who wants to work to better himself. I think it 
is also important to note that his supervisor at the Defense 
Logistics Agency is also very eager for Tom to come to work 
full-time, and is disappointed that he can't because of the 
limitations of the current system.
    As a family, we are concerned that if Tom lost his SSDI 
benefits, and then were to face a job reduction or loss, he 
would face great difficulty in recovering the needed long-term 
healthcare benefits that can be provided through Medicare, 
supplemental income, and necessary job supports.
    A developmental disability is a life-long condition. A 
person does not recover, get better, or get over it. 
Unfortunately, the SSDI system often assumes that they will. 
The threat of the loss in healthcare benefits is a major risk 
that we cannot ignore. Over the long-term, our family cannot 
afford to place Tom's employment needs at a higher premium than 
his healthcare needs.
    Earlier I mentioned my age, because, like me, many parents 
of the developmentally disabled are senior citizens, and their 
adult children are often heavily dependent on their parents for 
assistance and support. Most, if not all of us, continue to 
worry about the long-term outcomes for our children as long as 
we live. The provisions for Medicare coverage that are included 
in this legislation will help provide my wife and me with an 
improved peace of mind, and Tom with the benefits of increased 
work incentives, and the opportunity for improving his 
employment status.
    Finally, in my role as a board member of Fairfax 
Opportunities Unlimited, I am aware of a recent survey that FOU 
conducted of 79 individuals who receive similar benefits to my 
son, and are employed by the company part-time. Of that group, 
63 percent expressed interest in working full-time if their 
eligibility for healthcare and job support benefits could be 
maintained. I think that this sample does help to illustrate 
that this bill, which is now under your consideration, will 
positively impact many that want to work, and want to work 
full-time.
    Now, as the second part of our team presentation, I would 
like to ask Tom to say just a few words about what it means to 
him to work as a productive American citizen.
    [The prepared statement of Harold Deeley follows:]
              Prepared Statement of Harold and Tom Deeley
    Thank you Mr. Chairman and the other members of the Committee.
    My name is Hal Deeley. I am 73 years old and I am a former United 
States Navy officer and retired federal government patent attorney. I 
live in Annandale, Virginia, with my wife, Sally, and our two sons--
Tom, age 39, who is seated beside me, and Joe, age 34.
    Tom and I are here today as a team to express our support for H.R. 
1180, the Work Incentives Improvement Act that is now being considered 
by this Committee. Our goal is to briefly tell you that based on our 
own life experience working within the Social Security Disability 
Income (SSDI) system, we believe that this Act contains many needed 
improvements and deserves passage in the 106th Congress. We are here 
today to urge you to support this legislation which will enable 
individuals with disabilities to improve their employment status while 
maintaining needed health care benefits that are not otherwise 
available.
    How will Tom be impacted by the passage of the Work Incentives Act? 
First, Tom is developmentally disabled, which is a more appropriate 
term for those who in the past have been categorized as mentally 
retarded. Today, if an individual with a developmental disability works 
and earns enough to reach the ``gainful employment'' income level, that 
worker will lose eligibility for SSDI health benefits. That level is 
now set at only $500 per month.
    Because of the low-income restrictions that are now in place, most 
recipients of SSDI benefits are forced to work part-time and remain 
under-employed. This is certainly true for my son. Under the current 
SSDI system, the benefits of working full-time, earning full-time wages 
and becoming fully productive members of society are lost to many with 
developmental disabilities because of the potential to lose needed 
health care benefits. The country also loses the benefit of including 
many individuals into the full-time work force that could become 
productive taxpayers as well. Loss of health care benefits could cause 
catastrophic consequences for many individuals with developmental 
disabilities and their families across America.
    This is the case with my son. Tom now holds a part-time job working 
on a Javits-Wagner-O'Day program performing custodial services at the 
Defense Logistics Agency at Fort Belvoir, Virginia. Tom is limited to 
working two days a week because of the income limitations under SSDI 
that if violated, will have an adverse impact on his health benefits. 
While working at the DLA, Tom is fortunate to receive job supports from 
Fairfax Opportunities Unlimited, a community rehabilitation service 
provider headquartered in Alexandria. I am also affiliated with Fairfax 
Opportunities as a volunteer member of the company's Board of 
Directors.
    Many who know Tom will tell you that he is a hard worker who is 
very eager to work full-time. Tom has been the recipient of his 
company's ``Employee of the Year'' award for his work at the DLA. When 
Tom was recently offered a cash award of $200 for his work performance, 
he was forced to consider an alternative award because of the impact of 
additional earnings. Of course, Tom cannot accept a pay raise because 
it would place him over the income threshold to retain his current 
health benefits. I hope that you will agree with me that this would be 
a tremendous disincentive for any American in similar circumstances 
that wants to work to better himself. I think it's also important to 
note that his supervisor at the Defense Logistics Agency is also very 
eager for Tom to come to work full-time and is disappointed that he 
can't because of the limitations in current system.
    As a family, we are concerned that if Tom lost his SSDI benefits 
and then were to face a job reduction or loss, he would face great 
difficulty in recovering the needed long-term health care benefits that 
can be provided through Medicare, supplemental income and necessary job 
supports. A developmental disability is a life-long condition; a person 
does not ``recover,'' ``get better,'' or ``get-over-it.'' Unfortunately 
the SSDI system often assumes that they will. The threat of a loss in 
health care benefits is a major risk that we cannot ignore. Over the 
long-term, our family cannot afford to place Tom's employment needs at 
a higher premium than his health care needs.
    Earlier, I mentioned my age because like me, many parents of the 
developmentally disabled are senior citizens, and their adult children 
are often heavily dependent on their parents for assistance and 
support. Most, if not all of us, continue to worry about the long-term 
outcomes for our children as long as we live. The provisions for 
Medicare coverage that are included in this legislation will help 
provide my wife and I with an improved peace of mind and Tom with the 
benefits of increased work incentives and the opportunity for improving 
his employment status.
    Finally, in my role as a Board Member of Fairfax Opportunities 
Unlimited, I'm aware of a recent survey that FOU conducted of 79 
individuals who receive similar benefits to my son and are employed by 
the company part-time. Of that group, 63 percent expressed interest in 
working full-time if their eligibility for health care and job support 
benefits could be maintained. I think that this sample does help to 
illustrate that this bill which is now under your consideration will 
positively impact many that want to work and want to work full-time.
    Now, as the second part of our team presentation, I would like to 
ask Tom to say just a few words about what it means to him to work as a 
productive American citizen. Thank you.

                     STATEMENT OF TOM DEELEY

    Mr. Tom Deeley. I would like to work 5 days a week.
    Mr. Harold Deeley. Short, but sweet.
    Mr. Lazio. I want to thank you both very much. Tom, you 
must be a terrific employee and a real star.
    Mr. Harold Deeley. He is, believe me.
    Mr. Lazio. And now I'd like to turn now to Mary Gennaro, 
who is the Director of Federal-State Relations at the National 
Association of Developmental Disabilities Councils. I want to 
thank you for your attendance and your preparation of 
testimony, and now I'll turn and recognize you. Good to see 
you.

                    STATEMENT OF MARY GENNARO

    Ms. Gennaro. Thank you, Representative Lazio, and members 
of the subcommittee, for the opportunity to testify. I have had 
cerebral palsy since birth. I once received SSI benefits, and I 
am now employed. I am anxious for enactment of the Work 
Incentives Improvement Act, because I believe it will help more 
people with disabilities to work. With about 75 percent of 
people with disabilities not employed, one of the Nation's 
largest minorities without jobs, we are needlessly wasting 
vital, irreplaceable human potential.
    Major barriers stand in the way of people with disabilities 
who want to work. Some of these are: lack of access to vocation 
and rehabilitation and employment services and supports, and 
lack of choice regarding these services and providers; lack of 
access to healthcare coverage; financial disincentives, and 
complex rules regarding what happens to beneficiaries who work. 
By giving people with disabilities choice, the ticket program 
included in H.R. 1180 will increase access to VR and employment 
services and supports. It will help more people with 
disabilities to work. It moves us a step closer, but unless it 
removes the fear that people will continue to have regarding 
loss of healthcare benefits, it will not do what it promises to 
do.
    Healthcare coverage is the key. Current policies must 
change so that people with disabilities are no longer forced to 
choose between healthcare and work. People with developmental 
and other disabilities may have part-time work, or low-wage 
work, where private insurance is not available. If it is, it 
may be too costly given their earnings, or maybe simply 
inadequate to meet the needs that they have for healthcare. I 
have seen people struggle with the difficult choices in the 
current system. I have seen people held back, unable to fulfill 
their potential. Government policies intended to help people 
have too often served as traps, rather than tools, for 
empowerment, and we are anxious to see that change.
    The Work Incentives Improvement Act would address that in a 
variety of ways. It provides for continued Medicare coverage 
for DI beneficiaries who work, and this is not a matter of 
adding new people to the program, which has been already 
pointed out, but of continuing benefits, continuing coverage 
for people who have been able to work their way off of cash 
benefits. It allows people to make the choice for work. By 
giving States the option to offer Medicaid buy-ins to people 
with disabilities who earn over 250 percent of poverty, and 
allowing States to increase the assets and resource limits, 
H.R. 1180 will help people to work to their potential. People 
with disabilities need to be assured that they will not lose 
access to the critical therapies they need, personal care, 
prescription drugs, and other supports and services that are 
often vital to their ability to work in the first place. The 
State options contained in the bill will assist and encourage 
States to address this need. States will be able to help people 
with disabilities who are employed to stay employed. And the 
State and infrastructure grants will be able to assist and 
encourage States to offer personal assistant services. Lack of 
these services is often the major barrier to employment for 
people with disabilities, particularly people with 
developmental disabilities.
    As you know, the bill also provides important beneficiary 
protections, work incentives, planning and assistance in 
outreach provisions, and demonstration projects that will 
address other major barriers to work. It does not address all 
the issues, no bill could, but it addresses the critical, 
essential elements necessary to bring us a step closer in 
positively changing the current environment. It is an important 
step in removing barriers to work for people with disabilities. 
And what it can do is help to erase prejudice and shatter myth 
about our abilities to contribute in the workplace, and in 
every area of life. People with disabilities are encouraged by 
your support and are looking forward to swift, bipartisan 
passage of this bill.
    [The prepared statement of Mary Gennaro follows:]
     Prepared Statement of Mary Gennaro, Director of Federal-State 
 Relations, National Association of Developmental Disabilities Councils
    Chairman Bilirakis, Members of the Subcommittee on Health and 
Environment, thank you for the opportunity to testify on the Work 
Incentives Improvement Act of 1999. I am Mary Gennaro, Director of 
Federal-State Relations of the National Association of Developmental 
Disabilities Councils. I am also a person with a disability, namely 
cerebral palsy, which limits my mobility and therefore, my employment 
options.
    NADDC is a national organization representing Developmental 
Disabilities Councils that work for change on behalf of people with 
developmental disabilities and their families. It promotes a national 
policy to enhance the quality of life for all people with developmental 
disabilities. A developmental disability is generally, defined as a 
severe, chronic disability which occurs in an individual before the age 
of 22 and results in substantial functional limitation in three or more 
of the following areas of major life activity: self-care; receptive and 
expressive language; learning; mobility; self-direction; capacity for 
independent living; and economic self-sufficiency.
    Developmental Disabilities Councils exist in every State as well as 
in the District of Columbia, and the territories of America Samoa, the 
Commonwealth of the Northern Mariana Islands, Guam and Puerto Rico. 
Councils have been established pursuant to ``The Developmental 
Disabilities Assistance and Bill of Rights Act.'' The purpose of the 
Councils in each State is ``to promote, through systemic change, 
capacity building, and advocacy activities--the development of a 
consumer and family-centered, comprehensive system and a coordinated 
array of culturally competent services, supports and other assistance 
designed to achieve independence, productivity, and integration and 
inclusion into the community for individuals with developmental 
disabilities.'' In recognition of a great need for improvement and 
change the only federal priority area ``The Developmental Disabilities 
Assistance and Bill of Rights Act'' requires the Councils must focus 
their work on is employment.
The Problem
    The Presidential Task Force on Employment of Adults with 
Disabilities indicates in its first report ``Re-charting the Course,'' 
that about 70% of adults with severe disabilities are not employed--one 
of the largest minorities in the nation without jobs.\1\ The time to 
take action to address this problem is now. When our nation's economy 
is flourishing and unemployment rates are at all time lows we must take 
serious steps to begin to break down the barriers preventing people 
with disabilities from working. This would save taxpayers money, but 
more importantly it would begin to allow people with disabilities to 
more fully contribute their talents to the community.
---------------------------------------------------------------------------
    \1\ Re-Charting the Course--A Report of the Presidential Task Force 
on Employment of Adults with Disabilities, November 15, 1998.
---------------------------------------------------------------------------
    People with disabilities want to work. A 1998 Harris poll found 
that seven out of ten (72%) of people with disabilities age 16--64 who 
are not employed say they would prefer to be working.\2\ Disability 
benefits provide a critical safety net to millions of people with 
disabilities. The latest figures from SSA indicate there are 4.7 
million individuals receiving Social Security disability benefits as 
disabled workers, 700,000 as disabled adult children, 200,000 as 
disabled widows and widowers; and there are 3.7 million individuals 
with disabilities, aged 18-64 receiving Supplemental Security Income 
benefits (SSI). Some Social Security Disability Insurance (SSDI) 
beneficiaries and SSI beneficiaries are simply unable to work because 
of their impairments. Some are very seriously ill, others have terminal 
illness. Other people receiving benefits have work potential and want 
to work to the maximum extent of their abilities, but barriers prevent 
all but a few from working. If enacted the ``Work Incentives 
Improvement Act of 1999'' will take a significant step forward in 
removing some of these barriers.
---------------------------------------------------------------------------
    \2\ National Organization on Disability/Louis Harris Survey, 
conducted April and May of 1998.
---------------------------------------------------------------------------
Barriers to Employment for People with Disabilities
    Some of the barriers that keep SSDI/SSI beneficiaries from working 
are:

 Lack of access to vocational rehabilitation and employment 
        services and lack of choice in vocational rehabilitation and 
        employment services;
 Lack of access to health care coverage
 Financial Disincentives
 Work Incentives are Complex and Can Hinder Work Attempts
    Removing these barriers will assist many people with disabilities 
who can work to work. Some will be able to achieve economic self-
sufficiency; others will earn enough to move off of benefits, but will 
require some ongoing support such as health care, personal assistance, 
and housing subsidies. Still others will work to their maximum 
potential and continue to need both some cash assistance as well as 
other supports. For instance, over 150,000 people with very significant 
disabilities have gone to work since supported employment was added to 
the Rehabilitation Act in 1986, those with the most significant 
disabilities are unable to move completely off benefits, but they are 
given a chance to work to their potential. Many other people with 
disabilities would benefit from removal of barriers to employment.
Barrier: Lack of Consumer Access to and Choice of Vocational 
        Rehabilitation and Employment Services and Providers
    The ``Work Incentives Improvement Act of 1999'' recognizes the need 
to improve access to vocational rehabilitation and employment services 
and to allow consumers to choose their own providers and services as 
they attempt to return to work or work for the first time. Few 
beneficiaries of SSDI/SSI are referred for vocational rehabilitation, 
and fewer return to work because of these services. The Congressional 
Budget Office (CBO) has estimated that about 10 to 15 percent of new 
SSDI and SSI beneficiaries are referred to State Vocational 
Rehabilitation (VR) agencies, and about 10 percent of those referred 
are accepted for services. 1998 data from the Social Security 
Administration (SSA) indicates that last year 9,950 SSDI or SSI 
beneficiaries moved off of disability benefits into employment due to 
SSA funded VR services. During that time about 4.8 million disabled 
workers received monthly SSDI benefits, and about 3.6 million 
individuals with disabilities, aged 18-64 received SSI benefits. 
Providing beneficiaries with a ``ticket'' and allowing them to choose 
their own provider and services will enable more people to get the 
services and supports they need to work.
Establishment of a ``Ticket'' Program
    NADDC believes that by establishing a Ticket to Work and Self-
Sufficiency Program the ``Work Incentives Improvement Act of 1999'' 
will improve access to services, improve the services and supports 
people with disabilities receive and improve the results of those 
services and supports--helping more people with disabilities to work. 
In overwhelmingly passing H.R. 3433, the ``Ticket to Work and Self-
Sufficiency Act,'' by a vote of 410 to 1 in the 105th Congress, members 
of the House have shown they understand the need for and benefits of 
expanded access to and choice of services and providers. Giving 
beneficiaries control over the rehabilitation process will assist them 
in their efforts to succeed and will spur providers to improve 
services. Beneficiaries must have the choice to obtain the services 
they need whether provided by VR, private providers, or a combination 
of both. Choice is important for all people with disabilities, some may 
need assistance in exercising choice and such assistance must be easily 
available through out the rehabilitation process.
    H.R. 1180 will improve outcomes. Inclusion of milestone payments as 
well as outcome payments is critical. Milestone payments will allow 
more qualified providers to participate in the ticket program and 
assist providers in providing services to people who may be harder to 
serve. Extending payments over a 60-month period will also allow 
providers to offer continued supports and services beyond initial 
employment. People with disabilities often need vocational and 
employment services and supports to assist them in maintaining 
employment and dealing with changed circumstances on the job or related 
to their disability. The ticket should encourage work by all SSDI/SSI 
beneficiaries, regardless of their ultimate work capacity. Instead of 
rewarding providers only for removing people from the rolls, it should 
reward providers for assisting people to minimize their dependency on 
cash assistance programs. Paying providers a portion of the savings 
realized by the federal government will enable many more people to work 
to their full capacity resulting in greater savings than only paying 
for those attaining SGA. Payments should be made on a milestone/outcome 
approach. Finally, an Advisory Commission will be important to the 
success of the ``ticket'' program as well as the other work incentive 
provisions of the ``Work Incentives Improvement Act of 1999.''
Barrier: Access to Health Care CoverageBarrier: Access to Health Care 
        Coverage
    Access to health coverage is increasingly cited as the key obstacle 
to employment. People fear losing medical benefits that can mean the 
difference between life and death. A ``ticket to work'' program will go 
a long way in addressing some of the major barriers to employment, but 
if lack of access to health care benefits is not addressed, the 
``ticket'' program will fail. Until they can be assured that working 
will not threaten their ability to receive necessary health care 
services, SSDI/SSI beneficiaries will not be able to take advantage of 
what a ``ticket'' program could offer. Without provisions that will 
allow sufficient access to health coverage, a ticket program will only 
create the illusion of adequately addressing barriers to employment for 
people with disabilities.
    Medicare--SSDI beneficiaries who become employed need to know that 
in doing do they will not lose Medicare coverage. Currently SSDI 
beneficiaries are eligible for Medicare benefits 24 months after 
becoming eligible for cash benefits. They receive Hospital Insurance 
(Part A) and Supplementary Medical Insurance (Part B). (Part B is 
voluntary, but virtually all Part A beneficiaries enroll in Part B.) 
The Part B premium of $45.50 is deducted from the individual's benefit 
check. The average monthly cash benefit is $733. Many people with 
developmental disabilities receive Social Security benefits as adult 
dependents of their parents, who have retired, become disabled, or 
died. To qualify based upon a parent's work history, the adult 
``child'' must have become disabled prior to the age of 22. In 
addition, many people with developmental disabilities have, through 
years of sheltered, supported, or competitive work, earn their own 
disabled worker's insurance coverage. (Note: Since the eligibility 
criteria and work incentive provisions of the disability insurance 
program are applied to all of these categories of adults, the term SSDI 
(Social Security Disability Insurance) is often used, and is used here, 
to encompass all of the Title II disability programs, even though it is 
technically incorrect to use it as a term encompassing all categories 
of adults who may be receiving disability insurance benefits.)
    After an SSDI beneficiary has completed a nine month trial work 
period and a 3-month grace period, over the next 36 month extended 
period of eligibility cash benefits are suspended for any month in 
which the individual earns $500 or more in income. (The trial work 
period consists of nine months within a 5-year period during which a 
beneficiary is able to test his or her ability to work without losing 
cash benefits or Medicare coverage. Earnings of as little as $200 a 
month will be credited toward the trial work period.) After the trial 
work period and 3-month grace period, Medicare Part A coverage 
continues during the 36-month extended period of eligibility. After 
this extended period of eligibility an individual earning $500 or more 
a month will be found to be able to engage in substantial gainful 
activity and no longer eligible for benefits. Medicare coverage will 
cease. If the person is still ``medically disabled'' he/she can 
purchase Medicare through payment of monthly premiums, currently $309 a 
month for Part A and $45.50 per month for Part B at a total cost of 
$354.50 a month. It is quite hard to imagine how an individual whose 
earnings may be as low as $500 a month ($6,000/ annually or under $42/
day) could afford to continue Medicare. Last year, only 170 people 
nationwide were enrolled under this buy-in program. We believe that the 
premium cost is prohibitive for many people with disabilities.
    People with developmental and other disabilities lose Medicare when 
they may be earning as little as $500 a month. Yet their need for 
health care coverage continues unchanged. People may be working to 
their fullest potential at a part-time job, or at a full-time job with 
limited earnings in which health care coverage is not offer or if 
offered is too costly given their income. Or private insurance is not 
available or adequate. These circumstances force beneficiaries to 
choose between critical health care and a job. Only one choice is 
possible and they, by consequence, remain trapped on benefits.
    Many SSDI beneficiaries find they need Medicaid to supplement their 
Medicare coverage and to cover the cost of Medicare premiums, 
deductibles, and cost sharing requirements. Medicare does not cover 
prescription drugs, non-medical personal care or personal assistance 
services. Many people with disabilities need these critical and 
sometimes commercially unavailable benefits. The personal care received 
by a person with severe cerebral palsy, enabling them to bathe, eat, 
dress and accomplish other activities of daily living can be the very 
thing which makes employment possible. Medicaid covers personal care 
services, which is not available through Medicare or private insurance, 
but needing to meet the income and asset limits of Medicaid buy-ins 
acts as another disincentive to work.
    Medicaid--Medicaid is a federal-state health insurance and long 
term care program for certain low-income people. In all but 11 states, 
individual's who are eligible for SSI are automatically eligible for 
Medicaid. (The other 11 states link Medicaid eligibility to Section 
209(b) disability definitions, which may be more restrictive than SSI 
criteria.) Medicaid mandates coverage of a core set of services for all 
beneficiaries and gives states the option to cover 34 additional 
services. Many of these optional services, such as physical therapy, 
occupational therapy, prescribed drugs, prosthetic devices, 
rehabilitation services, personal care services, and home and 
community-based waiver services, are very important for persons with 
disabilities.
    To be eligible for SSI and thus eligible for Medicaid in most 
states, an individual must be disabled, according to the SSA definition 
of disability and meet the income, assets and resource criteria set in 
the program. Generally, SSA defines disability as the inability to 
engage in ``substantial gainful activity'' (SGA) by reason of a 
physical or mental impairment. The current SGA level is $500 per month 
for non-blind individuals and $1,110 per month for the blind. Other 
eligibility criteria requires that an individual's ``countable'' income 
fall below the federal maximum monthly SSI benefit, which is currently 
$500 for an individual, and $751 for couples. The current resource 
limit is $2,000 for an individual and $3,000 for couples.
    Unlike SSDI beneficiaries, SSI recipients can earn more than $500 a 
month and continue to receive cash benefits if they continue to be 
disabled, but for their earnings. Section 1619(a) and (b) of the Social 
Security Act allow cash benefits to be gradually reduced as income 
increases. Cash assistance is decreased $1 for every $2 in earned 
income. Eligibility for cash benefits will end when the amount of 
countable income equals the maximum benefit level for an individual. 
Currently, this ``break even point'' is $1,085 per month. When 
eligibility for cash benefits ends, SSI recipients can continue to 
receive Medicaid if they continue to meet all other requirements for 
SSI eligibility (disability status, assets and resource limits), they 
need Medicaid in order to obtain or continue employment, and their 
earnings are not sufficient to provide a reasonable equivalent of the 
benefits they are receiving from SSI and Medicaid. Each state sets an 
earned income threshold to measure this last criteria. The thresholds 
vary by state and individualized thresholds can also be applied. In 
1998 the threshold in Arizona was $12,636, in Missouri $19,014 and in 
New York $28,580.
    Medicaid covered services often meet the critical everyday needs of 
people with developmental and other disabilities. Medicaid may fund 
residential supports in the community and provide habilitation services 
which assist people with disabilities in gaining, maintaining and 
improving the skills necessary for everyday life. It may provide 
assistive technology to enable an individual to communicate, or a 
wheelchair to enable his/her mobility. It may also cover prescription 
drugs that improve or control a person's condition enabling them to 
function in the workplace.
    Private Insurance--For many reasons employer based or private 
insurance will not adequately meet the needs of people with 
disabilities. Employers may not offer a group plan, or the cost of the 
group plan offered may be too expensive given the person's income. This 
is especially true in part-time or low-income jobs in which many SSDI 
beneficiaries and SSI recipients are likely to be employed. 
Furthermore, if insurance is offered, the benefit package may be 
limited, failing to cover many of the items, services and supports 
needed by many people with disabilities, such as coverage of 
prescription drugs, mental health services, durable medical equipment, 
assistive technology, physical, occupational and speech//hearing/ 
language therapies and personal assistance services. Additionally, 
people with severe disabilities may have difficulty accessing covered 
services because the insurer uses a narrow definition of medical 
necessity, limiting services to those which restore health, and not 
covering services which maintain function and/or prevent deterioration 
or loss of function. Also of concern is a recent Harris Poll finding 
that: ``Among adults with disabilities who are not covered by health 
insurance, one in five (18%) were not able to get insurance because of 
a disability or preexisting health condition.\3\
---------------------------------------------------------------------------
    \3\ National Organization on Disability/Louis Harris Survey, 
conducted April and May of 1998.
---------------------------------------------------------------------------
    Private insurance also does not offer personal assistance services, 
a critical need for many people with developmental and other 
disabilities. Personal assistance services refer to a range of 
services, provided by one or more persons or devices, to assist an 
individual with a disability to perform daily activities on or off the 
job, which the person would typically perform if they did not have a 
disability. These services may include assistance with eating, 
toileting, grooming, dressing, bathing, getting in and out of bed or 
one's wheelchair, meal planning and preparation, managing finances, 
cooking, cleaning house, handling money and on-the-job support.
Providing Access to Health Care Coverage
    H.R. 1180 addresses the very real concerns SSDI beneficiaries have 
regarding loss of Medicare coverage when they work. For a ten-year 
trial period it would allow SSDI beneficiaries who work to continue to 
receive Part A coverage. It recognizes that the current extended 
eligibility for Medicare and the Medicare buy-in are simply 
insufficient to address the needs of beneficiaries. Coverage for 
Medicare must be extended without an arbitrary cut off after a certain 
number of years. This continuation of Medicare does not add new people 
to the program; rather it maintains benefits for beneficiaries who have 
been able to move off cash benefits. It saves the government money, and 
frees people with disabilities to work secure in the knowledge that 
doing so will not jeopardizing their life or health.
    By giving states the option to offer a Medicaid buy-in to people 
with disabilities who earn above 250 percent of poverty and allowing 
states to increase the assets and resource limits under which people 
can receive Medicaid, H.R. 1180 will remove a significant barrier to 
employment. People with developmental and other disabilities will not 
have to worry that increased earnings will mean the loss of health 
care, personal care, prescription drugs or other necessary items or 
services covered by Medicaid.
    The ``Work Incentives Improvement Act of 1999'' will help people 
with disabilities who are employed to stay employed by giving states 
the option to continue Medicaid coverage for individuals whom SSA has 
found to have medically improved. This would allow people who continue 
to have a disability and are employed and have lost benefits due to 
medical improvement, to continue to receive coverage. Critical health 
care, such as prescription drugs, personal care, and other supports and 
services that enabled their medical improvement and thus their 
employment could continue. If these individuals are not able to obtain 
coverage for these services and supports they will not be able to work 
and therefore, need cash assistance as well as Medicaid. H.R. 1180 also 
includes an important demonstration program which would allow states to 
provide medical assistance to workers who have a disability and who 
without health care and the services and supports covered by Medicaid 
would likely become eligible for SSDI and/or SSI. This will help 
prevent the need for cash assistance.
    H.R. 1180 will support and encourage states to develop systems to 
provide the items, services and supports people with disabilities need 
in order to work. Infrastructure grants will assist people with 
disabilities to work by encouraging states to cover personal assistance 
services under Medicaid. Lack of personal assistance services often is 
major barrier to employment for people developmental and other 
disabilities. Yet the availability of these services is limited. 
Currently, only 31 states offer the more limited personal care option 
through Medicaid.
Barrier: Financial Disincentives
    SSDI beneficiaries who work lose their cash assistance before their 
earnings are high enough to make up for the loss of benefits. Cash 
benefits and health care coverage ends at earnings of $500 or more a 
month, rather than declining gradually as in the SSI program. The 
Employment Support Institute at Virginia Commonwealth University 
studied this problem in 1997, and found that under current rules, an 
SSDI beneficiary receiving the then average benefit amount of $704 per 
month, who attempted to work fell off a net ``income cliff'' after 
earning just $600 per month or $7,200 annually. The beneficiary did not 
recover the same net income level until earnings reached $2,000 per 
month or $24,000 annually. On the other hand, because their benefits 
are reduced $1 for every $2 earned, after allowable income exclusions 
and disregards, SSI beneficiaries do not reach the same ``income 
cliff'' until their income reaches the State Medicaid threshold limit 
and they may be found ineligible for continue Medicaid coverage. Then 
they must attempt to purchase medical coverage.
Beginning to Address the Financial Disincentive Faced by SSDI 
        Beneficiaries
    The SSDI program should allow for a gradual reduction of benefits 
as earnings increase, similar to the SSI program. This would help 
alleviate the financial disincentive currently faced by SSDI 
beneficiaries who want to work. The ``Work Incentives Improvement Act 
of 1999'' begins to address this by requiring SSA to conduct a 
demonstration project under which SSDI benefits would be reduced by $1 
for every $2 earned above a certain level. This demonstration would 
also allow information to be gathered regarding payment for reduction 
of benefits in the ``ticket'' program.
    NADDC also supports language in H.R. 1180 calling for the General 
Accounting Office to evaluate the coordination of work incentives for 
individuals eligible for both SSDI and SSI. Disabled adult children who 
receive both SSDI and SSI can experience great difficulties due to the 
different work incentives in these programs. When they become eligible 
for SSDI due to their parent's retirement, disability or death, this 
increase in unearned income can lead to the loss of SSI and Medicaid 
and act as a disincentive to work. A person with a severe disability 
who needs some level of life-long support can't afford to work or 
continue to work unless potential income is high enough to skip over 
the ``income cliff'' in the SSDI program.
Barrier: Work Incentives are Complex and Can Hinder Work Attempts
    Work incentives are often complex and difficult to understand and 
it can be very difficult to get dependable, accurate information 
regarding them. Given the risks that people with disabilities face 
(loss of health benefits, lose of cash assistance, loss of other income 
based assistance) when attempting to work, SSDI/SSI beneficiaries often 
fear using work incentives. They fear overpayments, knowing that others 
with disabilities have been surprised by overpayments of thousands to 
tens of thousands of dollars, even when they had reported their 
earnings to SSA. They fear that a work attempt will lead to a review of 
their disability and put their eligibility for benefits in jeopardy. 
They fear that if they fail at their attempt, or if they become unable 
to work, but continue to have a disability they won't be able to 
reestablish their eligibility for benefits. Individuals need 
information, advice, advocacy and other supports and services in order 
to benefit from work incentives and other programs designed to assist 
them in securing or reentering employment.
Protecting Beneficiaries and Helping Them to Use Work Incentives
    It is critical that beneficiaries be able to use work incentives 
without fear of loosing necessary support. They must be able to risk 
the failure that often occurs before success. They must be able to try 
in order to succeed. The ``Work Incentives Improvement Act of 1999'' 
assures that continuing disability reviews will not be scheduled solely 
because of work activity. It also provides that work activity by a 
person with a disability will not be used as evidence that he/she no 
longer has a disability. Further, it provides for expedited 
reinstatement of benefits when a person who continues to meet SSA's 
standards for disability, finds him or herself unable to work.
    The work incentives planning, assistance and outreach provisions of 
H.R. 1180 are necessary elements in a comprehensive plan to remove 
barriers to employment for people with disabilities. Community based 
outreach will help assure that people with disabilities receive the 
information and assistance they need to make the informed choices 
necessary to prepare for, secure, maintain and advance in employment, 
while at the same time accessing or maintaining access to necessary 
health care and other supports and services. Requiring SSA to make a 
greater commitment within its own program to have trained, 
knowledgeable and accessible work incentive specialists will also help 
beneficiaries to successfully use work incentives. It will enable SSDI/
SSI beneficiaries as well as community-based planners to obtain 
reliable information and assistance. H.R. 1180 recognizes the 
importance of giving SSDI/SSI beneficiaries access to protection and 
advocacy services. This will assist people with a variety of issues and 
difficulties, which can arise as they navigate through a new way of 
assisting people with severe disabilities to work. If such assistance 
is not available people with disabilities will not be able to fully 
take advantage of the ``ticket'' and work incentives.
An Opportunity for Change
    The ``Work Incentives Improvement Act of 1999'' would be a great 
step forward in assisting people with disabilities to move into 
employment and reduce their dependence on benefits and other 
assistance. It does not address all issues, no bill could. It addresses 
critical elements necessary to bring positive change, while balancing 
the concerns of key stakeholders, taking an important step forward to 
remove barriers to employment for people with disabilities.
    NADDC believes that as we move forward and break down barriers to 
employment for people with disabilities we will also promote the 
independence, productivity, and integration and inclusion into the 
community of people with developmental disabilities and other 
disabilities. Enacting the ``Work Incentives Improvement Act of 1999'' 
will assist in continuing efforts to erase prejudice and shatter myths 
about the ability of people with disabilities to contribute in the 
workforce and in every area of life. Thank you for introducing this 
important legislation, we encourage it enactment. We must not pass up 
the tremendous opportunity we have to begin breaking down barriers and 
changing lives for the better.

    Mr. Lazio. Thank you very much.
    The next individual to testify is Allan Bergman, and I 
welcome you to the committee. Mr. Bergman is the President and 
CEO of the Brain Injury Association. I now recognize you for 
your statement. Thank you for being here.

                  STATEMENT OF ALLAN I. BERGMAN

    Mr. Bergman. Thank you, Mr. Chairman. Members of the 
committee, I am Alan Bergman, President and CEO of the Brain 
Injury Association. I am also Deanna Bergman's father, a 
daughter with disabilities of 34 years, and Mindy Pearlman's 
stepdad, a young woman of 27 years with disabilities. So I've 
sort of walked all sides of this system, professionally and 
personally, for a number of years. In the world of traumatic 
brain injury.
    I'm sorry to report to you, we are adding to the long-term 
disabilities rolls at about 90,000 individuals per year. There 
are now about 5.1 million children and adults with long-term 
severe disability from traumatic brain injury, and we all are 
potentially members of that club at any given moment, as a 
newspaper reporter mentioned to me very recently, potentially a 
car crash or a banana peel slip away, and many of these folks 
do end up on the SSI or the SSDI rolls.
    What I'd like to do in the few minutes in the oral 
testimony is look globally at what we've been discussing here 
today, which is the major disconnect between national 
disability civil rights policy, as referred to in the Americans 
with Disabilities Act, and our Federal disability employment 
policy, which is nested in SSI and SSDI, going back to 1956 and 
1972 when people like Jeff and Mary were seen in a very 
different light and were, very frankly, looked at by the 
Federal Government as eternally dependent.
    I think you have a flavor for what is going on here. We 
have a revolution in the world of disability in terms of what 
the opportunities now really can be, not in theory, but in 
practical life. People with disabilities do want to work. They 
are capable of working. You've heard about the technology; 
there is also job accommodation, job restructuring, job 
sharing. We have all kinds of techniques, but the real issue, 
as my colleague, Tony Young, said a couple of years ago, is we 
need a Federal policy that makes work pay for people with 
disabilities and stops punishing people with disabilities for 
wanting to contribute to American society.
    That is what this piece of legislation begins to do, and we 
move from paternalism and maternalism and dependency to a 
policy that talks about economics, empowerment, contribution, 
and independence. Yet, with the best of intentions, over 8 
million working-age adults with severe disabilities are not 
benefiting from the booming economy or the lowest unemployment 
rates in our history. Something is clearly wrong, and this bill 
begins to address it.
    You have heard of the Harris Poll, referred to by several 
members earlier. Let me give you the healthcare data within 
that same Harris Poll. Among those people with disabilities who 
are insured, 32 percent say they have special needs because of 
their disability, such as therapies, equipment, or prescription 
drugs, not covered by the employer-based health insurance. 
These are folks who are working, who are paying a price in 
order to stay employed. Among adults with disabilities not 
covered by health insurance, 18 percent were not able to get 
insurance because of a disability or pre-existing health 
condition, in spite of the enactment of the Health Insurance 
Portability and Accountability Act, another disconnect with a 
well-intended policy to break down the barriers. So, we've 
still got lots of things to deal with.
    Most people with disabilities are not going to be employed 
by Fortune 500 companies or the government. They are going to 
be employed, as you know, by the engines of this economy, small 
business, medium-size business, where most of the jobs are 
being created. And in those situations, as you've heard, the 
employer doesn't offer a group plan; the premium is very high 
in relation to the person's salary; the benefit package is very 
restricted or limited, and certainly doesn't offer personal 
assistant services, because none of them do, and, in addition, 
we often face a rigid definition of medical necessity, having 
to do with only restoration and not maintenance of function. 
So, those things continue to be barriers in the commercial 
market.
    So, continuous, affordable access to Medicare or Medicaid 
is absolutely essential if we want to assure equal opportunity 
for people with disabilities to join the workforce using 
Medicaid and/or Medicare as a wrap-around to the benefits, if 
they are provided. So, the time is now, and we have to move 
from the 1960's when severe disabilities was a synonym for 
helpless, hopeless, homebound, and eternally dependent. I think 
the moral and economic imperatives of 1999, and the new 
millennium we are approaching, demand that we shift our 
economic support and health insurance public policies for 
people with disabilities to one consistent with the wishes, 
needs, and increased expectation of people with disabilities 
and the tenets of the ADA.
    As a society, we cannot afford to waste a human life and we 
can't afford to wait any longer. H.R. 1180 moves us toward a 
21st century policy, making severe disability a new synonym 
with personal responsibility, choice, empowerment, 
interdependence, contribution, and economic self-sufficiency. 
With this as a first step, we can begin to reframe disability 
policy as a social and economic investment with a valued 
performance outcome. Very simply stated, as economic and 
productivity and contribution and value, and a better society 
for all of us.
    [The prepared statement of Allan I. Bergman follows:]
Prepared Statement of Allan I. Bergman, President and CEO, Brain Injury 
                           Association, Inc.
                              introduction
    My name is Allan Bergman. I am the President and Chief Executive 
Officer of the Brain Injury Association (BIA). Founded in 1980, BIA is 
the only national non-profit association dedicated to the full range of 
issues related to traumatic brain injury: from trauma care to community 
integration and appropriate supports for persons with brain injury, 
their families and caregivers. BIA's mission is to create a better 
future through prevention, education, research and advocacy. What began 
as a small group of concerned family members and professionals has 
grown into a national organization with 43 State Associations, over 800 
local support groups and thousands of individual members.
    I have been a professional in disability for 31 years and have been 
privileged to help create opportunities which have resulted in great 
strides in the perception of and actual capacity and contribution of 
persons with disabilities--intellectual, cognitive, physical, sensory 
and psychiatric. During the past fifteen years, I have devoted a 
significant portion of my career to disability and health policy--both 
acute care and long term care--as well as the opportunities and 
challenges in the use of managed care technology for people with 
severe, lifelong disabilities and chronic illnesses. I also bring the 
perspective of the father of a young woman with disabilities in the 
work force and a step-daughter with severe and multiple disabilities 
who is contributing to her community in a very responsible fashion 
everyday in return for her public benefits.
    On behalf of BIA, we are pleased lend our support to H.R.1180, the 
``Work Incentives Improvement Act of 1999,'' and commend its lead 
sponsors, particularly Congressman Rick Lazio, Commerce Committee 
Chairman Thomas Bliley, Health Subcommittee Chairman Mike Bilirakis and 
Ranking Member Sherrod Brown, as well as Congressmen Henry Waxman, 
Nancy Johnson, Jim Ramstad, Mark Foley and Bob Matsui. We also 
appreciate the many other cosponsors on both sides of the aisle for 
this very significant piece of legislation that will enable many 
Americans with disabilities who want to work, to be able to do so with 
incentives, choice and no risk of losing their vital health insurance 
for prescription drugs, therapies, durable medical equipment, mental 
health services and personal assistance services. The sponsors and 
their staffs have worked very closely with members of the disability 
community and other stakeholders, as well as with many members of the 
Senate who cosponsored S. 331, to reach the consensus we now have on 
this critically needed legislation. We are also pleased to note the 
support of President Clinton and the Administration as part of the 
President's FY 2000 Budget.
    In compliance with Commerce Committee Rules, attached is a copy of 
my resume along with a statement regarding BIA's federal funding last 
year.
                         traumatic brain injury
    Traumatic brain injury (TBI) is defined as an insult to the brain, 
not of a degenerative or congenital nature but caused by an external 
physical force, that may produce a diminished or altered state of 
consciousness, which results in an impairment of cognitive abilities 
and/or physical functioning. TBI can also result in the disturbance of 
behavioral or emotional functioning.
    TBI is the leading cause of death and disability of young people in 
the United States. Almost one half of all TBIs result from 
transportation-related incidents. Most of the remainder result from 
falls, assaults, sports and recreation and firearm-related injuries. 
Each one of us, the members of our families, and our friends are at 
risk everyday of joining this population!
    Long known as the ``silent epidemic,'' TBI can strike anyone--
infant, youth or elderly person--without warning, and often with 
significant and life long consequences. TBI affects the whole family 
and often results in huge medical and rehabilitation expenses over a 
lifetime. Advances in medical technology and improvements in regional 
trauma services have increased the number of survivors of TBI. Thus, 
daily a growing pool of persons with disabilities and their families 
must deal with the social consequences and medical challenges of the 
road to recovery.
    An estimated 2 million Americans experience traumatic brain 
injuries each year. About half of these cases result in at least short-
term disability, and 51,000 people die as a result of their injuries. 
Each year, approximately 260,000 persons require hospitalization for 
TBI (30% of which show disabilities a year post injury), and over 1 
million people receive emergency medical care for TBI. The Brain Injury 
Association estimates the cost of TBI in the United States at more than 
$48 billion annually. Every year about 90,000 people sustain severe 
brain injuries leading to long term disability. CDC has recently 
estimated that there are 5.1 million persons living with long term, 
severe disability as a result of brain injury and as many as 6.5 
million person living with some form of injury including mild and 
moderate brain injuries.
    A recent report on TBI Rehabilitation prepared by the Oregon Health 
Sciences University for the NIH Consensus Conference on TBI in October 
1998, states that ``Class II evidence indicates that supported 
employment can improve the vocational outcomes of TBI survivors. 
(Studies rated as Class II are randomized controlled trials [RCTs] with 
design flaws, well done, prospective, quasi-experimental or 
longitudinal studies, and case control studies).
    Many persons with long term disability as a result of TBI want to 
work and are capable of remunerative employment with appropriate 
supports. In order to remain employed, however, persons with TBI, like 
most people with disabilities, need consistency and continuity of 
health care services and long term supports. The need for these 
services is documented in a February 27, 1998, U.S. General Accounting 
Office Report to the Honorable Thomas J. Bliley, Jr., Chairman, 
Committee on Commerce of the House of Representative and the Honorable 
James Greenwood of the House of Representatives (GAO/HEHS-98-55). The 
report states that ``both the private and public sectors finance acute 
care services to adults with TBI. When the individual progresses past 
the acute phase, private health insurance typically limits coverage of 
rehabilitation therapies and does not cover long term care or community 
based support services. As families exhaust their financial resources, 
the public sector pays for a greater share of the services received--
exceptions are those individuals injured on the job and thus covered by 
worker's compensation.'' Many individuals with TBI access public 
benefits only after their health insurance policy lifetime cap of 
$500,000 or $1 million is met within 3-5 years after the injury.
                       historical policy context
    How did we get here and why is this legislation necessary?
A. Social Security Disability Insurance (SSDI)
    The SSDI benefit was created as a social insurance program as an 
amendment to the Social Security Act in 1956, for workers ages 50-64 
who become ``disabled.'' In 1960, it was amended to include workers 
under the age of 50 who become ``disabled'' who had paid into the trust 
fund for 20 of the previous 40 quarters. In 1956, benefits also were 
extended to children with disabilities over the age of 18 (DAC) of 
retired, disabled or deceased workers, if the disability of the child 
occurred prior to age 18. In 1973, consistent with changes in the 
definition of developmental disabilities in the ``Developmental 
Disabilities Assistance and Bill of Rights Act,'' the definition of the 
child benefit was changed to age of onset prior to 22.
    Generally, disability is defined as the inability to engage in 
``substantial gainful activity'' (SGA) by reason of a physical or 
mental impairment. The impairment must be medically determinable and 
expected to last for not less than 12 months, or to result in death. 
Applicants my be determined to be disabled only if, due to such an 
impairment, they are unable to engage in any kind of substantial 
gainful work, considering their age, education, and work experience.
    The first step in the disability determination process for a worker 
is to determine if the individual is engaging in SGA which for most 
people is defined as more than $500 per month--nearly $2,000 per year 
less than the federal poverty level. (In February 1999, the Social 
Security Administration (SSA) proposed a regulatory change to increase 
the SGA level for non-blind individuals from $500 to $700 per month, 
the first increase since 1990 and the second since 1980.) The next step 
in the process is to determine if the impairment is ``not severe'' 
(i.e. it does not significantly limit the individual's capacity to 
perform work.) If the impairment is ``severe,'' a determination is made 
as to whether the impairment ``meets'' or ``equals'' the medical 
listings published in regulations by SSA and whether it will last for 
12 months. The process continues through numerous steps. SSDI benefits 
are not paid until the beginning of the sixth full month of disability. 
As of December 1998, there were 4.698 million persons receiving SSDI 
with an average monthly benefit of $733. Unfortunately, the number of 
SSDI beneficiaries working in September 1997, was only 318,728 (or 6.1% 
of the SSDI caseload). The percentage of people with disabilities 
earning over $500 per month after trial work period and extended 
eligibility is 0.33%.
    The age distribution and medical listing categories are depicted in 
the charts below from the SSA.

   Table 1-31.--Percent Distribution by Age, Sex and Education of Title II Disabled Beneficiaries Granted Benefits In Selected Calendar Years 1970-96,
                                                       Compared With Adult U.S. Population in 1990
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Year granted benefits
            Characteristics            --------------------------------------------------------------------------------------------------   Adult U.S.
                                         1970   1975   1979   1982   1985   1988   1989   1990   1991   1992   1993   1994   1995   1996  population \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Age
  Under 35............................    9.0   11.0   13.6   14.4   16.8   15.2   16.2   15.7   15.7   16.8   16.2   14.7   13.3   12.3         45.6
  35-44...............................   11.0   10.0   11.5   12.3   15.0   16.5   17.9   18.7   19.6   20.4   20.9   20.7   20.4   20.4         24.4
  40-54...............................   26.0   26.0   27.2   26.5   25.7   23.3   24.7   24.7   25.1   25.6   26.8   27.7   28.3   29.7         16.3
  55-59...............................   24 0   23.0   27.0   27.2   23.9   20.6   20.4   19.9   19.5   18.5   18.6   19.2   19.9   20.0          6.8
  60 and over.........................   30.0   30.0   20.6   19.6   18.7   24.4   20.9   21.0   20.1   18.7   17.6   17.8   18.0   17.4          6.9
  Median age (years)..................   56.0   55.6   53.4   53.1   51.7   53.3   52.1   51.9   51.4   50.5   50.3   50.8   51.3   51.3         32.9
Sex:
  Male................................     74     68     69     70     67     66     64     64     64     63     62     60   58.4   56.7         49.5
  Female..............................     26     32     31     30     33     34     36     36     36     37     38     40   41.4   43.2         50.5
Education (years of school completed):
  No schooling \2\....................      2      1      1      1      2      1      1      1      1      1      1      1     NA      1            1
  Elementary school (1-8).............     44     37     29     26     23     18     17     16     16     12     11     12     NA     10            9
  Some high school....................     46     52     55     56     59     59     60     62     62     50     45     55     NA     58           45
    9-11..............................     23     24     23     22     22     20     19     19     19     15     14     16     NA     16           11
    12................................     23     28     32     34     37     39     41     43     43     35     31     39     NA     42           34
  Some college........................      9     10     12     14     14     15     17     17     17     14     12     16     NA      3           45
  Unknown.............................      0      0      3      3      2      7      5      5      5     23     31     16     NA     28            0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Derived from 1990 census. Figures for age based on population aged 18-64. Figures for education based on persons aged 25 and over.
\2\ Also includes special schools for handicapped.
NA--Not available.
Source. Office of Disability, Social Security Administration.


     Table 1-32.--Percent Distribution by Disabling Condition of Title II Disabled Beneficiaries Granted Benefits In Selected Calendar Years 1970-96
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Year granted benefits
                  Disabling Condition                  -------------------------------------------------------------------------------------------------
                                                         1970   1975   1979   1982   1985   1988   1989   1990   1991   1992   1993   1994   1995   1996
--------------------------------------------------------------------------------------------------------------------------------------------------------
Infective and parasitic diseases \1\..................      3      1      1      1      1      0      1      6      6      7      7      6      6      5
Neoplasms.............................................     10     10     14     17     15     16     18     17     16     13     15     16     16     17
Allergic, endocrine system, metabolic and nutritional       4      3      3      4      5      3      3      3      4      5      5      5      5      5
 diseases.............................................
Mental, psychoneumtic and personality disorders.......     11     11     11     11     18     22     22     23     24     25     26     24     22     22
Diseases of the nervous system and sense organs.......      6      7      8      9      8      8      9      9      8      8      7      8      8      8
Circulatory system....................................     31     32     28     25     19     18     17     16     15     14     15     14     14     14
Respiratory system....................................      7      7      6      7      5      5      5      5      5      4      5      5      5      5
Digestive system......................................      3      3      2      2      2      2      2      2      2      2      2      2      2      2
Musculoskeletal.......................................     15     17     17     16     13     14     11     12     13     13     12     12     12     12
Accidents, poisonings and violence....................      8      6      6      6      4      5      4      4      4      4      3      3      3      4
Other/unknown.........................................      2      3      3      2     11      7      9      5      5      5      5      6      6      6
  Total percent \2\...................................    100    100    100    100    100    100    100    100    100    100    100    100    100    100
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Beginning in 1990, AIDS/HIV cases are included in this category.
\2\ May not add to 100 percent due to rounding.
Source: Office of Disability, Social Security Administration.

B. Medicare Linkage
    After a two year waiting period, SSDI also entitles beneficiaries 
to Medicare. In 1996, 4.8 million Americans with disabilities had 
coverage under Part A and 1 million of them actually received 
reimbursed services. Persons receiving SSDI may elect to enroll in Part 
B. In 1996, 4.1 million SSDI beneficiaries enrolled in Part B and 3.3 
million of them actually received reimbursable services.
    If the beneficiary is successful in testing their ability to return 
to work (``trial work period'' of up to nine months and a 36 month 
``extended period of eligibility''), Medicare coverage continues as 
long as the individual remains entitled to disability benefits. When 
Medicare entitlement ends because the person is engaging in SGA, but is 
still ``medically disabled,'' the person may purchase Medicare 
insurance at a current premium of $317 per month for Part A and $43.80 
per month for Part B.
    Moreover, the Medicare benefit package does not offer prescription 
drug coverage nor does it offer non-medical personal care or personal 
assistance services; two critical and often costly benefits necessary 
either singly or in combination for many people with disabilities to 
work and to live in the community. In addition as a result of 
amendments included in the Balanced Budget Act of 1997 (BBA), coverage 
for therapies (physical occupational and speech/language) is capped at 
$1,500 per year, which is detrimental to many persons with 
disabilities.
C. Supplemental Security Income (SSI)
    The Supplemental Security Income (SSI) program, Title XVI of the 
Social Security Act, was enacted in 1972 as a means tested (income and 
resource limitations) income assistance program. It replaced the former 
Federal-State Programs of Old-Age Assistance and Aid to the Needy Blind 
established in 1935 as well as the program of Aid to the Permanently 
and Totally Disabled enacted in 1950. All but seven states--Arkansas, 
Georgia, Kansas, Mississippi, Tennessee, Texas and West Virginia 
provide some form of state optional supplementary payment.
    To qualify for SSI payments, a person must satisfy the program 
criteria for blindness or disability. Individuals with 20/200 vision or 
less with the use of correcting lens in the person's better eye, or 
those with tunnel vision of 20 degrees or less are defined as blind. 
Disabled individuals are those unable to engage in any substantial 
gainful activity by reason of a medically determined physical or mental 
impairment expected to result in death or that has lasted, or can be 
expected to last, for a continuous period of at least 12 months. The 
test of ``substantial gainful activity'' is to earn $500 monthly in 
counted income, with impairment-related expenses subtracted from 
earnings. (SSA's February 1999 proposed regulatory change in SGA noted 
on page 3 would also apply to SSI.)
    At the end of 1998 there were 3,518,000 SSI recipients between the 
ages of 18 and 64. In addition, there were 885,000 children under the 
age 18 receiving SSI. The maximum SSI payment in 1997 was $484 per 
month for one person and $726 per month for a couple. Less than two 
percent of the 18-64 year old recipients are engaged in the section 
1619(a) and 1619 (b) work incentive programs. Approximately 40% of the 
SSI recipients between the ages of 18 and 64 also receive social 
security benefits.
    A breakdown of the SSI population by broad diagnosis is as follows:

  TABLE 3-13.--Disability Diagnosis of SSI and Section 1619 Disability
                      Recipients. December 1996 \1\
              [Percentage distribution by diagnostic group]
------------------------------------------------------------------------
                                  Supplemental Security Income (SSI) \1\
                                 ---------------------------------------
        Diagnostic group            All SSI    SSI section   SSI section
                                   disabled      1619(a)       1619(b)
                                   18-64 yrs  participants  participants
------------------------------------------------------------------------
Infectious and parasitic                 1.7          1.1           1.5
 diseases.......................
Neoplasms.......................         1.4          1.3           1.6
Endocrine, nutritional, and              4.3          2.1           2.7
 metabolic disorders............
Mental disorders:
  Schizophrenia.................         8.9          9.6          11.6
  Other psychiatric.............        21.5         19.3          20.0
  Mental retardation............        28.4         46.6          38.6
Diseases of:
  Nervous system and sense              10.1         12.1          13.3
 organs \2\.....................
  Circulatory system............         4.9          1.5           2.3
  Respiratory system............         2.7          1.0           1.0
  Digestive system..............         0.7          0.4           0.6
  Genito-urinary system.........         0.9          1.1           1.6
  Musculoskeletal system and             7.3          3.0           4.4
 connective tissues.............
Congenital anomalies............         1.7          0.9           0.8
Injury and Poisoning............         2.7          2.2           3.3
Other...........................         2.7          1.3           1.2
                                 ---------------------------------------
    Total percent...............       100.0        100.0         100.0
                                 =======================================
    Total individuals \3\.......   4,375,650       23,101        34,909
------------------------------------------------------------------------
\1\ Information on diagnosis of SSI disabled recipients under age 65 is
  from the December 1995 SSI 10 percent disability file. Information on
  diagnosis for section 1619 recipients is available from SSI source
  files.
\2\ Most of the section 1619(b) participants who are classified as blind
  individuals are included in this category. A few section 1619(b) blind
  participants have a primary impairment other than diseases of the eye
  and are coded in other categories in this table. Also, there are a few
  participants classified as having diseases of the eye who are not
  blind, whose impairment does not meet the definition of blindness, and
  are classified as disabled.
\3\ Includes only recipients whose diagnosis information is specifically
  identified on the source files.
Source: Office of Supplemental Security Income, Social Security
  Administration.

D. Medicaid
    Medicaid, Title XIX of the Social Security Act, was enacted in 1965 
as a means tested program (income, assets and resources) of health 
insurance and long term care. In all but 11 states (the section 209(b) 
states of Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, 
New Hampshire, North Dakota, Ohio, Oklahoma and Virginia) a recipient 
of SSI is federally entitled to Medicaid. In the 11 states, the state 
determines disability eligibility which may be more restrictive than 
SSI criteria. Medicaid is a Federal-State matching funds program that 
mandates a core set of benefits for all recipients and provides the 
states the option of 34 additional benefits, many of which are very 
important to persons with disabilities.
    The mandated benefits are: Inpatient hospital services; Outpatient 
hospital services;Rural health clinic (including federally-qualified 
health center) services; Other laboratory and x-ray services; Nurse 
Practitioner's services; Nursing facility (NF) services and home health 
services for individuals age 21 and older; Early and periodic 
screening, diagnosis, and treatment (EPSDT) for individuals under age 
21; Family planning services and supplies; Physicians' services and 
medical and surgical services of a dentist; and Nurse-Midwife services
    The optional benefits are: (*denotes benefits often needed by 
persons with disabilities) Podiatrists' services; Optometrists' 
services; Chiropractors' services; Psychologists' services*; Medical 
Social Workers' services; Nurse Anesthetists' services; Private Duty 
Nursing; Clinic services; Dental services; Physical therapy*; 
Occupational therapy*; Speech, hearing and language disorders*; 
Prescribed drugs*; Dentures; Prosthetic devices*; Eyeglasses*; 
Diagnostic services; Screening services; Preventative services; 
Rehabilitative services*; Age 65 or older in IMDs; Inpatient 
psychiatric services for under age 21; Christian Science nurses; 
Christian Science sanatoriums; NF services for under age 21; Emergency 
hospital services; Personal care services*; Home and Community-based 
waiver services*; Transportation services; Case management services*; 
Hospice care services; Respiratory care services*; and TB-related 
services.
    Today all states offer Medicaid beneficiaries the prescription drug 
benefit.
    The following states offer a personal care benefit; however, the 
states define the amount, duration and scope of the benefit as well as 
the provider standards and payment methodology and rates. Alaska, 
Arkansas, California, Delaware, District of Columbia, Idaho, Iowa, 
Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, 
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North 
Carolina, Oklahoma, Oregon, Rhode Island, South Dakota, Texas, Utah, 
Vermont, Washington, West Virginia, and Wisconsin.
    The passage of the Home and Community Based Services Waiver Option 
(H-CB) in 1981, has permitted many persons with disabilities to leave 
institutions and live in the community. In 1986, amendments to the H-CB 
waiver authority added supported employment as a habilitation service 
for persons previously institutionalized. The BBA of 1997 included an 
amendment to allow H-CB waiver supported employment services to anyone 
receiving H-CB services.
    The BBA also included a provision allowing states to expand 
eligibility for Medicaid to persons with disabilities who meet the SSI 
disability ``test'' and are working, up to 250% of the federal poverty 
level and to impose a sliding scale for premiums sharing.
                     the disability rights movement
    The early years of federal disability policy focused almost 
exclusively on establishing people with disabilities as citizens with 
cash assistance, health insurance and the full protection of the United 
States Constitution. As stated earlier, SSDI was enacted in 1956 and 
SSI in 1972. It was not until 1973, that Section 504 of the 
Rehabilitation Act was enacted to prevent discrimination against 
qualified people with disabilities by entities receiving federal funds. 
In 1975, this country enacted the Education for All Handicapped 
Children's Act. In 1990, this country enacted landmark, internationally 
acclaimed civil rights legislation with the Americans with Disabilities 
Act (ADA). In the ADA, we declared that disability is a natural part of 
the human condition which in no way diminishes the rights of and 
opportunities for people with disabilities to participate fully in all 
aspects of American life. We also declared that the barriers to 
opportunity for persons with disabilities exists outside of the person 
in the attitudinal, physical, social and economic environments.
    As we approach the 21st century, we have an opportunity to move 
toward real implementation of the intent of the ADA by beginning to 
remove some of the major barriers to work for this nation's working age 
adults with disabilities and the generations to come of children and 
adolescents benefiting from their right to an education under the 
Individuals with Disabilities Education Act.
    People with disabilities want to work. People with disabilities are 
capable of remunerative employment. With techniques of job 
accommodation, job restructuring, job sharing and the use of assistive 
technology and devices, people with the most severe disabilities can 
and are working. We need federal policy that MAKES WORK PAY! And it 
must re-craft disability from a policy of paternalism and dependency to 
one which is based on economics, empowerment, contribution and 
independence.
                  today's context: the need for change
    Today, the United States economy is booming. Unemployment rates for 
the country are at near all times lows and less than two percent in 
many states.
    Yet with the best of intentions, nearly 8 million working age 
adults with severe disabilities are not benefiting from this prosperity 
and seem doomed to a life of dependency and poverty at a cost to the 
taxpayer of nearly $74 billion! If they are married and receive SSI 
and/or Medicaid, we impose on these couples a spousal penalty that 
makes the marriage penalty under the IRS code look like kindergarten. 
As a nation we can do better. H.R.1180 affords us the opportunity to 
change the disincentives and to disconnect the current link between 
income support and health insurance. All of the surveys conducted with 
working age adults with disabilities have reported the loss of health 
insurance (Medicare and/or Medicaid) as the primary reason why they are 
financially unable to return to work. The four other principle barriers 
to work identified by the Consortium for Citizens with Disabilities and 
the National Council on Disability are: the complexity of existing work 
incentives; financial penalties of working; lack of choice in 
employment services and providers; and independent work opportunities.
    New data from a Louis Harris Survey for the National Organization 
on Disability conducted in April and May of 1998, reports a continuing 
part-time or full-time employment rate of only 29% for non-
institutionalized working age adults with disabilities compared to 79% 
for the population. Yet the same survey indicates that 72% of those 
persons who are unemployed state they would prefer to be working!
    In the area of health care the Harris Survey reported the following 
findings:

 Among those persons with disabilities who are insured, 32% say 
        they have special needs because of their disability (such as 
        particular therapies, equipment, or medicine) that are not 
        covered by their health insurance;
 Among adults with disabilities who are not covered by health 
        insurance, one in five (18%) were not able to get insurance 
        because of a disability or pre-existing health condition (in 
        spite of the enactment of the Health Insurance Portability and 
        Accountability in 1996).
    These brand new data unfortunately confirm all previous studies and 
surveys regarding employment and health care for people with 
disabilities.
    Through many of the ``Choice'' Employment Projects funded under the 
demonstration authority of the Rehabilitation Act Amendments of 1992, 
people with the most severe physical and multiple disabilities are 
returning to work through an individualized process of personal 
profiling and choice. However, we also know that in spite of these 
individuals demonstrated ability, most are choosing to work part-time 
in order to be sure not to lose their Medicaid. These choices represent 
flawed national disability policy that H.R. 1180 begins to address.
                common limitations of employer insurance
    Most people with disabilities are not likely to end up on the 
payroll of the federal or state governments or large Fortune 500 
corporations which tend to have more comprehensive health care benefits 
and the capacity to spread risk across a very large employee base. Most 
people with disabilities are more likely to become employed by small or 
medium sized businesses where most new jobs are being created in the 
current economy, or because of the nature of their disability, work on 
a part-time or intermittent basis.
    In small or medium sized businesses, persons with severe 
disabilities tend to encounter the following range of barriers to their 
health care needs:

 The employer does not offer a group plan;
 The cost of the employer's group plan is very high in relation 
        to the person's income;
 The limited employer benefit package does not meet the needs 
        of the person with a severe disability in areas such as 
        prescription drugs, mental health services, durable medical 
        equipment/assistive technology, physical, occupational and 
        speech/language therapies and none offer personal assistance 
        services; and
 The health care package is constrained by a rigid definition 
        of ``medical necessity'' which is limited to services to 
        ``restore'' health rather than to maintain function and/or 
        prevent deterioration or loss of function which is critical to 
        persons with disabilities accessing the benefit package.
    Therefore, continuous and affordable access to Medicare and/or 
Medicaid is absolutely essential if we want to assure equal opportunity 
for people with disabilities to join the work force.
    We are also beginning to see increased problems in access to health 
insurance benefits for people with disabilities as a result of the 
rapid expansion of managed care in the commercial, Medicaid and 
Medicare markets. Increasing concerns about the impact of managed care 
on people with disabilities and chronic health care conditions have 
generated great interest by the disability community for Congress to 
pass strong, enforceable patient protection legislation this session as 
well.
                            the time is now
    The linkage of SGA to access to Medicare and Medicaid represents an 
outmoded policy from the 1960's when severe disability was a synonym 
for helpless, hopeless, homebound and eternally dependent. The moral 
and economic imperatives of 1999 demand that we shift our income 
support and health insurance public polices for people with 
disabilities to one consistent with the wishes, needs and increased 
expectations of people with disabilities and the tenets of the ADA. As 
a society we cannot afford to wait for the perfect bill that will solve 
all of the barriers to employment for persons with disabilities. 
H.R.1180 begins to lay a new foundation for disability employment 
policy that provides incentives for people with disabilities to replace 
some or all of their federal income assistance with a pay check; to pay 
income taxes and FICA; and to maintain their Medicare and/or Medicaid 
coverage at an affordable premium based on their earnings. This 
foundation along with other provisions of H.R.1180 move us toward a 
21st century policy that will begin to make severe disability a synonym 
for personal responsibility, choice, empowerment, interdependence, 
contribution and economic self sufficiency. With this first step, we 
can begin to reframe disability policy as a social and economic 
investment with a valued performance outcome and begin to remedy the 
9th finding in the ADA:
          ``(9) the continuing existence of unfair and unnecessary 
        discrimination and prejudice denies people with disabilities 
        the opportunity to compete on an equal basis and to pursue 
        those opportunities for which our free society is justifiably 
        famous and costs the United States billions of dollars in 
        unnecessary expenses resulting from dependency and non-
        productivity.''

    Mr. Bilirakis. Thank you, Mr. Bergman, for your very 
powerful statement.
    Next, Mr. Steven Cooley. Steve is from my home area of 
Clearwater, Florida. He is a Fellow, as I've already indicated, 
on the American Board of Disability Analysts. Steve, before you 
even start, I want to personally thank you for all the great 
work that you are doing for many individuals with disabilities 
down there. I know you are really strong in the rehabilitation 
area. Please proceed, sir.

                  STATEMENT OF STEVEN R. COOLEY

    Mr. Cooley. Chairman Bilirakis, ranking member Brown, and 
members of the subcommittee, thank you for inviting me here 
today to testify about the Work Incentives Improvement Act. My 
name is Steven Cooley, and I am the legislative section chair 
for the Florida chapter of the National Association of 
Rehabilitation Providers in the Private Sector, known as 
NARPPS. More importantly, I am a vocational rehabilitation 
provider with firsthand experience and knowledge of the 
barriers that Social Security beneficiaries with disabilities 
face in their efforts to secure and maintain suitable gainful 
employment.
    In my experience, one of the most fundamental barriers is 
the loss of access to affordable healthcare coverage. I believe 
that this legislation will probably address that issue with the 
proposed Medicaid buy-in, and the continuation of Medicare 
coverage.
    I am not an acadamian. I come before you with firsthand 
experience, and not theory. I am out there on the front lines, 
in the trenches so to speak, working with persons with 
disabilities, assisting in their transition back to gainful 
activity, and a productive lifestyle. I go into my clients' 
homes, I sit down with them, identify barriers to employment, 
and we develop strategies to overcome those barriers. We set up 
job-seeking skills counseling, and I develop placement plans, 
and actually put clients into my car and transport them to 
interviews that I have arranged with prospective employers. It 
is this perspective that I bring before you today.
    Regardless of the disability status, the nature of their 
impairment, or their vocational attributes, one of the most 
common and significant barriers that I encounter in vocational 
rehabilitation is the concerns of the individuals about he or 
she's loss of access to affordable medical care. When 
conducting a vocational evaluation, and providing 
rehabilitation services to individuals receiving Social 
Security disability benefits, whenever vocational alternatives 
are discussed, or actually the process of returning to work, 
some of the most common questions I am asked are, ``Are medical 
benefits provided with this job? If medical benefits are 
provided, how much will it cost me? Will I be accepted for 
medical benefits with my pre-existing medical condition? If I 
am accepted for medical benefits, will my pre-existing medical 
condition be covered?''
    Surprisingly, these types of questions are often asked 
before my client asks about the nature of the employment 
opportunity or even the wages for the job. Fear of losing these 
benefits represents one of the biggest disincentives against 
returning to work encountered in the field of vocational 
rehabilitation. Not just for individuals receiving Social 
Security, it is a universal concern. Concern regarding 
continuity of medical benefits is an extremely difficult 
barrier to overcome.
    Upon returning to the workforce, many of the Social 
Security disability clients that I work with are not likely to 
secure high-paying jobs, and most of them know that. Most of 
these individuals have ongoing medical concerns, and anticipate 
future medical needs. When an individual is earning entry-level 
wages, the cost of the very treatment or medication that are 
necessary to enable them to return to the world of work are 
often financially devastating. Even when employers provide 
medical benefits within their setting, the cost to the worker 
is often prohibitive. Many individuals in returning to work 
actually experience less net income into their home than the 
benefits they receive through Social Security disability 
income. From the perspective of the SSDI recipient, they have 
very little to gain, and much to lose, by returning to work.
    The specific impact of healthcare benefits coverage became 
very apparent to me in 1994 when I participated in the Social 
Security Administration's Project Network, which was a pilot 
program that attempted to address some of these barriers we 
have discussed. And at least temporarily they helped, as they 
allowed access of SSDI recipients to private rehabilitation 
providers. I do not know the final statistics of this Project 
Network, but I do know that all of the clients I worked with 
were highly motivated to return to work, and I think part of 
their positive attitude was knowing that their healthcare 
coverage was intact for a protected period of time while they 
attempted to re-establish themselves in the workforce.
    There is an old rehabilitation joke that goes something 
like, ``How many rehabilitation providers does is take to 
change a light bulb?'' Well, the answer is only one, but the 
light must want to change. There is a kernel of truth to the 
joke.
    Most of the individuals with disabilities that I see are 
motivated to return to work, but that light grows dimmer with 
every barrier they must face, and it has been my experience 
that the fear or concerns about losing healthcare coverage or 
access to affordable coverage all but puts that light out.
    On behalf of NARPS and all my fellow rehabilitation 
professors out there in the trenches working with people with 
disabilities and myself, I thank you for the opportunity to 
come testify before you and share my feelings regarding this 
act, and I will be available to answer questions at the 
appropriate time.
    [The prepared statement of Steven R. Cooley follows:]
    Prepared Statement of Steven R. Cooley, National Association of 
           Rehabilitation Professionals in the Private Sector
    Chairman Bilirakis, Ranking Minority Member Brown and members of 
the Subcommittee, thank you for inviting me to testify on the Work 
Incentives Improvement Act (H.R. 1180). My name is Steven Cooley, and I 
am the legislative section chair of the Florida Chapter of the National 
Association of Rehabilitation Professionals in the Private Sector 
(NARPPS). More importantly, I am a vocational rehabilitation provider 
who has firsthand knowledge of the barriers that Social Security 
beneficiaries with disabilities face in their efforts to find and 
maintain gainful employment. In my experience, one of the most 
fundamental barriers is the loss of access to affordable health care 
coverage. I believe that this legislation will properly address that 
issue with the proposed Medicaid buy-in and the continuation of 
Medicare coverage provisions.
    As for my background, I am a Nationally Certified Rehabilitation 
Counselor (CRC), Certified Vocational Evaluator (CVE), Certified Case 
Manager (CCM), a Fellow of the American Board of Disability Analysts 
(F-ABDA) and I am licensed as a primary rehabilitation and vocational 
service provider in Florida, Georgia and Tennessee. I have been in 
private practice as a rehabilitation provider for approximately fifteen 
years. I conduct vocational evaluations, develop and implement 
rehabilitation plans, develop and coordinate life care plans and 
provide overall case management for individuals who have physical, 
economic, educational, emotional, psychological or situational 
impairments to help them return to functional and productive 
lifestyles.
    I am often called upon to provide expert testimony in State and 
Federal courts on vocational and rehabilitation issues in workers' 
compensation, medical malpractice, divorce, personal injury, wrongful 
death and Social Security disability determination cases. I testify on 
cases litigated under the Longshoreman Act, the Jones Act, Title 7 
(EEO) and the American with Disabilities Act (ADA). In 1994, I 
participated in the Social Security Administration's (SSA) ``Project 
Network,'' an initiative to assist beneficiaries of Social Security 
Disability Income (SSDI) to return to gainful activity. Additionally, 
because current Florida workers' compensation law defers to Social 
Security guidelines regarding disability determinations, many of the 
individuals I work with through the worker's compensation system have 
sought and are receiving SSDI benefits.
    I am not an academician. I come before you with firsthand 
experiences and not theory. I am out there in the trenches. I actually 
go into the homes of those I assist in returning to work. I sit down 
with them, identify the barriers they face, work with them to develop 
strategies to overcome those barriers, provide placement assistance, 
interview and job retention skills counseling and actually transport 
them to interviews I have set up with an employer. It is this 
perspective that I bring before you today.
    Regardless of their disability status, nature of impairment, or 
vocational attributes, one of the most common and substantial barriers 
against returning to work that I encounter is concern by the individual 
that he or she will lose access to affordable health care.When 
conducting a vocational evaluation and/or providing vocational 
rehabilitation services to individuals receiving Social Security 
disability benefits, whenever vocational alternatives are discussed, 
among the most common questions I have been asked, are:

 Are medical benefits provided with this job?
 If medical benefits are provided, how much will it cost me?
 Will I be accepted for medical benefits with my pre-existing 
        medical condition?
 If I am accepted for medical benefits, will my pre-existing 
        medical condition be covered?
    Surprisingly, the above questions are commonly asked before 
inquiries regarding wages or the nature of the work to be performed. 
However, it does underscore the significance of medical benefits to 
Social Security beneficiaries with disabilities. Fear of losing these 
benefits represents one of the biggest disincentives against returning 
to work encountered in the field of vocational rehabilitation; and not 
just for the individuals receiving Social Security disability benefits. 
It is a universal concern.
    Concern regarding continuity of medical benefits is an extremely 
difficult barrier to overcome. Upon return to the workforce, the 
majority of the individuals receiving Social Security disability 
benefits are not, at least initially, likely to command high wages, and 
they are well aware of this fact. The majority of them either have 
ongoing medical concerns or fear that they may need future medical 
services.
    When an individual is earning entry level wages, the cost of the 
very medications or treatments which may enable them to return to work 
can be financially devastating. Even when medical benefits are 
available through an employer, the cost to the worker is frequently 
prohibitive. For many individuals, returning to work may actually 
result in less net income than they received through Social Security 
disability benefits. From the perspective of the Social Security 
beneficiary with a disability, it often appears they have much to lose 
and little to gain by returning to work.
    The specific impact of the loss of health care coverage became very 
apparent to me when I participated in ``Project Network.'' This project 
was a pilot program that attempted to address, at least temporarily, 
the barriers that Social Security beneficiaries face by allowing them 
to work with vocational rehabilitation professionals in the private 
sector. I do not know the final statistics of the program, but I can 
tell you that most of the individuals I assisted through the project 
were eager to return to work, and I attribute much of the their 
positive attitude to the fact that they felt secure that their medical 
benefits would remain intact for a protracted period, while they were 
re-establishing themselves in the workforce.
    There is an old rehabilitation joke, that goes: How many 
rehabilitation providers does it take to change a light bulb. Only one, 
but first the light bulb must really want to change. There is a kernel 
of truth to this joke. Most of the individuals with disabilities that I 
see are motivated to return to work, however, their lights grow dimmer 
with each barrier that they must face. My experience leads me to 
believe that the concern regarding the loss of medical benefits all but 
puts out that light.
    On behalf of NARPPS, all of my peers who are out there in the 
trenches and myself, thank you for the opportunity to appear before you 
today to provide this testimony. I would be happy to answer any 
questions at the appropriate time.

    Mr. Bilirakis. Thank you, Mr. Cooley. Thank you very much.
    You may not have heard the bells, I don't know, but we had 
the first bells and now the second bell, which means we have 
less than 10 minutes to get to the floor. There are four votes, 
and the first one will be 15 minutes, and then the other three 
will be 5-minute votes. So I am not sure really what that does 
to us, but it probably takes us to about 5. Mr. Auerbach and 
Mr. Gray, I apologize, but will you wait a little while, if you 
don't mind?
    Mr. Brown. You might find it curious that 15 plus 5 plus 5 
adds up to 45.
    Mr. Bilirakis. Well, I don't know. If we get back by 4:45, 
fine; otherwise, it will be about 5. Thank you.
    [Brief recess.]
    Mr. Bilirakis. Let's go ahead and get started. I apologize 
on behalf of all of us for the interruption, but also the fact 
that members haven't returned. I mean this is a pretty hectic 
place, I think some of you know that, but it is certainly not a 
reflection on the issue itself and on this panel.
    Mr. Auerbach, why don't we just go ahead and go over to you 
now, sir, and your written testimony is a part of the record. 
You can complement it as you wish. Please proceed.

                  STATEMENT OF ROGER AUERBACH

    Mr. Auerbach. Thank you so much, Mr. Chairman. I appreciate 
the opportunity to appear before you today to give a State 
perspective on the health-related concepts embodied in the Work 
Incentives Improvement Act of 1999.
    First of all, I commend you highly on focusing on this 
much-needed piece of legislation. You have heard testimony from 
a lot of people about the numbers of people with disabilities 
who are unemployed and who want the opportunity to go to work.
    The major barrier to employment for disabled individuals, 
but not the only barrier, is the fear of losing essential 
health and personal assistance benefits. The current work 
incentive programs of the Social Security Administration do not 
sufficiently address these fears.
    Oregon has implemented an employed persons with 
disabilities program, pursuant to section 4733 of the Balance 
Budget Act of 1997. Our program allows persons with 
disabilities to go to work, and to work to their fullest 
capacity, without fear of losing health and personal assistance 
benefits.
    While we impose a cost share on unearned income over $500 a 
month and have a sliding fee scale premium payment for income 
over 200 percent of the Federal poverty level, we pretty much 
are guaranteeing a healthcare safety net for disabled workers 
who cannot afford to risk this needed coverage. We are enabling 
people to make a dramatic impact on their lives, and we thank 
you very much for passing this legislation and giving our State 
the opportunity to help the working disabled.
    With this comprehensive bill before you, I know we will be 
able to do much more for this deserving population to expand 
opportunities for independence, increased income, and self-
esteem, to expand opportunities for more disabled persons to 
become taxpayers, to expand the labor pool needed in most areas 
of the country, and to expand the hopes and dreams of millions 
of people who want their chance to make more meaningful, 
societal contributions.
    If this bill is passed, Oregon would seriously look at 
expanding income eligibility above 250 percent of the Federal 
poverty level, which we have already done, and expanding 
coverage to disabled workers whose conditions have improved, 
but still have an impairment.
    From the standpoint of humanity and fiscal common sense, we 
should enable people to work as long and as much as they can 
and not drive them onto higher levels of public assistance.
    We would use the grant to States to establish 
infrastructures to expand our current efforts to counsel people 
on how to best use current work incentive programs along with 
these new opportunities to begin outreach to people to let them 
know they really can go to work and retain essential health 
benefits.
    Oregon might also use the infrastructure money to address 
other barriers to employment, affordable and accessible 
housing, transportation, job readiness skills, and needed 
support for job retention.
    In the interest of time, and my hope to engage in a little 
dialog, let me just state that we are very encouraged in the 
legislation by the continuation of Medicare coverage for SSDI-
eligible individuals. We are very enthusiastic about the 
proposed demonstrations. We are very supportive of the crucial 
provisions allowing expedited reinstatement if employment is 
lost, and employment not triggering continuing disability 
reviews. These provisions send the positive message that we 
want you to join the workforce and we will support your 
independence by continuing your essential health and personal 
assistance benefits.
    I believe many States are interested in providing these new 
options for working disabled individuals. However, I do want to 
point out two big issues for States. First, most States are 
nervous about potential costs to their budgets. Although the 
bill defines a working person with a disability in Section 
101(a)(2)(b) and 104(b)(1), it does not make that same 
definition on 101(a)(1). State officials are nervous that could 
allow people who work occasionally or really only enough to 
qualify for benefit to be able to qualify for this program.
    We believe that States should be allowed to have a less 
restrictive definition of working, but at least be allowed to 
define working at 40 hours a month at the Federal minimum wage. 
We also believe that the age definition contained in the other 
subsections, 16 to 64, should apply unless the State wants a 
less restrictive definition.
    Second, we believe the State should have the option to 
phase in the program and not be required to implement a program 
statewide from the first day they start it. As you have 
acknowledged in this bill, and we appreciate that 
acknowledgment, most States need to build infrastructures to 
support the program and need time to develop them. States ought 
not to have to ask for a waiver from HCFA in order to launch a 
planned phase-in program.
    Again, I thank you for this opportunity to bring a State 
perspective to this bill, which has a potential to help so many 
people in all parts of this country. We believe in what this 
bill can do. We applaud you for investing energy in this 
proposal, and we in Oregon stand ready to answer your questions 
about both the philosophy and the operations of our existing 
program. Thank you.
    [The prepared statement of Roger Auerbach follows:]
Prepared Statement of Roger Auerbach, Administrator, Oregon Department 
       of Human Resources, Senior and Disabled Services Division
    I am Roger Auerbach, Administrator of the State of Oregon, Senior 
and Disabled Services Division. The division arranges and pays for 
services for low-income Oregonians who need assistance with activities 
of daily living; determines eligibility for Medicaid acute and long 
term care services, food stamps and other cash assistance and health 
programs; licenses, monitors and provides technical assistance to all 
long term care service providers; investigates and acts on incidents of 
abuse involving the elderly and disabled; administers the federal Older 
Americans Act programs; assists disabled workers to obtain and retain 
employment.
    I very much appreciate this opportunity to testify on the Work 
Incentives Improvement Act of 1999. As members of this committee, you 
are to be commended for focusing on this much-needed legislation. This 
is extraordinarily important legislation for a number of reasons. 
First, it benefits people with disabilities, increasing their 
opportunities for independence, increased income, and self-esteem. 
Second, it benefits federal and state treasuries by allowing people 
with disabilities to earn additional taxable income. Third, at a time 
when employers are seeking talented workers, this population has many 
to offer. Finally, serious consideration of legislation such as this 
delivers new encouragement to millions of people with disabilities who 
want their chance to make meaningful societal contributions.
    You have asked me to present a state's opinion of the legislation. 
Besides having worked in Oregon's state government for eight years, I 
am a member of the executive committee of the National Association of 
State Medicaid Directors, an affiliate of the American Public Human 
Services Association. I also serve on the Board of Directors of the 
National Association on State Units on Aging. I understand not only 
what we are doing in Oregon, but also the aspirations--and fears--of 
many other states.
    Oregon's work on helping people with disabilities go to work 
without losing Medicaid benefits began in the Summer of 1996. Then, the 
director of Oregon's human resources department, Gary K. Weeks, called 
for a stepped-up effort to help people with disabilities obtain and 
retain employment. Director Weeks called together not only my division, 
Senior and Disabled Services, but also the Vocational Rehabilitation 
Division, the Adult and Family Services Division, and the Oregon 
Employment Department. Subsequently, our Office of Alcohol and Drug 
Abuse Programs and the Mental Health and Developmental Disability 
Services Division became actively involved, as well. He reminded us of 
some bleak statistics, most recently reported last year by the National 
Organization on Disability. It reported a Harris Poll showing that 29 
percent of people with disabilities ages 18 to 64 are employed compared 
with 79 percent of the non-disabled population. Moreover, 70 percent of 
unemployed people with disabilities say they want to work.
    In planning for this new initiative, we spoke with many consumers 
and advocates about why more disabled individuals weren't working. We 
encountered a recurring theme: people were not working for fear of 
losing health-care benefits; specifically, personal care attendant and 
mental health drugs, which are costly and not ordinarily covered by 
private insurance plans.
    We began working with consumers and advocates to craft a plan that 
would assist people with disabilities to retain essential Medicaid 
benefits after they went to work. Our initial intent was to seek a 
waiver from the U.S. Health Care Financing Administration (HCFA). 
However, when Congress approved Section 4733 of the Balanced Budget Act 
of 1997, State Option to Permit Workers with Disabilities to Buy-in to 
Medicaid, we elected instead to seek an amendment to Oregon's state 
Medicaid plan. (See appendices for explanation of Oregon's program). 
From the perspective of a state administrator who regularly works with 
talented people with disabilities who cannot risk the loss of Medicaid 
benefits, this legislation was a breakthrough of breathtaking 
proportion.
    I also cannot say enough about the high level of cooperation Oregon 
received from HCFA. People from HCFA's regional and central office 
worked with us every step of the way, so much so that we consider them 
as partners in this effort. Not only that, but the people at HCFA 
approved our state plan amendment in what must have been record time, 
just a few weeks after submission.
    Although there is a great deal to address in this bill, I want to 
focus on the concepts relating to continuation of health benefits. 
Again, we hear over and over again from consumers and advocates that 
the loss of health-care coverage is the No. 1 barrier to employment. We 
enthusiastically support the concepts in this bill as it gives states 
new, voluntary options to provide coverage for the working disabled. I 
believe that many states will be interested in these options and 
welcome the increased federal focus on this issue.
State Medicaid Options
    The bill would allow states to cover people whose income exceeds 
250 percent of the federal poverty level and have resources exceeding 
$2000. We believe this is an excellent provision. Our current employed 
persons with disabilities program takes advantage of the flexibility 
afforded by Section 4733 of the Balanced Budget Act of 1997 to cover 
people up to 250% of the federal poverty level. If this bill passed, we 
would seriously consider raising the maximum income eligibility level. 
We also used existing law to allow people with disabilities to retain 
coverage and own greater assets. This bill also permits greater assets, 
which people with disabilities, like the rest of us, should be able to 
accumulate for children's college education or retirement or other 
quality-of-life purposes.
    We also support the bill's provision to permit states to provide 
coverage for individuals aged 16 to 64 who cease to be eligible for 
Medicaid owing to improvement of their condition, but who still have an 
impairment and are employed. From the standpoint of humanity, and 
fiscal common sense, it is only reasonable to enable people to work as 
long as they can and not to drive them onto higher levels of public 
assistance.
Continuation of Medicare Coverage
    We are encouraged that the bill would continue Medicare coverage 
for people with disabilities who are eligible for Social Security 
Disability Insurance. These are typically people who have an 
established work history and, therefore, are often the best candidates 
for employment. This clearly sends the positive message that we care 
about all people with disabilities, regardless of when their disability 
occurred.
Grants to Develop and Establish State Infrastructures
    We very much appreciate that this bill offers grants to states to 
establish infrastructures to support people with disabilities. This 
would allow states to do a better job of implementing policies for 
people with disabilities, and then to evaluate what works best. It is 
also important to note that this legislation will send a very positive, 
but different, message to people with disabilities: we encourage you to 
join the workforce and are going to support your independence by 
continuing your health and personal assistance benefits; we will not 
cut off your benefits and assume you are no longer disabled if you go 
to work. It will take resources and varied communication efforts to get 
this new message across. In addition, Social Security disability cash 
benefits and existing ``work incentive'' programs will still exist and 
people with disabilities need to know how this new law affects those 
existing programs.
    I also ask that you remember that discontinuation of health 
benefits for people with disabilities is not their only barrier to 
going to work. Other barriers include affordable and accessible 
transportation, housing, and the need for job readiness training. 
Grants to states will help people closest to those with disabilities 
assess what is needed to help this often-overlooked population go to 
work, achieve greater independence, and pay taxes.
    Additionally, as important as it is to help people with 
disabilities go to work, we also recognize that our job shouldn't end 
with getting people ready for a job; grant funds could be used to 
develop job-retention services which are critical to the success of 
these programs. When people get jobs--all people--there can be 
problems, whether they be conflict at the worksite, transportation 
arrangements falling through, or interrupted child care. Any of these 
can lead to a person losing a job. Disabled workers, who often don't 
have recent work experiences, face these problems and more.
Medicaid Demonstration Projects for Workers with Potentially Severe 
        Disabilities
    We are also very enthusiastic about the bill's proposed 
demonstration projects to provide medical assistance for workers ages 
16-64 who have potential disabilities. These are people who, if they 
didn't receive Medicaid benefits, would see their health deteriorate 
and soon be too disabled to work. We are very interested in helping 
this population of working disabled individuals.
Elimination of Work Disincentives
    For a large and growing population of Americans, this bill has been 
a long time in coming. These people will tell you not only that the 
loss of health and personal assistance benefits is the biggest barrier 
to going to work, but that they live in fear that, should they go to 
work, they will trigger what is called a ``continuing disability 
review,'' which means the government will question whether they are 
truly disabled. The Work Incentives Improvement Act says that although 
the Social Security Administration will continue to perform such 
reviews, these reviews will not be triggered by employment. This 
provision is very important to the success of this program.
    In Oregon, we have struggled with the question of what happens if a 
person with a disability has gone to work only to find that his or her 
job is lost to an economic downturn or to a worsening of the 
disability. As you know, obtaining renewed eligibility for Social 
Security disability can take months or years. In contrast, this bill 
would entitle the person with the courage to go to work to expedited 
reinstatement if employment is lost. This is a welcome safety net that 
will show people with disabilities that they can work without totally 
risking loss of benefits.
Work Incentives Planning, Assistance and Outreach; Demonstration 
        Projects
    This bill is also helpful because it would direct the Social 
Security Administration to set up community-based programs to 
distribute work-incentives information to people with disabilities. The 
bill also provides for helpful grants to state advocacy programs that 
would give advice to those seeking information and assistance, such as 
the Oregon Advocacy Center in my state. Further, we support the 
provision allowing the Social Security Administration to conduct 
demonstration projects under the SSDI program. The bill mandates SSDI 
demonstration projects so that instead of a $500 earnings ``cliff,'' 
people would realize a $1-for-$2 benefit reduction on earnings over a 
specified level, similar to the SSI disability program. This specific 
demonstration deserves support.
State Concerns
    As stated previously, I believe many states are highly interested 
in providing these new options for working disabled individuals. 
However, as much as we support these concepts, I do want to point out 
two big issues for the states.
    First, most states are nervous about the potential cost to their 
budgets. Although the bill defines a working person with a disability 
in Sections 101(a)(2)(B) and Section 104(b)(1), it does not have any 
definition of working in 101(a)(1). State officials are nervous that 
this could allow people who work occasionally, or only enough to 
receive a benefit, to be able to qualify. We believe that states should 
be allowed to have a less restrictive definition of working, but at 
least be allowed to define working at 40 hours a month at the federal 
minimum wage. We also believe that the age definition (16-64) contained 
in the other subsections, should apply unless a state opts for a less 
restrictive definition.
    Second, we believe states should have the option to phase in the 
program and not be required to implement a program statewide from the 
first day that they start it. As you have acknowledged in this bill, 
most states need to build infrastructures to support this program and 
need time to develop them. States ought not to have to ask for a waiver 
from HCFA in order to launch a planned, phased-in program.
    Again, I thank you for this opportunity to bring a state 
perspective to this bill, which has potential to help so many people in 
every part of this country. We believe in what this bill can do, we 
applaud you for investing energy in this proposal, and we in Oregon 
stand ready to answer your questions about both the philosophy and 
operations of our existing program for the working disabled.

    Mr. Bilirakis. Thank you, sir, and Mr. Auerbach, on behalf 
of all of us, thanks to the State of Oregon for using the 
resource of that BBA 1997 provided. Possibly later on we can 
get some of the details as to why you think some States are not 
going into it.
    Mr. Gray, please proceed, sir.
    Mr. Auerbach. Thank you.

                   STATEMENT OF CRAIG E. GRAY

    Mr. Gray. Thank you. Good afternoon, Mr. Chairman, members 
of the committee. My name is Craig Gray. I am the Director of 
Program Management for the Services for Independent Living 
Division of UNUM Life Insurance Company of America, based in 
Portland, Maine. I also sit on the Employers Subcommittee of 
the President's Committee on Employment of People with 
Disabilities.
    I have been asked to comment today on behalf of the Health 
Insurance Association of America, of which UNUM is one of 269 
member companies who provide disability income, long-term care, 
supplemental and health coverage to 150 million people.
    I am a person with a disability that has made a successful 
return to the workforce. Unfortunately, I am an example of the 
exception, not the norm.
    In my professional capacity and personal life I regularly 
communicate in great depth with other people with disabilities 
and employers, and while I cannot, nor would ever, profess to 
speak for all people with disabilities, I would like to share a 
few observations that I believe are generally true.
    People are beginning to understand now, much more than even 
just 5 years ago, that acquiring a disability doesn't mean that 
one's life has come to an end; rather, it has entered a new 
phase--a phase that many people find equally productive, 
exciting, and fulfilling. In some cases they have an even 
higher quality of life than they had before.
    The general public is seeing people living successfully 
with disabilities in many aspects of society. Advances in 
assistive technologies enable people to participate in the 
workplace. Advances in recreational programs have people with 
disabilities recreating and competing in sports activities 
right alongside their able-bodied friends.
    They see people like Marilee Maitlin, Thomas Quasthoff, 
Michael J. Fox, and Steven Hawking making valuable 
contributions to society. They watch the Paralympic Games in 
Atlanta. You can even see people with disabilities in TV 
commercials and soap operas now.
    With the advance in assistive technologies and medical 
treatments, it is becoming more evident that disability is a 
socially defined concept, that is, once traumatic injuries or 
disabling conditions have been stabilized, the issues of 
quality of life and productivity are determined by societal 
norms and values.
    The ADA has done a lot to remove many of the physical 
barriers associated with disabilities. It is not the 
attitudinal barriers and institutional barriers that we need to 
address.
    Attitudinal barriers are slowly beginning to change and 
have come a long way in the 20 years I have been disabled, but 
this will continue to be a long, slow process. Many attitudinal 
barriers are the result of institutional barriers that tend to 
perpetuate disability stereotypes and actually limit one's 
ability to re-enter main stream society. One of the major 
institutional barriers is the very real fear of losing your 
health insurance when you return to work.
    This is real for me. In 1984 I was working as a computer 
programmer for an insurance company in Boston. I was recruited 
by another insurer here in Washington, DC. I took the job and 
the company actually moved me to an apartment in Annandale. I 
reported to work, and on my second day I met with the company's 
benefit manager who informed me that they would not be able to 
provide me with health insurance.
    It had not occurred to me to ask about health insurance in 
the interview process. It had not been an issue or source of 
concern with my previous employer, and I incorrectly assumed 
that I would be covered the same as any of their other 
employees.
    You can imagine my frustration. I had no coverage, and my 
new employer was not going to pay to move me back Boston. Had I 
not been willing and able to take a huge risk and rely on my 
own resources for a short period of time, I would have been 
forced to return to the ranks of Social Security. I found 
another job just as soon as possible and made sure that health 
insurance was part of that package.
    Now you have to understand that I am luckier than many 
people who need personal assistance services and prescription 
drug services to be able to work. Had this been a requirement 
for me, I would probably still be out of work.
    The Work Incentives Improvement Act of 1999 addresses 
several areas that are significant barriers for people with 
disabilities to return to work. It will eliminate several of 
the disincentives to return to work and will also move us a 
step closer to removing the attitudinal barriers that prevent 
people with disabilities from making greater contributions to 
society.
    Of course, there are a number of practical issues that must 
be dealt with. We suggest that the following factors be 
considered in evaluating any return-to-work proposal: The 
proposal should make it easier for employers to hire people 
with disabilities and ease the cost and concerns of ADA 
compliance. The proposal should be structured so it does not 
harm the Social Security safety net provided to seniors. 
Similarly, the proposal shouldn't place any additional burden 
on the Medicare supplement market that would make coverage more 
expensive or less available to seniors. Finally, expanded 
definitions of disability and other changes in the Federal 
programs should not be applied to private disability programs 
where they may not be appropriate.
    In general, we believe this proposal does a good job of 
addressing the needs and concerns of people with disabilities. 
We strongly encourage you to give additional thought to ways in 
which employers can be encouraged and supported in their 
efforts to hire people with disabilities.
    I would like to note that my written testimony contains 
detailed technical comments addressing this and other similar 
issues. Thank you very much.
    [The prepared statement of Craig E. Gray follows:]
Prepared Statement of Craig E. Gray, Director, Services for Independent 
             Living, UNUM Life Insurance Company of America
    Good morning, Mr. Chairman and Members of the Subcommittee. I am 
Craig Gray, Director of Program Management for the Services for 
Independent Living division of UNUM Life Insurance Company of America, 
based in Portland, Maine. While at Unum I have held various positions 
including disability consultant in product development, customer 
service, marketing, and communications. I currently serve on the 
Employer Subcommittee of the President's Committee on Employment of 
People with Disabilities. I have been asked to comment today on behalf 
of the Health Insurance Association of America (HIAA), of which UNUM is 
a member. The HIAA is the nation's most prominent trade association 
representing the nation's private health care system. Its 269 members 
provide health, disability, long-term care, and supplemental coverage 
to more than 115 million Americans. UNUM is the nation's leading 
provider of disability income insurance.
    I am a person with a disability that has made a successful return 
to the workforce. Unfortunately, I am an example of the exception, 
rather than the norm.
    In my professional capacity and personal life, I regularly 
communicate in great depth with other people with disabilities and with 
employers. And while I can not, nor would never profess to speak for 
all people with disabilities, I would like to share a few observations 
that I believe are generally true.
    People are beginning to understand now, much more than even just 5 
years ago that acquiring a disability does not mean that one's life has 
come to an end. Rather, it has entered a new phase--a phase that many 
people find equally productive, exciting and fulfilling. In some cases, 
they have an even higher quality of life than they had prior to 
acquiring a disability.
    They see people living successfully with disabilities in many 
aspects of society. Advances in assistive technologies enable people to 
participate in the workplace. Advances in recreational programs have 
people with disabilities recreating and competing in sports activities 
right along side their able-bodied friends. They see people like 
Marilee Maitlin, Thomas Quasthoff, Michael J. Fox, and Stephen Hawking 
making valuable contributions to society. They watch the Paralympic 
games in Atlanta. People with disabilities are even seen on television 
commercials and soap operas.
    Advances in assistive technologies and medical treatments are 
helping to demonstrate that ``disability'' is a socially defined 
concept. That is, once traumatic injuries or disabling conditions have 
been stabilized, the issues of quality of life and productivity are 
determined by societal norms and values. The Americans with 
Disabilities Act (ADA) has helped to remove many of the physical 
barriers associated with disabilities. It is now the attitudinal 
barriers and institutional barriers that our society must address.
    Attitudinal barriers are slowly beginning to change. In fact, they 
have changed a great deal in the 20 years I have been disabled. But, 
this change continues to be a long, slow process. Many attitudinal 
barriers are the result of institutional barriers that tend to 
perpetuate disability stereotypes and actually limit one's ability to 
re-enter mainstream society. One of the major institutional barriers is 
the very real fear of losing your health insurance when you return to 
work.
    This is real for me. In 1984, I was working as a computer 
programmer for an insurance company in Boston. I was recruited by 
another insurer here in Washington DC. I took the job and the company 
actually moved me to an apartment in Annandale. I reported to work and 
on my second day, I met with the company's benefits manager who 
informed me that they would not be able to provide me with health 
insurance. It had not occurred to me to ask about health insurance in 
the interview process. It had not ever been an issue or source of 
concern with my previous employer and I incorrectly assumed that I 
would be covered on the same basis as their other employees.
    You can imagine my frustration. I had no coverage and my new 
employer was not going to pay to move me back to Boston. Had I not been 
willing and able to take a huge risk and rely on my own resources for a 
short period of time, I would have been forced to return to the ranks 
of Social Security. I found another job just as soon as possible and 
made sure that health insurance was part of the package.
    Now you have to understand that I am luckier than many people who 
need personal assistant services and prescription drug coverage to be 
able to work. Had this been a requirement for me, I would probably 
still be out of work. While the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA) helps increase access to coverage in 
some specific situations, it is not a complete solution for all 
individuals with disabilities.
    Efforts to help workers with disabilities return to the labor force 
have the potential to improve the lives of beneficiaries and strengthen 
the financial position of the Social Security Disability Income (SSDI) 
program. We fully support the goal of helping these individuals return 
to full participation in the workplace. At the same time, we believe 
that legislation designed to enable individuals with disabilities to 
return to the labor force, while maintaining their access to important 
federal health care benefits, should be carefully crafted to avoid 
unintended adverse consequences. We would suggest that the following 
general guidelines be considered in evaluating the impact of any 
specific return-to-work legislation:

 The legislation should seek to support employers that hire 
        workers with disabilities and ease the cost of Americans with 
        Disabilities Act (ADA) compliance.
 The legislation should be structured and funded so as to avoid 
        adversely affecting the financing of the Medicare and Medicaid 
        programs.
 The legislation should not place requirements on the private 
        Medicare-supplement market that would increase the cost of 
        coverage to seniors.
 Expanded definitions of disability should not be inadvertently 
        applied outside the scope of the specific programs under 
        consideration.
    With respect to the ``Work Incentives Improvement Act of 1999,'' 
H.R. 1180, we have two specific questions regarding its interactions 
with other public and private insurance programs. We believe that an 
understanding of the issues involved is important to evaluating the 
real world impact of such legislation.

 If an SSDI beneficiary returns to work while continuing 
        Medicare coverage, what is the role of the employer's health 
        plan? Does the aforementioned role change if their earnings are 
        below the level defined for ``substantial gainful employment?'' 
        Can Medicare be made primary to any employer-sponsored coverage 
        for these individuals?
 If an SSDI beneficiary returns to work on a trial basis 
        through the Ticket to Work program, would they be covered by 
        the employer's short-term or long-term disability plan? If the 
        beneficiary then proves unable to perform the duties of the 
        job, does the employer become responsible for disability income 
        benefits as a result of assisting the individual in returning 
        to the labor force?
    We believe the sponsors should clarify their intent regarding these 
issues as the legislation moves forward. We also have several specific 
technical comments that we hope you will consider.

 We would strongly encourage adding a provision amending the 
        Medicare Secondary Payer rules (42 USC Section 1395y) to make 
        employer-sponsored coverage secondary to Medicare and Medicaid 
        coverage for those SSDI beneficiaries who return to the labor 
        force. This would directly support the goals of the ADA and the 
        Ticket to Work program by encouraging employers to actively 
        seek out workers with disabilities. This would not represent a 
        significant expansion of the Medicare program, because these 
        individuals, in the absence of a return to work, already would 
        be receiving Medicare benefits. It would also be consistent 
        with the current treatment of individuals with end stage renal 
        disease.
 The possibility of Medicare Supplement policies being allowed 
        to suspend premiums and benefits during periods of time in 
        which the policyholder is covered by an employer-sponsored 
        program should be considered. This would reduce premium costs 
        for beneficiaries while allowing them to keep their policies in 
        force. It would also prevent multiple sources of coverage 
        resulting in payments to providers that exceed their billed 
        charges, and would be consistent with the current treatment of 
        Medicaid coverage (42 U.S.C. Section 1395ss(q)).
 Title II, Subtitle B, Section 211 amends section 221 of the 
        Social Security Act (42 USC 421) by adding a new subparagraphs 
        (m). (B) and (C) of the new paragraph (m)(1) should be 
        clarified to indicate that they refer only to disability 
        benefit determinations under sections 202 and 223 of the Social 
        Security Act, and not to benefit determinations made under 
        private disability programs.
    In addition, we would suggest that the following enhancements be 
added to the legislation:

 The period of time during which expedited eligibility 
        determinations are made available to applicants who have 
        previously received SSDI benefits and attempted to return to 
        the labor force through participation in the Ticket to Work and 
        Self-Sufficiency Program should parallel the time during which 
        continued Medicare eligibility is available.
 An extended trial work period should be established for 
        participants in the Ticket to Work and Self-Sufficiency 
        program, during which a return to the SSDI rolls does not 
        trigger a second qualification period during which benefits are 
        not available. This should parallel the extension created for 
        Medicare eligibility.
 Beneficiaries who return to the SSDI rolls during the extended 
        trial work period should have their earnings histories 
        protected. In other words, their SSDI benefits should not be 
        reduced due to lower earnings during their return to the 
        workforce.
    Again, I appreciate the opportunity to comment on this proposed 
legislation on behalf of UNUM and HIAA. We support the concept that the 
structure of the SSDI, Medicare and Medicaid programs should encourage 
disabled beneficiaries to return to an active role in the work force. 
The Work Incentives Improvement Act of 1999 addresses several areas 
that are significant barriers for people with disabilities to return to 
work. It would eliminate several of the disincentives to return to work 
and would also move us a step closer to removing the attitudinal 
barriers that prevent people with disabilities from making greater 
contributions to society. We would strongly encourage you to give 
additional thought to ways in which employers can be encouraged and 
supported in their efforts to hire people with disabilities.
    This Subcommittee's consideration of efforts to help workers with 
disabilities return to the labor force have the potential to improve 
the lives of beneficiaries and strengthen the financial position of the 
SSDI program is an important step towards fully integrating Americans 
with disabilities into the mainstream of our society, and strengthening 
our social insurance safety net for all of our citizens.
    Thank you Mr. Chairman and Members of the Subcommittee. We look 
forward to working with you to ensure that the best possible 
legislation becomes law.

    Mr. Bilirakis. Thank you very much, Mr. Craig. We are going 
to go through rather than a second round or anything of that 
nature, apparently, there's only three of us, so maybe a 10-
minute questioning session here.
    Mr. Bangsberg, I understand, has to leave at 5:30. So I 
would ask my colleagues, if you have any questions of Mr. 
Bangsberg, you might want to--I will yield to you now. Do you 
have anything of Jeff?
    Jeff, thanks for your testimony. Getting to your personal 
situation, let me ask you, do you have private health 
insurance?
    Mr. Bangsberg. Yes, sir, I do. I do have private insurance 
through my wife, and believe it or not, it does pick up most of 
the expenses that I do have, including much of my supplies and 
equipment that I have as well. However, it does not pick up 
personal care assistance services, and I privately pay 2 days 
out of the week for that service, and then, fortunately, my 
wife cares for me and provides all of the other cares that I 
need that a normal personal care assistant would do 7 days a 
week, both morning and night, and to assist me with food 
preparation as well.
    So to answer your question, the insurance that I receive is 
for much of my supplies and equipment, and any acute and 
primary care costs that I incur, but as far as personal 
assistance services, no, they will not pick up for those kinds 
of costs.
    Mr. Bilirakis. Well, now we heard Mr. Gray share with us a 
couple of his personal experiences. I wonder what types of 
barriers have you faced regarding your health care. Is there 
anything you might want to share with us?
    Mr. Bangsberg. Sure. I guess that the barrier that we see 
in Minnesota is primarily the prescription drugs that we cannot 
get for many people, and I think another magnitude is supplies 
and equipment for most people who are trying to get 
prescription drugs.
    One thing that is very important to note, as I stated 
earlier in my testimony, is that many of the people who are 
disabled like myself are going to be on Medicaid or Medicare 
regardless. In fact, the survey that I alluded to that is in 
your packets indicates that 77 percent of those people that 
were surveyed are on medical assistance and Medicare, and so 
those individuals would not add an additional expense to this 
program. In fact, we find that they would probably save 
additional dollars to this particular program.
    Mr. Bilirakis. Well, there would be additional revenue 
coming into the treasury as a result of their working.
    Mr. Bangsberg. Precisely. I think there is a few ways to 
look at it. One is in the area of secondary disabilities, where 
you find a person with a disability who is not working, and 
with not being active, they become more sick, if you will, much 
quicker, and they are not staying as healthy because they are 
not living an active lifestyle and, in addition, depression and 
chemical dependency becomes a secondary disability to those 
individuals.
    In addition to their primary care health insurance that 
would be allotted to those individuals, that is another expense 
that would be incurred by the medical assistance and the 
Medicare system, these people would become sicker and use the 
healthcare dollars much more frequently.
    Mr. Bilirakis. Thanks, Jeff. Why don't we just go ahead and 
excuse you. That way you can leave at your leisure. Thanks so 
very much.
    Mr. Bangsberg. Thank you very much, Mr. Chairman.
    Mr. Bilirakis. I know you were not planning to stay here 
for this hearing. You were here last week for the press 
conference, and I know you had planned to return.
    Mr. Bangsberg. It was my pleasure and I was more than happy 
to stick on and stay around. I don't get this chance very often 
and I am very thankful.
    Mr. Bilirakis. You have honored us. Good luck to you.
    Mr. Bangsberg. Thank you very much.
    Mr. Bilirakis. Thank you, Mr. Bangsberg.
    Mr. Gray, you brought up this point of making it easier for 
employers to hire individuals with disabilities, and, of 
course, you brought up the point of the Disabilities Act. 
Basically, what we are saying is that the Disabilities Act 
would require certain improvements on the part of the employer, 
which would be costly, and so might deter their thought about 
even hiring someone with disabilities; is that right? That is 
your point?
    Mr. Gray. That is correct.
    Mr. Bilirakis. Yes, that is something that maybe we don't 
think about. But can you imagine the problem we would run into 
with some of the disabled community if we choose to make 
exceptions in some cases? I don't know. I guess it is something 
to think about.
    Mr. Cooley, do you believe that the State of Florida is 
likely to pursue the Medicaid optional expansions authorized 
under this bill?
    Mr. Cooley. I certainly hope that they do. I don't have any 
personal insight, as I sit here today, that they will, but it 
would certainly be my position to encourage them to do so.
    Mr. Bilirakis. All right, you were aware of the provisions 
of BBA 1997 I would imagine; right?
    Mr. Cooley. Somewhat, yes.
    Mr. Bilirakis. And did you inquire of the State why they 
were not doing what Oregon is doing in terms of taking 
advantage of it?
    Mr. Cooley. Mr. Chairman, I actually have not had that 
communication with them, as I sit here today. I assure you that 
when I return back to Florida that will be one of my very first 
initiatives this week.
    Mr. Bilirakis. So, in terms of current initiatives at the 
State level, what are they basically, and how would they be 
enhanced with this legislation being enacted?
    Mr. Cooley. I think one of the serious conflicts that 
exists in Florida today is that the State Workers Compensation 
system uses a Social Security Disability criteria for 
determinations of permanent total disability, and for the 
injured workers in the State everything is either all or 
nothing. I believe that if we can get this legislation through, 
passed, people won't be encouraged to seek total disability, 
and with the benefits that will be continuing, we will be able 
to get many, many more of the disabled population in our State 
back to work.
    Everybody I see, as I earlier testified, their major 
barriers are whether or not they are going to have medical 
coverage. I think if we can get the State to buy into this, 
participate, it will certainly help us in Florida.
    Mr. Bilirakis. Mr. Auerbach, you spoke of certain problems 
with the BBA 1997 language that you feel probably has deterred 
some States, and, apparently, did not deter Oregon, but you 
were able to surmount them. Do you think that this bill would 
take care of all of those problems?
    Mr. Auerbach. Mr. Chairman, I don't think it will take care 
of all of the problems. I wanted to highlight just two points 
in my testimony. One was, again, the definition of working and 
the fear of State budgets and actually biting off a bigger 
chunk than they thought they would.
    People want to work with this program. I have talked with 
States from around the country. One of the things that happens 
when you are one of the first out of the chute, people call 
you. So we have spent a lot of time answering phone calls from 
around the country.
    States were asking, how did you make an estimate about how 
much it is going to cost us? We have our State budget office 
saying that this is going to be a lot more expensive than you 
say it is going to be.
    So that really the definition of who actually is qualified 
and the definition of who actually is a working disabled 
individual is a big question for States, and the other one, as 
I said, is the ability to phase in the program, to be able to 
build the infrastructure. I know my colleagues in Wisconsin, I 
think, wouldn't be reluctant to have me say that has been their 
concern; that they think that they are going to have a program 
up and ready to go in certain areas of the State, but they 
would like to be able to phase the program in across the State.
    Mr. Bilirakis. All right; so those two particular areas----
    Mr. Auerbach. Those are the two biggest areas.
    Mr. Bilirakis. [continuing] you have repeated those areas?
    Mr. Auerbach. Yes, sir.
    Mr. Bilirakis. I am glad you did. Those would not be taken 
care of necessarily by this legislation.
    Mr. Auerbach. On this bill, that's correct. That's correct. 
Let me just say----
    Mr. Bilirakis. You would suggest maybe be a change in the 
language of the legislation or changing the BBA language, 
right?
    Mr. Auerbach. Mr. Chairman, members of the committee, I 
certainly would like to see some changes in the language of 
this bill. I think this bill is much more comprehensive than 
the Balanced Budget Act section was and really, again, affords 
States more opportunities, more options. We are appreciative, 
and let me speak on behalf of the other States, we are 
appreciative of the fact that this is an optional program, that 
it is going to be a partnership with the Federal Government, 
but I think, again, that there is some hesitation about going 
in without knowing exactly what all the ramifications are going 
to be, and those are two issues where you can help us with 
budget concerns.
    Mr. Bilirakis. Well, Mr. Lazio is here and he hears you, 
and I think that speaks well for what you said.
    Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman.
    Mr. Bergman and Ms. Gennaro, your statements I thought--and 
your written testimony--were particularly poignant I thought. 
Let me cite a couple of things and ask you a question together, 
if you would.
    Ms. Gennaro, in your statement you wrote that people with 
severe disabilities may have difficulties accessing coverage 
services because the insurer uses a narrow definition of 
medical necessity, limiting services to those which restore 
health and not covering services which maintain function and/or 
prevent deterioration or loss of function.
    Mr. Bergman, you wrote that normally, quote ``The limited 
employer benefit package does not meet the needs of the person 
with a severe disability in areas such as prescription drugs, 
mental health services, durable medical equipment, assistive 
technology, physical, occupational, and speech language 
therapies, and you underline none offer personal assistance 
services, and the healthcare package is constrained by rigid 
definition of medical necessity which is limited to services to 
restore health, rather than to maintain function or prevent 
deterioration or loss of function, which is critical to persons 
with disabilities accessing the benefit package.''
    Talk about this rigid definition of medical necessity 
preventing people with disabilities from accessing many 
healthcare benefits, since obviously people with disabilities 
almost always have conditions that cannot be restored, if you 
would both elaborate on that.
    Ms. Gennaro. Well, for instance, someone may need physical 
therapy that just maintains the functionability at which they 
have been able to progress, and it is important to maintain 
that, to maintain their mobility or whatever abilities they 
have been able to attain. The therapy may not be making them 
improved, but it is maintaining motor functions that they have, 
and losing certain functions can have a great impact on the 
different abilities that they have in other areas of their 
lives.
    But it is not the way typically that insurers would look at 
that in terms of maintaining the abilities that you have and 
the necessity of that, and it is not just physical therapy; it 
is also work in rehabilitating people and helping them learn 
skills and tasks and helping them just maintain safe living in 
their communities, and so forth.
    Mr. Brown. And in most cases insurance would not cover 
that?
    Ms. Gennaro. Well, you would have to----
    Mr. Brown. Would not consider that a medical necessity?
    Ms. Gennaro. Well, you often have to, I think, argue with 
them over what is and isn't medically necessary. I think this 
comes up often with managed care and trying to get covered what 
needs to be covered.
    Mr. Brown. Mr. Bergman.
    Mr. Bergman. Yes, let me take another shot at it and make 
it concrete, if I may. I think traditional health insurance 
comes from an accident and health indemnity model, and that is 
what most commercial insurance still is framed on, which looks 
at restoration.
    So, for example, if one of us who is temporarily abled-
bodied breaks an arm or breaks a leg, and you get it casted or 
you get it put in a sling or they put a pin in, whatever the 
medical end of it is, usually what is going to happen is you 
are going to get a prescription for physical therapy for 
restoration of function, whether it is your leg or your arm, 
and you are going to go see the PT. It is probably a capped 
benefit for 15 sessions, at which point you are probably 
restored pretty good and the therapist is going to say go home 
and squeeze the ball, do some stretching, but you got about 95 
percent restoration, go have a nice day, end of benefit, end of 
coverage.
    For somebody who has a neuromuscular disability, whether it 
is cerebral palsy, muscular dystrophy, spinal bifida--we go 
down a long list of things--residual from a traumatic brain 
injury, in that person's situation at the end of 15 sessions we 
are not talking about going home and taking care of it and 
everything is back to business, because what we are really 
worried about is preventing neuromuscular atrophy, and atrophy 
leads to function or loss of function, and that can be an 
independent living which then translates to higher costs and 
more personal assistance. It could also cause more problems in 
the workplace because the person isn't able to use their hands 
as well, their arms, their feet, depending on which limb is 
involved.
    So what happens often with the employer-based insurance is 
the person with a long-term disability either is not able to 
access the benefit at all because of the definition of medical 
necessity or, even if they can access it, it's a capped 
benefit. There again, we would suggest that the Medicaid or 
Medicare needs to be available as a wraparound, and I know that 
Congress is getting ready to address the limitations in 
Medicare that were put in in BBA to the $1,500-a-year cap on 
therapies.
    Mr. Brown. So the wraparound works the wrong way?
    Mr. Bergman. Well, the wraparound, at least as I think this 
bill would propose it, would work the right way, which is the 
commercial insurance would be primary and then the Medicaid 
and/or Medicare would be the secondary or in some cases the 
alternative payer.
    Again, we talked about assistive technology and durable 
medical equipment. Jeff pointed out he has very good coverage 
there. An awful lot of commercial employer-based insurance 
either has a capped coverage, no coverage, one lifetime 
coverage--for example, power wheelchairs such as his, you get 
one forever. Well, if that is basically his mode of 
transportation, we know that is not going to last him forever. 
It breaks down just like our cars do. So every often you might 
get the one-time-only wheelchair for $12,000 or $15,000, but 
repairs are not covered and then the replacement chair 6, 7 
years out isn't going to be covered, and then where does the 
next $12,000, $15,000, $18,000 come from?
    Mr. Brown. Let me shift to Mr. Gray. You are representing 
the Health Insurance Association of America. That is the 
private for-profit insurance companies; is that correct?
    Mr. Gray. That's correct.
    Mr. Brown. In your testimony you mentioned the Health 
Insurance Portability and Accountability Act of 3 years ago, of 
1996, and state that it helps increase access to coverage in 
some specific situations, but it is not a complete solution for 
all individuals with disabilities. If reversal of the status 
quo of Medicare as secondary payer were allowed, would HIAA 
lower the premiums charged to employers to reflect the fact 
that private insurance is paying only for things that Medicare 
doesn't cover?
    Mr. Gray. If I understand the question correctly, you are 
asking me if the HIAA position is that Medicare should be the 
secondary?
    Mr. Brown. If you were the secondary, if HIAA were second 
or if the health insurance were secondary, would you then lower 
your premiums?
    Mr. Gray. I would have to take that question back for more 
technical consideration by some of the actuaries. I am not 
sure. I don't want--I am not sure that I can answer that 
question correctly on behalf of HIAA.
    Mr. Brown. If it is true that disabled individuals today 
who have access to Medicare coverage aren't able to purchase 
Medigap insurance to help assist them with their extra costs, 
which I understand is true in almost every case, don't you 
think that this would improve the situation for the disabled, 
and would HIAA support such legislation?
    Mr. Gray. The HIAA perspective on this is that it should 
be--in some situations there should be no need for Medigap 
insurance any more, because we will have a full spectrum of 
coverage from what Medicare provides coverage for and then what 
the commercial insurer provides coverage for.
    Mr. Brown. But in those cases where it is not, would HIAA 
support availability of Medigap for Medicare beneficiaries?
    Mr. Gray. Yes.
    Mr. Brown. Thank you.
    Mr. Bilirakis. Mr. Lazio.
    Mr. Lazio. Thank you very much, Mr. Chairman. Let me thank 
the panel for all of your efforts, and if I can, I want to 
start off with some questions of the Deeley partnership at the 
end. I just want to get back to two of the experiences that you 
have had, which I think in a very concrete, but simple way, 
make the case for H.R. 1180. Mr. Deeley, you were talking about 
Tom and the fact that he has been such an outstanding employee 
that he was offered a bonus and he couldn't take it?
    Mr. Harold Deeley. That is correct. We think we finessed 
it.
    Mr. Lazio. I am happy to hear that.
    Mr. Harold Deeley. We changed it from the $200 award, which 
was a standard thing for his achievement, to a $200 gift 
certificate, and that may be declarable as income, but we think 
it got around the type of income that raised his salary or his 
income over $500 per month.
    Mr. Lazio. And Tom, you would like to work full time and it 
appears as though you have the opportunity to work full time 
and this is a company that would like to see you work full 
time.
    Mr. Harold Deeley. Yes, that is exactly correct. Tom was 
working full time at the start. He was evaluated and his 
performance was good enough to give him a substantial hourly 
raise. Once that came into being, we began to tread on thin 
ice. Then a second raise was in prospect and we got around that 
by reducing the number of hours, and it went from 5 days a week 
down to what are now 2 days a week. Tom would love to be a 5-
day-a-week worker.
    Mr. Lazio. He says yes.
    Mr. Harold Deeley. Show that the plaintiff nods.
    His boss would love to have him. I have been told by his 
current boss and the previous one that he is by far the best 
worker they have down there at the Defense Logistic Agency, and 
this is janitorial work, but he does a good job and he is 
eager. In fact, he carries it home and he pricks my conscience 
that my desk is such a mess. He is a neatnik.
    Yes, he would very definitely like to go back to full time. 
He enjoys a very good relationship with his co-workers as well 
as his boss, and there is at least one or two of them who are 
reduced, but not to the degree Tom has been, down to the 2-day-
a-week thing.
    Mr. Lazio. So this certainly is a perverse disincentive.
    If I can just turn, if I can, to Mr. Gray. You had 
suggested earlier that there are attitudinal consequences to 
providing some opportunity for folks to feel secure about their 
healthcare coverage and the opportunity to go back to work. 
Could you expand upon attitudinal institutional barriers to 
employment?
    Mr. Gray. Thank you, yes.
    Mr. Lazio. Because I think that flows well from the 
testimony we just heard.
    Mr. Gray. I think that there are two areas that I would 
like to address. First is the existence of a continued 
attitudinal barrier that people with disabilities are less 
abled, rather than differently abled, and an extension of that 
kind of thinking is that people with disabilities are always 
going to require the maximum degree of support, and help, and 
cost associated with what we think of in a worse-case scenario.
    Now that is absolutely not true. There is more diversity in 
the ability of people with disabilities than there would be in 
the rest of the general population.
    The second area I would like to address is what I consider 
an institutional barrier that we don't often talk about, which 
is amazing because it has to do with communication, and it is 
that we have a lack of an effective dissemination of 
information regarding existing programs and services that will 
enable people with disabilities to lead a higher quality of 
life and be more productive and independent.
    That is why we feel that the community outreach portion of 
this legislation is so critically important. People need to 
know how to weave their way through the complex maze of laws 
and details, and quite honestly, most people are not prepared 
or have the desire to deal with things at that level of detail. 
We need to make sure that the most effective ways of 
disseminating information are in fact funded, and that may be 
through private means as well as public means.
    Mr. Lazio. But let me ask Mr. Auerbach this, if I can. 
There are some critics to the approach that we have taken who 
suggest that maybe a 1-year extension to the 4 that we 
currently have for Medicare coverage or 2 years would be 
enough. Why isn't 6 years enough? Why do we need, if you will 
agree that we need the 10-year timeframe, why is that important 
that is in this bill?
    Mr. Auerbach. Mr. Chairman, Representative Lazio, I think 
this is a major philosophical shift for the Federal Government 
saying to people with disabilities that we are going to support 
your independence and the continuity, and I don't know if there 
is a magic number. Candidly, I don't know if there is a magic 
number, but the longer that people know that they can have that 
support and go to work, your SSDI beneficiaries are much more 
likely, we think, to be able to make that transition to 
employment. Most of them already have work histories of some 
sort or another, and they are the most likely, we think, to be 
able to go back to work. They have a great chance of being 
successful. So I think it is the messaging, candidly.
    Mr. Lazio. So does that help us get the information out, 
get the word out? Mr. Gray was talking about it, and so many 
things, marketing it so that people understand clearly what 
their risk is, or how risk is alleviated, and whether this is a 
realistic choice for people to dream about it, think about.
    Mr. Auerbach. We spend a lot of time--right now we have--we 
started our program in February of this year and we have, at 
last report, 22 people on the program. It is not, you know, a 
situation where people bust down the doors. But this is just 
pent-up demand at this point. We haven't gone out and started 
marketing, but yet my staff in field offices throughout the 
State are saying, when are you going to send us more staff to 
be able to handle all the questions? Because there is a complex 
set right now, and you heard it from other people testifying, 
of work incentives, and to be able to explain to somebody how 
they go through and what they are allowed to do, and what they 
are not allowed to do, and how potentially these new 
opportunities are going to fit in with the existing ones is 
going to take a lot of time. The marketing is very important, 
and the messaging is very important.
    We have told people with disabilities that they had to 
prove to us that they are disabled in order to have cash 
benefits. For us now to say to them we have changed, we need to 
have as many real things to show them that there, in fact, is 
going to be a change for them.
    Mr. Lazio. So it is attitudinal in that sense as well that 
people feel as though this is a realistic opportunity, that 
this may even be an expectation for folks to actually pursue or 
explore opportunities to the extent that they can.
    Mr. Auerbach. This is absolutely what we would like to be 
able to do. We would like to be able to, as we sign someone up 
for benefits, say as you are signing up for benefits, we want 
to help you get your life stabilized so that we can talk with 
you about going to work.
    So, in fact, we would like to be able to have that message 
from the time that people actually come in our doors and have 
an expectation that we are going to help them be as independent 
as possible, and for most people, as you can tell from the 
statistics, most people want that opportunity to work.
    Mr. Lazio. It is overwhelming. I know Mr. Bergman is 
shaking his head. One of the problems that some folks face is 
maybe an episodic disability. Some people go through stages in 
which they have problems functioning to full capacity, because 
they may be in remission for a while; they may be able to go 
back, for example.
    How does this bill--does it address that problem?
    Mr. Auerbach. That is a very good question, Congressman 
Lazio. I think it does, but can I put a parenthetical on the 
last one, because it is very important. I think there is such 
concern about this bill from some parties opening up the 
woodwork effect and the floodgates, and, gosh, we should be so 
lucky.
    I think there is so much history around the return-to-work 
mythology, and bad starts, and false starts, and failures, if 
you will, that I think the marketing piece that Roger talked 
about needs to really happen. And even with that, to build 
confidence and trust is going to take a long time within the 
collective disability community before we get any of the kind 
of numbers some of us hope we are going to see on this 
initiative. It is not going to happen quickly.
    On the episodic issue, I think what the bill does is make 
it more comfortable for the person to take some risk to go to 
work by knowing that disability determination is not going to 
be another 2-year process, and if you will, there is re-entry 
back to, if you will, the safety net, some sense of security. 
You get through that next period of your situation, and then 
you go back to work, and obviously, that is going to take some 
flexibility with employers and people may end up changing jobs, 
but what it does is begin to give confidence to the person with 
the intermittent or episodic disability to be able to say, 
``Okay, I'm in remission now; I am feeling good. Life is good 
right now. Let's go.'' And whether that is something like MS 
and a physical disability or somebody with a psychiatric 
disability or a traumatic brain injury, that individual has 
some sense of security they can go forward, their health 
insurance will have some continuity, and they go and feel good, 
and they make a contribution, and they pay some taxes, and get 
a real paycheck, and 6-8 months later they are back and they 
have to stop work for a while.
    But, yes, this bill at least begins to put some 
underpinnings in there that says, just because you go to work, 
you haven't been cured, if you will, to go back to the 
healthcare model. You still are a person with a disability, and 
that is what we are trying to do here, is change the paradigm. 
As I said in my testimony, the old paradigm was disability was 
a synonym for incapable of work by definition of SGA, because 
if you reach SGA, you are not disabled. And there is a case 
going to the Supreme Court that is actually going to test that 
out for us very soon. This bill begins to say, no, disability 
doesn't have anything to do with employability and the Federal 
Government wants to create some real incentives.
    Mr. Lazio. Well, that is a great way to end up. I want to 
thank you, Mr. Chairman.
    Mr. Bilirakis. Thank you, Rick.
    Gentlemen and Mary, Mr. Lazio asked the question about some 
problem--maybe some people feel that we should really extend 
for another 6 years, and maybe another 2 years or something of 
that nature is adequate. I would suggest to you--and he already 
knows this--that that could be a very critical point with the 
progress of this bill, particularly with Ways and Means, and 
whatnot.
    So, I am not going to take up any more time here. There 
will be a number of questions that will be afforded you in 
writing by the staff and that is one of them, and I would 
suggest, please, if you want to really help us here, give more 
thought to it.
    Mr. Auerbach responded to it, but, you know, I think that 
you can do better, quite frankly. We would like to hear from 
all of you in that regard, how critical you think maybe the 6-
year extension is versus anything less than that.
    So are you all willing to respond to any written questions?
    Okay, that being the case, the Chair yields to Mr. Brown 
for his statement.
    Mr. Brown. Mr. Chairman, I want to just thank you and thank 
Mr. Lazio and Mr. Waxman for bringing this bill here today, and 
thank the majority staff for working with us in a bipartisan 
fashion to invite appropriate witnesses. I think the hearing 
was excellent; the witnesses were terrific.
    There were a couple of issues that minority members are 
concerned about that are procedural issues. One is that to find 
out an hour before the hearing that a new witness has been 
added is a bit problematic, and we were not told of the 
decision to combine the panels until we showed up today. I 
don't certainly blame Mr. Bilirakis personally, because he has 
always worked in good faith, but these issues are important to 
the minority, just so we can continue to fashion legislation 
bipartisanly, as we have today, that we can work as full 
partners. I would hope that your staff, the majority staff, 
would work a little more closely, and a little more directly, 
with the minority staff so we can work bipartisan and continue 
that effort. Thank you.
    Mr. Bilirakis. Well, I would like to think that they are 
already doing that, but apparently they are not. I will tell 
you that we found out an hour before the hearing that the mayor 
was going to be testifying. That's what they tell me. I don't 
know any of the background as to why he decided to testify, but 
I think that we all agree that he was a very valuable witness.
    As far as combining, that is something that I always 
prefer, maybe less than--rather than 4 or 5 panels I like to 
see----
    Mr. Brown. Mr. Chairman, I can't quite see that far, way 
over on the left.
    Mr. Bilirakis. But it worked. It worked.
    Mr. Brown. It did work. We don't object to the combining, 
but just that we are notified of combining a little bit earlier 
than when we show up because it does affect--sometimes, not 
today, because this was not a contentious hearing and all, not 
a partisan hearing or any of that, but sometimes it affects the 
way that we might prepare questions.
    Mr. Bilirakis. Well, I agree, and I certainly ask the staff 
for better cooperation with the minority staff. But I do think 
that it is important that we don't get hung up with the size of 
the table or the shape of the table here; we have more 
important things to be concerned with.
    Thank you very much. You were of tremendous assistance to 
what we are trying to accomplish here. Stay with us, and again, 
please feed any additional information you can think of that 
might be helpful to what we are trying to accomplish. Thank 
you. God bless you.
    The hearing is adjourned.
    [Whereupon, at 5:52 p.m. the subcommittee was adjourned.]