PCPID Quarterly Meeting: September 26–27, 2011

Income Support

Marty Ford, Director of Public Policy, The Arc

Marty Ford, Director of Public Policy for the Arc of the United States, informed the Committee that income supports involved two programs: 1) Old-Age, Survivors, and Disability Insurance program (OASDI) which is the Title 2 of the Social Security Act; and 2) the Supplemental Security Income (SSI) program which is Title 16 of the Social Security Act. Summing up the goals and core values of the OASDI program, she cited a quote from President Roosevelt saying that “one can never insure 100% of the population from 100% of life’s hazards but attempted to frame a law that would give protection to the average citizen and family against job loss and against poverty-ridden old age.” (Social Security Act 1935)

Ms. Ford gave an overview of OASDI or Social Insurance, stating that people share risk of common life events and each worker’s record provides benefits for different family generations and guaranteed monthly payment. She pointed out that the OASDI program was linked to Medicare and funded by the payroll tax contributions under the Federal Insurance Contributions Act. In 2011, 55 million would receive Social security OASDI benefits, and more than one third of all monthly checks would go to non-retired people. Ms. Ford named three benefit categories including: retirement, survivors and disability. These categories insure against poverty, dependents after retiree dies and loss of work due to a disability. Disabled Adult Children are eligible for all three types of benefits if they have a severe disability before age 22, significant work limitations, and are single. This is based on earning records of a parent who was disabled, retired or died and they rarely leave the program. Ms. Ford discussed OASDI Program Strengths as fixed monthly payment, flexibility to move among three programs, work history, age and eligibility category, and pays multiple family members based on one worker’s earnings. She stressed that over 11 Million people with disabilities and their spouse and children receive OASDI benefits. She noted that SSI is a shortcut reference for people with disabilities in the Title 2 program or the Disability Insurance program. Technically, they were not all in the Disability Insurance Program. She cautioned members, when writing the 2011 Report, to remember to use the larger terms of Social Security disability programs. Ms. Ford described how people who received adult child benefits rarely left the program and often started receiving SSI benefits and Medicaid. When a parent became disabled, or retired, he/she moves into the status of receiving a disabled adult child benefit and Medicare, and may end up keeping all four benefits: SSI, Medicaid, Title 2, Social Security, and Medicare. Illustrating the complexity, Ms. Ford pointed out that, if a parent died, it may move them up to a higher cash benefit and loss of SSI, but they would keep the other three. She described OASDI’s parameters for the average monthly payment to beneficiaries as well as the Social Security Disability Insurance (SSDI) or the “DI” part of the Social Security OASDI program. Ms. Ford stated that SSDI pays benefits to 8.4 million workers, who are unable to work due to illness or impairment. She confirmed that only workers who met a strict definition of disability under federal law and have earned enough work credits would receive benefits. She also gave an overview of the Supplemental Security Income (SSI) program. As a federal income supplement, it was designed to help people who are aged, blind, or have disabilities and have no income. It was designed to provide cash to meet basic needs for food, clothing, and shelter and was administered by the Social Security Administration. She reported the two were linked: funds for SSI come from the general tax revenues and Medicaid was its health benefit. In December of 2010, almost 8 million people received SSI, including a little over a million children and adults with ID under age 65. According to Ms. Ford, the average federal SSI benefit for all beneficiaries was $501 per month. For people with ID, it was $530 per month.

Ms. Ford discussed the differences between OASDI and SSI. Title 2 was funded through payroll taxes, while Title 16, general revenues. Title 2 paid benefits to other family members, while the SSI program did not. The SSI program only paid the individual. The SSI program was needs based, while the Title 2 program was not. Title 2 went with Medicare. SSI went with Medicaid.

Ms. Ford addressed the concerns of people with ID and their families about OASDI and SSI. She emphasized that both of them included delays in benefits: a very complex application process, long processing times for SSDI and SSI, a 5 month wait for eligibility for SSDI benefits and a 2 year wait for SSDI beneficiaries for eligibility for Medicare. This is part of the law, and even if SSA was able to process applications immediately, there would still be a 29-month waiting period before Medicare would kick in and average payments would be low and often insufficient to meet basic needs. Ms. Ford acknowledged that there were marriage penalties built into the system for people with disabilities.

Next, Ms. Ford presented the Risks and Opportunities. Social Security Reform was on the Horizon, citing the Social Security Trustees Report: Social Security was able to pay full scheduled benefits through 2036. Modest adjustments could ensure long-term solvency without reducing benefits because of the contributions from payroll taxes.

In addressing the Budget Control Act Risks, Ms. Ford stated that people with disabilities stand to lose a great deal from any benefit cuts. Adults with disabilities have a very low employment rate.

She then discussed principles for Social Security reform. They include: addressing reform separately from deficit reduction; keeping the basic design based on payroll taxes; preserving social insurance for disability, survivors and retirement; guaranteeing monthly benefits adjusted for inflation; preserving current and future benefits; and restoring the program’s long term funding.

Ms. Ford discussed opportunities for work incentives: allowing ongoing presumptive re- eligibility for SSDI; allowing continuing eligibility for Medicare for SSDI beneficiaries; establishing earnings offsets for SSDI beneficiaries that are similar to SSI earnings offsets; and strengthening work incentives programs. She mentioned a couple of current legislative opportunities, the SSI Savers Act and the Achieve a Better Life Experience Act. There are opportunities for improving benefits, supporting the Social Security Administration's efforts to improve the application and payment process, eliminating the five-month wait for SSDI, eliminating marriage penalties, increasing the SSI asset limits and indexing to inflation, creating opportunities for savings, improving work incentives, and eliminating the two-year wait for Medicare. Ms. Ford advocated for permanent premium-free access to Medicare for Title 2 disability beneficiaries. She acknowledged that there are several proposals in the President’s budget, a permanent attachment to the Title 2 disability program and premium-free access to Medicare for Title 2 beneficiaries called the Work Incentive Simplification Program (WISP). The WISP would be a tremendous improvement in Title 2, and could alleviate problems in the Title 2 program and help make it more like the SSI program.

(Presenter-Committee Dialogue)

Carol Wheeler asked Ms. Ford if she could repeat what was in the President’s budget as it relates to Title 2. Ms. Ford noted there was a pilot, WISP, proposed in the budget, and advocates would like to work with Social Security and with the Congress to explore it further and try to get it passed. That would allow people who are in the Title 2 disability programs, the Social Security disability programs, to have a more permanent connection to the cash benefit so that, as their income rose, they would not lose their connection to the program. When their income went down again, they could automatically get back into the program without the long application process, the long waiting times, and the fear of not being able to get back in. The permanent connection to Medicare is also important for the same reasons, so that if they do not have a job that comes with health insurance, they are covered.

Ms. Ford noted that some fears of losing Medicare or Medicaid, facing the long application process, and being ejected from the cash benefit roles kept people from taking the risk of going to work once they have tried and failed.

Ms. Bazilio-Bellegarde asked if there was any intersection between these benefits and what a veteran with disability might receive.

Ms. Ford replied that there are some intersections, but she could not talk about the veterans benefits aspect of it. She confirmed that veterans were eligible for some of these benefits and there would be intersections with the benefits they're eligible for under the Department of Defense and Veterans Administration. The Consortium for Citizens with Disabilities had some organizations, like Paralyzed Veterans of America, who could answer her questions.

Peter Berns asked Ms. Ford to discuss one of the proposals that would potentially have unintended consequences, if the retirement age changed from 65 to 67. Ms. Ford answered that increasing the retirement age was considered a reduction in benefits for people because it will take longer for anyone to be able to receive a full benefit.

Marty Ford noted that Arc did not have a fact sheet for self-advocates on benefit laws.

Dr. Spitalnik asked two questions. First, she asked if Ms. Ford had any suggestions about changing the public tendency to lump Social Security with Medicare and Medicaid when speaking about deficit reduction. This seemed erroneous to Dr. Spitalnik. She wanted to know if Second, some of these issues intersect with the Affordable Care Act. If the Class Act were implemented, there would be less pressure for early retirement and less pressure on Medicaid. Did Ms. Ford have any suggestions for engaging in this discussion in a productive way, since these are not popular topics at present?

Agreeing with Dr. Spitalnik, Ms. Ford stressed that the Social Security trust funded the Social Security System. She stated the Social Security surplus was very significant, $3½ Trillion.

After that is depleted, it could still pay 75 percent of promised benefits if no changes were made in the law due to payroll taxes.

In response to Deborah’s second question, Ms. Ford affirmed that the Class Act, the Community Living Assistance Services and Supports Act will help take the pressure off the Medicaid program by helping people avoid the need to become impoverished in order to become Medicaid eligible to cover long-term services and supports, or long-term care. Among programs, Medicaid sustains most of the long-term care.

Chairman Brett remarked that Marty Ford was right on the Social Security issue and he appreciated her input. In 1936, when Social Security was passed, there were about 160 contributors to each recipient. The wisdom of Franklin Delano Roosevelt, was that he made Social Security eligible for people at 65 years, when the average lifespan of a male in 1936 was 63 years. The program has gone from 160 contributors for each recipient, to three contributors for each recipient and increased life expectancy. There will be enough funds to go to 2036.