Hot Topics in Disability Policy Seminar Washington, DC April 23-25, 2012

Transcription

1 Hot Topics in 2012 Disability Policy Seminar Washington, DC April 23-25, 2012

2 The Context Congressional Dynamics New Members with agenda willing to shut things down All about the next election Legislation slow, almost gridlock Bipartisanship more difficult Debt ceiling episode good example All about spending, not policy

3 Budget Control Act (BCA) Basics Enacted August 2, Three step process to raise the debt ceiling by up to $2.8 trillion and reduce the deficit by $2.3 trillion over 10 years. Required vote on a constitutional amendment to have a balanced budget. Revenues not explicitly included, although not prohibited.

4 Three Step BCA Process Step 1 - Caps placed on discretionary programs: $800 billion will be cut from discretionary programs over a 10 year period ( ). Step 2 - Congress charged with reducing the deficit by an additional $1.5 trillion. failed Step 3 Since Congress failed to enact at least $1.2 trillion in deficit reduction, then lower caps are placed on spending for If caps are exceeded, across-the-board cuts will be made ( sequestration ).

5 What if Congress Does Not Act? (current law continues) 1) All Bush-era tax cuts expire (would save $3.8 trillion over 10 years) 2) Alternative Minimum Tax (AMT) threshold does not increase (would save $ 1.1 trillion over 10 years) 3) Medicare Physician payment rate is reduced by 29% (would save $300 billion over 10 years) 4) BCA automatic cuts take place (would save $1.2 trillion over 10 years) Total: $6.4 trillion over 10 years

6 Without Congressional Action Deficits reduced But Cuts will hurt many different constituencies: High income populations Military Low income populations Disability community

7 Why is Medicaid At Risk? Costs The Economy Demographics Politics Health care costs growing faster than other costs More poor people qualifying for Medicaid More seniors using more health care Medicare and Social Security more politically difficult to cut Governors want more flexibility

8 Medicaid The Good News No significant cuts so far Exempted from step 1 caps Exempted from step 3 across-the board-cuts as currently designed Current procedural obstacle to structural changes House & Senate must negotiate a Concurrent Budget Resolution with reconciliation instructions. Senate not likely to pass a Budget Resolution this year

9 Medicaid The Bad News Significant cuts can still be made Step 3 across-the-board-cuts can be re- designed Current procedural obstacle to structural changes could be removed Post election lame duck session of Congress may have very different dynamics

10 Proposed Medicaid Cuts President s Budget Request: $51 billion would be cut (over 10 years) House Budget Resolution: $810 billion would be cut (over 10 years) block granted

11 Funding Issues

12 What We Spend TOTAL FEDERAL SPENDING IN FY 2011 = $ Trillion (in billions) Mandatory Spending Other $465 Non Defense $646 Discretionary Spending Includes all other disability-related programs Medicare $560 Social Security $725 Defense $700 Source: Data from Congressional Budget Office, Jan The Budget and Economic Outlook: Fiscal Years 2012 to 2022

13 What Disability-Related Programs are in Non-Defense Discretionary? EDUCATION IDEA Preschool Grants IDEA State Grants Part B IDEA Early Intervention Part C EMPLOYMENT Supported Employment State Grant WIA Youth & Adult Employment DD ACT PROGRAMS State Councils on DD Protection & Advocacy Systems University Centers for Excellence FAMILY SUPPORT Lifespan Respite Care Act grants HOUSING Section 811 Supportive Housing for Persons with Disabilities RESEARCH Center on Birth Defects, Developmental Disabilities, & Health National Institute of Child Health and Human Development SOCIAL SECURITY Administrative Budget and many more

14 What We Bring In TOTAL FEDERAL REVENUE IN FY 2011 = $2.303 Trillion (in Billions) Other: - Miscellaneous -$102 - Excise -$72 - Customs Duties -$30 - Estate & Gift -$7.4 Corporate $181 Social Insurance $819 Individual Income $1,092 Source: Data from the Congressional Budget Office, Jan, The Budget and Economic Outlook: Fiscal Years 2012 to 2022

15 Budget Control Act Update Deficit reduction has been through program cuts ONLY - $2.1 Trillion. All of the cuts from the caps (step 1) come from discretionary programs. The vast majority of the across-the-board cuts (step 3) come from discretionary programs.

16 Step 1: Discretionary Caps (in billions) $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 9% 8% 8% 8% 7% 7% 6% 6% 4% 6% Spending reductions Percent reductions compared to federal spending projections (baseline) Non-Defense All programs not included in defense (includes disabilityrelated programs) Defense - Department of Homeland Security - Department of Veterans Affairs - National Nuclear Security Admin - International affairs programs -Intelligence community management -Department of Defense (050): Department of Defense Military: Military Personnel; Operation and Maintenance; Procurement ; Research, Development, Test, and Evaluation; Military Construction; Family Housing Combined Non-Defense and Defense Source: Data from the Budget Control Act of 2011 (Debt Ceiling Deal), OMB Watch

17 Step 3: Across-the-Board Cuts Combined with spending caps, would result in total spending cut for discretionary programs: 14% in % by 2021 Cut amounts split evenly between Defense and Non Defense Much concern in Congress over cuts to Defense programs.

18 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Step 3 Cuts: Revised Reductions in Discretionary Spending 4% 14% 14% 14% 14% 15% (in billions) 15% 15% 15% 15% Spending Reductions Percent reductions compared to federal spending projections (baseline) Non-Defense All programs not included in defense (includes disabilityrelated programs) Defense = DEFENSE Department of Defense Military: Military Personnel; Operation and Maintenance; Procurement ; Research, Development, Test, and Evaluation; Military Construction; Family Housing Source: Data from the Budget Control Act of 2011 (Debt Ceiling Deal), OMB Watch

19 What Happens if Congress Changes Certain Major Laws Affecting the Baseline? Deficits could increase substantially Calls for even greater spending cuts: likely to include mandatory spending - Medicaid, Medicare, & Social Security

20 Federal Debt Held by the Public in CBO s Baseline and Under an Alternative Fiscal Scenario (Percentage of Gross Domestic Product) Alternative Fiscal Scenario assumes: 1) All expiring tax cuts are extended 2) AMT indexing for inflation continues 3) Medicare physician payment rate held constant 4) BCA automatic across-the-board cuts do not happen Source: CBO, March Updated Budget Projections: FY 2012 to 2022

21 Caps & Cuts: What are the Alternatives? Caps Across-the-Board Cuts $840 billion $1 trillion Likely to occur as enacted Occur as enacted? Should be replaced by a balanced deficit reduction plan Much uncertainty, risk Could alternatives be worse for disability-related programs? - Cuts to entitlements? - Defense programs exempted?

22 Where are We in the FY 2013 Budget & Appropriations Process? Feb 23 President s Budget Request introduced Mar 29 House Budget Resolution passed -$19 billion in discretionary spending below BCA cap - Block grants Medicaid & cuts funding by $810 billion over 10 years? Senate Budget Resolution? ---- Concurrent Budget Resolution May - Sep 12 annual appropriations bills to be considered Oct 1 FY 2013 starts Nov 6 Election after Nov 6 Lame Duck session of Congress to begin?

23 House FY 2013 Budget Resolution Increases cuts to discretionary programs by additional $800 billion over 10 years (exceeds BCA step 1) Makes major cuts & structural changes to entitlement benefits Medicaid block granted & cut by $810 billion over 10 years Increases the across-the-board cuts for non-defense discretionary programs (exceeds BCA step 3) by exempting defense discretionary programs Repeals the health care reform law

24 President s FY 2013 Budget Stabilizes debt so that it no longer rises faster than the economy Balanced approach to deficit reduction with spending cuts and revenue increases Entitlement programs protected from structural changes $51 billion cuts to Medicaid (over 10 years) Many programs consolidated Prevention Fund used to backfill cuts to Centers for Disease Control and Prevention Center on Birth Defects and DD cut by $12 M

25 President s FY 2013 Budget (continued) Most DD Act programs (UCEDD, P&A, DD Councils) level funded PNS cut maintained (result: Family Support projects cut) LEND level-funded NIH level-funded Most IDEA programs level-funded but early intervention increased by $20 M Transition to Postsecondary (TPSID) program consolidated Disability Research in education level-funded (after a 35% cut in2011) Vocational Rehabilitation funding maintained but Supported Employment consolidated

26 President s FY 2013 Budget: Housing Section 811 Supportive Housing for Persons with Disabilities FY 2012 appropriation: $165 million FY 2013 President s Budget: $150 million Our ask: $165 million in FY 2013 New Section 811 option will help meet the urgent need for affordable, accessible housing for people with significant disabilities to live in the community.

27 Next Steps in Appropriations Appropriations Committees plan to markup soon House and Senate so far apart that no action is likely Continuing Resolution (CR) likely through Nov. Lame Duck passage of omnibus (catch-all) bill likely

28 What Might We Expect in the Lame Duck Session? 1) Raising the debt ceiling 2) FY 2013 Appropriations 3) Extension of Bush-era tax cuts 4) Extension of indexing the Alternative Minimum Tax (AMT) to inflation 5) Medicare doc fix 6) Alternatives to automatic spending cuts (sequestration) 7) Other?

29 Messages to Congress Cancel the across-the-board cuts and replace them with a more reasonable deficit reduction package. Balance deficit reduction between program cuts and revenues. Do not block grant or cap the Medicaid program. Exempt non-defense discretionary programs from any further cuts. If the sequester is not cancelled, do not exempt or reduce the cuts to defense programs Protect programs for people with disabilities.

30 Education

31 Elementary & Secondary Education Act Civil Rights Law: equal opportunity No Child Left Behind : close achievement gaps Required that students with disabilities be included in student achievement system Access to general curriculum rise in test scores Increased access to accommodations Increased requests for TA, training (IEP team training, validity of assessments & accommodation policies)

32 Senate Draft Bill Tom Harkin (D-IA) & Michael Enzi (R-WY) College & Career-Ready Standards in math, reading states define Shift to state accountability continuous improvement (No more AYP) Fed oversight for lowest performing 5% of schools, those with achievement gaps Waters down teacher quality requirements

33 Senate Draft Bill, continued So far, no achievement targets High standards and expectations for all students Alternate assessments: 1% cap; by subject Universal Design for Learning, Multi-Tiered Systems of Support, Positive Behavioral Interventions and Supports

34 House: 5 Reform Bills Eliminate 70 federal education programs Expand successful charter schools Allow flexibility with ESEA funds, including Title 1 grants for disadvantaged students State accountability systems Lift caps on alternate assessments Eliminate highly qualified teacher requirement

35 Administration s ESEA Flexibility Congress stalled, Admin s short-term solution Waive some of NCLB s requirements for states that adopt policies to improve academic achievement College and Career-Ready Standards State accountability systems + subgroup achievement targets 11 States approved; 26 and D.C. pending

36 Restraint & Seclusion in Schools New civil rights data, numerous reports show widespread use Children suffer trauma, injury, death Staff also injured No federal laws to regulate in schools; state patchwork Used disproportionately on SWD 70% of physical restraints in school year (OCR) Numerous alternatives

37 Keeping All Students Safe Act H.R. 1381, S Minimum standards Ban most dangerous restraints Limit use to emergencies Require training, parental notification, monitoring while in use Senate bill bans seclusion Next steps? ESEA? Chances for stand alone bill?

38 Message to Congress ESEA reauthorization Keep focus on accountability for all students Limit alternate assessments Preserve strong teacher quality standards Restraint & Seclusion Pass the Keeping All Students Safe Act!

39 Employment

40 Employment Too many people with developmental disabilities are unemployed or underemployed, in segregated settings, earning little. Only 14.1% of working age adults with intellectual disabilities have jobs in integrated non-facility settings 88% of working age adults with developmental disabilities are unemployed (AFP) 424,000 earning sub-minimum wages (GAO) Limited exposure to the workforce, reduced expectations, lack of access to jobs Major changes needed legislatively, administratively and culturally

41 Rising Expectations People with developmental disabilities increasingly expect to work in integrated employment, at prevailing wages. Transition can be geared to integrated employment or post-secondary education. Employers learning to expect productive and reliable employees with disabilities and to provide reasonable accommodation.

42 Rising Expectations Increased focus on One-Stop centers and other workforce programs to make their services accessible and expect outcome to be integrated employment for people with disabilities. Some states implementing systems change in Medicaid and other systems to support employment. Many states have adopted employment first policies.

43 Workforce Investment Act (WIA), including Rehabilitation Act Goal: Increase employment, retention and earnings; reduce dependency; improve the workforce; & enhance national productivity. Last reauthorized in Bills introduced in Senate and House. Senate HELP Committee considering introduction of youth transition legislation in July, 2012.

44 Senate on WIA/Rehab Act Senate Health, Education, Labor & Pensions (HELP) Committee issued bi-partisan discussion draft to reauthorize WIA/Rehab Act, June Increased opportunities to engage in competitive integrated employment Significant transition supports and services for youth to postsecondary education or work Improved data collection on employment of people with disabilities Create new Independent Living Administration

45 House on WIA/Rehab Act Workforce Investment Improvement Act of 2012, H.R. 4297, Reps. Foxx (R-NC), McKeon (R-CA) & Heck (R-NV) Consolidates many programs; adds flexibility. Workforce Investment Act of 2012, H.R. 4227, Reps. John Tierney (D-MA), Ruben Hinojosa (D-TX) and George Miller (D-CA) Addresses: transition to competitive employment or education; strategic partnerships with private employers, labor organizations, etc.; accessibility of services.

46 Two More Proposals Fair Wages for Workers with Disabilities Act, H.R. 3086, Rep. Cliff Stearns (R-FL) Over 3 years, phases out special wage certificates that allow employers to pay less than minimum wages. Extend the Work Opportunity Tax Credit For employers of people with disabilities and other targeted groups. In 2010, over 113,000 people with disabilities obtained jobs through WOTC. Without long term authorization, administrative problems encourage employers to drop out. Various proposals including Rebuild America Act, S. 2252, Sen. Harkin (D-IA)

47 Social Security

48 Social Security: A Lifeline for People with Disabilities Social Security Old-Age, Survivors, and Disability Insurance programs serve: Disabled workers and their dependents Retirees with disabilities Disabled dependents of retirees Disabled survivors Disabled adult children and disabled widow(er)s

49 Social Security Funding Funded by payroll contributions (FICA taxes) paid by workers and employers: Old Age and Survivors Trust Fund Disability Trust Fund

50 Social Security Reform Proposals Existing policy proposals: National Commission on Fiscal Responsibility and Reform (Bowles/Simpson) Bipartisan Policy Center Debt Reduction Task Force (Rivlin/Domenici) Policy researchers Multiple legislative proposals, including Rebuild America Act

51 Only Modest Changes Are Needed Modest changes can make Social Security solvent for the next 75 years. Major cuts in benefits or major changes in the structure of Social Security are not needed. Major cuts will harm people with disabilities and their families.

52 Supplemental Security Income (SSI) SSI serves: Adults with disabilities who have little or no income or assets Children with disabilities whose parents have little or no income or assets Funded by general revenues

53 Improvements Are Needed Increase the substantial gainful activity (SGA) level Increase the SSI asset limits and income exclusions Eliminate marriage penalties Eliminate 2-year wait for Medicare Many more

54 Social Security Reform Timeline Congressional hearings laying the groundwork for potential reform Budget Control Act: Social Security and SSI benefits are exempt from immediate cuts (Step 1) and sequestration (Step 3) Potential for change if Congress alters the sequester

55 Messages to Congress Ensure solvency through limited or modest changes which spread the costs widely Request a beneficiary impact statement on all proposals Make improvements to these critical programs Preserve the SSI program, including SSI benefits for children

56 ABLE Act

57 ABLE Act Achieving a Better Life Experience (ABLE) Act, H.R.3423, S. 1872: Reintroduced Nov. 15 for the 112 th Congress Goal: To help people with disabilities and their families save to meet their long-term ongoing support needs Authorizes ABLE savings accounts for people with disabilities Intended to be simple to use

58 Structure of ABLE Accounts Structured within existing 529 qualified tuition program Qualified disability expenses: Education Housing Transportation Employment support Health, prevention and wellness Assistive technology and personal support Other approved expenses Miscellaneous financial management expenses, etc.

59 Eligibility SSI or Social Security disability Medically determinable physical or mental impairment, which results in marked and severe functional limitations, which will last 12 months or result in death AND provides copy of diagnosis signed by physician

60 Relationship to SSI and Medicaid SSI cash payments suspended at $100,000 in account; SSI eligibility remains intact SSI cash payment re-starts when account drops below $100,000 (no re-application) Medicaid payback provision included At death (or if disability ceases), funds left in account pay back Medicaid (up to amounts paid on individual s behalf during period account was held).

61 Affordable Care Act

62 Affordable Care Act (ACA) ACA Helps People With Disabilities Eliminates discrimination Ends pre-existing condition exclusions Removes annual and life time limits Restricts medical underwriting

63 Expands Access to Health Care Medicaid expansion in million people New health insurance exchanges For small business and individuals Helps people afford coverage

64 Essential Benefits Requires plans to cover Rehabilitation and habilitative services and devices Mental and behavioral health Pediatric services including dental and vision care Chronic disease management

65 Threats to ACA Politically polarizing Campaign issue Supreme Court decision in June Divided public opinion

66 Implementation Issues Tradeoffs Affordability vs. comprehensive State flexibility vs. uniform benefit Complicated Short time frame Many issues need regulation Administration has accomplished much

67 Action in Congress House repeal votes Senate has blocked efforts Defunding threats Using health care funds for other bills

68 Prevention and Public Health Fund Investing in wellness, prevention, public health Dedicated funding Next 10 years $12.5 billion Raided by Congress and the Administration

69 Funding Issues Prevention Fund used to pay for tax cuts $6.25 billion President s Budget requests funds for existing CDC programs $903 million of the $1.25 billion

70 Message to Congress ACA helps people with disabilities Oppose full or partial repeal Provide adequate funding Protect funding for prevention Oppose Medicaid cuts and block grants

71 CLASS Program New long term services and supports program Voluntary 5 year vesting Benefits based on functional need Take pressure off Medicaid

72 CLASS Program Status Administration suspended implementation The House voted to repeal Key action in Senate Important to prevent repeal and work to ensure viability

73 Community Living MEDICAID AND MEDICARE

74 Medicaid Long Term Services and Supports (LTSS) Medicaid is a Lifeline for people with I/DD For most people with I/DD, Medicaid is the only payment source for LTSS

75 Medicaid LTSS/Threats On March 29, the House passed the House Budget Resolution on a vote, which would: Change Medicaid from an individual entitlement into a block grant Place global caps on Medicaid Cut Medicaid by $810 billion over 10 years Cut Medicaid by 20% in 2013 Medicaid would be 34% less than it would be under current law by 2022 and almost 50% less by 2030

76 Medicaid LTSS/Bad Choices Options for states under the House Budget Resolution: Increase state spending to keep current Medicaid programs Cut services Reduce eligibility Lower provider rates Increase cost sharing

77 Medicaid LTSS The Future is Managed Care States are reforming their Medicaid systems now States including LTSS in managed care

78 Managed Care Contracts between the state and managed care entities will be critically important People with I/DD and advocates must get involved

79 Medicare/Threats The House Budget Resolution: Beginning 2033, flat payment to purchase private insurance or traditional Medicare Amount would increase at rate of inflation and population growth; would not increase as the rate of health care costs increase

80 Duals 9 million people are dually eligible for Medicaid and Medicare (Duals) 1/3 of Duals are people with disabilities under age 65 Heterogeneous; high need; high cost ACA called for Medicaid and Medicare Integration and Coordination for Duals

81 Medicaid and Medicare Integration and Coordination CMS awarded $1M grants to 15 states to design integrated coordination models of care for duals CMS gave states opportunity to combine Medicaid and Medicare in financial alignment models 26 states interested

82 1115 Demonstration Waivers Vehicle many states will use to reform Medicaid programs or address cost of care for Duals is the 1115 Waiver CMS 1115 Waiver transparency rule (4/27/12) Stakeholder involvement required 30 day state-level public comment 30 day federal-level public comment Periodic reports and evaluation

83 Duals Integration and Coordination Models Massachusetts first to submit model to CMS Include health care for people with I/DD in managed care, but continue providing LTSS through HCBS waivers Ohio People with I/DD who receive services through waivers or ICFs/ID carved out Illinois People with I/DD who receive services through waivers or ICFs/ID carved out

84 Duals Proposals In the pipeline to be submitted to CMS California Michigan Minnesota New York North Carolina Oklahoma Oregon Vermont Virginia Washington Wisconsin

85 Message to Congress The proposals to change Medicaid and Medicare could be very harmful to people with intellectual and developmental disabilities They will lead to people with diverse needs squabbling among themselves for a smaller piece of the pie

86 Message to Congress Medicaid is our lifeline Medicaid allows people with disabilities to live in their communities Medicaid keeps people with disabilities out of costly institutions Protect the Medicaid entitlement for people with disabilities