May 06,2004

Grassley, Kennedy Bill to Help Disabled Children Wins Senate Passage

WASHINGTON -- Senator Chuck Grassley, chairman of the Committee on Finance, and Senator Edward Kennedy, ranking member of the Committee on Health, Education, Labor and Pensions, today won Senate passage of their bipartisan legislation to help disabled children.

“Medicaid works well for a lot of people,” Grassley said. “The problem is some families fall through the cracks. Many parents of disabled children have to drop out of the workforce or keep themselves in a low-paying job just to remain eligible for Medicaid. In effect, the government is forcing parents to choose between near-poverty and their children’s health care. We need to fix that. This is an important step. I hope the House will follow suit.”

Kennedy said, “The Family Opportunity Act may be the most important legislation we passthis Congress. It will close the health care gap for the nation’s most vulnerable children, and enable families of disabled children to be equal partners in the American dream.”

Last September, the Finance Committee on a voice vote passed the Family Opportunity Act,which has attracted widespread bipartisan support in each Congress since the senators authored itin 1999.

The Family Opportunity Act allows states to create options for families with disabledchildren to buy into Medicaid while continuing to work. Parents would pay for Medicaid coverageon a sliding scale. Medicaid is critical to the well-being of children with multiple medical needsbecause it covers many services that these children need, including physical therapy and medicalequipment, the senators said. Private health plans often are much more limited in what they cover.And many parents can’t afford needed services or multiple co-payments out-of-pocket.In 2002, the Finance Committee passed the bill on a voice vote, without controversy. Thefull Senate never considered the bill, although at the time the legislation had 74 Senate co-sponsorsand more than 235 co-sponsors in the House (of a counterpart bill).

Grassley and Kennedy said the Family Opportunity Act is pro-work because it lets parentswork without losing their children’s health coverage, pro-family because it encourages parents towork and build a better life for their children, and it’s pro-taxpayer because it means more parentscontinue to earn money, pay taxes and pay their own way for Medicaid coverage for their children.“Parents want to provide the best they can for their children,” Grassley said. “Congressshould give states the flexibility to give families options without the federal government getting inthe way.”

Medicaid is a medical assistance program jointly financed by the federal government andstate governments for eligible low-income individuals. It also covers health care expenses for theneedy elderly, the blind and the disabled receiving cash assistance under the Supplemental SecurityIncome Program.

A bill summary of the Family Opportunity Act follows.

(also known as the “Dylan Lee James Act”)


The National Health Interview Survey (NHIS) and current census data show that 8% ofchildren in this country have significant disabilities, many of whom do not have access to criticalhealth care services they need. In order for these families to get needed health services for theirchildren, many are forced to stay impoverished, become impoverished, put their children in out ofhome placements, or simply give up custody of their children ---- so that their child can maintaineligibility for health coverage through Medicaid. Many employer health plans and a number ofCHIP/SCHIP programs do not cover essential services that these children need to maintain andprevent deterioration of their health status. Medicaid can provide these comprehensive services.

In a recent survey of 20 states, families with special needs children report they are turningdown jobs, turning down raises, turning down overtime, and are unable to save money for the futureof their children and family ---- so that they can stay in the income bracket that qualifies their childfor SSI and/or Medicaid.

Currently, less than 4% of the 850,000 children receiving Social Security benefits leave theSocial Security rolls due to increased family income. However, many would if access to neededhealth services was available. More than half the States in this country are reporting increasing ratesof families giving up custody of their children in order to secure needed health care services andsupports.

The Family Opportunity Act of 2003 is intended to address the two greatest barrierspreventing families from staying together and staying employed -- (1) lack of access to appropriateservices, and (2) lack of access to the advocacy and assistance services they need to help cut the “redtape” to meeting their children’s health care needs.


Access to Health Care Coverage

Expanding Medicaid Coverage Options. A new optional eligibility category will allow states toexpand Medicaid coverage to children with disabilities up to age 18, who would be eligible for SSIdisability benefits but for their income or resources. This option builds on previous reforms includingthe provision enacted in the Balanced Budget Act of 1997 (BBA) and the Ticket to Work and WorkIncentives Improvement Act of 1999.

These provisions permitted states to offer a Medicaid buy-in for disabled children who would beeligible for SSI disability benefits but for their income, who are in families earning up to 250% ofpoverty.

In order for a family to participate in the Medicaid buy-in for their disabled child or children, a statemust require a parent to take employer-offered insurance within the following guidelines: (1) theemployer offers family coverage under a group health plan, and (2) the employer contributes at least50% of the total cost of the annual premium for the coverage.

If such coverage is attained by the family, the state is required to reduce the premium charged for thebuy-in, in an amount that reasonably reflects the parent’s premium contribution for private coveragefor their child with a disability.

Participating states may charge premiums up to the full cost of the premium as long as that premiumdoes not exceed 7.5% of the families’ income.

The state may waive payment of a premium in any case where the state determines that requiring apayment would create an undue hardship.

Option for States to Include Children Receiving Hospital Psychiatric Services in Home andCommunity -Based Waivers

States would be now permitted to include disabled children receiving impatient psychiatric hospitalservices in the state’s home and community-based service waiver program.

These children do not currently meet the eligibility criteria for services under the waiver because ofthe narrow definition of “institution”.

Restoration of Medicaid Eligibility

Restores only the Medicaid eligibility for children meeting the “presumptive eligibility”requirementsunder SSI without having to wait until the “first day of the month following” the establishment ofeligibility.

Access to Health Information and Resources

Establishing Family to Family Health Information Centers. The bill provides funds for establishinghealth information centers to assist and support families of children with disabilities and specialhealth care needs. These centers, staffed by both parents of children with special needs andprofessionals, would provide technical assistance and accurate information to other families onvarious health care programs and services available and appropriate for children with special needs,including identifying successful health delivery models. In addition, these centers would act as aresource to healthcare insurers, providers, and purchasers in developing ombudsman models forcollaboration between families of children with special needs and health care professionals.