[Congressional Record Volume 142, Number 108 (Monday, July 22, 1996)]
[Senate]
[Pages S8472-S8476]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS:
  S. 1979. A bill to amend the Social Security Act to help disabled 
individuals become economically self-sufficient and eligible for health 
care coverage through work incentives and a medicare buy-in program, 
and for other purposes; to the Committee on Finance.


          THE WORK INCENTIVE AND SELF-SUFFICIENCY ACT OF 1996

 Mr. JEFFORDS. Mr. President, I introduce the Work Incentive 
and Self-Sufficiency Act of 1996. I believe that few people are 
returning to work after becoming eligible for Social Security 
disability income [SSDI] not because they can no longer find gainful 
employment, but because of a greater systemic problem we face as a 
nation. What I am referring to is this country's current schizophrenic 
national disability policy.
  The laudable policy we set forth in the Americans With Disabilities 
Act of 1990 [ADA] which requires that resources be provided to promote 
functioning and work for people with disabilities, as well as, income 
support for those who cannot work or whose ability to work is very 
limited, are not well integrated into our current SSDI and SSI 
programs. This is a very complex problem that we must deal with if we 
ever expect to get our Federal deficit under control.
  I remember when we reported the ADA out of the Labor and Human 
Resources Committee, the committee made explicit that the goals of this 
law were to provide people with disabilities with: equality of 
opportunity, full participation, independent living, and economic self-
sufficiency. Disability is not just a characteristic of individuals, 
but is a description of how well someone is able to fit into our 
society which includes his or her capacity to work. To provide for a 
clear and consistent national disability policy we must make sure that 
the incentives, and goals of our public programs, SSDI, SSI, Medicare, 
and Medicaid work in conjunction with the private sector.
  Many disabled individuals would like to return to work, but they are 
heavily penalized for there efforts to do so. For example, some courts 
have determined that if a person qualifies for SSDI, but then wants to 
try to go back to work and can't find a job, they have no cause of 
action under the ADA. I believe that the greatest disincentive for 
disabled individuals to return to work is the fear of losing their 
health care coverage. These individuals literally may not survive 
without health care coverage. Their condition often requires immediate 
utilization of health services and they cannot go, for, even for a 
short period of time, without the security of knowing they have 
guaranteed health coverage. It is understandable that they would prefer 
not to work if it will jeopardize this lifeline.
  Also in the labor market, despite the ADA, there is a disincentive to 
hire or maintain the disabled employee. The disabled employee will 
likely have a chronic high cost illness and if the employer offered a 
health plan they would be covered under this plan. It is important to 
keep in mind that all employer group health plans, both insured and 
self-insured, are covered under ERISA.

[[Page S8473]]

Under ERISA, the employer currently has substantial flexibility in not 
only the benefits it chooses to cover, but also the types of plan 
design features it uses. Some employers have used plan design features 
which will carve out any high cost individual from coverage under the 
employee benefit health plan.
  With no where else to turn, disabled individuals once again become 
dependent upon public sector health care plans. This cost-shift from 
the employer health plans to the public health plans was the main 
argument I made during debate on the Health Insurance Reform Act when I 
brought my amendment on the lifetime caps to the floor. Employers, by 
limiting the maximum benefits they will pay for employees in a 
lifetime, actually set the point where their costs will end and 
Government expenditures begin. In the private market, health plans 
usually decide how much risk they will assume and then they reinsure 
the rest. In this case, the private market uses the Government-run 
health plans as the reinsurer of last resort.
  According to previous testimony by the General Accounting Office 
[GAO] no more than 1 of every 1,000 SSI and DI leave the rolls for work 
as a result of the Social Security Administration's assistance. These 
programs need to place a greater focus on the rule the employer can 
play in getting people rehabilitated and back to work. Once an 
individual becomes disabled the link with their current employer is 
disrupted and often terminated. If there were incentives, particularly 
early in the process, for the employer to remain involved the chances 
of returning to work would go up markedly.
  The employer could focus on accommodating a valuable employee rather 
than on replacing him. Employers could assist their workers in getting 
assessed for rehabilitation services immediately instead of waiting for 
the SSI or SSDI programs to first complete the application process and 
then making a referral for such services. If the employer were to keep 
in closer contact it would have better opportunity to prepare for any 
unique assistance the individual might ultimately need like a personal 
assistant or other assistance technology.
  The Work Incentive and Self-Sufficiency Act of 1996, is designed to 
address two significant problems in the Social Security Disability 
Income [SSDI] Program: If individuals with significant disabilities 
cannot keep their health coverage when they return to work, and if that 
work does not leave them financially better off, they cannot afford to 
go back and work, and leave the cash assistance they receive under SSDI 
or SSI. It is not only the cash assistance they receive from benefits 
that is critical, it is the health coverage they obtain through 
becoming Medicare eligible.
  Let us look at the numbers. The average monthly SSDI check is $630; 
some who were in the work force longer at higher earnings receive more 
while many others receive less. At the current minimum wage of $4.25 
per hour, a person working full time--176 hours per month, or 8 hours 
per day for a standard 22 days--will earn $748. This is not much money, 
but if you assume a slightly better than minimum wage or some overtime 
at 1.5 times regular wages, then take home pay from work replaces the 
cash assistance that is lost.
  However, that cash assistance brings with it several noncash 
supports. The most well-known of these is health coverage, which comes 
through Medicare for SSDI beneficiaries and through Medicaid for SSI 
recipients. Other noncash supports include long-term supports under 
Medicaid, vocational rehab, or other programs, food stamps, rental 
assistance, home heating assistance, and a variety of discounts and 
reduced fares on public services, among other supports. The cost of 
replacing these noncash benefits for individuals with significant 
disabilities is often double or even triple the value of the cash 
assistance that is lost.
  The major assumptions are that individuals with significant 
disabilities can qualify for health coverage, much less afford to pay 
for it themselves, and private providers for long term supports can be 
located and afforded. The reality is that individuals with disabilities 
are often not able to locate health coverage that meets their needs, or 
if they can find coverage, it comes with either high deductibles and 
premiums, services exclusions, preexisting conditions limits, and/or 
yearly or lifetime caps on benefits.
  The same is true for the long term supports required by some 
individuals with significant disabilities such as quadriplegia or 
cerebral palsy. Many individuals with disabilities can work if they 
have the assistance of another person to perform activities of daily 
living that are required to prepare for work such as bathing, dressing, 
eating, transferring from bed to chair or using the bathroom. The 
difficulty is not with necessarily with working, but with locating and 
paying the support workers needed to prepare for and to perform work.
  Currently, when an SSDI beneficiary earns $500 monthly, that person 
demonstrates the capacity to work at the substantial gainful activity 
[SGA] level. If this work is sustained for 9 consecutive months, the 
individual no longer meets the first criteria for work disability 
eligibility: the incapacity to perform substantial gainful work in the 
national economy. Thus, proceedings are begun to end cash assistance. 
But, since take home pay equals or exceeds cash assistance, there is no 
problem.
  Or is there? One month individuals with significant disabilities are 
earning $748 from wages, less taxes, $630 from cash assistance, and 
receiving noncash benefits ranging in value from $1,200 to $1,800. The 
next month these individuals with significant disabilities are earning 
$748 from wages, less taxes, and from this amount now are expected to 
purchase up to $1,800 in medical coverage, long term supports, food, 
rent, and other necessities. It does not require sophisticated cost/
benefit calculations here to draw the conclusion that individuals with 
significant disabilities are being punished if they attempt to work.
  There are some basic solutions to this problem. First, continue 
health coverage for those who are on SSDI after they return to work. 
Second, make work pay by allowing low income former SSDI beneficiaries 
to receive benefits that gradually reduce as their take home pay 
increases. The Work Incentive and Self-Sufficiency Act of 1996 is 
designed to implement both of these solutions. First, it allows SSDI 
beneficiaries to keep their Medicare coverage if they return to work. 
If they take a job that does not offer health coverage, Medicare 
remains their primary insurance. If they find a position that does 
offer health insurance, they have the option to purchase Medicare 
coverage to use as supplementary coverage. Working beneficiaries would 
purchase this coverage on their own through premiums that rise on a 
sliding scale.
  Second, it allows SSDI beneficiaries to keep part of their cash 
assistance after they return to work. Rather than losing the entire 
amount once they earn $500 a month, they would lose $1 of cash benefits 
for every $2 in wages they earn that is above $500 a month. This is 
similar to, but not the same as, the rule that allows individuals over 
65 who are retired on Social Security to earn wages and continue to 
receive retirement income and Medicare.
  Third, it allows some individuals to apply only for Medicare coverage 
but not cash assistance. This would offer some workers who acquire a 
disability during their working years the option to purchase Medicare 
coverage and continue working. The Medicare coverage could be either 
their primary or supplemental coverage.
  At this point some will ask, ``Won't that increase already rising 
costs of benefits?'' Actually, no. Extending health coverage to those 
who return to work will not increase costs essentially because so few 
people are leaving the disability program for work. In fact, enabling 
people who were former beneficiaries or recipients to keep this health 
coverage would lead to some of them eventually being covered by private 
health insurance, thus reducing costs. It will also lead to a reduction 
in the amount of SSDI and SSI cash assistance paid as reentering 
workers replace benefits with wages, and pay taxes on those wages.
  Employers would not be required to purchase any additional insurance 
or to report any additional information to the Government. Individuals 
with disabilities would assume the responsibility to exercise the 
option to purchase

[[Page S8474]]

Medicare and pay the Medicare premiums. Considering the very important 
role employers have in assuring our Nation's policy goal to self-
sufficiency for individuals with disabilities I am especially pleased 
to have a letter from Michael R. Losey, president and CEO of the 
Society for Human Resource Management [SHRM]. SHRM is and I quote, 
``fascinated by your proposal that would provide employment incentives 
to individuals with disabilities * * * SHRM looks forward to working 
with you and your staff to promote employment and reemployment 
incentives for those with disabilities.'' I would also like to thank 
both Fred Grandy, president and CEO of Goodwill Industries 
International, Inc., and the Consortium for Citizens with Disabilities 
Task Force on Social Security, especially the cochairs, Tony Young, 
Marty Ford and Rhonda Schulzinger, for their letters of support for 
this bill. Mr. President, I asked unanimous consent that these three 
letters be inserted into the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                 Society for Human


                                          Resource Management,

                                    Alexandria, VA, July 18, 1996.
     Senator James M. Jeffords,
     Hart Building,
     Washington, DC.
       Dear Senator Jeffords: On behalf of the Society for Human 
     Resource Management (SHRM), I am writing to commend you for 
     your efforts to address the employment and reemployment needs 
     of individuals with disabilities. SHRM is the leading voice 
     of the human resource profession, representing the interests 
     of more than 70,000 professional and student members from 
     around the world.
       SHRM is committed to equal employment opportunity in all 
     employment practices, including hiring, training, 
     compensation, benefits, promotion transfer, termination, and 
     reduction in force, for all individuals without regard to 
     disability. SHRM is committed to these policies because of 
     our firm conviction that adherence to these principles is 
     sound management practice and contributes significantly to 
     the success of our membership and our members' organizations.
       As a result, SHRM is fascinated by your proposal that would 
     provide employment incentives to individuals with 
     disabilities. Faced with the loss of much-needed health care 
     coverage or minimal financial support, many individuals who 
     could continue making contributions as employees, are 
     actually discouraged from going back to work. It is clear 
     that the private and public sectors should work together to 
     increase opportunities for all Americans.
       SHRM looks forward to working with you and your staff to 
     promote employment and reemployment incentives for those with 
     disabilities.
           Sincerely,
                                           Michael R. Losey, SPHR,
     President & CEO.
                                                                    ____

         Consortium for Citizens With Disabilities Task Force on 
           Social Security,
                                                    July 18, 1996.
     Hon. James Jeffords,
     U.S. Senate,
     Washington, DC.
       Dear Senator Jeffords: The undersigned members of the Task 
     Force on Social Security of the Consortium for Citizens with 
     Disabilities support the principles set forth in the Work 
     Incentive and Self-Support Act of 1996 to enable individuals 
     on Social Security Disability Insurance to return to work.
       The Consortium for Citizens With Disabilities (CCD) is a 
     working coalition of more than 100 national consumer, service 
     provider, parent and professional organizations that advocate 
     on behalf of people with disabilities and their families. The 
     work of the Consortium in conducted by Task Forces in various 
     policy areas such as health care, education, employment, 
     technology, housing, civil rights, social security, and 
     budget and appropriations.
       The Work Incentive and Self-Sufficiency Act of 1996 is 
     designed to address two significant problems in the SSDI 
     program: If individuals with significant disabilities 1) 
     cannot keep their health coverage when they return to work 
     and 2) if that work does not leave them financially better 
     off, they can not risk or afford to go back to work, and 
     leave the cash assistance they receive under SSDI.
       There are some basic solutions to this problem. First, 
     continue health coverage for those who are on SSDI after they 
     return to work. Second, make work pay by allowing low income 
     former SSDI beneficiaries to receive benefits that gradually 
     reduce as their take home pay increases. The Work Incentive 
     and Self-Sufficiency Act of 1996 is designed to implement 
     both of these solutions.
       First, it allows SSDI beneficiaries to keep their Medicare 
     coverage if they return to work. If they take a job that does 
     not offer health coverage, Medicare remains their primary 
     insurance. If they find a position that does offer health 
     insurance, they have the option to purchase Medicare coverage 
     to use a supplementary coverage. Working beneficiaries would 
     purchase this coverage on their own through premiums that 
     rise on a sliding scale.
       Second, it allows SSDI beneficiaries to keep part of their 
     cash assistance after they return to work. Rather than losing 
     the entire amount once they earn $500 a month, they would 
     lose $1 of cash benefits for every $2 in wages they earn that 
     is above $500 a month. This is similar to (but not the same 
     as) the rule that allows individuals over 65 who are retired 
     on Social Security to earn wages and continue to receive 
     retirement income and Medicare.
       Third, it allows some individuals to apply only for 
     Medicare coverage but not cash assistance. This offers some 
     workers who acquire a disability during their working years 
     the option to purchase Medicare coverage and continue 
     working. The Medicare coverage could be either primary 
     or supplemental coverage.
       We thank you and your lead staff person on this issue, 
     Elaina Goldstein, for the outstanding leadership demonstrated 
     toward enhancing the employment of individuals with 
     disabilities through this bill. This is extremely important 
     legislation for individuals with disabilies. The CCD is eager 
     to work with you and your staff to enact this legislation.
       If you have any questions regarding this subject, please 
     call one of the Co-Chairs shown at the bottom of this letter.
           Sincerely,
     Tony Young,
       American Rehabilita-
       tion Association,
       Co-Chair.
     Rhoda Schulzinger,
       Bazelon Center for
       Mental Health Law,
       Co-Chair.
     Marty Ford,
       The Arc,
       Co-Chair.


                        Cosigning Organizations

       American Rehabilitation Association.
       Bazelon Center for Mental Health Law.
       Goodwill Industries International.
       International Association of Psychosocial Rehabilitation 
     Services.
       National Association of Protection & Advocacy Systems.
       National Community Mental Health Care Council.
       National Easter Seal Society.
       National Mental Health Association.
       National Multiple Sclerosis Society.
       The Arc of the United States.
       United Cerebral Palsy Association, Inc.
                                                                    ____

                                               Goodwill Industries


                                          International, Inc.,

                                                    July 16, 1996.
     Hon. James M. Jeffords,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Jim: On behalf of the Goodwill Industries network, I 
     congratulate you on the introduction of the Work Incentive 
     and Self-Support Act of 1996.
       This important legislation incorporates two reforms long 
     advocated by Goodwill Industries to assist Social Security 
     Disability Insurance (SSDI) beneficiaries to return to work. 
     First, we believe that no individual should suffer a loss of 
     income when leaving the SSDI rolls. By allowing a SSDI 
     beneficiary to retain a portion of cash benefits when they 
     re-enter the work force, your legislation will remove this 
     major disincentive. Secondly, Goodwill Industries recognizes 
     that loss of medical insurance is a significant impediment 
     confronting SSDI recipients who want to work. Again, the Work 
     Incentive and Self-Support Act of 1996 addresses this 
     disincentive by permitting an individual to apply for 
     Medicare coverage while working, or to purchase medical 
     coverage with premiums based on income level.
       Enclosed is a copy of testimony presented last year to the 
     House Ways and Means Subcommittee on Social Security that 
     discusses Goodwill Industries' recommendations for reforming 
     the SSDI program in greater detail.
       Please let me know how Goodwill Industries can assist you 
     in securing enactment of the Work Incentive and Self-Support 
     Act of 1996.
           Sincerely,
                                                      Fred Grandy,
                              President & Chief Executive Officer.
       Enclosure--Social Security Testimony.

  Work Incentive and Self-Sufficiency Act of 1996--Section-by-Section 
                                Analysis

       Intent of Legislation: To Create a Consistent Disability 
     Work Incentive Policy for Social Security Disability 
     Insurance Beneficiaries and Conform with the National 
     Disability Policy Established with the Passage of the 
     Americans with Disabilities Act (ADA).


                                Overview

       The intent of this bill is to create a work incentive 
     policy for Social Security Disability Income (SSDI) 
     beneficiaries. The model that has been used is the 1619(a)(b) 
     SSI/Medicaid provisions. SSDI and Medicare are amended to 
     provide the same incentive as the 1619 model which is to make 
     sure a person who goes off the DI roles will not be worse 
     off. The key reason, according to the GAO in their report to 
     Senate Select Committee on Aging issued this past April, why 
     many people who can work but do not is because they can not 
     obtain health care coverage because of their disability. 
     Therefore, a buy-in to the Medicare program is paramount in 
     this bill. Although a Medicare buy-

[[Page S8475]]

     in program currently exists it has not been a success.
       This bill repeals the current trial work period and 
     extended period of eligibility and replaces them with the 
     1619(a)(b) model provisions. Second, we allow people to 
     purchase Medicare if they meet the current medical listing 
     test in SSDI. The buy-in is on a sliding scale.
       Lastly, the bill also includes the Medicare-Medicaid 
     Integration demonstration project was that was included in 
     the 1995 reconciliation bill and repeals the Medicare/
     Medicaid Data Bank.


Section 2: Return-to-Work Program for Social Security Disability Income 
                             Beneficiaries

                 (A) Benefit reductions based on income

       Current law: An allowed SSDI/Medicare beneficiary who 
     returns to work loses eligibility for DI cash assistance when 
     achieving Substantial Gainful Activity (SGA). SGA is defined 
     as earnings from wages or salaries that equal or surpass $500 
     monthly (for non bind disabled beneficiaries) that are earned 
     continuously for nine months or longer. Beneficiaries can 
     shelter some income from the SGA calculation by using work 
     incentives such as the Impairment Related Work Expense 
     offset.
       Revision: An allowed SSDI/Medicare beneficiary who returns 
     to work has their DI cash assistance reduced by $1 for every 
     $2 earned beginning when achieving Substantial Gainful 
     Activity (SGA). SGA is defined as earnings from wages or 
     salaries that equal or surpass $500 monthly (for non blind 
     disabled beneficiaries) that are earned continuously for nine 
     months or longer. Beneficiaries can shelter some income from 
     the SGA calculation by using work incentives such as the 
     Impairment Related Work Expense offset. This creates an 
     incentive similar to the cash continuation provisions for 
     1619(a).

        (B) Benefit reductions for those who are dually eligible

       Current law: An individual who is dually eligible for SSDI 
     and SSI and who returns to work loses eligibility for both DI 
     cash assistance and Medicare when achieving Substantial 
     Gainful Activity (SSA). SGA is defined as earnings from wages 
     or salaries that equal or surpass $500 monthly (for non blind 
     disabled beneficiaries) continuously for nine months or 
     longer. Beneficiaries can shelter some income from the SGA 
     calculation by using work incentives such as the Impairment 
     Related Work Expense offset. This individual would have their 
     SSI cash assistance and Medicaid coverage continued under the 
     1619(a) and (b) program.
       Revision: An individual who is dually eligible for SSDI and 
     SSI and who returns to work would have their SSI cash 
     assistance and Medicaid coverage continued under the 1619(a) 
     and (b) program, and, when achieving SGA the individual has 
     their DI cash assistance reduced by $1 for every $2 earned. 
     Reductions in cash assistance are taken first from SSI and 
     secondly from SSDI.

                (C) Required continued disability status

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE = 3 years), Medical Improvement Possible (MIP = 5 years) 
     or Medical Improvement Not Expected (MINE = 7 years). The 
     individual must continue to meet criteria of: 1) earning less 
     than $500 per month in wages or salaries; 2) having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months; 3) being 
     unable to perform any job in the national economy.
       Revision: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE = 3 years), Medical Improvement Possible (MIP = 5 years) 
     or Medical Improvement Not Expected (MINE = 7 years). The 
     individual must continue to meet criteria of having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months through a 
     condition or combinations of impairments which meets or 
     equals the requirements of the Listings, including functional 
     equivalents, who, except for earned income meets the 
     disability definition. This incentive is similar to 1619(a) 
     provisions regarding Medicaid.

                    (D) Repeal of trial work period

       Current law: An individual who is an allowed SSDI/Medical 
     beneficiary receives SSDI cash assistance after a five month 
     waiting period and receives Medicare coverage after a two 
     year waiting period. If the individual returns to work and 
     earns $500 or more per month (Substantial Gainful Activity), 
     cash assistance and no cost Medicare continues through a nine 
     month Trial Work Period and a three month transition period.
       Revision: Continuing disability status, gradual decline of 
     cash assistance, and a sliding scale buy-in to Medicare make 
     the Trial Work Period unnecessary.

              (E) Repeal of extended period of eligibility

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives SSDI cash assistance after a five month 
     waiting period and receives Medicare coverage after a two 
     year waiting period. If the individual returns to work and 
     earns $500 or more per month (Substantial Gainful Activity), 
     no cost Medicare continues through a nine month Trial Work 
     Period and a Three month transition period. Beginning in 
     month 13, an Extended Period of eligibility continues 
     Medicare for 36 months if the beneficiary elects to pay the 
     full cost of both the Part A and Part B premiums.
       Revision: Continuing disability status, gradual decline of 
     cash assistance, and a sliding scale buy-in to Medicare make 
     the Extended Period of Eligibility unnecessary.

                 (F) Reaffirmation of disability status

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE=3 years), Medical Improvement Possible (MIP=5 years) or 
     Medical Improvement Not Expected (MINE=7 years). The 
     individual must continue to meet criteria of: (1) earning 
     less than $500 per month in wages or salaries; (2) having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months; (3) being 
     unable to perform any job in the national economy.
       Revision: An individual who is as allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE=3 years), Medical Improvement Possible (MIP=5 years) or 
     Medical Improvement Not Expected (MINE=7 years). The 
     individual must continue to meet criteria of having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months through a 
     condition or combinations or impairments which meets or 
     equals the requirements of the Listing, including functional 
     equivalents, who, expect for earned income meets the 
     disability definition. This incentive is similar to 1619(a) 
     provisions regarding Medicaid.


   section 3: continued eligibility for Medicare buy-in benefits for 
                          disabled individuals

            (A) Continuation of Medicare and Medicare buy-in

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives SSDI cash assistance after a five month 
     waiting period and receives Medicare coverage after a two 
     year waiting period. If the individual returns to work and 
     earns $500 or more per month (Substantial Gainful Activity), 
     no cost Medicare continues through a nine month Trial 
     Work Period and a Three month transition period. Beginning 
     in month 13, Medicare continues if the beneficiary elects 
     to pay the full cost of both the Part A and Part B 
     premiums.
       Revision: An individual who is an allowed SSDI/Medicare 
     beneficiary who returns to work and earns $500 or more per 
     month (SGA), is in a continuing disability status unless 
     medical recovery is determined as described in paragraph 3 
     above and receives no cost Medicare until Adjusted Gross 
     Income (AGI) reached $15,000; after this point beneficiaries 
     would pay Medicare premiums of 10% of AGI beyond $15,000. 
     This incentive is similar to the continuation of Medicaid 
     under 1619(b). [The exact Formula is to be determined pending 
     additional research].

              (B) Defining the Medicare buy-in conditions

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives SSDI cash assistance after a five month 
     waiting period and receives Medicare coverage after a two 
     year waiting period. If the individual returns to work and 
     earns $500 or more per month (Substantial Gainful Activity), 
     no cost Medicare continues through a nine month Trial Work 
     Period and a Three month transition period. Beginning in 
     month 13, Medicare continues if the beneficiary elects to pay 
     the full cost of both the Part A and Part B premiums.
       Revision: An individual who is an allowed Medicare Buy-In 
     beneficiary receives no SSDI cash assistance month, but 
     receives Medicare coverage without a two year waiting period. 
     If the individual returns to work (or remains at work) and 
     earns $500 or more per month (Substantial Gainful Activity), 
     no cost Medicare continues through a nine month Trial Work 
     Period and a Three month transition period. Beginning in 
     month 13, Medicare continues if the beneficiary elects to pay 
     the cost of both the Part A and Part B premiums on a sliding 
     income scale. The beneficiary would receive free Medicare 
     until Adjusted Gross Income (AGI) reached $15,000; after this 
     point beneficiaries would pay a premium of 10% of AGI beyond 
     $15,000. [The exact Formula is to be determined pending 
     additional research].


 section 4: medicare buy-in provision for disabled individuals who can 
work but remain on ssdi because they cannot obtain health care adequate 
                     coverage in the private market

      (A) Creating a new allowed beneficiary class to promote work

       Current law: An individual qualifies for SSDI/Medicare if 
     they meet a series of stringent criteria. This criteria 
     includes: 1) earning less than $500 per month in wages or 
     salaries; 2) having a medically determinable physical or 
     mental condition that has lasted or is expected to last 12 or 
     more months; 3) being unable to perform any job in the 
     national economy. In order to meet the criteria of having a 
     medically determinable condition, an applicant must either a) 
     have a condition which meets or exceeds the requirements of 
     the Listings, b) have two or more

[[Page S8476]]

     conditions which meets or exceeds the requirements of the 
     Listings, or c) meet strict functional criteria for not being 
     capable of performing any job in the national economy, given 
     their condition, age, and education. If these criteria are 
     met, an applicant is an allowed beneficiary and receives SSDI 
     cash assistance after a five month waiting period. Medicare 
     begins after a two year waiting period.
       Revision: An individual qualifies for Medicare Buy-In, but 
     not for SSDI cash assistance, if they meet a slightly less 
     stringent test of disability. The applicant would be required 
     to meet criteria that demonstrates having a medically 
     determinable physical or mental condition that has lasted or 
     is expected to last 12 or more months. In order to meet the 
     criteria of having a medically determinable condition, an 
     applicant must either a) have a condition which meets or 
     exceeds the requirements of the Listings, or b) have two or 
     more conditions which meets or exceeds the requirements of 
     the Listings. If these criteria are met, an applicant is an 
     allowed beneficiary and receives Medicare, but without a two 
     year waiting period.

                 (B) Reaffirmation of disability status

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE=3 years), Medical Improvement Possible (MIP=5 years) or 
     Medical Improvement Not Expected (MINE=7 years). The 
     individual must continue to meet criteria of: 1) earning less 
     than $500 per month in wages or salaries; 2) having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months; 3) being 
     unable to perform any job in the national economy.
       Revision: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE=3 years), Medical Improvement Possible (MIP=5 years) or 
     Medical Improvement Not Expected (MINE=7 years). The 
     individual must continue to meet criteria of having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months through a 
     condition or combinations of impairments which meets or 
     equals the requirements of the Listings, including functional 
     equivalents, who, except for earned income meets the 
     disability definition. This incentive is similar to 1619(a) 
     provisions regarding Medicaid.


     section 5: medicare/medicaid integration demonstration project

 section 6: repeal of medicare and medicaid coverage data bank

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