**Online Appendices**

**Supplement to the National Council on Disability Report:**

**The State of 21^st^ Century Financial Incentives for Americans with
Disabilities**

August 11, 2008

TABLE OF CONTENTS

[Item 1: APPENDIX A: Six Major Life Domains Affected by Financial
Incentives
3](#item-1-appendix-a-six-major-life-domains-affected-by-financial-incentives)

[1A -- Education 3](#a---education)

[1B -- Employment 8](#b-employment)

[1C -- Transportation 15](#c-transportation)

[1D -- Health Care and Long-Term Services and Supports
24](#d-health-care-and-long-term-services-and-supports)

[1E -- Income Maintenance and Asset Development
44](#e-income-maintenance-and-asset-development)

[1F -- Housing 62](#f-housing)

[Item 2 -- APPENDIX B: Background of 529 Plans
71](#item-2-appendix-b-background-of-529-plans)

[Item 3 -- Appendix C**:** Research on Promising State Innovations
(Identified According To Domains Affected)
73](#item-3-appendix-c-research-on-promising-state-innovations-identified-according-to-domains-affected)

[3A -- Education: Louisiana START Program
73](#a-education-louisiana-start-program)

[Louisiana's Student Tuition Assistance and Revenue Trust (START)
Savings Program
73](#louisianas-student-tuition-assistance-and-revenue-trust-start-savings-program)

[3B -- Long Term Services and Supports: Missouri Assistive Technology
Program
78](#b-long-term-services-and-supports---missouri-assistive-technology-program)

[Assistive Technology Legislative Initiative
79](#assistive-technology-legislative-initiative)

[Overview of Missouri's Assistive Technology Program
81](#overview-of-missouris-assistive-technology-program)

[3C -- Employment: Wisconsin's Medicaid Purchase Plan (MAPP)
90](#c-employment-wisconsins-medicaid-purchase-plan-mapp)

[Wisconsin's Legislative Initiative to Create a State Medicaid Buy-In
Program
90](#wisconsins-legislative-initiative-to-create-a-state-medicaid-buy-in-program)

[Effects of the Medicaid Buy-In Program for Wisconsin Participants
94](#effects-of-the-medicaid-buy-in-program-for-wisconsin-participants)

[3D -- Transportation: Maryland's Statewide Special Transportation
Assistance Program
96](#d-transportation-marylands-statewide-special-transportation-assistance-program)

[3E -- Housing: Kentucky's Universal Design Program
100](#e-housing-kentuckys-universal-design-program)

[Kentucky's Adoption of Universal Design Principles
100](#kentuckys-adoption-of-universal-design-principles)

[3F -- Asset Development: Washington's Individual Development Accounts
107](#f-asset-development-washingtons-individual-development-accounts)

[The Washington Statute and Program
107](#the-washington-statute-and-program)

[Item 4 - Appendix D: Examples of State Legislation on Financial
Incentives
111](#item-4-appendix-d-examples-of-state-legislation-on-financial-incentives)

[Louisiana 111](#louisiana)

[Missouri 111](#missouri)

[Wisconsin 113](#wisconsin)

[Maryland 118](#maryland)

[Kentucky 119](#kentucky)

[Washington 120](#washington)

##   {#section .unnumbered}

## Item 1: APPENDIX A: Six Major Life Domains Affected by Financial Incentives:

Education, Employment, Health Care And Long-Term Services And Supports,
Transportation, Income Maintenance And Asset Building, And Housing

Many major federal programs that target eligible beneficiaries, such as
programs administered under the auspices of the Social Security
Administration (SSA), the Departments of Education (Education),
Transportation (DOT), Health and Human Services (HHS), Housing and Urban
Development (HUD) or carried out by the Internal Revenue Service (IRS),
include elements of the three incentive types: direct, indirect,
community-based. Nevertheless, by agreeing to forgo undue dispute over
program features that split the difference or blur the boundaries, it
should be possible to use the predominant features of each program for
purposes of categorization.

### 

###  1A - Education

#### 1A:1 -- Individuals with Disabilities Education Improvement Act (IDEA)

The main source of federal funding in education of students with
disabilities is the Individuals with Disabilities Education Improvement
Act of 2004. While subject to the annual federal budget process,
expenditures under this program have grown steadily over the years and
are expected to continue to do so. How are these expenditures to be
categorized?

IDEA is not a statute intended primarily to provide incentives directly
to individuals with disabilities, although local educational agencies
(LEAs) utilize federal special education funds in conjunction with local
resources to purchases goods and services for students based on
Individualized Education Programs (IEPs). The purchases often include
assistive technology (AT) or other devices given to students with
disabilities for use in school and in connection with school. In
addition, the levels of federal special education funding for particular
states and districts are determined largely from child-find and counts
of students receiving special education and related services. In its
overwhelming design and function, IDEA provides resources to school
systems to enable them to identify and meet the needs of eligible
children and school-age youth with disabilities.

Perhaps the closest that IDEA comes to providing incentives directly to
individuals is in two areas: in its recognition of the central role of
individualized service-planning through the IEP, and in the
authorization of attorney fees to parents who successfully litigate
against school system placement or service decisions. Yet neither role
constitutes a direct financial incentive to students with disabilities.

It also is arguable that in authorizing the payment from public funds of
certain special education costs on behalf of students attending
non-public schools, IDEA provides a direct incentive to those students
and their families. The incentive here consists in the degree to which
the costs for attending private or parochial school are reduced below
what they would otherwise have been if the family had been obliged to
pay the add-on special education costs itself. If the premise is
accepted that public support for such costs does constitute a direct
incentive to attendance at non-public schools, then a further
distinction must be made between status-based and purpose-based
incentives. A status-based incentive, like a non--means-tested
half-price mass transit fare to all people with disabilities, is
available to anyone who meets the status requirement of having a
disability. A purpose-based incentive is one, like the school example
just noted, that is available in a particular context to those who make
a particular choice, such as attend a private or parochial school rather
than a public school.

The rationale for supporting non-public school special education in this
way is twofold. First, it is based on an equity argument, and in some
instances on a religious freedom argument. Second, it is based on the
assumption that in many instances the costs to the public school system
of defraying these special education costs will be less than the costs
of fully educating and serving the child in the public schools would be.
This latter argument has efficacy, though, only if the policymakers or
school administrators advancing it actually believe that the subsidy is
an incentive to desired behavior. For if the special education payments
did not actually increase the likelihood that students receiving the
subsidies would choose private over public schools, then what would be
the point of giving subsidies?

Another key question surrounding IDEA involves the allocation of federal
funds between third party and community-based resources. Public
policymakers must decide whether it is necessary to make a distinction
between the public school system as a community-based resource or
activity, on the one hand, and the consultants, teachers, and other
personnel who actually provide services, on the other. Part of the
answer to this question may hinge on whether special education funding
to the public schools is regarded as a community-based expenditure at
all, or whether such expenditures are regarded as expenditures intended
to help people with disabilities exclusively. On that debate, far larger
than can be addressed here, hinges much of the destiny of public
attitudes toward special education in general, and toward mainstreaming
in particular.

For present purposes, and in the interests of supporting the policy
goals of community integration and full participation that underlie
IDEA, in this report NCD adopts the view that special education funds
are community-based expenditures. Largely, the funds go to a major
public sector institution, are community-based expenditures, made
largely on behalf of students with disabilities, and as such fall within
Category 3 (community-based financial incentives) of the NCD topology.
Except in those cases where the status of individual service providers
as independent contractors makes a critical difference to the nature or
cost of services provided, or except where any sort of personnel costs
raise issues that require in-depth consideration, there is little basis
for separating these out as Category 2 items (indirect financial
incentives). Nothing in the wording of the federal law, or indeed in the
structure of relevant line items in the federal budget, would warrant
such further distinctions.

Another area in which IDEA contemplates subsidies to individuals, albeit
dispensed through community-based institutions, is in the area of
personnel preparation. To the extent that IDEA appropriations may be
available or used to help defray the tuition or other costs of people
acquiring postgraduate credentials in special education--related
disciplines, such funds properly can be regarded as intended to benefit
individuals. Since the individuals receiving the funds are not the
children with disabilities ultimately intended to benefit from the
services of those with improved teaching skills, such subsidies are
regarded as going to third parties for the benefit of individuals with
disabilities.

As the examples show, IDEA provides incentives of all three types
(direct, indirect, and community-based). However, IDEA is not the only
source of financial incentives for students with disabilities in the
educational context.

#### 1A:2 -- The ADA and Section 504 

Important civil rights laws, including the Americans with Disabilities
Act (ADA) and Section 504 of the Rehabilitation Act (Section 504)
require both public and private educational institutions to take various
steps to make their facilities and programs accessible to students and
staff with disabilities. These situations present three analytical
complexities with respect to financial incentives. First, they involve
not the direct expenditure of federal funds, but rather the use of
federal law to leverage the expenditure of state, local and private
funds. Second, precisely because of this indirect effect, estimation of
the sums expended on accessibility is far from easy. Third and finally,
to whatever extent such expenditures are counted in the overall
assessment, a question arises regarding categorical fit. While one might
see such expenditures as institutional or community-based expenses,
their very specific nature requires treating ADA and Section 504
compliance-related costs as expenses incurred by third parties for the
benefit of individuals with disabilities. Add to this reasoning the fact
that the expenses likely would not have been incurred except for federal
civil rights law and the consciousness the law engenders.

This problem of defining and accounting for the costs of civil rights
compliance and enforcement must in fact be confronted in each of the six
domains or subject areas, because various federal civil rights laws
apply to all of them. Reiteration of this discussion occurs in cases
where identifiable federal funding, for example in the form of technical
assistance, is provided to help achieve civil rights goals. IDEA
authorizes some federal funds to be used by states in compliance
monitoring, but this appears to be of a fairly routine administrative
nature.

#### 1A:3 -- Tax Incentives

An important source of financial incentives, that suffuses every subject
area, is the Internal Revenue Code. Although this report could address
the tax law as a separate incentive category, the relevance consists in
the extent to which and the ways in which tax law subsidizes education,
transportation, housing, and other life domains. Thus, tax issues will
be addressed, as appropriate, within each of the six subject areas used
in this study.

As it relates to education, the tax law provides two kinds of
incentives. Through the tax-exempt status of private educational
institutions, the subsidy is to the people who make tax-deductible
charitable contributions to the institutions. There is nothing
particular to people with disabilities in this aspect of the law.

Federal tax law also provides purpose-based financial incentives to
individuals, including individuals with disabilities, but again,
primarily, there is nothing specific to individuals with disabilities in
these provisions. There are certain small provisions allowing families
to liberate funds intended for higher education or other school costs
when the disability of the student prevents the anticipated activity,
but such provisions are likely of minimal significance.

Where the tax law does provide important financial incentives to people
with disabilities is in its treatment of certain out-of-pocket,
non-reimbursed special education costs borne by families. These
opportunities arise under the medical expense itemized deduction.

While the law is clear in denying tax deductibility for any educational
expense, those special education expenses that can be characterized as
medical in nature (ranging from the costs of specialized services aimed
at overcoming the effects of a disability, and the add-on costs of
accessible transportation vehicles for getting to and from school, to
the costs of specialized AT devices necessitated by a disability) do
qualify for the medical expense deduction.

The distinctions the law makes, as well as those it winks at, are
slippery at best, putting a premium on expert use of language and on
close familiarity with the law. These facts combine with the limitations
on the number of taxpayers who can itemize at all, and further combine
with the limitations on medical expense deductions (which must exceed
7.5 percent of adjusted gross income in order to be allowable). Such
factors combine to form a rather rare incentive. It is available only to
people with sophisticated tax-planning resources, the resources to
expend money first and wait for reimbursement, and with tax profiles
that allow them to make maximum use of their special education expenses.
In short, this is an incentive for the people already sophisticated and
financially established.

### 1B -- Employment

As indicated above, because of the close relationship and indeed in some
cases inseparability, the information presented here is a result of
consolidating job training, placement and employment into one subject
area. Under the employment domain is information about vocational
rehabilitation, Ticket to Work and Work Incentives Improvement Act,
One-Stop Centers, the Office of Disability Employment Policy (ODEP), and
other work and tax incentives to employment.

#### 1B:1 -- Vocational Rehabilitation

By far the largest and most important source of federal incentives for
the vocational rehabilitation training and job placement of people with
disabilities is the federal-state vocational rehabilitation system (VR).
VR is a system that works through designated state agencies---called
designated state units (DSUs)---in each state and territory to provide a
variety of services to job-seekers with disabilities and to participate
in a number of partnerships and collaborations with other entities
involved in labor market issues. In addition to the VR programs in
states and U.S. territories, American Indian Vocational Rehabilitation
Services (AIVRS) programs are funded by the Department of Education.
While the culturally relevant AIVRS programs serve only an estimated 10
percent of the federally recognized tribal nations, the AIVRS role as a
source of financial incentives is similar to that of the VR programs in
states and U.S. territories. Additional information is available about
AIVRS challenges, promising practices, and suggested changes to programs
for greater impact on the population served. The Rehabilitation Act also
includes authorization and funding for independent living services and
services to older adults with vision loss. These incentives defray the
costs of services provided by others, to benefit the person with a
disability, including the peer counseling and other peer services of
independent living centers.

Although the VR Program addresses many activities, its largest and most
important role likely remains in providing funds for direct case
services to individuals. While some funds go to individual consumers
under various circumstances (e.g., through experimental programs or as
training stipends), the overwhelming majority of case services funds are
channeled through the DSUs to a variety of private, other public and
nonprofit sector service providers.

Two points are initially important in categorizing these funds. First,
the VR system differs from the special education system in that, unlike
the school systems that receive IDEA funds, the state agencies that
receive VR funding ordinarily do not regard themselves, and are not
generally regarded by others, as direct service providers. That being
so, it seems appropriate to characterize most VR incentives as paid to
third parties for the benefit, through the provision of specified
services, of individuals with disabilities.

Properly, some VR funds are allocable to the other categories as well
(indirect and community-based). To the extent, for example, that some
program funds may be used to subsidize long-term placements in extended
employment (sheltered workshops, in common parlance), these would
constitute direct incentives to individuals, but purpose-based
incentives in that they are only available to individuals who are deemed
eligible to and who opt to work in these settings.

Generally, speaking with respect to the panoply of case services funding
administered and provided through VR, the role of consumer-control is a
theme of continuing controversy. A most notable example is the
requirement for mutually-agreed upon individualized plans of employment
(IPE) that serve, as IEPs do in education, to set forth almost by
contract the services, activities and responsibilities of both parties,
in this case the agency and the service recipient. However, to the
degree that state agencies largely retain authority to accept or reject
an individual's determinations so far as long-term goals and interim
measures for obtaining them are concerned, one would not characterize VR
as a consumer-controlled or consumer-directed system. The researchers
identified no instance (other than some limited experiments) under the
VR Program in which funds go directly to individual service-recipients
under circumstances that give them any discretion in their use.

In its partnership and technical assistance role, the VR system may be
providing resources to various third parties for the benefit of
individuals with disabilities. Job analysis and reasonable accommodation
services provided to employers would be an example of this. Other forms
of broad educational outreach may constitute community-based supports by
not being directed toward any previously identifiable individual.

An interesting variation of mainstream VR Title I expenditure is
presented with funds used to provide AT devices to job seekers and
employed people with disabilities. These funds are not specifically
differentiated or line-itemed in federal appropriations, and may
represent an incidental component of program expenditures.

#### 1B:2 -- The Ticket to Work and Work Incentives Improvement Act (TWWIIA)

The Ticket to Work and Work Incentives Improvement Act (TWWIIA)
represents an innovative effort to broaden the range of
service-providers able to work with job seekers with disabilities, and
to reduce financial disincentives in the health insurance area faced by
such individuals when they seek to enter or return to work.

The most innovative thing this law does is create the Ticket, a voucher
or authorization that enables individuals with disabilities (Ticket
holders) who receive Social Security benefits to obtain services of a
designated value from Employment Networks (ENs). These Ticket holders
need to be new entrants to the job training and placement field,
motivated by the opportunity, through providing services under the
Ticket, of receiving federal reimbursement for their services. In fact,
in more states, in part because of: 1) the high cost of serving people
with significant disabilities, 2) the extraordinary complexity of the
program, and 3) for other reasons, many state VR agencies also have
emerged as the most likely EN to provide services to Ticket holders
under TWWIIA.

The Social Security Administration (SSA) administers TWWIIA through a
series of administrative and implementing contractors. The non-Ticket
funds paid to these contractors can be regarded as third party payments.
The Tickets and the milestone-based payments that ENs receive for their
work contribute to the complexity. Because the Ticket is more a voucher
than anything else, redeemable only at the company store, so to speak,
it is difficult to view the Ticket as an incentive paid directly to
individuals.

The other major financial incentive to employment provided by TWWIIA is
the preservation of health insurance under both Medicare and Medicaid
for recipients who would otherwise lose such coverage upon going to
work. This is a financial incentive for two primary reasons. First,
because the continued provision of coverage costs the Federal Government
money, and second, because the insurance has a clear monetary value to
covered individuals, even if the amount is not precisely knowable, and
even though no funds change hands. As such, continued eligibility for
Medicare or Medicaid represents tangible, non-cash, financial incentive
directly to individuals. It is probably among the most powerful
incentives that go into influencing the calculation, assuming any
opportunities for work exist, of how to respond to and deal with such
opportunities. Incentives that combat disincentives are no less
important, perhaps more important, whether they come in cash or in the
rearrangement of program rules.

#### 1B:3 -- One-Stop Centers

The VR system is a complex combination of stand-alone and collaborative
functions. In its collaborative role, the VR system is one component of
the overall federal employment system operating under the auspices of
the Workforce Investment Act (WIA). Central to the overall WIA scheme
are the so-called one-stop centers, designed to centralize and
rationalize the often bewildering array of federal jobs programs.
Consistent with the nondiscrimination and accessibility provisions of
WIA, one-stop centers are required to serve all job seekers, including
people with disabilities.

There are undoubtedly expenses, constituting incentives paid from
federal funds that go for meeting these civil rights requirements of
facilities and program accessibility, including expenses for making
electronic and information technology (E&IT) accessible. Although it is
widely believed that many centers have failed to comply fully with the
mandate of full accessibility, or have taken the view that their core
funding should not be used to meet what they regard as specialized
expenses for high-cost clientele, these civil rights compliance costs,
as noted in the discussion of education above, are not an immediate
concern. What is the concern here are the programmatic components
specifically designed to meet the accessibility mandate and to give the
one-stops incentives for doing so.

Among these, one of the most interesting is the Disability Program
Navigator pilot program (DPN). This program places liaison personnel in
one-stop centers to assist their staff in working with
service-applicants with disabilities, and in ensuring that such
individuals are made aware of and given appropriate referrals to
collateral services that may be of relevance. To the degree that the DPN
is intended to directly aid both the one-stop-center staff and its
service-recipients with disabilities, it is a financial incentive
falling within the indirect and community-based, third party
classifications.

#### 1B:4 -- ODEP

The Department of Labor's Office of Disability Employment Policy (ODEP)
serves a limited coordinating function with respect to
disability-related issues within the Department of Labor. Additionally,
it administers, with what must be regarded as discretionary funds, a
number of outreach, education, technical assistance and training
programs, the most notable of which probably being National Disability
Awareness Month. Also, the employer-educational work of ODEP may be
added to that of the Department of Justice's Civil Rights Division and
that of the Equal Employment Opportunity Commission (EEOC) in the
disability nondiscrimination area. To these may be added certain aspects
of the work of the Protection and Advocacy (P&A) system.

Taken together, these programs, which may be regarded as incentives to
the employment of people with disabilities, can be described best as
community-based resources. Their importance lies in two features. The
first is what they accomplish and the means for evaluating what they
accomplish (to be addressed in a later phase of this study). The second
is that they may represent the types of efforts that enforcement
agencies increasingly will prefer to litigate in the civil rights area.

#### 1B:5 -- Other Work Incentives

We normally think of SSA as an agency that distributes
income-replacement funds. But features of both the Supplementary
Security Income (SSI) and Social Security Disability Insurance (SSDI)
programs are designed to facilitate employment by recipients of funds
under these programs.

The background of the work disincentives problems plaguing this nation's
social benefits is beyond the scope of this study as well. The two
problems central here are: 1) that benefits are tied both to the ability
to work and to the income and resources of recipients, and 2) that
eligibility for health insurance is tied to SSI and SSDI Program
eligibility.

The way the law tries to avoid these problems is by creating
circumstances in which various items of income or types of resources
will be excluded from "countability" for eligibility purposes, including
for example key eligibility for Medicare or Medicaid. The mechanisms in
question include Impairment-Related Work Expenses (IRWE), substantial
gainful activity (SGA), plans for achieving self-support (PASS), along
with several demonstration and waiver programs, and (although not yet
much used for people with disabilities) individual development accounts
(IDAs). These exemptions constitute important purpose-based incentives
to individuals with disabilities.

#### 1B:6 -- Tax Incentives to Employment

The tax system includes all three kinds of incentives to employment of
people with disabilities. By way of direct incentives to individuals,
there are the Impairment-Related Work Expenses (IRWE) deduction and the
extremely important Earned Income Tax Credit (EITC). The IRWE is an
itemized deduction that allows individuals with disabilities to deduct a
number of disability-related expenses incurred in order to work. Once
again though, its obscurity, together with its status as an itemized
deduction, probably limits its usefulness for most people with
disabilities. This limitation is particularly egregious when it is
recognized that the times at which people will most need to incur large
disability-related expenses, such as for the costs of additional
training or costs for AT, are likely to be times when people have the
smallest income against which to absorb the value of this deduction.

As for the EITC, it is of course a broadly applicable and very important
provision for all low-income workers, particularly people with children.
It has one provision that makes it of specific applicability to people
with disabilities, however. Whereas the coverage of children is limited
to those who are young (under 19 or under age 24 and a full-time
student), in the case of children with serious disabilities whose
parents remain their primary caretakers, the upper age limit is waived.
Parents may thus continue to take these children into account for
purposes of determining their eligibility for, and the amount of, the
EITC.

Provisions of the Internal Revenue Code (IRC) that provide incentives to
third parties for the training or employment of individuals with
disabilities include the Disabled Access Credit (DAC) and the
architectural and transportation barriers removal deduction. While tax
aficionados generally have thought of these two provisions as having
their greatest impact in the area of public accommodations, both are
available for use in defraying the costs of barrier removal and
reasonable accommodation as well.

For small businesses, as defined under the law, the Disabled Access
Credit provides a 50 percent tax credit of up to \$10,000 per year in
"eligible access expenditures," including readers, sign-language
interpreters, or the purchase or modification of equipment. The
architectural and transportation barriers removal deduction allows
businesses of any size a deduction of up to \$15,000 a year for the
removal, according to specified design guidelines, of access barriers to
people with disabilities and elders.

One may ask how these provisions act as incentives to the employment of
people with disabilities. After all, although they may help offset any
add-on costs associated with hiring employees with disabilities, would
not such costs be tax deductible anyway, just as any other legitimate
business expenses would be? What makes these into specific incentives is
that they enhance and accelerate the value of the tax deduction. The
expenses covered by the DAC normally would qualify as ordinary
deductions. By converting them to a credit, they become worth more to
the business. Related provisions also offer flexibility regarding when
they can be claimed. The expenses covered by the architectural and
transportation barriers removal deduction normally would be
characterized as capital expenses, meaning they would have to be
allocated over a number of years equal to the useful life of the
renovation or property. By re-characterizing them as an itemized
deduction, they can be claimed in the year the expenses were incurred.

Finally, there are a number of tax provisions that, though not directly
targeting or specifically impacting people with disabilities, have the
potential with minor changes to be of great incentive value to the
employment of such people as members of a broader community. The
provisions in question are the Low-Income Housing Tax Credit and New
Markets Tax Credit Program.

We need to recognize the role that accessible and affordable housing, in
itself and as it interacts with accessible transportation, plays in
employment. While the details of the changes that would be needed are
beyond the scope of this paper, the tax provisions are noted to
highlight the complex web of infrastructural underpinnings that underlie
the employment destiny of given individuals.

In-depth attention to a variety of other broad-based job-development
efforts is warranted to identify simple and inexpensive measures that
would make them more responsive to the aspirations of people with
disabilities. A convergence of anti-poverty and disability-based efforts
is required for this to take place.

### 1C -- Transportation

Interaction between transportation and employment, and bearing in mind
the close, if often ignored, connection between transportation and
housing, health care and other pathways to community living, are
complex. The ADA's transportation requirements have multiple components.
Although some public transit agencies had already provided accessible
bus service because of political pressure and prior mandates, the ADA
greatly accelerated this trend. For example, in 1989, before passage of
the ADA, 36 percent of the national bus fleet was accessible. By 2002,
13 years later, 91 percent of public transit buses were ADA lift or ramp
equipped. Improvements of this type are attributed to general agreement
that public transit bus use by people with disabilities has increased
with the service improvements.[^1]

The principal point of note about transportation in America, evident
throughout the culture and reflected in the allocation of public funds,
is that the private automobile is the transportation modality of choice
for most Americans. More important though, the design of the environment
has contributed to this preference by making many trips difficult or
impossible to complete by any other means. Even when public or mass
transit is available, scheduling, routing, financing, capital
investment, crowding and other factors, including inaccessibility, all
may contribute to reducing its value for those people who would choose
to utilize mass transit.

So many sources of public funding converge to support the automobile
society and culture that it would be impossible to list them all. They
range from a number of indirect subsidies to keep down the cost of
gasoline, to excise tax exemptions for trucks and light trucks
(including SUVs), to tax credits for hybrid vehicles (apparently
intended to compensate for the tax exemptions accorded to large SUVs),
to vast federal expenditures for highway building and road maintenance,
to literally dozens of others of a direct and indirect nature.

For people with disabilities, therefore, the question is twofold: Does
the emphasis on private automobile use affect relative freedom of
movement differently than it does that of other people, and do the
funding streams incorporate provisions that are designed to recognize or
respond to any of these needs?

There are people whose disabilities make traveling by means other than
private automobile difficult and stressful, without regard to legal
dimensions of accessibility. For them, the existence of the car culture
and the fact that most locations are now designed to accommodate the
automobile is likely a net advantage. On the other hand, for many people
the inability to drive or even to afford an automobile is itself a
serious social disability. Against this backdrop, let us look at various
programs.

#### 1C:1 -- Automobile-Oriented Funding

Considerable publicity during the summer of 2005 was directed to the
federal highway legislation adopted by Congress after two years of
gridlock. Whether the numerous, earmarked projects it authorized and
funded are valuable contributions to the transportation infrastructure
or other special expenditures, the question is whether the bill
contained any specific earmarks of importance to people with
disabilities. Pending a more thorough review of the lengthy enactment
than has thus far been possible, initial indications are that if any of
the earmarked projects were of special significance for people with
disabilities, this was incidental.

With regard to the broader provisions governing the use of highway funds
under the law, there are a number of provisions that can be regarded as
intended to enhance the transportation access of people with
disabilities. To the extent that these provisions, though intended to
recognize and benefit particular subpopulations, involve the imposition
of requirements on the way states and municipalities spend their highway
money, these provisions can be regarded as examples of infrastructural
expenses targeted to people with disabilities.

Provisions in question would include funds appropriated for specialized
and experimental transportation programs for underserved areas and
groups; provisions regarding accessible paths of travel in certain
contexts; and (in conjunction with the Telecommunications Act)
requirements for the compatibility of emergency roadside phones with the
911 emergency system, to name a few.

The dollar value and net effect of these and related expenditures and
requirements is not known and likely difficult to determine. It may be
that the mechanisms involved are as important as the dollars expended,
or perhaps more so. At issue here is the connection between regulation
and funding. In subject areas like transportation, housing and health
care, analysis of the nature and role of financial incentives requires
careful assessment of the leverage value of regulations that guide the
expenditure of funds. Regulations have been subjected to various kinds
of cost-benefit analysis over the years. Their leverage value in
influencing the expenditure of funds, when the funds were not
appropriated with specific reference to the goals of the regulation but
are subject to the regulation nonetheless, must be an important area of
study in the development of sophisticated cost-benefit measurement
tools.

The leverage value of pro-accessibility or disability-oriented funding
categories, regulations, set-asides or similar mechanisms is heightened
where matching state funds are involved. Federal regulations not only
condition and direct the expenditure of federal funds, but where
programs include matching fund requirements, or where federal funds
provide seed money for state-based efforts, regulations help leverage
the use of these funds as well. Discussion of this matter is at greater
length in the civil rights section, below.

#### 1C:2 -- Fixed Route Public Transit

##### 1C:2A. Intercity

###### 1C:2A(i) Air Transport

The Air Carrier Access Act of 1986 (ACAA) imposes nondiscrimination and
accommodation requirements on most commercial airlines operating in the
United States. ACAA is an example, albeit a small one, of the kind of
leverage mentioned above, because while in this case no federal funds
are appropriated to implement ACAA (though some funds are used to
support its enforcement by the Department of Transportation (DOT)),
airlines are obliged to spend some money to comply with the law.

Where federal funds come into the mix, again more interesting for the
concept than for the amount, is in the exercise of the DOT authority to
fine carriers for violation of the law. DOT has imposed several fines on
carriers. If it is accepted that these fines become federal money when
collected, it is interesting to note that the government has routinely
remitted them, provided the sums are used for ACAA-related activities
such as employee training in disability awareness.

To the degree that the ADA requires municipal airport authorities to
make certain expenditures for accessibility and accommodations, it, too,
may be said to be an indirect source of disability-specific
infrastructure funding. This role is far more pronounced in the rail and
bus transportation area.

Another variable in the air transport context brings us face to face
with the subject of user fees. The Transportation Security
Administration (TSA) has embarked on a number of disability-related
initiatives. Activities of TSA, as well as other airport infrastructure,
are funded partly from per-ticket fees, which are in effect excise taxes
paid by air travelers. To the extent that any of these fees go to
defraying access-related costs, they too can be considered, however
unexpectedly, a form of federal financial support.

###### 1C:2A(ii) Rail Transportation

Title II of the ADA is very much concerned with rail and bus
transportation. There are a number of specific timeframes in the law
applicable to the rolling-stock and station facilities of each. Amtrak,
the nation's passenger rail service, receives direct federal support,
both for capital and operational expenses. As such, although neither the
precise sums in question nor the specificity of appropriations language
has yet been reviewed, it is clear that federal financial support to a
third party (namely, Amtrak) does go toward making intercity rail travel
more accessible.

A question suggested by the interaction of regulations and funding must
be addressed by the research. Can one properly speak of financial
incentives where the disability-oriented expenditure is mandated and
where failure to make such expenditure could put other funds at risk?
For purposes of this report, the semantic liberty is taken of using the
term incentives broadly, to include all identifiable expenditures that
meet any of the financial incentives study criteria for disability
relatedness.

No data have been located concerning the amount that accessibility
measures cost the National Passenger Railroad Corporation, or what
percentage of such costs is covered by federal funds. Likewise, data on
the impact of such expenditures have not come to light. Were such data
to exist, it would have to be explained by the exploration of two
questions in order to be fully meaningful. It would have to address the
question of how many people with disabilities are motivated or enabled
to use rail service that otherwise could or would not. In addition, it
must ask what costs of relevance to federal policy or funding would have
been incurred as a result of the inability or disinclination of such
people to utilize rail service.

###### 1C:2A(iii) Inner City Buses

Title II of the ADA, together with Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU),
includes clear and specific requirements for the accessibility of inner
city buses and in some cases for the procedures that must be used to
ensure that access is effective. There is significant public
subsidization of bus travel, emanating from numerous sources (including
local funds, bond issues and direct expenditures or tax forgiveness for
the building or maintenance of transportation terminals), which helps to
account in many cases for the price advantage held by bus over rail on
various competitive routes.

Whether regulation and funding are commensurate with one another, or put
another way, whether federal funds pay for federally-imposed
requirements, is a key question that should be considered.
Alternatively, subject to insurmountable complications under currently
existing accounting practices, is the question of whether other forms of
public subsidization offset the costs of mandated accessibility, and
whether, paradoxically, the costs of accessibility, however met, yield
increases in revenue through more ridership that have a significant
bearing upon the cost-benefit assessment.

##### 1C:2B. Fixed Route Public Mass Transit

Depending on the city and region, public mass transit, including local
buses, light rail, subways and commuter trains, play an important role
in the morning and afternoon traffic reports that are a staple of almost
every radio station and television newscast in the country. Robust mass
transit is deemed important to the economic development of many
metropolitan areas, but it also is important in the daily lives of
individuals.

So important has mass transit become in the lives of people,
particularly older people who lose the ability or confidence to drive,
that certain urban areas like New York City, with dense mass transit
webs, have been dubbed NORCs (naturally occurring retirement
communities). Of many people with disabilities of any age who cannot
drive (or who cannot afford the add-on costs of vehicle accessibility)
this is no less urgent an issue. The question then becomes: Do current
financial incentives and support for mass transit recognize and respond
to the identifiable and specific concerns of customers with
disabilities?

In the area of capital funds for equipment, federal funds are
contemplated for use in meeting vehicle and station accessibility
requirements. Once again, reflecting the interplay between regulations
and appropriations, this occurs both in terms of the direct expenditure
of funds and the risk of loss of other funds if requirements are not met
or procedures not followed.

Accessibility requirements supported with or leveraged by federal funds
would include, for example, the percentages of bus fleets that must be
wheelchair equipped, the accessibility to people with vision and
physical disabilities of fare machines, and even the accessibility of
transit system Web sites. Although these requirements are aimed at
passengers with disabilities, they also are examples of universal or
accessible design. In this context, they are the sort of amenities that
benefit all passengers. For this reason, they represent the classic
instance of disability-oriented measures, expenditures or incentives
that have as their byproduct a benefit to the entire community. Perhaps,
at least in some communities, inversion of the analysis may be
appropriate. That is to say, it may be that awareness of the needs of
passengers with disabilities or the desire to attract such passengers
was an extension of more basic progress in awareness of what constitutes
good design.

In contrast to other incentives, useful data may be available about some
of the consequences of accessible mass transit. Indeed, it is believed
that the willingness of transit system owners/providers to take such
measures as equipping new buses with wheelchair lifts may have arisen in
some cases from calculations that the increased capital costs associated
with such accessibility would be offset by savings in the paratransit
program. Apart from the benefit of such savings, further evidence of
savings and community integration could, without much difficulty or
cost, be gathered through the use of already commonly used research
techniques. Transit systems routinely survey riders to determine their
needs and attitudes. It would be relatively straightforward to use
standard research techniques, involving the surveying of voluntarily
self-disclosing passengers with disabilities, to ascertain the extent to
which system accessibility has increased their utilization of transit.
Considerations of the quality of their experience and the impact of
greater access to other spheres of life also could be addressed.

#### 1C:3 -- Paratransit

Perhaps the greatest change in the nation's transportation system over
the past generation has been the development of paratransit as a
supplement or replacement for fixed-route transit for people whose
disabilities make the general system unusable, despite its accessible
design. Paratransit, as operated by local or municipal transportation
agencies, represents one of the closest approaches to a direct
transportation subsidy to individuals. The other near approximation to
direct incentives to individuals is the reduced fares required by
federal law to be provided to passengers with disabilities by municipal
transit systems. Neither paratransit nor reduced fare is means-tested.
Both are status based, in that the recipient of the service or discount
must be an individual with a disability (or in the case of the fare
subsidy an individual over the age of 65), but legal status alone is not
sufficient to make one eligible for paratransit services.

Eligibility for paratransit is determined on an individualized,
case-by-case basis. Beyond even individualized eligibility
determinations, there is a further concept, disliked by many, but legal,
called trip eligibility. With trip eligibility people with disabilities,
though eligible in principle, are granted or denied the service for
particular trips or types of trips based on purpose of trip,
destination, or other factors.

Critics have maintained that disproportionately large amounts of
paratransit resources have been dedicated to reviewing front-end
eligibility screening rather than to delivering the service. Whether
this is true or not, it presents an opportunity for asking how the
character and implications of administrative expenses should be handled.
As a general matter, the cost effectiveness of elaborate procedures for
screening out ineligible recipients, in paratransit or other programs,
largely has been exempt from outcome measurement. Simply stated, the
existence of finite limitations on the resources available for any
program, coupled with the desire to avoid furnishing of services to
ineligible individuals, have led to a relatively unquestioned acceptance
of the notion that sums spent on ensuring program integrity and focus
are well spent. Rarely has this assumption been put to the test,
especially in programs for people with disabilities.

There is in fact room for disagreement over the primary characterization
of paratransit. Except in cases in which taxi vouchers are used, neither
funds nor scrip come into the hands of the riders. Moreover, because the
vouchers can be redeemed only for one service, even if the recipient
sometimes has choice over the selection of the provider, it would be
hard to regard such a voucher as an individual subsidy. More precisely,
the paratransit system can be seen as a tightly targeted incentive,
available to transit agencies, to underwrite certain capital and
operational costs associated with the provision of door-to-door service
to individuals who have what are deemed transportation disabilities.

#### 1C:4 -- New Freedom Initiative

The President's broad-based commitment to expanding the opportunities
for and facilitating the integration of people with disabilities into
all phases of community life is embodied in the New Freedom Initiative
(NFI). Through the NFI a number of experimental and demonstration
projects aimed at extending transportation services through innovative
programs, using traditional and nontraditional providers, have been
undertaken. These experiments vary in nature, and it is not the purpose
to describe them in detail here. What matters is that thus far these
projects have not generated a sufficient body of data to bring about any
fundamental changes in the character of local and regional
transportation services in this country.

Even if standardized data collection and outcome criteria were used to
ensure the collection of comparable data and to facilitate comparison
among experimental approaches, a question remains regarding how and
whether the results of the NFI transportation projects, under the Real
Choice Systems Change Grants, for example, are being aggregated,
disseminated and compared. Put another way, the question emerges whether
the full value of these experiments is being harvested. Cumulative data
must be aggregated and synthesized to generate broad-based conclusions.

### 

### 1D -- Health Care and Long-Term Services and Supports

Both direct and indirect financial incentives are involved in the
provision of health care, medical services and insurance coverage to
people with disabilities. The incentives also are among the three
categories of incentive recipients: individuals with disabilities, third
parties and community-based resources.

#### 1D:1 -- Private Health Insurance

The most important health issue for most people is health insurance.
Although government-funded programs, including most notably Medicare and
Medicaid (both discussed below), are steadily growing in importance as
sources of health insurance and care, private insurance remains the
source of coverage for most employed Americans. As important, almost all
proposals for health system reform make extensive use of the private
insurance sector---some through managed care contracting with the
government, and some giving them a far greater role.

Although many people regard the effort as inadequate, judging from the
lack of affordability and unavailability of insurance for many people,
and although an estimated 45 million Americans are uninsured, in
addition to an indeterminate number who are underinsured, the government
provides financial support for the purchase and provision of private
sector health insurance through a number of mechanisms. One question,
after describing the principal ones, will be: Do those mechanisms
respond to the unique insurance coverage issues facing people with
disabilities?

The means by which the government subsidizes health insurance can be
summarized briefly. These means are concentrated in the area of
employer-sponsored insurance. They include, among other modalities: tax
deductibility to employers of premiums paid for employee health
insurance and tax exclusion of the value of such premiums from the wages
of employees; negotiation of private sector contracts that include
fringe benefits for project staff health insurance in many instances;
health savings accounts (that allow tax deferral and potential tax
exemption of sums set aside for meeting co-payments under
high-deductible policies); and direct subsidization under the Medicare
Modernization Act of employer-sponsored retiree health and drug coverage
(on the theory that this will be less costly to the public than would
the abandonment by companies of these plans).

In the area of individually-purchased coverage, financial incentives are
less systematic, but they do exist. One that is particularly
controversial is the exemption of the insurance industry, including the
health insurance industry, from a number of legal requirements
applicable to other industries. In exempting the insurance industry, to
varying degrees, from civil rights laws, antitrust laws and generally
applicable accounting practice (GAAP) requirements, the argument has
been made that such exemptions allow the industry to extend coverage to
more people and at lower costs. Arguments in favor of genetic
anti-discrimination legislation currently pending in Congress largely
are predicated on the contention that such legislation, however
desirable in principle, would drive up the costs and hence reduce the
coverage available to Americans.

If the opponents of such regulation are consistent in their analysis,
then it follows that the government's forbearance to subject the
industry to certain regulations constitutes an indirect financial
subsidy.

Although not within the scope of this study, owing largely to their
variety, state funds play an important role in the availability of
private health insurance. Modalities include high-risk pools, purchasing
groups, regulation of premiums (for individual policies), and, in
parallel with the Federal Government's role in guaranteeing the solvency
of employer-based plans, maintenance of oversight of the financial
stability of insurers operating in the state.

Against this brief backdrop, the major question for us is whether the
federal efforts take into account people with disabilities and, indeed,
what the issues are that such awareness should include. It generally is
believed that lack of access to private sector insurance, whether
through literal denial or through lack of affordability, is a major
cause for the persistence of high unemployment rates among people with
disabilities who cannot risk the loss of Medicare or Medicaid coverage
that they fear would ensue from their entry into employment. To a
remarkable degree, disability-based discrimination is overt and legal.
Under a provision of the ADA, for example, activities of insurers are
explicitly excluded from the law's coverage if they involve underwriting
or classification of risk. Despite the lapse of years since adoption of
the ADA, no authoritative court decisions have been forthcoming
regarding the burden of proof under this provision. It appears that the
mere assertion by an insurer that its refusal to grant coverage to an
individual, based on its assessment of risk, will begin an inquiry into
whether that assessment was based on data or indeed on any rational
considerations, or if it was solely the expression of stereotype and
myth.

In the employer-sponsored health insurance setting, governed by the
Employee Retirement Income Security Act (ERISA), opportunities for the
denial of coverage are somewhat limited. However, employer-sponsored
discretion to structure the coverage, the benefit levels, the caps and
the outright exclusions give rise to numerous opportunities and methods
for limiting coverage for people with disabilities who have high,
recurrent, or merely unusual expense, such as the costs of AT.

Through research, NCD has been able to identify little in federal law or
budgeting that targets private health insurance availability for people
with disabilities. This is distinguished from long-term care insurance.

Beyond the question of access to insurance, there is the question of
what is covered when coverage is nominally forthcoming. People with
disabilities may need specialized services or care, and may need
auxiliary aids and services that enable them to participate actively in
care planning and monitoring. If the Federal Government were going to
respond to any of these needs, by funding, regulation, or both, how
might it do so?

It might fast-track U.S. Food and Drug Administration (FDA) review of AT
devices (but in fact the current system for device review appears in
several ways to have the exact opposite result with AT devices that come
within FDA jurisdiction). The government might facilitate research into
disability-related or disability-specific treatments and modalities
through CMS, through its relationship with the Blue Cross Blue Shield
research arm, or by other means, but so far as can be determined, it
does not. The government could articulate nondiscrimination requirements
or definitions of medical-necessity for use by insurers that enhance the
availability of specialized goods and services. But there is no federal
definition of medical necessity. Nor does federal law include any
coverage mandates (comparable, say, to mandates at the federal or state
level regarding coverage for mammography or of minimal hospital stays
for childbirth) that would relate to goods or services of particular
value to people with disabilities. Finally, federal law places almost no
limits on caps or item exclusions.

#### ID:2 -- Medicare

Medicare is the system of federally-financed medical insurance for
people over the age of 65 and people receiving Social Security
Disability Insurance (SSDI). Since recipients of SSDI are people with
disabilities, and in fact, many recipients over the age of 65 are as
well, Medicare properly can be regarded as a program of insurance for
people with disabilities.

Although there are some situations in which beneficiaries receive cash
reimbursement, these instances are rare, and in any case, such payments
would be purpose specific and need to be used to pay for services
already received. For the most part though, Medicare represents payments
to third parties---hospitals, doctors, short-term skilled nursing
facilities, certain home-health-care providers, durable medical
equipment (DME) suppliers, and now managed care organizations and
pharmaceutical manufacturers---on behalf of beneficiaries.

In terms of eligibility, Medicare for people with disabilities under the
age of 65 differs markedly from the program for elders. People over 65
have automatic entitlement to Part A hospital coverage, and are subject
to financial penalty if they fail to sign up for Part B and the new Part
D as soon as age-eligible. But no requirement of disability and no
income limit or means-test applies. By contrast, because of the link
with SSDI, people with disabilities under age 65 are eligible for
Medicare only if deemed unable to work according to the standards of the
Social Security Act.

Beyond the question of Medicare eligibility, there once again is the
issue of coverage. To say that Medicare covers some people by virtue of
their status as people with disabilities is not to say that it
necessarily covers services that would be of particular importance to
people with disabilities. In fact, as still a predominantly acute care
program, Medicare appears distinctly ill-suited to provide the
rehabilitative, AT support services and specialized resources that many
people with disabilities need.

Many people fear that the enormous sums required to fund the new
Medicare Part D prescription drug benefit will result in cuts in
coverage for other services of particular importance to people with
disabilities. Recent moves by CMS, apparently dictated by cost, to
curtail the scope of powered wheelchairs and other mobility aids are
particularly ominous in this regard, since such devices are
disproportionately and uniquely needed by beneficiaries with
disabilities.

#### ID:3 -- Medicaid

Operated with federal and matching state funds, and implemented by the
states, Medicaid is the federal-state system of health insurance for
people who are poor and who in addition meet one of two other
conditions: either they are people who are blind or have disabilities,
or are people over the age of 65. Other categories have been added,
including people whose earnings exceed normal maximums but who are
allowed to receive or retain coverage under state buy-in programs and
people covered under waiver programs.

Given Medicaid's significant focus on people with disabilities,
attention once again shifts from the question of eligibility to that of
the scope of coverage. Like Medicare, indeed like any health insurance,
Medicaid focuses on traditional medical services, goods and
practitioners. To do this it distinguishes between mandatory services,
which states must provide as a condition for receipt of federal funds
under the program, and optional services that states are free to provide
or not as they see fit.

In the provision of both mandatory and optional services, states have
considerable discretion: some of it inherent in the design of the
program, and increasingly much of it derived from authority given them
by the Federal Government to waive the applicability of one or another
ordinarily applicable requirement.

##### 1D:3A. Third Party Medicaid Incentives

As a financial incentive, Medicaid, by design, affects people with
disabilities. It impacts their lives primarily through payments to third
parties---to health care practitioners, medical institutions, nursing
homes or others---for the provisions of services and care. What is
ironic is that although people with disabilities represent a key target
population of the program, the specific needs of people with
disabilities are not systematically addressed in the range of goods and
services required to be provided. To the degree that there may in some
cases be an overlap between disability and health problems or medical
needs, those disability-related issues that are subsumed under standard
medical treatment will be addressed. But when it comes to needs of a
specifically disability-related, non-medical nature such as AT, PASS,
home modifications, or rehabilitation services (which are in theory
covered), the picture is quite different. While a number of these needs
could be met by such services as vision and hearing services, orthotics
and prosthetics, speech-language pathology, DME or rehabilitation, these
low-incidence services fall almost exclusively within the discretionary
area, and as such have been among the first casualties of budget cutting
and cost-savings efforts at the state level. Moreover, even when they
are covered, an enormous range of limitations on which diagnoses will
trigger their use, how much or for how long they can be provided, how
much they can cost, which practitioners are permitted to prescribe or
implement them, which suppliers must be used for procurement, what prior
authorization will be requested or what specific devices or kinds of
devices can be used will combine to make the provision of
disability-related services to Medicaid recipients with disabilities a
challenging and uncertain prospect.

For people with disabilities of low income, the availability of
insurance coverage through Medicaid is of great significance. Economics,
lack of employment and disability itself combine to make private health
insurance unavailable or unaffordable to many people with disabilities.
But once again, the fact of coverage and the content of coverage must be
taken into account in determining the extent and value of this, or of
any other financial incentive.

A dilemma about Medicaid is whether it constitutes a financial incentive
to community living. To say that it is a financial incentive provides
little information until the question of what is incentivized has been
fully illuminated. On balance, it would appear that Medicaid as a
financial incentive to community living varies greatly from state to
state, depending on targeted populations and the defined scope of
services covered by the state plan and federally approved waivers.

When Medicaid was created in 1966 it was not designed as an acute care
program in the way that Medicare was designed. Nevertheless, many, if
not most, of the concepts (independent living, community integration,
deinstitutionalization, home- and community-based services,
aging-in-place) that today dominate the Medicaid debate were unknown at
the time of its creation. Likewise, many of the services of greatest
importance and value for people with disabilities, such as those
previously mentioned, were not part of policy and decision makers'
consciousness when the program was designed. Perhaps most important in
this regard, the ADA did not exist when Medicaid came into existence.

Although opinions differ regarding whether and how this can be modified,
it is widely agreed that Medicaid resources disproportionately
incentivize facility-based services at the expense of home- and
community-based services. Hospital and nursing home services are
mandatory; home- and community-based services are covered largely by
waiver programs, making them more tenuous than optional services. Beyond
this, specific services needed to support a community-based or
community-integration model of health care are marginal within the
Medicaid framework.

The fit between this venerable statute, on the one hand, and emerging
new needs and awareness, on the other, is dramatized nowhere more
vividly than in the 1999 Supreme Court's *Olmstead v. L.C*. decision and
in its aftermath. The *Olmstead* case held unnecessary
institutionalization a violation of the ADA's community integration and
least restrictive environment provisions. The Court provided a
three-pronged test for determining when and how nursing home residents
should or could be returned to the community.

In the wake of *Olmstead*, the Federal Government, through the NFI and
other initiatives, has assisted states in complying with the mandate of
the case. Among other things, states have been expected to prepare
*Olmstead* implementation plans, which are supposed to reflect progress,
measurable goals and procedures for assuring the necessary interagency
and service coordination. Opinions differ regarding the success and
vitality of these efforts, but it is notable that because they have
never been brought under the mandatory funding category of the law, the
*Olmstead* implementation services and activities are more exposed to
budgetary pressures and more vulnerable to new preoccupations than are
traditional hard-core medical services.

##### 1D:3B. Direct Medicaid Incentives

Although Medicaid operates primarily through payments to third party
caregivers, a tiny but growing part of Medicaid funding is being
directed to individuals and this trend is likely to grow over the coming
years. Through a variety of experimental federal programs being launched
jointly by CMS and SSA, under such rubrics as cash-and-counseling, life
accounts, asset-development and others, and as embodied in legislation
such as Money Follows the Person, these initiatives have the related
goal of increasing autonomy on the part of beneficiaries. For example,
such programs reward beneficiaries for frugality by allowing them to
keep a portion of what they save, reducing total program costs, and
creating incentives for individuals to save program funds. As a result
of these converging initiatives, a small but growing stream of Medicaid
funds, potentially including federal funds and leveraged state matches,
is likely to go directly to beneficiaries with disabilities. Two key
questions will emerge in evaluating these initiatives: How effective are
these funds in bringing about sanctioned activities or established goals
of the program? How much choice will beneficiaries actually have in the
way their individual funds are expended?

From the standpoint of describing incentives, the second question is of
more immediate importance. It seems likely that some program-related
limitations will be placed on how these funds can be spent. The
likelihood of political opposition to direct payments to recipients
already exists, and if they are allowed to retain unspent funds, in
derogation from existing rigid means-testing of the program, such
opposition is likely to be greater still. Given prevailing and
politically potent stereotypes about the reason poor people are poor,
the absence of significant limitations on how permissibly the funds are
to be spent probably would prevent growth of such programs beyond the
isolated-experiment phase. That being so, the Category 1
direct-to-individuals Medicaid incentive will not be open-ended.

What will be critical in this regard, and based on the design of early
experiments does seem likely, is that the permissible uses will include
disability-related expenses that cannot be met by available payments to
third parties. Of course, if funds made available directly to recipients
are obtained by being taken away from traditional program funding
streams, then it may be that the nature but not the overall level of
financial incentives will be changed. With this possibility in mind, it
will be useful here to consider how proposals for Medicaid reform and
restructuring bear upon the role of incentives for people with
disabilities.

##### 1D:3C. Medicaid Program Reform

State governors from both major political parties appear to agree that
Medicaid is far too expensive to be sustained at its current rate of
growth or under its current structure. Federal level policymakers in the
Executive Branch and in Congress likewise appear united in the belief
that current and projected rates of program growth are unsustainable,
though strong ideological divergences emerge around the reasons this is
so or what should be done about it. Proposed solutions take numerous
forms, such as greater use of managed care as a means of achieving cost
control; imposition of expenditure caps on the states; narrowing of
program eligibility criteria; reduction in the scope of covered
services; greater use of tax and other incentives to increase the
availability of private insurance; and, of course, heard hardly as
frequently, adoption of some form of single-payor or national health
care which would essentially supersede Medicaid and dramatically broaden
the funding base for medical care in this nation.

It is beyond the scope of this research to discuss these proposals in
any depth. The point of listing some of them here is to note the
startling absence from the debate of any discussion or apparent
awareness of the specific issues relating to people with disabilities in
the current operation and potential reconfiguration of the Medicaid
Program.

With cost-saving emerging as the chief imperative of many Medicaid
reform proposals, there is ground for fearing, especially in the absence
of awareness of disability-related issues, that cuts will impact people
with disabilities disproportionately. This is likely for several
reasons, with the most significant being that although there is no
necessary correlation between disability and ill health, extremely
high-cost recipients are very likely also to be people with
disabilities. As such, any cost-cutting measures that focused on
reduction of per capita costs, control of high-cost services,
elimination of low-incidence services or similar measures would hit
financial incentives for the care of people with disabilities harder
than those for the care of others. So too would expanded use of managed
care, unless accompanied by provisions reflecting awareness that people
with disabilities may need specialized goods and services often
available only out-of-network or out of their geographical areas, or
from nonstandard sources.

#### 1D:4 -- Electronic Medicine

One major governmental initiative in the health care area relates to the
creation, under authorization of the Health Insurance Portability and
Accountability Act of 1996 (HIPPA) of an electronic medical records
system over the coming decade. Many considerations, ranging from
avoidance of costs to minimization of medical errors, have been cited in
support of this initiative. What would make this initiative responsive
or unresponsive to the health care needs of people with disabilities?

Broadly speaking, what would make this forthcoming system more effective
as an incentive to the provision of health care to people with
disabilities, or for that matter for the participation of people with
disabilities in the health care system on equal terms as those of people
without disabilities? Accessibility in the design of the system, to
assure equal access irrespective of disabilities, would be one measure
that could help to bring this about. As such, employment would be
implicated too, because more jobs in the growing health care system
would be available for people with disabilities. Inclusion in the data
sets of categories that are of particular relevance to people with
disabilities and that would improve the quality of data on disability
also would be of great value in this regard.

#### 1D:5 -- Health Care Tax Strategies

In health care as in every other sector, the tax law is coming to play
an ever-larger role. The most tangible recent example of its increasing
importance is the creation in 2003 of the Health Savings Account (HSA)
under which people are encouraged, through tax benefits, to purchase
high-deductible health insurance policies. This report discussed this
and other ways in which the tax system supports the current insurance
system.

Beyond this, there are the medical expenses deductions, including
expenses for many AT items that are available to taxpayers who itemize.
Lastly, in this regard, there are provisions in the IRC allowing for
waiver of the early withdrawal penalty tax when the premature
withdrawals are used to meet medical costs.

To the degree that such provisions help offset the economic consequences
of catastrophic illness, they undoubtedly represent important and direct
financial incentives to at least some people with disabilities. But for
those people with disabilities whose specialized needs are of an ongoing
nature, not to mention for those who lack retirement savings or who lack
income against which to offset their deductions, such provisions are of
limited value.

As a general matter, except for definitions of "medical expenses" that
include various AT devices, none of the provisions of the Internal
Revenue Code that subsidize individually purchased health insurance or
care reflect any specific awareness or particular concern to maximize
the value of the incentives to people with disabilities or their
families.

#### 1D:6 -- Health Care Research

##### 1D:6A. Outcomes Measurement and Evaluation

With evidence-based practice the watchword, outcomes and evaluative
research have become central to many of the resource allocation and
prioritization decisions made by and for the health care system. But
health system outcomes are extremely difficult to measure, even compared
to outcomes in other areas.

The complexities encountered in measuring the efficacy of health
interventions are well beyond the scope of this study. For present
purposes it is enough to note that the government plays a major role in
evaluations research, including through its expenditure of funds and
through the private expenditure it commands by regulation. From studies
conducted at or directly funded by National Institutes of Health or the
Department of Veterans Affairs, to research funded through a variety of
program rubrics administered under the authority of a number of agencies
and departments, to the role of CMS and FDA in reviewing and validating
research into pharmaceuticals, medical equipment and other
interventions, the interests and resources of the Federal Government
play a major role in determining what gets evaluated, when and according
to what criteria or standards.

Against this backdrop of these various incentives to outcomes and
evaluative research provided with federal resources or under federal
oversight, the question that arises is: What, if any, outcomes
measurement is carried out in the health system of modalities of
particular or specific relevance to health-system consumers with
disabilities? The question applies in the area of treatment itself and
in the realm of procedures designed to ensure effective outreach,
follow-up, informed consent, compliance or the achievement of other
system goals.

##### 1D:6B. Other Research

The line between outcomes research and other types of research is
sometimes difficult to find. But when it comes to research designed not
to evaluate existing modalities but to create and implement new ones,
government again plays major direct and indirect roles. Like evaluations
research, these efforts can be regarded as incentives to the community,
aimed at improving overall health.

Among these research efforts are a number that relate specifically to
people with disabilities. These include earmarked research projects and
funds administered by the National Science Foundation and NIDRR,
including rehabilitation engineering research centers (RERCs) and other
rehabilitation research programs. While some of these projects are aimed
at evaluating existing modalities within the medical or quasi-medical
framework, including those designed to identify and promote best
practices, others may be regarded as prospective in nature.

Such research may be regarded as an incentive to the community, usually
taking the form of competed discretionary funding, available to a
potentially broad range of contractors, grantees or program operators,
for the designated purposes. Needless to say, the use of these research
funds is tightly circumscribed by the terms of the award or competition
under which they are forthcoming.

Any attempt to judge the overall impact of these and related research
projects would require assessment of the mechanisms available for
integrating findings into practice, and for drawing such connections
between and among jurisdictionally or bureaucratically diverse programs
and services as the data warrant.

##### 1D:6C. Prevention and Public Health

Among the many types of medical and related research supported and
encouraged by government, research into the prevention of disease
represents an important category. As concern for long-term savings works
itself into the policy equation at various points, the potential cost
effectiveness of such research cannot be denied. For this NCD study the
question is: How can such research be categorized in terms of the
financial incentives with which are identified? Such research clearly is
disability oriented but it typically offers little incentive of
relevance to people with disabilities. Instead, the research is designed
to create evidence-based data and sometimes behavioral incentives that
will prevent the occurrence of conditions leading to disability.

Definitional ambiguities aside, such research remains controversial.
Sectors of the disability community believe that prevention research,
and "cure" research that bypasses efforts or resources designed to
address the day-to-day realities of living life with a disability,
actually result in the diversion of resources that might otherwise be
available for incentives of one kind or another in the health care and
lives of people with disabilities.

##### 1D:6D. Long-Term Services and Supports

The line between health care and long-term services and supports or
long-term care (LTC) is often difficult to draw. This line is important
to everyone because of the overlap or gaps between public programs. But
the distinction is particularly important to many people with
disabilities who must face the vicissitudes of obtaining long-term
services at a younger age than is typically the case for the general
population.

As major research supported by NCD has shown, this country has no LTC
policy. At the risk of making unduly fine distinctions among health
care, income maintenance and long-term services, it is possible to
identify programs that fall within the medical sphere, as discussed in
the previous section, and as discussed in the next section, that provide
income maintenance. Though no consensus, let alone legal definition, of
the concept exists, LTC programs generally are distinguished by the
nontraditionally medical nature of the services being provided, by the
circumstances under which and purposes for which they are offered, by
the non-cash nature of the services in most instances, and by other
features.

###### 1D:6D(i) Private Sector Insurance

The private sector has intricate connections that bind federal funding
and tax policies to the kinds of coverage offered by that sector of the
insurance industry. Private insurance coverage, all of which is
tax-favored to varying degrees, involves the provision of specified
institutional or home-based services to covered individuals who meet the
requirements for benefits. Disability as such is rarely an absolute
prerequisite to the receipt of benefits (though measures of severity of
limitation apply). Ordinarily, activities of daily living (ADLs) are the
baseline for determining entitlement to benefits under these policies.
Home-based services up to a given dollar value or for up to a certain
period of time may be authorized; for example, two ADLs (such as
bathing, dressing, feeding, toileting, and so forth) cannot be performed
independently. Institutional services such as nursing home residence,
again subject to policy limits, will be authorized at varying but
usually higher levels of severity, frailty or risk.

Nothing in the laws surrounding these policies overtly distinguishes
between people with and without disabilities. It is widely assumed that
inability to perform two ADLs would equate with disability under any of
a number of medical or ADA-type standards. This is not necessarily so,
particularly if the major life activity at issue is the ability to
continue living in one's own home. By the same token, people with
sensory disabilities, communication disabilities, or mental illnesses,
who need assistance with various functions in order to maintain a
quality of life in their homes and communities, may not qualify for
benefits, given the close association of ADLs with physical and
cognitive abilities. Likewise in this connection, while it is certainly
possible that individual insurers have provided AT to particular insured
people under appropriate circumstances, research for this study has been
unable to find any federal law that could be used, or at least that has
been used successfully, to require provision of AT or home modifications
under a private sector LTC policy. These AT and home modifications have,
by contrast, been required under workers compensation insurance.

Insurers and insurance products (i.e., policies) are licensed by either
state or federal regulators. One might suppose therefore that in the
case of a community incentive such as LTC insurance, governmental
regulatory and approval power would be used, if not to ensure the
availability of goods and services of specific relevance to people with
disabilities, then at least to guarantee nondiscriminatory treatment of
people with disabilities in terms of coverage offered, premiums charged
and related matters. Along similar lines, the tax benefits offered to
both providers and purchasers of LTC insurance do not appear predicated
on any demonstrated willingness by the carrier to provide coverage on
terms of equality to people with disabilities, subject to legitimate
underwriting and classification criteria stemming from age, objective
likelihood of utilizing services and similar established variables.

Without any guarantees, the net result may be that adults with
disabilities whose actual need for services may be little or no greater
than those for people without identified disabilities, attributed
perhaps to coping skills developed over a lifetime, may nonetheless be
denied coverage or granted coverage only at higher cost. As such,
governmental inaction or seeming even-handedness can constitute not an
incentive for people with disabilities, but an anti- or dis-incentive to
this group of citizens.

The broader question raised by this discussion is again one of
definition. When plausible government action, undertaken within the
scope of existing authority or recognized policy prerogatives, could
result in more nearly equal opportunities for people with disabilities
than may otherwise exist, does the failure of the government to
implement such equality measures constitute or amount to a financial
anti-incentive so far as people with disabilities are concerned?

###### 1D:6D(ii) LTC Insurance-Medicaid Partnerships

One approach to LTC insurance coverage and through it to the provision
of some long-term services and supports that does bear directly on
people with disabilities is the LTC insurance-Medicaid partnership.
Under this model private coverage and Medicaid coverage can be combined
more seamlessly and with continuity in those states where it operates.
Again, because of Medicaid's inclusion of disability as one of its
eligibility criteria, such programs represent a financial incentive, to
people with disabilities directly (if they receive funds at any point to
recruit and pay their own caregivers) or to third parties (if the funds
are paid directly to home care agencies, nursing homes, care managers or
other support and service personnel).

###### 1D:6D(iii) Medicaid

One measure of the difficulty encountered in determining where health
care ends and long-term care begins can be seen in the ambiguous and
overlapping role of Medicaid. Although Medicaid is a medical insurance
program, it also may well be the second largest funder, behind only
self-payers, of nursing home services in this country. It is in
incorporation of this service as much as in anything else that the
differences between Medicare and Medicaid coverage can be glimpsed.

In its coverage of long-term care, Medicaid makes few distinctions
between beneficiaries with and without disabilities. Though these
populations often face very different issues in when and whether they
require institutional care, and in what their needs are in the context
of such care, the Medicaid Program provides its incentives in an
even-handed way that takes minimal account of these differences. Even
the Civil Rights of Institutionalized Persons Act (CRIPA), while
providing for a number of reviews and including other protections for
the rights of people in custodial settings, and while implicitly
assuming significant lack of autonomy among such people, does not
recognize the different risks that different institutionalized
subpopulations may face.

As it relates to people with disabilities, the financial incentive
involved in Medicaid coverage of nursing home care demonstrates this
same relative inflexibility. For instance, states generally take the
position that extra costs, such as for powered mobility or other AT
devices, even if eligible for Medicaid coverage in the community, should
be covered out of the facility's standard daily rate for residents. As
with all of Medicaid, whether predominantly health or long-term-care
oriented, it recognizes disability as an economic limitation but
typically not as one requiring differentiation in services.

###### 1D:6D(iv) Other LTC Supports

######## 1D:6D(iv)(a) Senior Services

Senior services, provided through a number of sources, including
community development block grants (CDBG), Older Americans Act, and a
number of other federal funding streams, represent another financial
incentive to community living. A preliminary review of such sources
doesn't reveal any particular attention to disability, either in terms
of its role in eligibility determination or in the identification and
planning of services that eligible individuals may need. Programs to
identify frail elders at risk of institutionalization may be presumed to
focus on people who meet or come close to meeting accepted definitions
of disability, but disability does not appear to be a formal criterion
for the most part.

######## 1D:6D(iv)(b) In-home Supportive Services

These largely state-based programs, sometimes including federal funds
from Medicaid or other sources, while relatively limited in impact,
represent a model that could prove of relevance as an incentive to
continued community participation for people with disabilities. Because
the number, funding levels, eligibility criteria and scope of services
characterizing these programs change so much even from year to year, it
is unwise to offer too many generalizations about them here. One thing
that is clear is that, by law or by practice, such programs tend to
focus on elders, thus ensuring that a fairly high percentage of people
with disabilities will be included among service recipients, but also
largely excluding people with disabilities under the age of 65 from
benefiting from the incentives represented by such programs.

A major cost issue with Medicaid, respite care, and other family support
programs relates to their capacity to compensate family caregivers for
their time and services. Any attempt by the nation to come to terms with
the explosive costs for home- and community-based services will have to
address this question. Its answers have implications for the relative
value of current or future incentives to people with disabilities. Some
glimpse of those implications may be found in an already existing
program.

######## 1D:6D(iv)(c) The Rehabilitation System

One may ask how the rehabilitation system, geared primarily to
employment as it is, could have anything to do with home- and
community-based long-term services. The answer lies in two established
features of the Rehabilitation Act and two federal funding streams that
exist under this Act.

######## 1D:6D(iv)(c)(i) Homemaker Outcome

In VR the law specifies a number of outcomes by which a case can be
closed. Traditionally, homemaker has been regarded as a successful
outcome, meaning that when a case is closed with the service recipient
trained to and able to function as a homemaker, the VR agency can claim
credit for a successful case closure for a "status 26 outcome" in VR
parlance.

Overuse of homemaker closures came under heavy criticism in the 1960s
and 1980s. Resorting to this outcome goal was seen as an excuse for the
inability to get people jobs or for the lack of effort in that arena.
While the use of homemaker closures has declined dramatically, one
underlying rationale for this outcome category remains valid and
relevant---that equipping a person with a disability to function as a
homemaker frees another family member to go out of the household in
order to work.

A number of VR services, whether targeted under an individualized plan
of employment (IPE) or targeted to this or to another sanctioned VR
outcome, include components that are relevant incentives to community
living and participation, including various types of skills training,
such as adaptive techniques, low-level assistive technology, or limited
home modifications. As such, community living and participation is an
incentive that is targeted directly to people with disabilities, and
that provides support largely for the provision of goods and services by
third parties. Moreover, the time-limited nature of these services,
given the concept of case closure that informs VR, reminds us that
services need not always be open-ended or long-term in nature to
represent financial incentives to long-term community living.
Presumably, the skills and resources provided remain viable for some
time, and there is always the possibility, although reported to be
fairly rare in practice but countenanced by the governing federal law,
of reopening a case or applying for follow-along services if conditions
or needs to which the system can respond undergo major change.

######## 1D:6D(iv)(c)(ii) Independent Living Services

An important component of the Rehabilitation Act, aimed largely at
people with disabilities who do not have paid employment as their
immediate goal, and reflecting the evolution of attitudes toward
self-determination over the past generation, is independent living
funding. Provided mainly through the network of over 400 independent
living centers (ILCs) that have grown up around the country, these
centers have come to represent a vital community resource for people
with disabilities. As such, the federal funds that contribute to their
operation, whether through direct grants or contractual services,
represent an important incentive to community participation.

Consistent with the independent living philosophy, rigid jurisdictional
requirements for the receipt of these services are not imposed. Economic
status and perceived ability to work are not issues. To be sure, the
procedural rules surrounding the operation of ILCs receiving federal
funds, together with the rules establishing their governance (such as
rules for the composition of their boards), have grown more complex. But
the range of services they provide remains consistent with the perceived
needs of the population being served, subject again to emphases that may
become more or less relevant with the passage of time.

As it relates to the characterization of services, allowing independent
living services between direct, indirect, and community-based incentives
is sometimes difficult. In its ideal expression, embodying as it does
the availability of a broad range of options and interactions to anyone
who wants or needs them, independent living services are best described
as a community incentive targeted specifically to people with
disabilities.

What are known as core independent living services are enumerated in the
Rehabilitation Act. Subject to the possibility of change in the
forthcoming reauthorization of the Workforce Investment Act (WIA) (the
federal statute embodying the Rehabilitation Act), these include both
mainstream services such as housing, and specialized services (with the
peculiar exception of AT). Notwithstanding this omission, many ILCs are
deeply involved in AT, either as service-providers under contract with
state VR agencies, as demonstration or training sites working with state
Assistive Technology Act funding, as partners in AT loan programs under
the AT Act, or under other auspices.

###### 1D:6D(v) Tax Aspects

We noted earlier that the tax system supports the purchase and sale of
LTC insurance. It does this by allowing deductibility to the purchaser,
both through the usual health expense mechanism and in some cases as a
business deduction for self-employed people, and through the usual range
of benefits that attach insurance companies who sell the coverage. But
tax system subsidization of long-term services, care and supports in
other respects does not live up to this encouraging standard.

When it comes to home-based services such as personal assistants (PAs)
or housekeeping or similar services, the tax law maintains unwarranted
and outmoded distinctions between deductible medical services and
nondeductible personal ones. To enforce this distinction, tax compliance
officials resolve doubtful cases by looking at the skills and
qualifications of the service provider (e.g., nurse or nurse's aide) and
the nature of services provided. Where both medical and non medical
services are provided, some allocation between them may be required. By
contrast, if one is in a nursing home for medical reasons, all one's
costs related to being there are tax deductible.

Likewise, although the add-on costs of transportation attributable to
vehicle modifications, for example, would be medically deductible, the
entire cost of transportation is subsidized only when used for medical
purposes. Although advocates believe that this limitation should be read
expansively, present law still appears to support the notion that visits
to ILCs for training or exposure to AT or peer counseling would not meet
the applicable threshold for being classified as medical. Hence such
costs would not be medically deductible.

Subject again to all the usual limitations on the medical expense
deduction discussed above (including ability to itemize, 7.5 percent AGI
threshold, sufficient income to absorb any available deduction in the
year of expenditure, and one or two others), home modifications too are
deductible. This deduction is of little practical value to most people
who need such modifications.

The Earned Income Tax Credit (EITC) offers an incentive to home-care of
people with significant disabilities in one interesting way. Whereas the
credit, which is refundable and of great value to lower-income working
families, normally can be used only by families with children, its upper
age limit is waived for an adult child living and being cared for at
home on account of disability. Since this age-limit exemption would not
be available for adult children living in nursing homes, assisted living
facilities, congregate care facilities or other community residences,
this feature of the EITC represents one of the few tax law provisions or
other legal provisions that differentially incentivize home-based or
facility-based long-term services and living.

### 1E -- Income Maintenance and Asset Development

####### Income Maintenance

Depending on one's definition, income-maintenance and income-replacement
probably represent the largest category of identifiable federal
expenditures targeted to people with disabilities. Though varying in
detail based on the prevailing assumptions at the time of enactment, all
these programs take as their point of departure certain assumptions
about the association of disability, in its own right or as mediated by
inability to work, with poverty.

Looked at globally, income maintenance or replacement programs can be
divided into two basic groups: those that provide cash and those that
provide in-kind assistance. A classic example of programs that provide
cash would be the programs administered by the Social Security
Administration (SSA). A classic example of programs that provide in-kind
assistance that is more or less the equivalent of cash is food stamps.

All of the nation's income-maintenance programs are open to people with
disabilities. Indeed, through §504 of the Rehabilitation Act if
supported with federal funds, or through the ADA if operated by state or
local government, all such programs are required to operate in a
nondiscriminatory manner. Let us examine those programs that,
controlling for poverty, appear to have the greatest impact on the lives
of people with disabilities, and that were designed with this population
particularly in mind.

#### 1E:1 -- Social Security Disability Insurance

Social Security Disability Insurance (SSDI) is one of the two key
underpinnings of the nation's social insurance system. Available to
workers who have paid into Social Security and to their dependents, SSDI
replaces income for those rendered unable to work by reason of
disability prior to the usual retirement age. Benefit levels are
predicated on meeting the SSA definition of disability, which includes
both a diagnosis, a prognosis that the condition will last for at least
a year or result in death, and a determination of the individual's
inability to work. Although not means-tested, this linkage to the
ability to gain income through work amounts as a practical matter to the
equivalent of means-testing in many cases. Benefit levels are linked to
the amount of time one has worked, and to one's wages or self-employment
income during that time.

SSDI was first added to the Social Security Act as Aid to the
Permanently and Totally Disabled in 1955. Its purpose, as a logical and
humane corollary to a program of social assistance for retirees, was to
provide a safety net of income replacement for those prevented from
completing their working careers on account of disability, as well as
providing a measure of protection for their spouses and children.

Although SSDI is vital to millions of American families, it is hard to
characterize it as an incentive. Despite the suspicions of many about
the program, it is unlikely that people would deliberately seek to
become a person with a disability (as opposed to claiming falsely to
have a disability) in order to qualify for SSDI. In the end, the program
is a community resource, designed to ensure stability and prevent
destitution and rapid downward mobility. It can best be described as a
major clause in the social contract.

But while disability is a necessary precondition for SSDI eligibility,
it is not a sufficient one. An individual can meet the SSA definition of
disability beyond any possible doubt yet be ineligible for benefits
because of the failure to have amassed the minimum 40 quarters of
covered employment. Moreover, while the diagnostic and functional
dimensions of disability may be fairly straightforward in many cases,
the determination of whether someone can or cannot work is a much more
subjective one. This is because it is a legal, not a medical or
functional definition. Among other things, it looks to whether the
individual could perform any work that exists in the economy, regardless
of qualifications or experience, and regardless of proximity to the
individual's home, and regardless of the services, supports and
technology that might be needed in order for the individual to perform
this hypothetical job. Fortunately, because no one is willing to find
the individual this hypothetical job, or routinely pay the costs of
making it accessible, or on the other hand witness large numbers of
people with visible disabilities starving in the streets, the law has
not been enforced literally. Yet, changes in official interpretations of
its nominal provisions are unquestionably associated with increases or
decreases in the number of people receiving benefits at various times.

Other variables created by the governing law have resulted in the
removal of people from the rolls at times, not necessarily because they
have experienced miraculous cures. Often it has been because of
technicalities in reporting or in documenting receipt of income or
capacity to earn income, a lack of cooperation, or for other procedural
reasons.

Underlying these procedural vagaries, the fundamental problem that
emerges is the SSDI treatment of disability, via employability, as an
all-or-nothing, one-or-the-other matter. Yet experience and commonsense
tell us that in this society, with appropriate attention to training,
technology, transportation and accommodations, most people can perform,
and want to perform, productive work. SSDI increasingly has functioned
to absorb the provision of a safety net for those people whose costs of
employment employers and government were unwilling to bear, or whose
potential for productivity was considered lower than the wage that
society would demand they be paid.

A key factor in understanding the tool of SSDI as an incentive or
disincentive in the lives of people with disabilities is its linkage to
health insurance. Most people receiving SSDI also are eligible for
Medicare. While some SSDI recipients will be able to maintain private
sector insurance, assuming they had it when they worked, through the
coverage of a spouse who works, or for a period of time through their
former employment coverage under COBRA (subject to full assumption of
the premiums and a 2 percent administrative fee) or through other
affiliations, Medicare is as crucial or more so than cash benefits in
the lives of many SSDI recipients. It is this close connection,
resulting as it does in the potential loss of insurance coverage if work
is obtained that does not include comparable insurance coverage, that
perversely cements the relationship, and the destructive dichotomy,
between disability and work in American public policy.

Put another way, and emphasizing the connection between income
replacement and health care, Medicare through SSDI makes insurance
available to certain non-employed people with disabilities, under
circumstances where comparable coverage is not generally available to
people without disabilities who do not work. Conceived of at a time when
health insurance was not such a looming concern or as costly as it is
now, and at a time when the numbers of people obtaining such insurance
through their employment was growing, this linkage made good sense. The
linkage was based on the further assumption that disability equated with
medical need, and that a meaningful response to it therefore should
include health insurance. Health insurance coverage represents perhaps
the most important in-kind income-replacement strategy available.

#### 1E:2 -- Supplemental Security Income (SSI)

Supplemental Security Income (SSI) derives from many of the same
premises as SSDI, but with several key differences. SSI extends the
safety net to all people with disabilities regardless of age, and to all
elders regardless of disability, who meet its strict income- and
resource-eligibility standards. SSI also differs from SSDI in being
strictly means-tested, beyond the capacity for earnings. Unearned income
is taken into account in determining eligibility and benefit amounts, as
are savings, along with employment. Lastly, SSI differs from SSDI in
being linked not to Medicare but to Medicaid, meaning that the state
plays two important roles in it that are not parallel to SSDI: the state
may or may not add a state supplement to the standard SSI payment (the
Federal Benefit Rate), and the state, through its discretion in
administering the Medicaid Program, will determine to a large degree
exactly which health services an individual will receive. For people
whose route to eligibility comes through disability, rather than age,
monitoring of disability status as well as of economic status becomes a
standard component of the program.

Because SSI is a direct cash payment of a relatively unrestricted nature
to people of any age, the question of how to define disability related
to children has caused recurring debate. No tests of employability and
no actual evidence of work performance are of much use in determining
the eligibility for SSI benefits of children. In place of ability to
work, Congress and the courts have wrestled with various functional
definitions over the years.

On balance, at least as it relates to adults, the law governing SSDI and
SSI eligibility alike has placed far more weight on diagnostic and
medical assessments than on functional ones. To take an extreme case,
what this amounts to is that if a person were unable to move, speak, or
interact in any way, that individual still might not qualify for SSDI or
SSI benefits in the absence of some plausible medical explanation for
the condition. Short of such an extreme case, the problem that emerges
is that while society has moved toward a contextually-based definition
of disability such as that of the ADA, which looks to the nexus between
a physical limitation and its impact on one or more major life
activities, the incentives embodied in SSA programs continue to adhere
to a strict medical model, at least regarding initial eligibility
determination.

There is one other key respect in which SSI must be distinguished from
SSDI. Where SSDI is an income replacement program, SSI is for income
maintenance. While this distinction may seem slight, it is in fact very
important. Among other things, it means that the benefit levels
available to SSI recipients, even though they are by definition "poor,"
which SSDI recipients need not necessarily be, are generally far lower
than workers with disabilities can expect.

Not only is SSI a program that at best is aimed at maintaining people at
or near poverty level, including formulas for "deeming" family or other
household members' income as shared by the recipient so that benefits
can be adjusted, but it is a program that contains powerful
disincentives to saving or to asset accumulation of any kind. While a
web of provisions exists to mitigate the disincentive effects upon
employment of the SSI rigid resource limitations, and allowing for the
maintenance of health insurance coverage while work status is
demonstrated and stabilized, as well as allowing for the saving of funds
for self-sufficiency-related purposes, it is argued that the complexity,
inconsistency and occasionally internally conflicting nature of these
provisions combine to offset much of their positive intention. In this
regard, it may be noted for example that such key work incentives as the
Earned Income Tax Credit (EITC), while excluded from SSI income
calculation, remain exempt from inclusion in countable resources for
only nine months. Such money might of course be used during that
nine-month window to meet the costs of Impairment-Related Work Expenses
(IRWEs), or it might be deposited into an SSA approved plan for the
achievement of self-support (PASS), but these options may be unavailable
to many people. By far the more common and perhaps more sensible
response will be simply to spend the refund, since if kept it could lead
to countable resources exceeding the \$2,000 limit. Cost benefits and a
possible demand for return of overpayments might all too readily ensue.

The work-incentive provisions in the law are intended as incentives to
work and to saving for work-related or other self-sufficiency-related
purposes. Whether these provisions have much effect in this regard
cannot be known, but the low numbers of people leaving benefits rolls
for work suggests that they do not. Whether work incentive provisions
could have a significant effect if coordinated with other benefit,
educational and employment programs, one can likewise only speculate,
but the overwhelming likelihood is that they could.

#### 1E:3 -- Benefits Counseling

Benefits counseling, along with its associated training and technical
assistance, is applicable to virtually all incentives in federal law and
to all targeted populations for those incentives. Placement is here
because direct financial incentives of cash payments made directly to
individuals present perhaps the most vivid illustration of where and how
such counseling can be useful.

Today almost every federal program of any size or note includes
provisions for public education and outreach, and when enabling
legislation or budgetary authorizations make no explicit provision for
this component of their work, agencies find ways to use their Web sites
or other means for public relations about all the good things they do.
In terms of the incentives to program access and utilization represented
by benefits counseling targeted to audiences in the disability community
(including potential recipients and service-providers), two principal
forms of such outreach efforts can be identified: information and
training regarding the opportunities for people with disabilities
embodied in mainstream programs, and information targeted specifically
to people involved with disability-oriented programs.

##### 1E:3A. Generalized Public Outreach

Generalized public outreach regarding mainstream programs takes many
forms. From agency Web sites and hot-lines, to presentations at
conferences, to public relations campaigns and a host of other means,
government agencies and their partners, in delivering program resources
or services, constantly barrage the public with information. In the fine
print, so to speak, of these efforts often there is an equal opportunity
notice, a disclaimer of any illegal discrimination, or an indication of
a number or office to contact for further information or specialized
assistance on accommodation, accessibility or other disability-related
matters. These may be regarded as community incentives, perhaps only
indirectly financial, but ones intended to have a specific impact on
people with disabilities and to redound to their financial benefit.

A significant recent example of the attempt to ensure fuller
participation of people with disabilities in a mainstream program is the
joint effort undertaken by a consortium of nonprofit, university and
public sector agencies to make the services and resources of the
Volunteer Income Tax Assistance Program (VITA) available to people with
disabilities. Having the appropriate utilization of the EITC by these
taxpayers as its immediate purpose, this effort has operated through the
establishment of a variety of relationships between grassroots
organizations, ranging from credit unions to ILCs, and VITA sites and
sponsoring organizations.

The financial incentive represented by such efforts at inclusion is
indirect. That is, it does not directly benefit people with
disabilities, nor put appreciable money into the hands of third parties
or into the community. What it does, much like job training, or
education, in the longer-term might do, is create the conditions for the
infusion of new financial resources into the community through enhanced
utilization of the EITC by low-income working families that include
members with disabilities.

##### 1E:3B. Specific Public Outreach, Training, Technical Assistance and Train the Trainers Programs

Similar kinds of outreach occur in connection with programs that are
specifically created for use by or to serve people with disabilities.
Two models are of particular interest here: outreach that focuses on
relevant public audiences, and specialized training and technical
assistance given to intermediaries whose work involves direct and
sustained contact with individuals with disabilities.

##### 

##### 1E:3C. Civil Rights Enforcement

One need not tune into radio or TV for too long before encountering a
public service announcement regarding people's rights to be free from
discrimination and indicating sources of help if housing, job or other
discrimination has occurred. Frequently these announcements list
categories of discrimination that are not permitted. Almost always when
such enumerations are provided, race, gender and nationality are listed.
Disability sometimes is listed too, the uncertainty being a function
partly of the coverage of the specific laws being relied upon and partly
of other considerations.

Whether such announcements and related public education and outreach
constitute financial incentives once again depends on a fairly expansive
reading of the concept of incentive. Civil rights have an important
economic dimension in the form of many benefits arising from equal
treatment and opportunity. Beyond that, discrimination may on occasion
give rise to damages or at least reimbursement for losses.

##### 1E:3D. Narrowly Targeted Education and Outreach

Increasingly the Federal Government has viewed education and technical
assistance as important components of civil rights enforcement, with
respect to those components in their own right and as their use as
alternatives to enforcement by litigation. As such, the Federal
Government has sought to make available as much information as possible
about such laws. Numerous technical assistance manuals, booklets, Web
sites, Q & As, educational videos, speaker programs and other means have
been used by the Department of Justice, the Equal Employment Opportunity
Commission, the Access Board, the FCC, the Department of Transportation
and the Department of Housing and Urban Development to inform employers,
airlines, architects, and many other groups of their obligations under a
variety of civil rights and accessible-design laws.

In particular, owing to the apparent persistence of widespread
unfamiliarity in the building industry with applicable ADA and Fair
Housing Act Amendments (FHAA) accessible-design requirements, and in
view of the emphasis that HUD has placed on reports and statements on
efforts to reach the building industry, fair housing enforcement appears
an appropriate context for raising the question of how the value of
these incentives can be measured or judged.

#### 1E:4 -- Protection and Advocacy Services

Perhaps the most vital example of highly specialized, targeted
information-dissemination and counseling about benefits-related issues
to people with disabilities is found in the programs implemented by
state-based protection and advocacy programs throughout the nation.
Under such rubrics as Protection and Advocacy for Developmental
Disabilities, Assistive Technology, Voting Rights, Traumatic Brain
Injury and several other categories, the organizations are charged with
certain responsibilities, including clarifying and communicating the
meaning of these programs and helping (though now largely without the
right to litigate against the government) to ensure that recipients
understand and can maximize their rights.

In an increasingly complex program and regulatory environment, such
dedicated, expert resources are becoming ever more crucial if
individuals with disabilities and indeed communities are to benefit
fully from many of the financial incentives theoretically available to
them.

The Client Assistance Program (CAP) is perhaps the best-known variant of
P&A services for a target population defined by disability, or by
involvement with a disability-related service system. CAP programs,
operating under the Rehabilitation Act, as amended, are designed to
provide clarification and information (though again, not litigation) to
individuals with disabilities in resolving disputes over services with
their state VR agencies. They present yet another interesting window
into the complexity of defining and analyzing financial incentives.

CAP programs are intended in large measure to ensure that VR service
recipients are able to access the services they need. As such, they
certainly qualify as gateway assets, meaning

that access to these programs helps bring about access to financially
equivalent tangible resources such as services, vouchers, AT, tuition,
and other services authorized under the Rehabilitation Act.

But at the same time, reason exists for believing that CAPs save public
funds by preventing some disputes from escalating to costly litigation.
By helping to clarify misunderstandings in some cases, by informally
brokering compromises in others, and by convincing service recipients
that formal grievance processes, including administrative appeals or
full-blown lawsuits would be fruitless, these programs in all likelihood
do operate to prevent litigation in the VR area. As such, it is likely
that they save the VR system money that otherwise might be expended in
defending such suits.

####### Asset Development

In today's world, a great part of federal asset development policy
involves efforts to strengthen, encourage and protect various sectors of
society and the economy. As this section will show, a dynamic awareness
of the changing nature and incredible complexity of these goals and the
arrangements underlying them will bring us into contact with a number of
areas of the law rarely discussed in relation to poverty or disability
but increasingly central to the destinies of people characterized by
these terms.

To begin discussion, the line between income maintenance and asset
development often may be difficult to draw. For purposes of this paper,
income maintenance and asset development should be distinguished from
one another based on three criteria: the nominal purposes for which
funds are provided; the conditions governing their accumulation,
availability and use; and the frequency or regularity with which they
are received.

Using this screening test, most programs and funding streams will fall
predominantly on one side or the other of the line. Individual
Development Accounts, for example, may be regarded as asset-development
programs because their stated purpose is to provide capital for
specified purposes, because penalties ordinarily apply to their
withdrawal or premature use, and because, although funds are paid into
them regularly, these funds are subtracted from plan-holders' income for
most eligibility determination and other programmatic purposes.

By the same token, payments made under the SSI Program are a clear
example of income maintenance. Amounts to be paid are based in part on
ongoing expenses such as rent and are adjusted for household size; no
expectation of accumulation exists or is ordinarily even permissible;
and any accumulation above strict limits triggers penalties designed to
offset the capital formation that has occurred. Of course, mechanisms
such as PASS do allow for asset development through accumulation of
capital to meet specified purposes, but these options are an exception,
albeit an important and growing one, to the basic thrust of SSI.

Against this backdrop let us examine a number of key asset development
strategies currently in use in this country, some disability-specific,
others not, with a view to placing them in the context that has been
established.

##### 1E:4A. Bond Programs

Perhaps best known in the contexts of export guarantees to companies or
disaster-recovery loans to individuals and organizations, the Federal
Government plays a major role in economic activity through loan
programs. Indeed, insofar as the federal deficit may in some sense be
regarded as an intergenerational or at least inter-decade loan program,
one may say that borrowed funds play a central role in almost every area
of economic policy and activity.

The Federal Government also facilitates the use of loans by state
governments for a variety of economic development and infrastructure
purposes. It does this by the tax-favored treatment accorded to a
variety of private and economic activity bonds underwritten by states,
and by a host of tax-based and other measures designed to assist states
in marketing bonds to finance a host of activities. With respect to all
of these, the key question is the extent to which any of these programs
are designed with people with disabilities in mind. A subsidiary
question asks whether these programs, especially if designed to impact
the lives and opportunities of people with disabilities in any specific
way, actually do so.

It is a natural instinct, as well as a fervent hope, that broad-based
economic development programs benefit all citizens. If a state or
municipality provides tax breaks, bonding authority or other subsidies
to a major manufacturer to locate a new plant within its borders, the
jobs created will impact the economy in ways that benefit everyone.
Leaving aside whether this is true, questions about the specificity and
inclusiveness of planning are still warranted. Do such programs ever
include commitments regarding the employment of people with disabilities
among the new workers to be hired? Is accessibility ever made a formal
requirement where retail facilities such as shopping malls are
subsidized, or is that left to routine building code enforcement? Do any
publicly-supported economic development programs target industries or
activities that may be of particular relevance or applicability to
people with disabilities?

Although instances abound in which the recipients of publicly-funded
economic development incentives have pledged major discretionary
contributions to education, health care or infrastructure in their host
communities, during this study there was no indication that people with
disabilities have been a specific object or topic of concern in these
settings, except so far as medical research and care may be viewed by
some as disability related.

##### 1E:4B. Small Business Development

Through the Small Business Administration (SBA), the Small Business
Innovation and Research (SBIR) Program, and a number of contractual
preferences and set-asides, as well as through other methods, the
Federal Government has sought to empower small business development
among disadvantaged populations. These programs are best known, and have
been most controversial, in application to businesses owned by people
from diverse racial and ethnic backgrounds, but they also are well
established in connection with women-owned firms. While SBA programs,
such as the Section 8(a) Program, provide preferences to a number of
populations, they expressly fail to do so for people with disabilities.
Nevertheless, there are a number of other federal programs that attempt
to provide economic development loans, grants, and technical assistance
and other capital formation assistance specifically to people with
disabilities.

###### 1E:4B(i) The Randolph-Shepherd Program

Established during the Depression, the Randolph-Shepherd Program
authorizes states to own vending facilities in public buildings and
facilities. These facilities are then licensed to people who are blind
to run as business operations, subject to certain controls and oversight
by the state. Among the resources made available to the entrepreneurs
participating in this program are capital for the purchase of equipment
and supplies, and technical assistance aimed at enhancing business
success. The financial assistance received by the Randolph-Shepherd
Program participants is regarded as asset-development rather than
income-maintenance in nature because the individuals' income is defined
by the profit they derive from the business.

###### 1E:4B(ii) Assistive Technology Loan Program and Telework

Two programs authorized under the Assistive Technology Act and
administered by the Department of Education target loans for AT, vehicle
modifications, telecommunications equipment or other technology directly
to people with disabilities.

Operated by state partners who slightly differ between the two programs
and from state to state, these programs utilize credit standards and
provide repayment terms aimed at surmounting the otherwise often
insurmountable barriers to credit market access facing many people with
disabilities. Indications are that repayment rates have been very high,
but the

Administration, after initially being very supportive of such programs,
does not appear to have looked on them, or on any portion of the
Assistive Technology Act, with favor in its last two budget proposals.
Nevertheless, Congress has continued to appropriate funds for the AT
Act, which constitutes largely indirect financial incentives or gateway
assets to many people with disabilities.

##### 1E:4C. Individual Development Accounts

Individual Development Accounts (IDAs), as authorized under at least two
major federal statutes, represent a creative new approach to breaking
the proverbial cycle of poverty by assisting low-income people to obtain
funds for saving toward specified purposes. Although the two laws
differ, all of the permissible savings goals, toward which earnings can
be put and to which matching funds may be added, can be regarded as
involving asset development or acquisition.

To determine whether IDA programs have been designed to take the needs,
situations or indeed the existence of people with disabilities into
account, the following questions must be asked: Do their waivers of
income- and means-based limitations include such limitations in programs
such as SSI that are of particular relevance to people with
disabilities? Are the programs marketed to disability-oriented community
groups and are linkages encouraged or required between anti-poverty and
disability-oriented community-based organizations? Are informational
resources made available in accessible formats? Do the permissible
asset-accumulation goals include AT, and/or accessible transportation
vehicles, or do the goals reflect the extra costs of accessibility in a
variety of situations?

As the number and character of IDA programs across the country grow,
generalization on the points discussed above becomes increasingly
hazardous. Yet, preliminary indications suggest that, by and large, the
answer to most of these questions is no. Still it seems likely, given
the considerable overlap between poverty and disability, that a
significant number of people with disabilities may benefit, either
directly as recipients or indirectly as family members, from IDA
programs.

##### 1E:4D. Industry-Based Subsidy Programs

Many major industries in this nation are the beneficiaries of federal
subsidies, sometimes directly, often indirectly or through regulation.
But whatever their form, these subsidies, including but not limited to
tax subsidies, contribute significantly to the capital and resources of
these industries.

Although not generally targeted to individuals (except as business
owners in these industries), the question may fairly be posed whether
industries that employ people with disabilities, that provide products
or services of particular use to people with disabilities, or that seek
to make their mainstream products and services more accessible to people
with disabilities are recipients of these financial incentives.

###### 1E:4D(i) Farm Subsidies

Although frequently the target of criticism as the number of family
farms in America and the percentage of the population living on farms
shrink, agricultural subsidy programs surprisingly have withstood these
attacks and remain a major component of food, land use, rural
development and related policies in this nation. To the degree that the
AgrAbility Program was incorporated into U.S. Department of Agriculture
(USDA) funding in the 1990s as a method for providing assistance to
farmers with disabilities, some recognition of this population has taken
place. The current status and the impact of this program have not been
determined.

###### 1E:4D(ii) Intellectual Property

Through copyrights, patents and trademarks, U.S. law, beginning with the
Constitution, grants protection to intellectual property of a literary,
scientific, or other original nature. Increasingly, in recent years,
intellectual property law has been seen and used as a tool in the effort
by various industries to enhance their economic position and safeguard
return on their investments. To the degree that the government has
adopted and enforced laws that dramatically have broadened the scope of
intellectual property and the length of time under which much of it is
protected, grounds exist for asking how this financial incentive has
affected people with disabilities.

###### 1E:4D(iii) Print Media

In perhaps no area have the issues been as clearly drawn as in the area
of the accessibility

of print or electronic media to people with sensory or communications
disabilities. From the legal right of people who are blind to scan
copyrighted books onto computers in order to

make them accessible, to the right of people who are deaf to have
closed-captioning of the audio component of television programs and
movies, these issues are being addressed within a rapidly evolving
framework of laws ranging from the Copyright Act to the
Telecommunications Act.

These laws are not without recognition of at least some of the access
needs of people with disabilities, but much of the concern appears to
relate to technologies that increasingly are anachronistic and falling
into disuse. For example, the copyright law provides exceptions to the
ban on unauthorized copying in order to permit materials to be
reproduced in accessible formats by nonprofit entities for use by people
with visual disabilities. Along the same lines, provisions strengthening
the availability of accessible textbooks and instructional media in
schools were added recently to IDEA. At the same time, there has been an
increase in legal protections that give owners greater control of the
modification of software, including software that determines how
material can be displayed. Web-based educational materials largely have
gone unaddressed by the law.

###### 1E:4D(iv) The Internet

In the Telecommunications Act of 1996, Congress recognized the central
role of telecommunications to full participation and included provisions
in Section 255 requiring that the manufacturers of telecommunications
equipment and the providers of telecommunications services make these
goods and services accessible to and usable by people with disabilities,
to the extent readily achievable. The Telecommunications Act provides
many financial incentives to such companies, and as such, requiring them
to make their goods and services accessible was regarded widely as a
matter of simple fairness. Perhaps the greatest financial incentive
provided to e-commerce, which directly benefits all those who sell
telecommunications equipment and services, is the law largely barring
state taxation of Internet-based transactions. Yet, through a complex
series of administrative interpretations by the FCC, no action by
Congress to modify those interpretations, and court decisions, including
most recently a Supreme Court decision bearing directly on the subject,
at this point so-called information services are not covered by the
accessibility provisions of Section 255. Without going too deeply into
the details, it has emerged that the "communications equipment and
services" covered by Section 255 constitute only traditional voice-based
telephone usage, while all data, graphics, Voice over Internet Protocol
(VoIP) and other cutting-edge electronic technologies are not regulated
by the FCC and are not subject to accessibility laws. Ironically, it is
these very cutting-edge technologies and services that, because deemed
closely associated with economic and productivity growth, are the
recipients of the greatest amount and range of financial incentives. The
conditions for ensuring that those incentives will benefit people with
disabilities have yet to be defined by regulation or legislation.

###### 1E:4D(v) Government Procurement

Government contracts for the procurement of goods and services represent
major financial incentives to industry. In light of the leverage value
they command, such contracts have provided the basis for imposition of
all manner of conditions and advancement of all manner of government
policies. From requiring major defense contractors to admit and bargain
with trade unions during World War II, to requiring federal contractors
to participate in the drug-free workplace program a half century later,
the carrot and stick represented by receipt or denial of federal
contracts represents a powerful incentive. As important, despite some
shrinkage of federal expenditure as a proportion of Gross Domestic
Product (GDP), such contracts are likely to grow in importance in the
coming years, particularly in light of the increasing use of private
sector entities to deliver services, and in light of the increasing
centralization of technology procurements.

Use of the federal contracting power to advance the cause of equality,
through nondiscrimination and even affirmative action requirements, in
the areas of race, ethnicity and gender, go back to the 1960s. Efforts
to use this asset development financial incentive of contracts to ensure
equality of treatment for people with disabilities, whether as employees
or beneficiaries, likewise have been established in one form or another
for more than 30 years. But implementation of such policy goals may be
very different than in the cases of other disadvantaged or marginalized
groups.

In the case of people with disabilities, equality of treatment often
requires a degree of individualization, in the choice of accommodations
or the structuring of tasks, that is diametrically opposed to the
equality of treatment that often defines nondiscrimination for other
groups. Moreover, accessibility of facilities, programs, goods and
services is also necessary if the equality and nondiscrimination
mandates are to be fully meaningful.

Through Section 508 of the Rehabilitation Act, Congress has taken its
largest single step in addressing these added dimensions of equal
opportunity for people with disabilities through government channeling
assets to industry. The law does this by requiring that electronic and
information technology (E&IT) purchased by the government be accessible
to and usable by people with disabilities, including federal employees
and members of the public where applicable.

Whether the transfer of federal funds as assets to industry for the
performance of services or the furnishing of goods leads to full
participation by people with disabilities in the benefits attributable
to the industry assets or assets of nonprofit sector organizations
depends in no small part on the interpretation and enforcement of the
federal laws. Key questions raised in this context include: Do federal
procurement processes treat Section 508 as an important condition, on a
par with other federal policy goals embodied in procurement law? Are
states required to adhere to similar standards in their purchase of
comparable equipment when supported by federal funds?

These questions are far too broad to be answered here. However, a
template can be suggested for addressing them. To the extent that
employment, consumerism, public information or other benefits are
expected among the end results of many contracts, it should be possible,
through survey techniques and case studies, including laboratory
experiments and usability tests where typical situations of access and
use are replicated under controlled conditions, to determine whether
people with disabilities can and do benefit or participate equally or
continue to face barriers.

Each dimension of, and barrier to participation translates into
financial costs and benefits, and into life probabilities or
opportunities that have direct and, at least in the aggregate,
measurable consequences. As with education, access of the kind promised
and represented by these technology-related provisions and structures
translates into employment, consumer participation, and community
living. That these incentives are granted or withheld so indirectly,
indeed so subtly, makes them no less important or real.

If current trends continue, it is likely that more and more national
policy goals will be implemented through the private sector. As such,
these less obvious, often lower-level decisions, though made with little
focus on or attention to disability, may prove to have as great a
financial impact on the lives of people with disabilities as will any of
the more obvious and overt choices that are made.

### 1F -- Housing

It would be difficult to overestimate the importance of housing in the
lives and consciousness of Americans. In ways that are obvious to us and
in ways that are not, housing options affect almost every other element
of life. Housing affects multiple aspects of living---what public
schools one's children attend, why commuter rush hours exist on the
roads into and out of every city or town of any size in America, the
zip-code-based offers received via mail, to the availability of
broadband---and as such, housing is a principal determinant of how
people live. As housing prices have risen, preoccupation with the
subject among Americans also has grown. From speculation about rising
home values to fears of displacement, from increasingly lengthy commutes
to rising homelessness, increasingly the subject has come to permeate
consciousness.

For people with disabilities, yet additional layers, related to
accessibility and affordability---insofar as accessibility bears upon
the supply-and-demand equation---must be added to the discussion.
Discrimination, too, inevitably plays a significant if unspecified role.

Concerns for people with disabilities include a look at direct federal
appropriations such as rental assistance, the effect and usefulness of
home ownership initiatives, construction and renovation, relevant tax
systems, mortgage interest deductibility, low-income housing tax credit
through state building code certification, and fair housing enforcement.

Our government has developed an elaborate web of funding streams and
programs affecting public and private sectors and broadly aimed at
increasing the amount, availability and quality of housing in this
country. All of these affect people with disabilities and their
families, with some directly targeted to this population and others
impacting their lives as an incident of their broader sweep. This
section will examine some major examples of each type, insofar as they
involve financial incentives of the kinds explored and proposed by NCD.

#### 1F:1 -- Direct Federal Appropriations

Housing-related appropriations by the Federal Government take many
forms.

##### 1F:1A. Rental Assistance

To a limited extent, federal housing subsidies still include some rental
subsidies that allow low-income people, and in some cases expressly
allow low-income people with disabilities, to pay for rental housing
that they could not otherwise afford. The role of such subsidy and
voucher programs has steadily declined. Even when such programs were a
more prominent component of national housing policy, and to the extent
that they remain in use in conjunction with other programs, recognition
of the issues facing people with disabilities appears to have focused on
only one dimension of access. That is to say, while economic eligibility
standards recognized the limited income and resources of many people
with disabilities, for example, there never has been any recognition in
the Section 8 (or 811) Program that factors other than income, age or
family size need to be taken into account in determining the amount of
subsidy or the kind of housing that would be appropriate. Thus, these
programs have not included sufficient elasticity to reflect possible
needs for additional space, or the heightened costs imposed on
affordability by the scarcity of accessible dwellings.

It seems likely that the value of direct financial incentives, or of
indirect incentives in the form of third party payments to landlords,
may have been undermined significantly or limited by this failure.

##### 1F:1B. Ownership Programs

The programs that today chiefly characterize federal housing policy, as
described in detail in several NCD reports over the past five years,
emphasize home ownership as the primary goal of federal involvement, and
as the principal measure of policy success. These programs take two
basic forms: programs, many administered under §202, for the
construction or renovation of housing that is then made available to
appropriate buyers under variously subsidized conditions; and in some
cases they also involve direct subsidies or rent-to-own demonstrations.

##### 1F:1C. Construction and Renovation

Programs operating in this vein include requirements for the setting
aside of specified percentages of developments for people with
disabilities, including people with physical and sensory disabilities.
Such provisions certainly operate as a financial incentive to the
availability of housing for people with disabilities, but the emphasis
again appears to be on the eligibility criteria more than on the design
of the property. While accessibility requirements apply to all
federally-assisted housing, it does not appear that any clear or
up-to-date definitions exist of what constitutes accessibility for
people with sensory disabilities. From visual-alert doorbells to
"talking" microwaves, technologies do exist to make independent living
more viable for people with sensory disabilities, but the incentives in
no way appear to take these possibilities or their implications into
account.

Similarly, with respect to the well-established and better-known
criteria for physical accessibility, grounds exist for concern whether
the value of the housing subsidies to people with disabilities are
maximized. Such accessibility standards also must consider the larger
challenges of needs-based program limitations on the ability of
potential purchasers to aggregate down payments or meet even subsidized
mortgage commitments and the integration of key infrastructure elements
such as transportation, accessible commercial facilities, health care or
other community-based resources. Faced with a perceived lack of
coordination among housing, transportation, economic development and
health care planners and programs, questions may be asked about whether
the number of individuals with disabilities who can benefit from these
subsidies is as large as it might be. Questions of just this sort have
been raised by critics of the federal and state response to the Supreme
Court's *Olmstead* decision.

###### 1F:1C(i) Other Homeownership Initiatives

A number of other homeownership strategies, including subsidy,
counseling and other programs, exist to facilitate and broaden
homeownership. While the government frequently has cited increases in
overall homeownership and in the percentages of group members from
diverse backgrounds who now own their homes, no data tracking
homeownership among people with disabilities have been published, but
research indicates the percentages to be dramatically lower than for
other demographic groups. From these facts alone---the relative failure
of the government to articulate homeownership among people with
disabilities as a goal of housing policy, and the comparative rarity of
such ownership---it seems safe to ask whether the variety of
homeownership incentive programs currently in operation are well suited
to increasing this desirable outcome for people with disabilities.

One evolving strategy that may be of particular interest here is the
IDA, described earlier in this chapter. Under the major governing law,
one of the permissible savings and matching objectives is home
ownership. But the dollar limits on how much can be aggregated, coupled
with the time limits applicable to how long the account can be funded,
appear to leave many participants far short of being able to afford a
down payment. Preliminary research findings indicate that, whatever it
may have done to advance other goals, the IDA has had limited impact in
increasing home ownership among its participants. Nor is there any
reason for believing that if IDA participants with disabilities were
studied as a subset, their results would be any better.

#### 1F:2 -- The Tax System

Few areas of life have a better known relationship to tax law than does
housing. Not only is the deductibility of home mortgage interest
familiar to most middle class homebuyers or homeowners, but it has
played a major role in subsidizing the residential real estate market
over the years. Even more complicated provisions of tax law play a
comparably important role in connection with commercial real estate. Two
provisions are particularly worthy of attention here.

##### 1F:2A. Home Mortgage Interest Deductibility

The question to be asked about the home mortgage interest deduction is
whether it represents an incentive to home ownership for people with
disabilities. One's natural reaction might be to suppose that at least
for some people with disabilities it does, but it may well be that for
even more people with disabilities it has the opposite effect.

But how could this be? To the degree that capital accumulation for use
as a down payment may be the chief obstacle to home ownership for many
people with low income, and particularly for people with disabilities
who are restricted by needs-based assistance programs from saving
material sums, mortgage interest deductibility may increase their
problem. Because mortgage interest is deductible, the price of houses is
subsidized by the tax law. If mortgage interest were not deductible, the
real carrying cost of a \$200,000 house would be higher than it is now.
Because of this fact, fewer people could afford it at that price and its
price would have to come down to a level that compensated for the lost
tax deduction. As overall house prices rise or stay level, so too do
down payments, as a percentage of those prices tend to remain high. Much
of the tax deductibility of mortgage interest may help homebuyers to
keep up with monthly mortgage costs; the same deductibility constitutes
a potentially serious barrier to homeownership entry for many people
with low income, including especially those with disabilities who have
been hindered in their ability to save or invest.

In like measure, where the costs of accessibility drive up the costs of
housing, the mortgage interest deduction takes this into account only in
the crudest sense of allowing a larger interest deduction if one pays
more interest.

The tax law does allow the costs of accessibility-related home
modifications to be deducted, but only as medical expenses available to
people who itemize. Interest on home-improvement loans in certain
circumstances and up to certain limits may be deductible, including when
structured as home equity borrowing, but the parameters are complex and
there is no special dispensation (except again potentially under the
medical expense rubric) to ease or simplify the deductibility of
interest attributable to such loans when their purpose is accessibility.

Even when it comes to the medical deductibility of home-modification
expenses, the interpretation of the law and rule relies upon a
definition of accessibility that prevents this financial incentive from
being of use to nearly as many people as it could or should. For the
deduction to come into play, changes need to be made to the home itself.
Other disability-related factors, such as proximity to public transit
for people prevented by disability from driving, proximity to medical
facilities for people with health conditions, or proximity to key
community-based resources crucial to the avoidance of
institutionalization, may all play a role as important as the actual
physical condition of the home in determining whether an individual with
a disability can live in it. These factors, by restricting choice, may
drive up cost, and they are every bit as much matters of accessibility,
but, apart from the tax deductibility of the larger mortgage interest
payment, the tax law accords them no recognition. As such, the law
chooses to treat as mere matters of preference or convenience issues
that are of central importance to the availability and usability of
housing and to the ability of many people to live in the community. It
is not far-fetched to suggest that the presence of a traffic light, a
curb cut, a bus stop or some other public amenity or private facility
may go a long way in determining the accessibility of a given home for a
person with a disability.

A related problem should be noted in connection with the interplay
between tax and civil rights laws relating to rental property. The ADA
and the Fair Housing Act Amendments make clear that a rental tenant who
needs to make accessibility modifications generally has the right to do
so, provided he or she is willing and able to pay and provided the
property is restored to its original condition when the tenant moves
out. Although not as clearly articulated in the law as some might like,
there appears little doubt that the costs of the modifications also
qualify for medical-expense deductibility. Regrettably, people
contemplating the use of the tax system to subsidize such costs must
reckon with the fact that the costs of restoration of the property to
its original condition likely will not be subsidized. Curiously, the
owner's costs, if incurred either to implement the modification or to
remove it, would qualify for deductibility routinely in the context of
the owner's business activities of producing rental income and owning
rental property.

##### 1F:2B. Low-income Housing Tax Credit

The Low-income Housing Tax Credit (LIHTC) allocates specified sums to
the states for use in subsidizing various housing projects for people
with low income. The logic is that if developers receive tax benefits
for building such housing, they will do so, thereby bringing down, both
directly and indirectly, the costs to the occupants.

While it is clear that people with disabilities are represented among
people with low income whose access to housing has been enhanced by this
financial incentive to a third party, nothing in the law itself rewards
developers for designing or building in ways that would make these
facilities more accessible than what the law minimally requires. Many
approaches could be fashioned that, consistent with well-understood
precepts of tax administration, would encourage accessibility and
heightened outreach to people with disabilities. In a growing number of
states, the competitive process for awarding the LIHTC has begun to
provide a competitive advantage to developers who consider affordability
and accessibility needs of people with disabilities.

###### 1F:2B(i) State Building Code Certification

Building codes are an important incentive to many health and safety
goals because the codes obligate private sector entities to expend funds
and implement designs that meet certain standards. ADA compliance is
among these.

Under the ADA, the Department of Justice (DOJ) can certify state
building codes as meeting the requirements of the ADA. Once this is
done, although such certification does not totally immunize states
against suits, considerable certainty is thought to be brought to the
building community and to the permitting process. But as an inducement
to ensuring developer investment in accessibility, DOJ certification may
or may not be effective. Much depends on whether the states, after
certification of their building codes, systematically enforce them.
Regrettably, nothing in the ADA appears to contemplate regular
monitoring or oversight of such enforcement, and unless there is a
complaint regarding failure, laxity may never come

to light.

###### 1F:2B(ii) Fair Housing Enforcement

To the degree that fair housing laws are vigorously enforced, including
through the levying of maximum fines for violations, fair housing laws
can represent a financial incentive to people with disabilities. Faced
with a risk of incurring costs for violating the law, building
designers, owners, rental agents, etc. are less likely to engage in
discriminatory practices, provided the risk of apprehension is real.
This would in turn expand the supply of available housing, hence
bringing down costs.

After a period when enforcement seemed to focus largely on education and
technical assistance, some renewed balance appears to have been
introduced into the system by the Department of Justice (DOJ) levying
fines against major builders and apartment complexes over the past two
years. What would be crucial to making such penalties become financial
incentives instead, would be the degree to which others regard the risk
of similar consequences as serious, and the extent to which the
practices of the respondents in these cases have been permanently
altered. The point here is that deterrence can, in certain
circumstances, have significant economic implications not merely for the
entities or individuals being deterred but also for those affected by
their conduct. Subject to the difficulty of designing reliable
methodologies, an attempt should be made to conduct research that would
probe the leverage value of such deterrence and that would assess its
impact on the supply and thus the cost of housing for people with
disabilities.

# **Item 2 -- APPENDIX B: Background of 529 Plans** 

There are a number of ways to save money for a child's education. Two of
the more popular are the [*Coverdell Education Savings
Account*](http://www.statefarm.com/lifevents/coverdel.htm) (ESA) and
state-sponsored college-savings plans commonly referred to as 529 plans.
Among the advantages are tax benefits and asset control. Although
contributions to either an ESA or a 529 plan are non-tax-deductible for
federal income tax purposes, earnings on the contributions grow tax
deferred. In addition, accumulated funds may be withdrawn free of
federal income tax if used for qualified education expenses.[^2] The
question is: can these asset-building techniques become widely inclusive
of individuals with disabilities, offering them better educational
opportunities?

The 529 plans are recent developments, but the plans are gaining in
popularity because of their tax advantages and contribution limits. You
may contribute up to the limit set by the state offering the plan,
sometimes over \$200,000, and there is no income limit for contributors.
The Federal Government allows yearly contributions from single taxpayers
of up to \$12,000 or a lump sum of \$60,000 in the first year of a
5-year period to avoid gift-tax consequences. Married couples may
contribute up to \$24,000 per year or \$120,000 in a lump sum for that
first year contribution.[^3]

ESA and 529 plans also offer the ability to transfer the assets to
another child if the intended beneficiary does not attend college or
does not use all of the assets. The beneficiary must use or distribute
the assets of an ESA prior to becoming 30 years old. Thirty days after
the beneficiary turns 30, the assets are deemed distributed and are
subject to all taxes and penalties. There is no age limit on the use of
529 plan assets.[^4]

The 529 savings plans have public (state government) control and a
centralized accounting system, which together constitute a policy
structure that has the potential to be universal and progressive, and
give everyone an account at birth and give greater subsidies to
low-income households.[^5]

With 529s, in contrast to IRAs, inclusive innovations are occurring at
the state level. Typically administered by the Treasury Department
through a centralized plan, states dictate rules and oversee plan
participation. Some states have a commitment to inclusion (with 529
plans) that does not occur with IRAs. These include much lower minimum
deposit requirements, extensive outreach, matched savings and other
features.[^6]

The direct involvement of state governments in 529 plans is beneficial
for examining how a centralized system of inclusive accounts could
operate in the future. Ultimately, a national savings plan may be
preferable to 50 different state plans, but as in other areas of policy
development in the United States, experimentation in the states can help
set the stage for a national plan. Different approaches in the states
can help identify the best policy features.[^7]

Many states are trying to reach a broad population. Outreach activities
vary by state.

The most often-used methods to communicate are television, radio, and
print advertisements. Efforts to reach wide segments of state residents
include inserting 529 plan information with mailings for birth
certificate and motor vehicle registration, and distributing information
via school systems, libraries, and day care centers.[^8]

A majority of plans require very low minimum contributions. In many
states, people may open accounts with a \$25 check, money order,
electronic funds transfer, or with as little as \$10 through an
automatic plan deposit. Extensive efforts also are made for workplace
enrollment.[^9]

Three states, Michigan, Minnesota and Louisiana, provide a savings match
through state appropriations. The Louisiana Student Tuition Assistance &
Revenue Trust (START) 529 savings plan matches a portion of deposits
made by all state residents, with the match rate dependent on the
adjusted gross income (AGI) of the account owner. The savings match rate
ranges from a high of 14 percent of contributions for those families
with an AGI up to \$29,999 to a low of 2 percent for incomes of
\$100,000 and above.[^10]

College savings plans may provide good partnerships with Individual
Development Accounts (IDAs). Several states encourage participation in
college savings plans by low-to-moderate income families through matched
savings. Other states already have links to IDAs. These precedents for
outreach and inclusion may offer lessons for future policy and program
development.[^11]

## 

## Item 3 -- Appendix C: Research on Promising State Innovations (Identified According to Domains Affected)

##  3A -- Education: Louisiana START Program

### Louisiana's Student Tuition Assistance and Revenue Trust (START) Savings Program

START is a program that encourages families to save for the education of
their children and grandchildren after high school. Parents,
grandparents and legal guardians may establish a college savings account
to benefit their child or grandchild. The feature that makes the START
Savings Program unique among savings plans is that for the average
family that has less than \$100,000 in annual income, the state of
Louisiana will award an incentive to save by matching a percentage of
the family's annual deposits. Deposits into individual accounts are
pooled, invested and managed by the State Treasurer. [^12]

The program charges no enrollment or investment fees because the state
pays all the costs of operating the program, which is assurance to
account holders that every cent deposited will earn interest to their
benefit. Parents may open a college savings account for each of their
children and are encouraged to make regular monthly deposits into these
accounts. Deposits and state-awarded incentives both earn interest at
competitive rates, and earnings used to pay the cost of education are
not taxed by the state. Federal taxes on earnings are deferred until the
earnings are disbursed and then taxed at the beneficiary's tax rate when
used for educational expenses.[^13]

As of the end of the state fiscal year, June 30, 2003, START accounts
totaled 9,170 and assets amounted to \$27,802,406.83, according to START
Division Director Carol Fulco. At that point in time, Fulco said net
contributions to accounts totaled \$26,887,374.18. Effective August 1,
2003, the new Maximum Allowable Account Balance (MAAB) will be
\$197,600.[^14]

START earnings exceeded projections during the first two quarters the
program was in existence. Louisiana State Treasurer of record, Ken
Duncan, reported earnings for the fourth quarter of 1997 in excess of 6
percent for both investors' deposits and the state's grant funds. START
funds, which are placed in the State Treasury investment pool and in
Agency securities, outperformed treasury bills, certificates of deposit
and passbook savings accounts for both third and fourth quarters.[^15]

Duncan said that investor funds (START account holder deposits) earned
an annualized rate of 6.12 percent for the fourth quarter, while grant
funds (state appropriations earmarked for matching Tuition Assistance
Grants) earned an annualized rate of 6.46 percent. The combined
annualized earning of investor and grant funds was 6.12 percent. The
average daily account balances as of Dec. 31, 1997, were \$442,074 in
the investor fund and \$108,729 in the grant fund.[^16]

Louisiana Office of Student Financial Assistance Executive Director,
Jack Guinn, praised the many public libraries across the state for
playing a vital role in making the program a success during its
inaugural enrollment period. The state's libraries served as
distribution points for START program enrollment materials.[^17]** **

In the latest *529 Plan Report,* Louisiana's START Program earned the
highest rate of return of states reporting earnings for the first half
of 2002, according to Louisiana State Treasurer John Kennedy. START's
annualized rate of 6.12 percent exceeded all other state plans
regardless of whether their savings options were age-based, fixed income
investments or equities.[^18]

START is categorized as a 529 plan with the lowest market risk because
its monies are diversified in a variety of fixed income investments like
government bonds and notes. The Treasury plans to diversify START even
further next year by expanding account holders' investment opportunities
to include equities.[^19]

In addition to earning interest on diversified investments, START
accounts receive matching funds from the state. The state matches 2
percent to 14 percent of START deposits depending on income and
Louisiana residency. Historically, START accounts have earned 8 to 20
percent on annual deposits.[^20]

The Louisiana Legislature, with the passage of State Senate Bill 690
authored by Sen. Fred Hoyt (D), enhanced the benefits of START and
enabled any benefactor to open an account for the purpose of assisting a
student, the intended beneficiary, in paying for their college
education. Originally, a START account could only be opened by a parent,
grandparent, legal guardian, a person claiming the beneficiary on their
federal income tax return, or an independent student who named
him/herself as the beneficiary. The new law will permit accounts to be
opened by anyone who wishes to assist a designated beneficiary in paying
for his/her college education, including relatives, employers and other
benefactors. Eligible account owners are categorized as follows: [^21]

1.  *Category I* - Original Class: Parents, grandparents, court-ordered
    custodians, \[people\] claiming the beneficiary as a dependent on
    their federal income tax return, and independent students, if, at
    the time of the agreement, either the account owner or beneficiary
    is a resident of the state.

2.  *Category II* - Members of Family: A person \[or people\] determined
    by the administering agency to be a member of the family of the
    beneficiary and, at the time of the agreement, the beneficiary is a
    resident of the state. Members of the family include adults related
    to the beneficiary as brothers, sisters, aunts, uncles, spouses,
    in-laws, step-parents and step-siblings.

3.  *Category III* - Other Persons: Any other person or juridical entity
    and, at the time of the agreement, the beneficiary is a resident of
    the state.

4.  *Category IV* - Other Persons/Non-Resident Beneficiary: Any other
    person or juridical entity who, at the time of the agreement, is a
    resident of the state and the beneficiary is not a resident of the
    state.

In addition to regular earnings on investments, owners whose accounts
are in Categories I and II will receive a contribution from the state to
match a percentage of their annual deposits, ranging from 14 percent to
2 percent and determined by the account owner's prior year income.
Owners of Category III accounts will receive state contributions that
match 2 percent of annual deposits. For example, if an employer opens a
Category III account for the benefit of an employee's child, that
account will receive an annual state contribution that will match 2
percent of deposits made by the employer during the year. Owners of
Category IV accounts are not entitled to state matching contributions;
however, earnings on their investments will be tax-exempt and the owner
may deduct up to \$2,400 per year, per account, from their Louisiana
taxable income.[^22]

Previously, START account owners were offered tax advantages in several
forms, one of which was the ability to deduct the equivalent of their
annual deposits in a START account from that year's state taxable
income, up to a maximum of \$2,400 per account. The new law will benefit
families who cannot take full advantage of this tax benefit every year,
by allowing the owner who claims less than the maximum \$2,400 per year
to carry the difference forward to subsequent years. The state's
contributions to an account will no longer be restricted to the payment
of tuition expenses and can be used to pay any qualified higher
education expenses. Other program enhancements contained in the
legislation include: accounts receiving annual deposits of less than
\$100 are now eligible for earnings enhancements; and, the calculation
for earnings enhancements will be based on the account owner's adjusted
gross income reported for the previous year, which permits earnings
enhancements to be allocated to accounts sooner and to earn additional
interest. In addition, state Senate Bill 690 authorizes the Louisiana
Tuition Trust Authority (LATTA), the administering agency for START, to
create other investment options that will be made available to all
classifications of accounts. One option will limit investments to
low-risk securities that provide a stable, fixed return, while other
options will permit investments in stocks and other securities that have
market risk, but which offer the potential for greater returns over
time. The redemption value of accounts invested in low-risk securities
will be guaranteed. However, those investment options that include
market risk will not be eligible for state-funded earnings enhancements,
nor would investments (principal and earnings) be guaranteed.[^23]

During the same week that the Louisiana Legislature completed action on
Senate Bill 690, the U.S. Congress agreed upon revisions to the federal
tax code that govern qualified tuition programs, such as Louisiana's
START Savings Program. As part of a \$1.35 trillion package of tax cuts
spanning the next 10 years, the U.S. Congress passed HR 1836, the
Economic Growth and Tax Relief Reconciliation Act of 2001, which
eliminates taxes on the earnings portion of disbursements made from
Louisiana's START Savings Program. Previously, earnings from
contributions made to qualified tuition programs were exempt from state
tax, and federal tax was deferred until earnings were disbursed. Upon
disbursement, the earned interest portion of the disbursement was
federally taxed at the beneficiary's usually lower rate. The new federal
legislation excludes the earnings portion of a disbursement from gross
taxable income, to the extent that the disbursement is used to pay for
qualified higher education expenses.[^24]

The final version of HR 1836 includes the following additional
enhancements to Louisiana's START Savings Program and to other qualified
state-sponsored tuition programs:

1.  Expands the amount of room and board expenses that may be paid from
    a qualified tuition program.

2.  Provides for transfers of credits, or "rollovers," from one
    qualified tuition program to another qualified tuition program for
    the benefit of the beneficiary, limiting such rollovers to one per
    12-month period.

3.  Revises the definition of "member of family" to include first
    cousins.

4.  Modifies the definition of qualified higher education expenses to
    include expenses of a special needs beneficiary that are necessary
    in connection with his or her enrollment or attendance at the
    eligible education institution.

All provisions in the federal bill relating to qualified tuition
programs were either suggested or endorsed by the National Association
of State Treasurers (NAST) and the College Savings Plan Network (CSPN),
of which Louisiana is a member. The majority of the provisions were
effective for taxable years after Dec. 31, 2001.[^25]

The Louisiana Tuition Trust Authority has approved two emergency rule
changes. One eliminates restricted enrollment periods, thus allowing
year-round enrollment. The prior rule established a restricted
enrollment period of July 1 through November 1 of each year for children
over age one. Infants younger than one year of age were allowed
year-round enrollment.[^26]

The Louisiana Legislature also approved legislation incorporating recent
amendments to the Internal Revenue Code (IRC) that affect the state's
START Program. Section 529, Internal Revenue Code, was amended by
Congress, to allow the inclusion of room and board costs as Qualified
Higher Education Expenses. Other principal features of the amendment are
clarification of the gift tax treatment of contributions and an
expansion of the definition of family members for purposes of rollovers
and distributions. A bill introduced by State Representative Charles
McDonald (D), which would amend current state law so that it would be
consistent with changes to the IRC, became law in July of 1999. This
legislation broadens certain savings limitations, making the START
Program more beneficial for participants.[^27]

In 2003, Louisiana Governor M. J. "Mike" Foster signed into law SB 271,
Act 221, making further changes to the START Program. Act 221 provides
four new provisions for the administration of and participation in the
START Program. The Act adds a new category of account owner to provide a
higher state match for irrevocable donations made by philanthropists on
behalf of needy students, provides that an account must be open for 12
months in order to earn interest, determines that accounts established
by juridical people may not be refunded, but a beneficiary may be
designated, and provides for the presumption of abandoned property if
abandoned for a certain period of time.[^28]

## 3B -- Long Term Services and Supports - Missouri Assistive Technology Program

### Assistive Technology Legislative Initiative

Missouri has many programs that effectively target individuals with
disabilities by providing them with support for assistive technology to
increase their independence and quality of life. Introduced and
sponsored by Missouri State Senator Harold Caskey, SB721 was designed to
improve statewide programs for individuals with disabilities in
Missouri, and became law in August 2000.[^29] This Act revises programs
for people with disabilities to enhance access to telecommunications,
and to enable access to other assistive technologies.

The Missouri Assistive Technology Advisory Council, as the program
administrator, will provide a statewide telecommunications equipment and
distribution program for people who, due to a disability, cannot use
traditional equipment.

The Public Service Commission will request annually, as a separate
budget item, appropriations from the deaf relay service and equipment
distribution program fund to deliver dual-party relay service. The
Missouri Assistive Technology Advisory Council will request annually,
through a separate line item, an appropriation from the same fund to
deliver the telecommunications equipment distribution program.

The Act also requires the Missouri Assistive Technology Council
(Assistive Technology Council) to establish an Assistive Technology Loan
Program.

The Assistive Technology Council shall spend available moneys in four
equal shares each quarter to ensure that the loan program will provide
loans throughout the entire fiscal year. The Act creates the "Assistive
Technology Loan Revolving Fund," which shall be used to fund the
Assistive Technology Loan Program.

The interest rates for loans shall be lower than comparable commercial
lending rates and shall be established by the Assistive Technology
Council based on the borrower's ability to pay. Loans may be made with
no interest. Loan repayment periods shall not exceed ten years. The
Assistive Technology Council shall promulgate rules to implement the
program and file annual reports with the Governor and General Assembly.

Impact of Federal Legislation

On October 25, 2004, President George W. Bush signed into law the
Assistive Technology (AT) Act of 2004 (HR 4278). The legislation
supporting state assistive technology programs was scheduled to sunset
on September 30, 2004. The AT Act of 2004 supports the continuance of
state AT programs and eliminates the sunset provision. Every state and
U.S. territory has an Assistive Technology Act Program funded under the
provisions of the Technology-Related Assistance Act of 1988. The AT Act
of 2004 focuses on the development or continuation of specific programs
that ensure direct access to technology, including assistive technology
loan programs, device demonstration programs, device reutilization
programs, and alternative financing.[^30]

In addition, AT programs are responsible for implementing training and
technical assistance, with special emphasis on assistance for
individuals with disabilities who are transitioning from school to work
or continued education. The AT programs also are responsible for
conducting public awareness activities, information and referral
services, and coordination and collaboration with public and private
entities that are responsible for programs, services, policies or
funding of assistive technology services.[^31]

The AT Act of 2004 also clarifies states' responsibilities to ensure
access to electronic and information technology as defined under Section
508 of the Rehabilitation Act of 1973. Activities carried out under and
supported with federal funds received under the AT Act of 2004 are
required to comply with Section 508 standards.[^32]

The ADA and Section 504 of the Rehabilitation Act do not specifically
require information technology accessibility as does Section 508. The
ADA and Section 504 are general anti-discrimination laws that require
program and architectural accessibility, which could include the
provision of accessible information technology as a reasonable
accommodation or as an auxiliary aid or service necessary for equal
access. The effective communication requirement of the ADA could also
require the delivery of accessible information technology products. All
of these requirements also might be met in other ways, such as by the
use of human assistance or other program modifications. ADA and Section
504 information technology access decisions are made for individuals on
a case-by-case basis, whereas Section 508 information technology access
decisions are made by determining if products adhere to the Access Board
standards. At the writing of this report, the Department of Justice has
not adopted any part of the Access Board standards for IT access as
standards for compliance with the ADA or Section 504. [^33]

For purposes of Section 508, Missouri defines its covered entities as,
"Each department, office, board, bureau, commission, or other unit of
the executive, legislative, or judicial branch of state government,
including public four-year and two-year colleges and universities."[^34]

Missouri defines information technology as, "Any electronic information
equipment or interconnected system that is used in the acquisition,
storage, manipulation, management, movement, control, display,
switching, interchange, transmission, or reception of data or
information, including audio, graphic and text."[^35]

Missouri requires covered entities to provide access when developing,
procuring, maintaining or using information technology so that
individuals with disabilities have access to and use of information and
data that is comparable to what is available to individuals without
disabilities.[^36]

### Overview of Missouri's Assistive Technology Program

Established by state statute in 1993, the Missouri Assistive Technology
Council (MoAT) directs programs and initiatives pertaining to MoAT. The
Council's charge is to serve as an advocate for policies, regulations
and programs and to establish a consumer-responsive, comprehensive
assistive technology service delivery system. The Council meets at least
four times a year, reports annually to the Governor and the general
assembly on Council activities to increase access to assistive
technology, and provides programmatic direction for all activities and
services.[^37]

For the third year, the Division of Special Education provided funding
to MoAT to reimburse school districts for assistive technology required
in student IEPs. Districts applied for funding to MoAT for assistive
technology expenditures. The minimum cost per student supported was
\$1,000 and the maximum was \$5,000. It is hoped that additional funding
will be available next school year.[^38]

Also in 2005, the MoAT Program Equipment Technology Consortium (ETC),
which is a short-term equipment loan program, received funding through
the Blindness Task Force in the Division of Special Education to
increase the availability of vision-related adaptive devices in the loan
pool. This reduced wait time for equipment in ETC. A little over
\$30,000 in additional funding was made available.[^39]

MoAT staff provided training on assistive technology to 1,824
Missourians through 30 other training events. People on MoAT staff
assist individuals with disabilities and service providers on a daily
basis through phone and e-mail. Assistance is provided in obtaining
assistive technology, securing device funding, accessing the various
MoAT programs discussed in this report, and gaining disability policy
knowledge. During this fiscal year, MoAT staff handled 17,957 inquiries
and requests for assistance by telephone and e-mail. The major topics of
discussion are listed below.[^40]

For the past 10 years, the state of Missouri has imposed a 13-cent
surcharge each month on every telephone line in the state. Whether
business or residential, mobile phone, or land line, the surcharge is
collected and moved directly into a fund for making telephone equipment
accessible to Missourians unable to hold a conventional telephone or
hear or speak on one.[^41]

"The money was growing," explains Dennis Miller, a disability rights
advocate and assistive technology trainer, "but there wasn't much
awareness of it, and it was seen as helping only deaf people." Last
year, such organizations as the Missouri Council of the Blind, the
National Federation of the Blind, and others worked in collaboration
with the Missouri Assistive Technology Project to expand the purpose of
the fund.[^42]

#### Telephones

The Missouri Assistive Technology Project has identified phones in every
imaginable configuration to solve the telephone access problem for
people with hearing and other disabilities. TTYs (also known as
TDDs)---telephone devices that connect to a phone line and allow the
user to type messages that are read on a similar device at the other end
of the conversation---are the most commonly known adaptive telephone
devices. Add to this telephones with large buttons for easy visual
identification; phones with Braille buttons; phones that respond to
voice commands for dialing; phones that have no handset, but are speaker
only; phones that allow a deaf person with use of his or her own voice
to speak output but read input on a two-line display; phones that
amplify the voice of an individual with speech difficulties or minimal
vocal strength; amplification at every level---some that can even damage
the hearing of a listener without a disability; phones that can be
dialed by puffing through a straw; and many more. Some telephones on the
approved list can be obtained through prescription only, but all can be
installed with accompanying training from the Missouri Assistive
Technology Project. Diane Golden, director for the Missouri Assistive
Technology Project, explains, "Now, we have about 10 people around the
state who help consumers figure out what will meet their needs. If
consumers didn't know what to choose, they chose nothing. The service
almost immediately doubled when it was moved over to our office last
August. The reason is that we added this consumer support piece to help
people make sense of the vast array of choices."[^43]

#### Online Access

When the wording was drafted to expand the scope of the program, the
initial idea was to assist blind and visually impaired Missouri
residents in obtaining screen readers. The actual outcome goes well
beyond those intentions. Although there is a list of recommended
products, virtually any hardware or software that will make it possible
for a person with a hearing, vision, speech, mobility, or other
disability to access the Internet can be purchased under the Adaptive
Telecommunications Equipment Program. For blind people, in other words,
this could mean Window-Eyes, ZoomText, or JAWS for Windows---programs
that enable the consumer to read the screen---but would not include a
Braille printer or optical character recognition system, since these
products are not directly related to Internet access. Screen readers,
magnification software, refreshable Braille displays, head pointers,
voice recognition software, and alternative keyboards are all products
on the approved list of purchases. Perhaps the best news is that if you
are eligible for the program, you also receive training to get you up
and running.[^44]

#### Eligibility

To be eligible for the Adaptive Telephone Equipment Program, a Missouri
resident needs to have a standard telephone line and a disability that
prevents conventional telephone access. Eligibility for the Adaptive
Telecommunications Program requires that an individual first have access
to the Internet (an Internet service provider) and a disability that
prevents online access through a conventional computer keyboard or
monitor. "If you didn't have a disability, you'd need a basic computer,"
Golden points out. "What we're doing is just adding to that basic
equipment whatever is required for access because of the disability."
The program will fund the additional accessories required for going
online, but not the computer itself. The Missouri Assistive Technology
Project also administers a low-interest loan program, which can be used
as a means to securing the basic computer.[^45]

As long as the applicant earns less than \$60,000 annually and has a
certifiable disability, no other criteria need to be met. Trainers are
evaluated and certified by the Missouri Assistive Technology Project to
work with program participants once equipment has been selected and
purchased. A waiting list of about 150 applicants already has been
approved (the majority of them blind or visually impaired), and as soon
as purchasing contracts have been released, the first year of the
Adaptive Telecommunications Program will be off and running. Although
many states have programs to help people purchase telephone equipment,
Missouri is the first to expand such a program to include the purchase
of screen readers and other equipment for Internet access. In keeping
with the "show-me" tradition, other states could learn much from this
Missouri model.[^46]

#### Missouri Rehabilitation Center

Missouri Rehabilitation Center is home to one of the best-equipped
assistive technology centers in the state. The Assistive Technology
Assessment Center has been serving the needs of pediatric and adult
inpatients and outpatients throughout the state of Missouri since 1997.
Among the people receiving service are individuals who present sensory,
motor or physical disabilities that prevent them from accessing a
standard computer or communication device, and work-related injuries
that require modification of job tasks or means to control their
environment.[^47]

In order for clients to maximize their abilities, the Assistive
Technology Assessment Center draws from a team of specialists with
backgrounds in speech, physical, occupational and recreational therapy,
and utilizes technical support personnel. The Assistive Technology
Assessment Center is an approved evaluation site by Missouri Medicaid,
the Bureau of Special Health Care Needs and Vocational Rehabilitation.
Referrals are received from Independent Living Centers, Regional
Centers, area schools, individual therapists, special educators, and
client advocates. As a result of the evaluations performed by the
Center's Assistive Technology team, many individuals have overcome
barriers in their day to day lives at home, in school, in the workplace,
and in the community. [^48]

#### Missouri's Interagency Assistive Technology Short-Term Loan Program

Missouri's ETC Program: Equipment Technology Consortium is a short-term
assistive technology equipment loan program for school districts and
agencies. Agency representatives can borrow equipment on behalf of
individuals with disabilities to try

out the equipment before purchasing, for use during the time equipment
is in for repair, or for other short-term needs. Agencies will be able
to borrow the equipment for up to six weeks.[^49]

Before a district or agency can borrow a piece of equipment, they must
complete an agreement form that needs to be signed by an authorized
district or agency representative. The agreement form must be approved
prior to borrowing equipment.

Once an individual's agreement form has been approved, he/she can
proceed with the equipment request. Any of the listed distribution sites
can process an equipment request for up to three items. There is no
limit to the number of loans. ETC has a wide range of equipment
available. Categories of devices are:

-   switches and mounts

-   computer access

-   environmental controls

-   hearing devices

-   home modifications

-   telecommunications

-   visual aids

-   augmentative communication devices

Six years after it started, the ETC Program continues to experience
yearly growth in the number of devices it lends and in the number of
school districts and agencies who borrow from its inventory of over
1,000 assistive devices. During FY 2005, ETC lent 1,471 devices
throughout the state and 450 entities signed up for the program.
Augmentative communication devices were again the devices most often
borrowed, with computer adaptations and vision-related technologies
comprising the second and third most borrowed types of technology.
Strong consumer satisfaction continues to be a hallmark of the ETC
Program with 98 percent of borrowers giving the program and its level of
service strong marks.[^50]

There are three primary reasons that people borrow from the ETC Program.
The first, and most common, is to borrow multiple items in order to
compare them prior to purchase. The second reason is to borrow a loaner
device when their personal device is being repaired. A third, and
increasingly important reason, is to increase staff and student
knowledge efforts by schools, colleges, universities and organizations.
[^51]

As more students with disabilities attend regular schools, today's
educators need to know about the various devices they may encounter in
their classrooms. A solid understanding of assistive technology is also
a necessary skill for tomorrow's teachers, and occupational, speech and
physical therapists. By tapping into the ETC inventory, local schools
can conduct in-services with an array of devices present for staff to
see, try and learn about. Higher education faculty can include devices
in their classes to help students understand assistive technology and
its specific applications for various types of disabilities. What is
learned today will be applied tomorrow, exponentially increasing
Missouri's assistive technology knowledge.[^52]

#### MoAT Assistive Technology Reimbursement Program 

Funded by the Department of Elementary and Secondary Education, Division
of Special Education, the AT Reimbursement Program helps school
districts offset the cost of purchasing assistive technology for
students with assistive technology needs written into their
Individualized Education Programs (IEPs). This year, the program
received 219 applications from 60 school districts throughout the state.
MoAT was able to fund 111 applications, an increase over the previous
year, divided among 46 different districts. The program aims to fund
those forms of assistive technology between \$1,000 and \$5,000, such as
Braille embossers, augmentative communication devices, computer access
systems and electronic enlarging.[^53]

Missouri's school districts have taken favorably to the program. Many
districts have indicated how pleased they are that this funding source
is available and what an impact it has had on the students for whom they
have applied. Follow-up surveying has uncovered many instances of
students being more engaged in school and achieving higher academic
success.[^54]

#### TAP Program

The Telecommunications Access Program, mandated by SB721, includes the
Telecommunications Access Program for Telephone (TAP-T) and
Telecommunications Access Program for Internet (TAP-I). The Missouri
Assistive Technology Advisory Council administers both programs. While
both programs have many similarities in their administration, they are
intended to provide different types of equipment.[^55]

For Missourians with disabilities, the two Telecommunications Access
Programs (Telecommunication Access for Telephone \[TAP-T\] and for the
Internet \[TAP-I\]) have made purchasing products, applying for
services, searching for jobs and even attending college classes via the
telephone and Internet commonplace. The TAP programs provide the
adaptive telephone and computer equipment needed for basic access to
telephone and Internet telecommunication for Missourians with hearing,
vision, mobility and other disabilities.[^56]

A critical component of TAP programs is the delivery of consumer support
services to assist individuals with disabilities in selecting the most
appropriate adaptive equipment and to assist with installation and use
of the equipment provided. TAP has provided training to staff from
statewide agencies in Missouri, including the Centers for Independent
Living, and Rehabilitation Services for the Blind, to assist consumers
with the selection and use of the adaptive telecommunications equipment.
[^57]

In 2006, 7,470 adaptive telephone devices were provided by TAP-T. A
network of Independent Living Centers provides consumer support and
helps ensure appropriate equipment matches through the use of
demonstration devices. Follow-up data from program beneficiaries
indicates an overall satisfaction rating of 97 percent, with most
reporting they used the equipment to make emergency calls, live
independently, and communicate with family and friends. Many individuals
also noted that the phone allowed them to improve access to education
and to get or maintain employment.

Over 43 percent of individuals reported that they had been unable to use
the phone for 6-20+ years.[^58]

Missourians throughout the state continue to benefit from the
Telecommunications Access for Internet Program. The program provided
1,327 adaptive devices a 14 percent increase in one year. The program
provides adaptive technology in four broad categories: alternative
keyboards and pointing devices, software adaptations, speech and Braille
output, and enlargement software.[^59] Though enlargement software is
the most often requested adaptation, the program provided over 160
different forms of adaptive technology to consumers (during 2006).

Consumers accessing the program range in age from 2 to 95+. Individuals
with vision loss make up the largest disability category to obtain
services through the program. Staying in touch with family and friends
and making contact with businesses and government are the primary
activities users perform. Missouri is unique in that it is the only
state in the nation to provide free adaptive technology for Internet
access.[^60]

#### Show-Me Loans

Under 8 CSR 70 -- 1.020, entitled *Assistive Technology Loan Program,*
Missouri developed rules for its "Show-Me Loans."[^61] During the past
year, "Show-Me Loans" was able to provide \$95,984 in low-interest loans
to people with disabilities to obtain assistive technology in Missouri.
Loans were made to make homes more accessible, to install wheelchair
lifts for vehicles, and for a variety of other cross-disability
assistive technology. The program's interest rates were among the lowest
of similar programs nationally, with an average rate of 3.23 percent.
The average amount borrowed during the period was \$3,479. Loan amounts
ranged from \$900 to \$9,000 with an average re-payment period of 39
months. The average period to process and review applications decreased
from 20 days in 2003--04 to 17 days in 2004-05.[^62]

A full 70 percent of loan applications were approved during the past
year. This is the case even though one-third of approved borrowers had
annual incomes of \$15,000 or less, and 74 percent had yearly incomes of
\$30,000 or less. During the year, borrowers repaid a total of \$64,641
in principal and interest. Even though borrowers had relatively low
incomes, far less than 1 percent (\$889) of the total amount borrowed
has been defaulted since the program began. People living in every
region of Missouri submitted loan applications.[^63]

##  3C -- Employment: Wisconsin's Medicaid Purchase Plan (MAPP)

### Wisconsin's Legislative Initiative to Create a State Medicaid Buy-In Program

Lack of access to health care is one of the most significant barriers
preventing millions of Americans with disabilities from working at an
income level that could cause their loss of access to Medicaid benefits.
The Balanced Budget Act of 1997 and the Ticket to Work and Work
Incentives Improvement Act of 1999 authorized states to enact Medicaid
Buy-In Programs for workers with disabilities.

Wisconsin established its Medicaid Buy-In Program, also called the
Wisconsin Medicaid Purchase Plan (MAPP), in March 2000 under the
Balanced Budget Act of 1997. Enrollment growth was modest during the
program's first year of implementation.[^64] Wisconsin MAPP offers
people with disabilities who are working or interested in working the
opportunity to buy health care coverage through the Wisconsin Medicaid
Program. Depending on an individual's income, a premium payment may be
required for this health care coverage.

To qualify for the Medicaid Purchase Plan, the following requirements
must be met. The participant must:[^65]

-   Be at least 18 years old.

-   Reside in Wisconsin.

-   Have individual countable assets of less than \$15,000. (Countable
    assets include savings, life insurance policies, stocks or bonds. A
    home or one vehicle is not considered a countable asset.)

-   Be determined to have a disability by the Department of Health and
    Family Services' Disability Determination Bureau.

-   Be employed in a paid position or be enrolled in a certified Health
    and Employment Counseling Program.

-   Have an adjusted family income of less than 250 percent of the
    federal poverty level based on his/her family size.

Under the Medicaid Purchase Plan, Wisconsin Statute 49.472,
participants:[^66]

-   Receive the same health benefits offered through the Wisconsin
    Medicaid Program.

-   May earn more income than another group of Medicaid recipients
    without the risk of losing health care coverage.

-   Are allowed increased personal and financial independence through
    savings opportunities, known as Independence Accounts. An
    Independence Account is any new financial account set up through a
    financial institution, such as a bank or credit union, and
    registered with a county/tribal human or social services department.
    Pre-existing retirement and pension accounts also may be used as
    Independence Accounts subject to similar contribution restrictions
    applicable to new accounts. By setting up Independence Accounts,
    participants can save earnings above the Medicaid Purchase Plan
    asset limit (\$15,000) to buy independence-related items (i.e., a
    home or vehicle) or services.

An Independence Account must be established after MAPP eligibility is
determined. There is no limit on the amount or type of account that may
be designated; however, the account must be registered with the County
Economic Support Office. Deposits into Independence Accounts are exempt
assets. The total deposit cannot exceed 50 percent of total gross earned
income during a twelve-month MAPP review period. Retirement and pension
accounts may be designated as Independence Accounts, yet, at the time of
application, they will be considered countable assets. [^67]

#### Background of Wisconsin Legislation

Consumers played an instrumental role in designing the study (of
barriers) and were part of a consumer-based Advisory Council for the
study. Over an 18-month study period, the researchers used focus groups
and individual interviews to gather information about the employment
barriers faced by people with disabilities.[^68]

Loss of Medicaid benefits was a major concern of the surveyed
individuals, as was the lack of comprehensive vocational services,
including career planning, education, and job placement. The Advisory
Council made recommendations on ways to remove the identified barriers,
including the recommendation of a pilot program to coordinate the
various service systems (vocational, health, housing) that serve people
with disabilities.[^69]

Building on this work, the state, along with Employment Resources, Inc.
(ERI), piloted the Vocational Futures Planning Process in 1994-1995.
Vocational Futures Planning involved coordination of vocational
services, long term support, and rehabilitation technology services,
consumer mentors and employers to develop solutions to an individual's
identified barriers to employment. Based on work with an initial group
of thirty participants, the process evolved into a model of
individualized vocational services emphasizing benefits counseling. In
1997 and 1998, officials in Wisconsin began discussing the need for the
Social Security Administration, SSI/DI, and Medicaid waivers to extend
participation in employment initiatives activities.[^70]

In 1997, the Robert Wood Johnson Foundation, the state of Wisconsin, and
Dane County jointly funded the Health Systems for Workforce Enhancement
Research and Demonstration Project. Fifty-three individuals with
significant physical disabilities were randomly recruited from Dane
County's long-term support programs. Those assigned to the experimental
group were to receive benefits and employment counseling and an
assurance that their health coverage would not be taken away if they
worked for wages. But project managers quickly discovered that this
demonstration project would not be possible without SSA and Health Care
Financing Administrative (HCFA) waivers. Instead, they conducted a
feasibility project, providing counseling along with guarantees that
existing benefits would be held harmless during the project period.[^71]

Wisconsin established the *Pathways to Independence* demonstration
project as a continuance of the 1997-1998 project to provide coordinated
vocational and health care advising to individuals with disabilities.
The state passed legislation in 1997, intending to form a program
similar to a Medicaid Buy-In by using a §1115 waiver, but the passage of
the Balanced Budget Act of 1997 allowed Wisconsin to add a Medicaid
Buy-In as a Medicaid state plan amendment instead. In addition to
general funds, the demonstration was supported by grants from the Social
Security Administration and the Robert Wood Johnson Foundation.[^72]

#### Role of the Wisconsin Executive Branch

The Wisconsin executive branch took a strong leadership role in the
development of the Medicaid Buy-In Program, based on consumer input and
previous efforts to redesign delivery systems for children, elders and
people with disabilities.[^73]

The Medicaid Buy-In Program was developed and implemented by the various
departments and bureaus of the Medicaid agency, including the HCBS
division, the Medicaid eligibility division and the aging/long term care
division. The Wisconsin Department of Workforce Development's Division
of Vocational Rehabilitation collaborates and offers feedback in an
advisory capacity through the Pathways Program. To maximize effective
implementation, the premium collection, outreach and eligibility worker
training sessions were incorporated into existing processes and
administrative structures within the Department of Vocational
Rehabilitation.[^74]

The Pathways program is run jointly by the Medicaid agency, the
Department of Workforce Development and the Office of the Governor. The
Medicaid agency largely serves as the program administrator, the
Department of Workforce Development serves as rehabilitative services
administrator and the Office of Governor provides additional support.
Employment Resources, Inc. is under contract to provide benefits
counseling. The Bureau of Community Mental Health (BCMH), Department of
Public Health (DPH), and the Bureau of Developmental Disabilities
Services (BDDS) also provide technical assistance at local sites.[^75]

### 

###  Effects of the Medicaid Buy-In Program for Wisconsin Participants

Wisconsin provides an incentive for continued work effort by providing
Medicaid Buy-In Program coverage during temporary periods of
unemployment and before an individual finds a job. Wisconsin calculates
separate payment obligations for earned and unearned income with
proportionately smaller premiums assessed on income derived from work.
For people liable for premiums, Wisconsin deducts the SSI income
standard, Impairment Related Work Expenses (IRWE), and medical and
remedial expenses, and then collects the remainder of the unearned
income as part of the premium. The individual pays 3 percent of his or
her earned income, in increments of \$25, as a premium.[^76]

In Wisconsin, if a Medicaid Buy-In Program participant has been in the
program for at least six months and has a health setback that makes him
or her unable to work, the work requirement may be exempted for up to 6
months. The individual may also participate in the Health and Counseling
Program for up to a year. However, individuals may only participate in
the Health and Counseling Program twice in a two-year period with at
least six months between each period of participation.[^77]

Wisconsin calculates premium liability by comparing the individual's
monthly income to the family income limit. If the participant's gross
individual monthly income is less than 150 percent of the Federal
Poverty Level (FPL) for the family size of which the beneficiary is a
member, there is no premium obligation. For example, an individual in
the Medicaid Buy-In with a family of three will pay a premium only if
his or her individual income (earned and unearned) is at least \$1,769
per month (150 percent of the FPL for a family of three).[^78]

The premium has two parts. The first component affects unearned income.
An individual pays 100 percent of his unearned income, minus a standard
living allowance (\$635/month in 2001), Impairment-Related Work Expenses
and medical and remedial expenses. The second component of the premium
is 3 percent of the individual's earned income. If unearned income
deductions exceed actual unearned income, the difference is subtracted
from earned income before assessing the 3 percent premium.[^79]

If Medicaid Buy-In participation is terminated because of failure to pay
the premium, the enrollee must wait at least 6 months before reapplying
and he or she will owe any unpaid premiums from the prior eligibility
period. If the enrollee waits at least 12 months before reapplying, he
or she may do so without repayment of past unpaid premiums. Premiums may
be paid up to 12 months in advance or until the time of the next
reapplication. Under Wisconsin's Health Insurance Premium Payment
Program, Medicaid may pay for insurance coverage for any individual
eligible for Medicaid through his/her (or the spouse's) employer's
health plan if doing so would cost less than Medicaid. People in the
Medicaid Buy-In Program would pay the MAPP premium, and Wisconsin
Medicaid would pay the insurance premium and cost-sharing expenses, such
as co-payments. If a Medicaid Buy-In participant loses employment, he or
she does not automatically lose Medicaid Buy-In eligibility. [^80]

Wisconsin has sought two waivers from the Social Security Administration
to provide income protections to people with disabilities. The SSI
waiver, granted in January 2001, allows SSI recipients to count \$1 of
every \$4 of wages as income, rather than \$1 of every \$2 as required
by current law. The waiver also allows the state to increase the SSI
assets limit from the current \$2,000 to 50 percent of earnings (not to
exceed \$8,000). The waiver also eliminates disability reviews for
people with permanent disabilities. In addition, certain types of
unearned income---private disability insurance, workers compensation,
and unemployment insurance---will be counted as earned income for the
purposes of calculating the SSI cash benefit. The SSDI waiver request
proposes a \$1 for \$4 reduction in SSDI benefits from earnings, rather
than the current dollar-for-dollar benefit reduction. The waiver also
proposes "stop the clock" provisions for the Trial Work Period, extended
periods of eligibility, and continued Medicaid coverage. Disability
reviews would be suspended unless medical improvement is expected. The
SSDI waiver was submitted in June 2000.[^81]

In the calculation of unearned income premiums, Wisconsin's Medicaid
Buy-In Program uses the state SSI supplementation program benefit
standard for "living independently" as its base. People with gross
incomes at or above 150 percent of the FPL can retain a total of \$635
of monthly unearned income (an amount equal to the federal SSI payment
plus the state SSI supplementation program plus \$20). Any remaining
unearned income is then returned to the state as a portion of the
Medicaid Buy-In premium.[^82]

Wisconsin uses a work incentive provision from the SSI Program to
increase the income level for Medicaid eligibility under the Medicaid
Buy-In. To encourage employment, Wisconsin deducts Impairment-Related
Work Expenses from the amount of an individual's countable income. A
similar deduction is made when calculating the amount of unearned income
to be paid as a premium. This is, in effect, an individualized budgeting
approach that increases both the income eligibility standard and the
maintenance allowance for an individual with work expenses. Enrollment
in the Medicaid Buy-In numbered 1,590 people as of July 2001. According
to state data, approximately 10 percent of participants have earned
income exceeding the \$740 Substantial Gainful Activity earnings
test.[^83] As of March 31, 2005, Wisconsin Medicaid Buy-In Program
participation rose to 8,265 people.[^84]

## 

## 3D -- Transportation: Maryland's Statewide Special Transportation Assistance Program 

Maryland's Statewide Special Transportation Assistance Program (SSTAP)
is an example of an effective approach to the transit and paratransit
needs of individuals with disabilities. In many areas across Maryland,
jobs and job seekers are far apart, often crossing county and city
lines. This gap is even wider for low-income people. In addition, many
companies across the state face a shortage of workers, especially
entry-level employees.[^85]

With this in mind the Maryland Mass Transit Administration (MTA), in
conjunction with Governor Glendenning's Coordinating Committee for Human
Services Transportation, worked with local jurisdictions to develop
Maryland's Job Access and Reverse Commute Program. This program has
allowed the state to develop transportation services to meet local
community needs and link workers with job opportunities. A map
describing projects funded through the state's Job Access and Reverse
Commute Program is available.[^86]

Maryland received \$5.1 million in federal funds over the first two
years of the Job Access Program, and will receive \$2.4 million in year
three. The Maryland Department of Human Resources (DHR) and the MTA work
closely on the Job Access Program, with DHR providing significant
funding to meet the matching requirement of the federal program. The Job
Access and Reverse Commute Program also has resulted in improved
collaboration among local transit providers and human services agencies
and a more coordinated effort to connect people with jobs.[^87]

In addition, the State began looking to ensure that the Job Access
Program could be sustained beyond the five-year federal authorization.
This legislation was modeled after Maryland's Statewide Special
Transportation Assistance Program (SSTAP) that funds general-purpose
transportation services for the elderly and People with disabilities.
The Job Access bill passed the Maryland House of Delegates, but was not
acted on by the Maryland Senate.[^88]

An example of how the SSTAP Program is administered at the local level
in Maryland is St. Mary's County. The St. Mary's Transit System (STS),
based in California, Maryland, provides public and specialized
transportation services in St. Mary's County. STS began operating the
SSTAP services differently. Before the onset of the service change, STS
made extensive efforts to publicize the change to customers and health
care providers. Under a new approach, a different geographic area of the
county, or zone, is served each day of the week. For example, on
Mondays, the area south of Lexington Park is served, on Tuesdays service
is provided in the north end of the county, and so forth.[^89]

In addition, STS worked with health care providers to encourage them to
schedule appointments with SSTAP customers on the day of the week served
by STS between 8 a.m. and 5 p.m. The SSTAP route serves a percentage of
the dialysis trips equally with ADA paratransit; SSTAP has approximately
624 dialysis trips a year. As a result, SSTAP passenger trips are more
effectively coordinated. Typical trips involve two or three customers
sharing a ride, and many customers have indicated that they enjoy the
social nature of the trip.[^90]

In terms of measurable efficiency and productivity improvements,
management is continuing to monitor service performance statistics for
the new service approach, and fine-tune the service.

For example, one modification made after the first few months of
monitoring operations was to serve the entire county on Thursdays, since
demand was low for the geographic zone originally assigned to Thursdays.
In addition to the new scheduling approach, STS has instituted several
other changes to reduce inefficiencies, including requiring "no-shows"
to pay the regular fare for the missed trip (\$3 per one-way trip),
which has reduced the number of no-shows. The new no-show policy also
requires customers who have missed two trips to call in to confirm that
they will be riding subsequent trips. STS also has begun issuing
confirmation numbers each time a trip is scheduled, which makes it
easier for scheduling and dispatching staff to find specific trips
whenever a customer calls. SSTAP trip reservations are accepted up to 30
days in advance. STS uses Excel and Access to schedule trips and
maintain their database of approximately 900 SSTAP customers, for which
17,000 trips per year are provided. STS also implemented a formal
customer application process, which has been helpful in maintaining the
customer database, and began issuing identification cards. STS hopes to
purchase an updated routing system in the future.[^91]

People with disabilities will use an array of transportation options to
access destinations enjoyed by their peers without disabilities. The
Maryland Department of Disabilities (MDOD) explains that the goal is to
create reliable, cost-effective transportation enabling people with
disabilities to access destinations of their choosing at the same rate
as their peers without disabilities. This way, people with disabilities
will have improved confidence in the MDOT paratransit system.[^92]

MTA, in conjunction with the Citizen's Advisory Committee on Accessible
Transportation (CACAT), will continue the training protocol for all MTA
and Mobility personnel that will be conducted by consumers who use the
paratransit system. MTA will continue to identify intersections of
opportunity within agency planning exercises and procurement development
to solicit input from the CACAT Committee. MDOD and MTA will consult
with the members of CACAT, individuals with disabilities and
representative organizations regarding ways in which to strengthen
CACAT's effectiveness, as well as continue to monitor MDOT's on-time
goal of 95 percent for paratransit trips.[^93]

MDOD's plan included that by December 31, 2006, MTA would develop a
reporting and monitoring process among stakeholders that includes
performance criteria, Federal Transit Administration trends, and
consumer feedback in the provision of paratransit services. MTA would
extend the process of Taxi Access certification to include all certified
paratransit users. MTA would expand the number of Taxi Access
sub-contractors, to include providers of taxi service to the users of
wheelchairs. The goal was to increase the use by people with
disabilities of fixed-route transportation in greater numbers.[^94]

On December 31, 2005, 100 percent of MTA buses would be fully accessible
(e.g., low floored, Clever Devices) to enable a greater number of people
to ride fixed routes. MTA will ensure compliance with procurement
timelines to keep the acquisition of fully accessible vehicles on
schedule. By December 31, 2006, MDOD would examine the feasibility of
uniform standards to assess paratransit certification to be used by
physicians to also include an assessment of whether or not travel
training could allow an individual to ride fixed route.[^95]

By July 1, 2006, MDOD planned to convene a group of stakeholders to
review the paratransit certification standards and ultimately, recommend
ways in which the standards can be modified to enhance independence on
the part of users. The group also should recommend ways to increase the
availability and types of travel training provided. By July 1, 2006,
MDOD would examine the technical feasibility, cost feasibility, and
schedule feasibility of providing cross-regional transportation capacity
in both the fixed route and paratransit systems to enable people with
disabilities to travel across regions using different systems. People
with disabilities who rely on provider-run transportation to get to a
human service program (DDA, MHA, DOA, etc.) would experience shorter
trips, increased flexibility, and streamlined scheduling.[^96]

## 

## 3E -- Housing: Kentucky's Universal Design Program

### Kentucky's Adoption of Universal Design Principles

Kentucky uses financial incentives to encourage the adoption of
universal design principles in the building of affordable housing. In
Kentucky, builders and developers whose rental housing and/or
single-family home construction or rehabilitation projects are partially
(50 percent) or wholly financed by the Kentucky Housing Corporation
(KHC), must follow KHC's Universal Design Policy. This policy, in effect
since 2003, is designed to "ensure that much of the housing produced
with KHC financing meets the needs of the greatest number of people for
the longest period of time."[^97]

Universal design is a concept used to achieve a number of goals.
Universally designed homes allow homeowners to stay in their homes as
they age because these homes are already adapted for possible changing
physical needs. Universal design helps minimize or avoid the high cost
of renovations and additions that may be required to meet changing
physical needs. Universal design allows the greatest number of
individual needs to be met -- whether a guest or relative uses a
wheelchair or the homeowner is experiencing a short-term loss of
physical ability.[^98]

In 2001, Kentucky was awarded a Real Choice Systems Change Grant for
Community Living from the Centers for Medicare and Medicaid Services
(CMS). The purpose of this grant is to enable children and adults who
have a disability or long-term illness to:

-   Live in the most integrated community setting appropriate to their
    individual support requirements and preferences

-   Exercise meaningful choices about their living environment, the
    providers of services they receive, the types of supports they use,
    and the manner by which services are provided

-   Obtain quality services as consistent as possible with their
    community living preferences[^99]

With support from the CMS Real Choice grant and input from the public
through public hearings and partners across the state, the Department of
Design and Construction Review of the Kentucky Housing Corporation
developed a *Universal Design Handbook* for use by builders and
developers in the construction and reconstruction of affordable housing.
The Universal Design Policy went into effect on January 1, 2003.[^100]

While housing that incorporates universal design can clearly benefit
people with disabilities, the Department of Design and Construction
Review's definition of universal design does not target any group in
particular. In fact, their definition is all-inclusive and stresses the
wide-ranging and lifelong benefits of housing built according to
universal design principles. Universal design is a building concept that
incorporates products, general design layouts, and characteristics into
residences in order to:

-   Make the residence usable by the greatest number of people

-   Respond to the changing needs of the resident

-   Improve marketability of the residence

The *Universal Design Handbook* prescribes the following design
guidelines:

1.  Finished hallways should be 42" wide.

2.  All doorways, including closet doors and entry doors, should be 32"
    wide at minimum. Specifications for entry platforms also are
    included.

3.  Ground level and elevator-accessible units must have a minimum of
    one full universally designed bathroom.

4.  Single lever or ADA-approved faucets must be installed at all sinks,
    showers, and tubs.

5.  Electrical outlets have to be installed at a minimum height of 15"
    and light switches, fan switches and thermostats at a maximum height
    of 48."

6.  All units must have at least one universally designed bedroom on the
    ground level or elevator accessible floor.

Specific actions for exterior accessibility, including parking areas and
walkways, also are included and, as an acknowledgement of the fact that
more and more members of the population own and regularly use personal
computers, cabling for high-speed Internet access also is required.

#### Universal Design Funding Resources

There are several ways that universal guidelines are promoted at the
federal, state, and local levels. Federal regulations, for example, set
accessibility standards for large new or rehabilitated multifamily
housing built with the help of federal funds, but not for smaller
projects. Some states, such as Georgia, and cities, such as Irvine, CA,
have developed their own accessibility guidelines that builders and
developers may voluntarily adopt, although these guidelines apply mostly
to privately funded projects. In Kentucky, the KHC has tied its
universal design policy to its housing finance programs. Thus, as
mentioned above, KHC universal design requirements are mandatory for any
projects that receive debt or subsidy financing from KHC equal to 50
percent or more of the total cost for new construction (or
reconstruction) of single-family or multi-family housing. The Department
of Design and Construction Review offers a full array of technical
assistance, and likes to begin working with developers from the
inception of the project to ensure that they are meeting all building
requirements, including the universal design guidelines. Once the
project is built, the Department's inspectors inspect the buildings and
certify them.

Many developers and builders around the country have been reluctant to
incorporate universal design features into their projects because they
believe the cost is prohibitive. Consumers who buy new homes also are
reluctant to request the features because they fear these features will
add substantially to the cost of the housing. But several studies have
shown that the added cost of universal design features is very
modest.[^101] In Kentucky, KHC's Department of Design and Construction
Review has polled developers of multi-family and single-family dwellings
and has found that, as a result of Universal Design Policy, additional
building costs for a two-bedroom unit are between \$900 and
\$1,500.[^102] "Retrofitting," or renovating homes after they are built
to accommodate the occupants' changing physical needs, is considerably
more expensive.

According to the Department of Design and Construction Review, since the
Universal Design Policy went into effect in 2003, at least 500 units
have been built that meet universal design requirements.

#### Kentucky Success Stories

Housing corporations around the U.S. have given thousands of Americans
access to affordable housing. In the past 31 years, KHC has helped many
families find affordable rental housing, and its homeownership programs
have assisted over 55,000 families in becoming homeowners, making
Kentucky's homeownership rate (74 percent) considerably higher than the
overall national rate of 67.8 percent, according to 2001 U.S. Census
data.[^103] Whether they own or rent, not only do more people have
access to affordable housing, with KHC's Universal Design Policy in full
effect, they will have housing that will meet their needs for a long
time to come. The following are examples of recent projects built
according to the Universal Design Policy Guidelines.

Hilton and Lively Partnership is a builder of affordable housing in
central and western Kentucky, and many of their clients are single
parents, elders, and people with disabilities. Hilton and Lively
receives some financing through KHC, so it has to comply with KHC's
Universal Design Policy. The firm works with manufactured housing, which
does not normally incorporate universal design principles, such as wider
hallways, generous space in bathrooms, and so on. But it has found a
housing manufacturer willing to revise its construction plans to meet
the universal design requirements and the firm is standing behind the
quality of the homes they build by providing warranties, construction
reinforcements, a traditional-looking roof pitch, a permanent
foundation, and higher insulation standards compared to other similar
homes.

Since 1998, Hilton and Lively has been helping provide affordable,
quality homes in the central and western parts of the state. Lively
receives some financing through KHC, which requires homes that include
at least 50 percent of KHC financing to meet the universal design
standards. "Not many developers are wanting to do the type of building
we do," said Lively. "We've always focused on affordable houses. We just
see a great need. Many of our clients are single parents, elders and
people with disabilities. We often receive referrals from USDA Rural
Development and other service organizations." It took some effort for
Hilton and Lively to find a housing manufacturer willing to revise their
construction plans to meet the universal design requirements, said
Lively.[^104]

In spite of the some assumptions about manufactured homes, Hilton and
Lively's products have been described as high quality and are among the
first in the state to meet KHC's universal design requirements.

Hilton and Lively's most recently funded project, the Hilton and Lively
Homeownership Program, will assist families in finding affordable
housing in Big Clifty. The project received KHC financing through the
Home Investment Partnerships Program (HOME) Program and the Housing
Development Fund. Hilton and Lively's service area includes Grayson,
Hardin, LaRue, Hart, Ohio and Breckinridge counties.[^105]

Another project built with funds from the HOME Investment Partnerships
Program is the South Main Street Apartments in Edmonton, Kentucky, which
will serve older people with incomes at or below 50 percent of the
average median annual income for the area, which is currently \$32,500.
Funds from the state's Small Multi-Family Affordable Loan Program (SMAL)
also were used to build the one-story, 11-unit complex. Through its
Universal Design standards policy, KHC is helping to ensure the quality,
affordability and sustainability of homes across the state. Lynn
Luallen, KHC's chief executive officer, said, "The families that obtain
universally designed homes will benefit today and in years to come
because of the standards and sustainability they provide."[^106]

Created by Congress in 1990, HOME provides funding for various types of
affordable housing production and rehabilitation. KHC awards HOME
funding to successful applicants, such as local governments, housing
authorities, private developers, and non-profit housing developers. KHC
administers and monitors the HOME Program for the U.S. Department of
Housing and Urban Development.[^107]

Kentucky is among a handful of states in the nation to fully embrace the
variety of activities available under the HOME Program, enabling KHC and
the agencies it funds to do a variety of activities, including homeowner
rehabilitation, home buyer assistance, rental projection projects and
tenant-based rental assistance.[^108]

Seven architects and design professionals from Kentucky, New York and
California were winners of the KHC Universal Design Competition --
*Visions for a New Kentucky Home*. A jury of five architectural and
housing industry professionals named the winners based on criteria
ranging from meeting KHC's universal design standards to square footage,
cost and general presentation requirements.

In January 2005, the KHC Board of Directors announced the allocation of
\$430,750 from the Affordable Housing Trust Fund (AHTF) to four projects
throughout Kentucky. These projects will conform to KHC's Universal
Design policies. The following recipients were listed for funding:[^109]

  ------------------- ----------------- ----------------- -----------------
  **Recipient**       **Counties        **Population      **Amount**
                      Served**          Served**          

  Lexington Habitat   Fayette           Families with     \$100,000
  for Humanity                          children, single  
                                        parents           

  Habitat for         Daviess           Families with     \$78,750
  Humanity of                           children, single  
  Owensboro/Daviess                     parents           
  County, Inc.                                            

  Frontier Housing,   Magoffin,         Elderly, families \$210,000
  Inc.                Menifee, Morgan,  with children,    
                      Wolfe             single parents,   
                                        individuals with  
                                        physical          
                                        disabilities,     
                                        and/or homeless   

  Mountain            Floyd, Johnson,   Individuals with  \$42,000
  Comprehensive Care  Magoffin, Martin, intellectual      
  Center, Inc.        Pike              disabilities      
  ------------------- ----------------- ----------------- -----------------

The AHTF was established in 1992 by the Kentucky State Legislature to
address the critical housing needs of very low-income Kentuckians,
including the people with mental health, intellectual and physical
disabilities and people on the verge of homelessness. The fund supports
projects that assist people at or below 60 percent of the area median
income with a preference to help people at or below 30 percent of the
area median income. To date, nearly \$31,000,000 has been allocated from
AHTF. What's more, AHTF funds have stimulated additional investments of
more than \$168,000,000 from other sources. Since its inception, AHTF
has financed the production of 4,865 homes or housing units for
low-income and special needs Kentuckians.[^110]

Since 1992, funding sources for AHTF have included the state's General
Fund, Kentucky Health Services Cabinet, KHC and the Kentucky Lottery.
Nearly 80 percent of the AHTF's total funding came from a portion of the
Kentucky Lottery's unclaimed prize winnings. However, authorization for
this resource expired June 30, 2003. For fiscal year 2003-04, the
Kentucky General Assembly allocated \$3,000,000 to replace the lost
lottery funding. Governor Fletcher included \$2,500,000 for the fund in
the Fiscal Year 2005 Spending Plan. Affordable housing advocates
continue to seek a permanent funding source for AHTF.[^111]

## 3F -- Asset Development: Washington's Individual Development Accounts:

### The Washington Statute and Program

Matched Savings Plans such as Individual Development Accounts (IDAs) are
an emerging strategy for a growing number of states to support
low-income wage earners and families to improve their economic status
and escape poverty. IDAs were introduced by Michael Sherradan in 1988,
who suggested that: "\[1\] saving and asset accumulation are largely a
matter of structures and incentives, not merely personal preferences,
and \[2\] assets may have a wide range of positive psychological,
social, and economic impacts including deferred consumption."[^112]

Low-income participants' savings contributions must come from income
they have earned. The state provides \$2 for every \$1 saved by the
participant, up to a maximum match of \$4,000 per participant (i.e.,
\$2,000 savings + \$4,000 match = \$6,000 total). The state's match is
available for three years after the participant opens the account.
Participants must attend financial skills-building classes to be
eligible for the state's match.[^113]

#### Eligibility

Families who are eligible to receive assistance under Temporary
Assistance for Needy Families (TANF), and families that have received
TANF assistance in the past and whose incomes are less than 175 percent
of federal poverty level, qualify to open an account. Families do not
have to meet TANF eligibility criteria at the time their IDA funds are
used.[^114]

When an individual beneficiary of SSI exceeds \$2,000 in assets or a
married couple exceeds \$3,000, SSI benefits are jeopardized. The IDA
savings, not including the match, are counted against these resource
limits. Social Security reform to exclude IDAs from resource
consideration will be essential to open up participation to the broad
disability community.

The cornerstone of IDAs is that earned income is necessary as a basic
eligibility requirement. Beneficiaries of SSI and recipients of Social
Security Disability Insurance (SSDI) who are not working but who would
benefit through IDA participation are excluded from participation. For
IDAs to be truly accessible there needs to be an allowance in federal
IDA legislation for people with disabilities to apply their SSI or SSDI
funds to their savings.

#### Administrative Structure

The state contracts with community-based organizations (CBO) using a
competitive process. These CBOs recruit and enroll participants, and
provide financial skills-building classes, individual counseling, and
account management. CBOs that lack expertise in homeownership, higher
education, or business start-up may partner with other organizations
that can help participants invest responsibly in those assets. CBOs also
partner with local financial institutions to hold the participants\'
deposits and restrict withdrawals. The participant's match is held in
"trust" until the participant is ready to apply the funds to an eligible
use. Match funds are paid directly to the person or institution from
which the asset is being acquired, not to the participant. For example,
the funds would be paid directly to the educational institution or the
seller of a house the participant is buying. Regular statements are
issued to participants showing how much money is in their account.
Participants are allowed to invest their contribution in any way allowed
by the partner financial institution. The state matches 2-to-1 the
amount at the time the participant is ready to apply his or her IDA
funds to an eligible use. Any losses of the principal are borne by the
participant. Participants are allowed to withdraw their own
contributions for purposes other than home ownership, higher education,
or business start-up, but they lose the state's match if they do so.
Specific provisions allow for a temporary 'leave of absence' from the
program or withdrawal of funds due to an emergency.[^115]

#### Funding

Funding for the IDA Program is currently from the state's Temporary
Assistance for Needy Families (TANF) reinvestment funds. A total of \$3
million has been awarded to date, but no additional funds are
anticipated. An estimated 567 accounts have been established by existing
IDA providers. IDA contractors currently serve individuals in over a
dozen counties.[^116]

#### Statute

In 2005, Washington passed statute 43.31.460 entitled, SEED
act---Individual Development Accounts Program---Rules,[^117] updating
the IDA law, which states in pertinent part:

> \(2\) An individual development account may be established by or on
> behalf of an eligible low-income individual to enable the individual
> to accumulate funds for the following purposes:

a.  The acquisition of postsecondary education or job training;

b.  The purchase of a primary residence, including any usual or
    reasonable settlement, financing, or other closing costs;

c.  The purchase of a computer, an automobile, or home improvements; or

d.  The purchase of assistive technologies that will allow a person with
    a disability to participate in work-related activities.[^118]

Senate Bill Report 5469 states that the appropriation for this bill is
\$3,000,000 for the biennium ending June 30, 2007.[^119]

#### Legislative History

The movement for IDAs in Washington began under the Washington WorkFirst
Act of 1997, where recipients of Temporary Assistance for Needy Families
(TANF) were permitted to establish IDAs with earned income.[^120] The
Department of Social and Health Services is directed to fund an IDA
Program as well, under statutory provision RCW 74.08A.220. During the
interim between the 1999 and 2000 legislative sessions, state staff
researched potential design and implementation issues for a Washington
state-supported IDA Program for TANF recipients. Their tasks included
determining the actions and resources that would be needed to establish
IDA programs, as well as the barriers that might hinder such programs.
Research was completed on this project with the help of a coalition of
community-based organizations and other interested parties. The
coalition was facilitated by the Community, Trade, and Economic
Development Department -- whose successor, the Office of Trade and
Economic Development (OTED), is the department under which the program
now runs.[^121]

The state approved the use of \$1.8 million per year in TANF
reinvestment funds for matching dollars and administration costs for IDA
programs. It is providing a 2-to-1 match for the first three years after
a participant opens an account. Community-based organizations (CBOs)
with whom contracts would be possible were responsible for recruiting
and enrolling participants, and for providing financial skills-building
classes, individual counseling, and account management. CBOs also were
required to partner with local financial institutions to hold
participants' accounts.[^122]

# **Item 4 -- Appendix D: Examples of State Legislation on Financial Incentives**

## Louisiana

> The final version of HR 1836 includes the following additional
> enhancements to Louisiana's START Savings Program and to other
> qualified state-sponsored tuition programs:

1.  Expands the amount of room and board expenses that may be paid from
    a qualified tuition program.

2.  Provides for transfers of credits, or "rollovers," from one
    qualified tuition program to another qualified tuition program for
    the benefit of the beneficiary, limiting such rollovers to one per
    12-month period.

3.  Revises the definition of "member of family" to include first
    cousins.

4.  Modifies the definition of qualified higher education expenses to
    include expenses of a special needs beneficiary that are necessary
    in connection with his or her enrollment or attendance at the
    eligible education institution.

## Missouri

SB721 In Its Entirety:

> This act revises programs for the handicapped to enhance access to
> telecommunications, to enable access to other assistive technologies
> and to provide for blind screening and education.
>
> TELECOMMUNICATIONS EQUIPMENT PROGRAM - The act revises the program for
> telecommunications equipment for the hearing and speech- impaired. The
> act adds definitions to expand the scope of the program to all
> telecommunications equipment, including voice and text.
>
> The Missouri Assistive Technology Advisory Council, as the program
> administrator, will provide a statewide telecommunications equipment
> and distribution program for people who cannot use traditional
> equipment due to disability.
>
> The act specifies qualifications of the program administrator which
> include appropriate expertise and experience to provide oversight,
> customer service and accountability. Expenditures for program
> administration will not exceed 20 percent of total program expenses.
> The Missouri Assistive Technology Advisory Council may enter into
> contracts to deliver consumer support and administrative services
> relating to equipment distribution.
>
> The Public Service Commission will annually request, as a separate
> budget item, appropriations from the deaf relay service and equipment
> distribution program fund to deliver dual-party relay service. The
> Missouri Assistive Technology Advisory Council will annually request,
> through a separate line item, an appropriation from the same fund to
> deliver the telecommunications equipment distribution program.
>
> The Deaf Relay Service and Equipment Fund surcharge will not be
> increased for 2 years, subject to changes in federal requirements.
> After 2 years, the Council will annually adjust the Fund surcharge
> based upon the Department of Labor and Industrial Relations'
> recommendation. The act requires means testing to allocate services
> efficiently.
>
> ASSISTIVE TECHNOLOGY LOANS - The act requires the Missouri Assistive
> Technology Council to establish an Assistive Technology Loan Program.
>
> The Council shall spend available moneys in four equal shares each
> quarter to ensure that the loan program will provide loans throughout
> the entire fiscal year. The act creates the "Assistive Technology Loan
> Revolving Fund," which shall be used to fund the Assistive Technology
> Loan Program.
>
> The interest rates for loans shall be lower than comparable commercial
> lending rates and shall be established by the Council based on the
> borrower's ability to pay. Loans may be made with no interest. Loan
> repayment periods shall not exceed ten years. The Council shall
> promulgate rules to implement the program and file annual reports with
> the Governor and General Assembly. This portion of the act is
> contained in SB 935 (2000).

BLIND ASSISTANCE PROGRAM - The Blind Education, Screening and Treatment
Program Fund is created. Applicants for registration of motor vehicles
and applicants for a license may donate one dollar to the fund. Moneys
in the fund may be used to provide eye screenings and treatment to
prevent blindness.

## Wisconsin

S. 49.472 Medical assistance purchase plan.

> \(1\) Definitions. In this section:
>
>  
>
> \(a\) "Earned income" has the meaning given in 42 USC 1382a (a) (1).
>
>  
>
> \[a\] "Family" means an individual, the individual's spouse and any
> dependent child, as defined in
> <http://nxt.legis.state.wi.us/nxt/gateway.dll?f=templates&fn=default.htm&vid=WI:Default&d=stats&jd=19.42(7)#JUMPDEST_19.42(7)>
>
> \(b\) "Health insurance" means surgical, medical, hospital, major
> medical or other health service coverage, including a self-insured
> health plan, but does not include hospital indemnity policies or
> ancillary coverage such as income continuation, loss of time or
> accident benefits.
>
>  
>
> \(c\) "Independence account" means an account approved by the
> department that consists solely of savings, and dividends or other
> gains derived from those savings, from income earned from paid
> employment after the initial date on which an individual began
> receiving medical assistance under this section.
>
>  
>
> \(d\) "Medical assistance purchase plan" means medical assistance,
> eligibility for which is determined under this section.
>
>  
>
> \(e\) "Unearned income" has the meaning given in 42 USC 1382a (a) (2).
>
>  
>
> \(2\) Waivers and amendments. The department shall submit to the
> federal Department of Health and Human Services an amendment to the
> state medical assistance plan, and shall request any necessary waivers
> from the secretary of the federal Department of Health and Human
> Services, to permit the department to expand medical assistance
> eligibility as provided in this section. If the state plan amendment
> and all necessary waivers are approved and in effect, the department
> shall implement the medical assistance eligibility expansion under
> this section not later than January 1, 2000, or 3 months after full
> federal approval, whichever is later.
>
>  
>
> \(3\) Eligibility. Except as provided in
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%286%29%28a%29&softpage=Document -
> JUMPDEST_49.472(6)(a)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(6)(a)&softpage=Document#JUMPDEST_49.472(6)(a))sub.
> (6) (a), an individual is eligible for and shall receive medical
> assistance under this section if all of the following conditions are
> met:
>
>  
>
> \(a\) The individual's family's net income is less than 250 percent of
> the poverty line for a family the size of the individual's family. In
> calculating the net income, the department shall apply all of the
> exclusions specified under 42 USC 1382a (b).
>
>  
>
> \(b\) The individual's assets do not exceed \$15,000. In determining
> assets, the department may not include assets that are excluded from
> the resource calculation under 42 USC 1382b (a) or assets accumulated
> in an independence account. The department may exclude, in whole or in
> part, the value of a vehicle used by the individual for transportation
> to paid employment.
>
>  
>
> \(c\) The individual would be eligible for supplemental security
> income for purposes of receiving medical assistance but for evidence
> of work, attainment of the substantial gainful activity level, earned
> income and unearned income in excess of the limit established under 42
> USC 1396d (q) (2) (B) and (D).
>
>  
>
> \(d\) The individual is legally able to work in all employment
> settings without a permit under
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=103.70&softpage=Document -
> JUMPDEST_103.70](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=103.70&softpage=Document#JUMPDEST_103.70)s.
> 103.70.
>
>  
>
> \(e\) The individual maintains premium payments calculated by the
> department in accordance with
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29&softpage=Document -
> JUMPDEST_49.472(4)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(4)&softpage=Document#JUMPDEST_49.472(4))sub.
> (4), unless the individual is exempted from premium payments under
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29%28b%29&softpage=Document -
> JUMPDEST_49.472(4)(b)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(4)(b)&softpage=Document#JUMPDEST_49.472(4)(b))sub.
> (4) (b) or
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%285%29&softpage=Document -
> JUMPDEST_49.472(5)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(5)&softpage=Document#JUMPDEST_49.472(5))(5).
>
>  
>
> \(f\) The individual is engaged in gainful employment or is
> participating in a program that is certified by the department to
> provide health and employment services that are aimed at helping the
> individual achieve employment goals.
>
>  
>
> \(g\) The individual meets all other requirements established by the
> department by rule.
>
>  
>
> \(4\) Premiums.
>
> \(a\) Except as provided in
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29%28b%29&softpage=Document -
> JUMPDEST_49.472(4)(b)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(4)(b)&softpage=Document#JUMPDEST_49.472(4)(b))par.
> (b) and
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%285%29&softpage=Document -
> JUMPDEST_49.472(5)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(5)&softpage=Document#JUMPDEST_49.472(5))sub.
> (5), an individual who is eligible for medical assistance under
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%283%29&softpage=Document -
> JUMPDEST_49.472(3)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(3)&softpage=Document#JUMPDEST_49.472(3))sub.
> (3) and receives medical assistance shall pay a monthly premium to the
> department. The department shall establish the monthly premiums by
> rule in accordance with the following guidelines:
>
> 1\. The premium for any individual may not exceed the sum of the
> following:
>
>  
>
> a\. Three and one-half percent of the individual's earned income after
> the disregards specified in
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29%28a%292m.&softpage=Document -
> JUMPDEST_49.472(4)(a)2m.subd.
> 2m.](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(4)(a)2m.&softpage=Document#JUMPDEST_49.472(4)(a)2m.)
>
>  
>
> b\. One hundred percent of the individual's unearned income after the
> deductions specified in
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29%28a%292.&softpage=Document -
> JUMPDEST_49.472(4)(a)2.subd.
> 2.](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(4)(a)2.&softpage=Document#JUMPDEST_49.472(4)(a)2.)
>
>  
>
> 2\. In determining an individual's unearned income under
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29%28a%291.&softpage=Document -
> JUMPDEST_49.472(4)(a)1.subd.
> 1.](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(4)(a)1.&softpage=Document#JUMPDEST_49.472(4)(a)1.),
> the department shall disregard all of the following:
>
>  
>
> a. A maintenance allowance established by the department by rule. The
> maintenance allowance may not be less than the sum of \$20, the
> federal supplemental security income payment level determined under 42
> USC 1382 (b) and the state supplemental payment determined under
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.77%282m%29&softpage=Document -
> JUMPDEST_49.77(2m)s. 49.77
> (2m)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.77(2m)&softpage=Document#JUMPDEST_49.77(2m)).
>
> b. Medical and remedial expenses and Impairment-Related Work Expenses.
>
> 2m. If the disregards under
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29%28a%292.&softpage=Document -
> JUMPDEST_49.472(4)(a)2.subd.
> 2.](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(4)(a)2.&softpage=Document#JUMPDEST_49.472(4)(a)2.)
> exceed the unearned income against which they are applied, the
> department shall disregard the remainder in calculating the
> individual's earned income.
>
>  
>
> 3\. The department may reduce the premium by 25 percent for an
> individual who is covered by private health insurance.
>
>  
>
> \(b\) The department may waive monthly premiums that are calculated to
> be below \$10 per month. The department may not assess a monthly
> premium for any individual whose income level, after adding the
> individual's earned income and unearned income, is below 150 percent
> of the poverty line.
>
>  
>
> \(5\) Community options participants. From the appropriation under
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=20.435%287%29%28bd%29&softpage=Document -
> JUMPDEST_20.435(7)(bd)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=20.435(7)(bd)&softpage=Document#JUMPDEST_20.435(7)(bd))s.
> 20.435 (7) (bd), the department may pay all or a portion of the
> monthly premium calculated under
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29%28a%29&softpage=Document -
> JUMPDEST_49.472(4)(a)sub. (4)
> (a)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472(4)(a)&softpage=Document#JUMPDEST_49.472(4)(a))
> for an individual who is a participant in the community options
> program under
> [http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=46.27%2811%29&softpage=Document -
> JUMPDEST_46.27(11)](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=46.27(11)&softpage=Document#JUMPDEST_46.27(11))s.
> 46.27 (11).
>
>  
>
> \(6\) Insured persons. 

## 

## Maryland

The Fiscal Note for House Bill 758 states in pertinent part:

> MTA has a specialized, shared-ride, curb-to-curb service for people
> with disabilities who are not able to ride fixed-route public
> transportation. Paratransit service is provided within three-quarters
> of a mile of any fixed-route service (bus, light rail, or subway) in
> Baltimore City and Baltimore and Anne Arundel counties. To be eligible
> for Paratransit, individuals must provide a physician's statement that
> confirms their physical disability. MTA then evaluates the individuals
> to determine which ones meet the criteria for the specialized service,
> which charges a \$1.55 one-way fare. The estimated cost to the State
> is \$22.96 per passenger.
>
> The intent of the legislation was that the Transportation Trust Fund
> expenditures would increase by \$400,000 annually, beginning in fiscal
> 2004, to provide grants required by the bill. MTA can administer the
> program with existing resources. Approximately 508,000 people would
> qualify for the service due to their annual income. Under the 2003
> federal poverty guidelines, a single-member household with an annual
> income up to \$35,920 would qualify for the proposed service. The
> Maryland Department of Legislative Services notes in the record that
> it is unclear how the income will be verified.
>
> Local jurisdictions would have to provide up to \$25,000 to receive a
> \$100,000 grant, if eligible. However, it is unclear how many local
> governments use volunteer drivers. The impact on smaller counties or
> municipalities was projected to be greater than on larger localities.

During the 2001 Maryland General Assembly session the MTA, introduced a
similar bill to create a State Job Access Program. This bill passed both
the Maryland Senate and House of Delegates, and was signed by Governor
Glendenning on April 20, 2001. The legislation outlines the application
procedures and matching funding requirements, and while it does not
mandate a specific annual allotment for the Job Access Program, it
ensures that Maryland's program will exist beyond the federal program.
The State, though, anticipates that the Federal Job Access and Reverse
Commute Program will be reauthorized and these funds can continue to
support Maryland's efforts to connect low-income workers with employment
opportunities. [^123]

## Kentucky

The *Universal Design Handbook* prescribes the following design
guidelines:

> 1\. Finished hallways should be 42" wide.

1.  All doorways, including closet doors and entry doors, should be 32"
    wide at minimum. Specifications for entry platforms also are
    included.

2.  Ground level and elevator accessible units must have a minimum of
    one full universally designed bathroom.

3.  Single lever or ADA-approved faucets must be installed at all sinks,
    showers, and tubs.

4.  Electrical outlets have to be installed at a minimum height of 15"
    and light switches, fan switches and thermostats at a maximum height
    of 48".

All units must have a least one universally designed bedroom on the
ground level or elevator accessible floor.

## 

## Washington

In 2005, Washington passed statute 43.31.460 entitled, SEED
act---Individual development account program---Rules, updating the IDA
law. The pertinent section is:

> An individual development account program is hereby established within
> the department for the purpose of facilitating the creation by
> sponsoring organizations of individual development accounts for
> low-income individuals.
>
> \(1\) The department shall select sponsoring organizations to
> establish and monitor individual development accounts using the
> following criteria:
>
> \(a\) The ability of the sponsoring organization to implement and
> administer an individual development account program, including the
> ability to verify a low-income individual's eligibility, certify that
> matching deposits are used only for approved purposes, and exercise
> general fiscal accountability;
>
> \(b\) The capacity of the sponsoring organization to provide or raise
> funds to match the contributions made by low-income individuals to
> their individual development accounts;
>
> \(c\) The capacity of the sponsoring organization to provide or
> arrange for the provision of financial counseling and other related
> services to low-income individuals;
>
> \(d\) The links the sponsoring organization has to other activities
> and programs related to the purpose of chapter 402, Laws of 2005; and
>
> \(e\) Such other criteria as the department determines are consistent
> with the purpose of chapter 402, Laws of 2005 and ease of
> administration.
>
> \(2\) An individual development account may be established by or on
> behalf of an eligible low-income individual to enable the individual
> to accumulate funds for the following purposes:
>
> \(a\) The acquisition of postsecondary education or job training;
>
> \(b\) The purchase of a primary residence, including any usual or
> reasonable settlement, financing, or other closing costs;
>
> \(c\) The capitalization of a small business. Account moneys may be
> used for capital, land, plant, equipment, and inventory expenses or
> for working capital pursuant to a business plan. The business plan
> must have been developed with a business counselor, trainer, or
> financial institution approved by the sponsoring organization. The
> business plan shall include a description of the services or goods to
> be sold, a marketing strategy, and projected financial statements;
>
> \(d\) The purchase of a computer, an automobile, or home improvements;
> or
>
> \(e\) The purchase of assistive technologies that will allow a person
> with a disability to participate in work-related activities.
>
> \(3\) An eligible low-income individual participating in the program
> must contribute to an individual development account. The
> contributions may be derived from earned income or other income, as
> provided by the department. Other income shall include child support
> payments, supplemental security income, and disability benefits.
>
> \(4\) A sponsoring organization may authorize a low-income individual
> for whom an individual development account has been established to
> withdraw all or part of the individual's deposits for the following
> emergencies:
>
> \(a\) Necessary medical expenses;
>
> \(b\) To avoid eviction of the individual from the individual's
> residence;
>
> \(c\) Necessary living expenses following loss of employment; or
>
> \(d\) Such other circumstances as the sponsoring organization
> determines merit emergency withdrawal.

General Information Regarding Medicaid Buy-In

There is some support among consumers and advocates for broadened income
and asset rules in the Medicaid Buy-In Program. The state is examining
the feasibility of exempting Independence Accounts for all Medicaid
eligibility categories.[^124]

As states face fiscal challenges, policymakers are seeking tools to
enable them to reduce work disincentives in Medicaid with a minimal
level of net costs. [^125] When designing their Medicaid Buy-In
programs, state policymakers are facing the challenge of simultaneously
achieving their policy objectives and controlling costs.[^126] In
designing a Medicaid Buy-In Program, state policymakers must weigh the
amount of subsidy they can provide against the amount they will require
the individual to pay as a premium. To help offset program costs, some
states are considering premiums modeled on private health insurance
premiums, with a cap pegged to the maximum premium amount required of a
state government employee.[^127]

A high premium may discourage some people from participating in the
Medicaid Buy-In Program. Their willingness to expend their resources is
likely to depend on the relative value they place on the extra benefits
available to them in the Medicaid benefits package. An individual
anticipating extensive use of personal care or prescription drug
services may not be discouraged by high premiums. On the other hand, a
person whose primary health care needs are met through Medicare may be
unwilling to pay high monthly premiums for wrap-around coverage.[^128]

The Balanced Budget Act of 1997 and TWWIIA authorized states to enact
Medicaid Buy-In programs for workers without disabilities. These laws
provided state policymakers and other stakeholders an opportunity to
focus on issues associated with employment of People with significant
disabilities. Every state starts from a different baseline as it relates
to Medicaid eligibility rules, the relationship between SSI eligibility
and Medicaid, SSI state supplementation, and the implementation of
existing SSI work incentives. The purpose, function, and size of a
state's Medicaid Buy-In Program vary depending on its policies governing
eligibility for cash benefits, work incentives, and health coverage
through Medicaid. The design of a Medicaid Buy-In Program must be viewed
in the context of a state's overall Medicaid Program, other
state-specific initiatives, and fiscal considerations.[^129]

Buy-In programs (enabling people with disabilities with increased earned
income to continue Medicaid eligibility) have become a key component of
state efforts. States are implementing Buy-In programs (and related
programs and supports) not as welfare programs, but as programs that
help states make productive use of all of their human capital resources.
Many policymakers support Buy-In programs as a means to increase workers
with disabilities' participation as productive citizens of states. That
is, such programs are seen as a means to "enhance a state's economic
status; not simply as a means to enhance access to health care."[^130]

[^1]: National Council on Disability (NCD), *The Current State of
    Transportation for People with Disabilities in the United States*,
    Washington, DC: June 13, 2005. Available at:
    <http://www.ncd.gov/newsroom/publications/2005/current_state.doc>

[^2]: <http://www.statefarm.com/mutual/cover529.htm>

[^3]: Ibid.

[^4]: Ibid.

[^5]: Clancy, Margaret, et. al., Center for Social Development (CSD),
    George Warren Brown School of Social Work, Washington University.
    *College Savings Plan: A Platform for Inclusive Saving Policy?* Feb.
    12, 2004. Available at:
    <http://gwbweb.wustl.edu/csd/asset/529s_universal_asset_building.pdf>

[^6]: Ibid.

[^7]: Ibid.

[^8]: Ibid.

[^9]: Ibid.

[^10]: Ibid.

[^11]: Clancy, Margaret, Center for Social Development (CSD), Washington
    University in St. Louis, George Warren Brown School of Social Work.
    *College Savings Plans and Individual Development Accounts:
    Potential For Partnership*. March 2003. Available at:
    <http://www.collegesavings.org/education/PolicyReport-529sandIDAs.pdf>

[^12]: *STARTing Line,* 1^st^ Quarter Newsletter Topics. Available at:
    <http://www.startsaving.la.gov/savings/news.jsp>

[^13]: Ibid.

[^14]: Ibid.

[^15]: Ibid.

[^16]: Ibid.

[^17]: Ibid*.*

[^18]: *Louisiana's College Savings Plan Outperforms Other States, Earns
    Highest Returns*. Oct. 8, 2002. Available at:
    <http://www.treasury.state.la.us/newsroom/pressreleases2002/pr10082002.html>

[^19]: Ibid.

[^20]: Ibid.

[^21]: Louisiana Office of Student Financial Assistance. *State and
    Federal Legislation Makes Sweeping Changes to START Savings
    Program.* June 12, 2001. Available at:
    <http://www.osfa.state.la.us/061201StartChanges.htm>

[^22]: Ibid.

[^23]: Ibid.

[^24]: Ibid.

[^25]: Ibid.

[^26]: *STARTing Line, L**ATTA approves rule changes for START Saving
    Program*. Spring/Summer 1999* *Newsletter Articles. Available at:
    <http://www.osfa.state.la.us/startqrt3a.htm>

[^27]: Ibid.

[^28]: *STARTing Line, 2003 Legislature Tweeks START.* Vol. VI, Issue 2,
    Third Quarter 2003. Available at:
    <http://www.startsaving.la.gov/savings/pdf/qtr032003.pdf>

[^29]: Kendrick, Deborah, *One State's Solution to Getting More People
    on Line.* AFB Access World. Available at:
    <http://www.afb.org/afbpress/pub.asp?DocID=aw020203>

[^30]: Rehabilitation, Engineering & Assistive Technology society of
    North America (RESNA). Available at:
    [http://www.resna.org](http://www.resna.org/)

[^31]: Ibid.

[^32]: Ibid.

[^33]: Ibid.

[^34]: Ibid.

[^35]: Ibid.

[^36]: Ibid.

[^37]: Missouri State Government. Available at: <http://www.at.mo.gov/>

[^38]: Missouri Assistive Technology Council, 2004 -- 2005 Annual
    Report, *Assistive Technology Today. Assistive Technology Tomorrow*.
    Available at:
    <http://www.at.mo.gov/publications/AnnualReport2005Text.shtm>

[^39]: Ibid.

[^40]: Ibid.

[^41]: Kendrick, Deborah, *One State's Solution to Getting More People
    on Line.* AFB Access World. Available at:
    <http://www.afb.org/afbpress/pub.asp?DocID=aw020203>

[^42]: Ibid.

[^43]: Ibid.

[^44]: Ibid.

[^45]: Ibid.

[^46]: Ibid.

[^47]: University of Missouri Healthcare. Available at:
    <http://www.muhealth.org/~MOrehab/assist.shtml>

[^48]: Ibid.

[^49]: Rockhurst University. *Missouri's Interagency Assistive
    Technology Short-Term Loan Program.* Available at:
    <http://etc.rockhurst.edu/>

[^50]: Missouri Assistive Technology Council, 2004 -- 2005 Annual
    Report, *Assistive Technology Today. Assistive Technology Tomorrow*.
    Available at:
    <http://www.at.mo.gov/publications/AnnualReport2005Text.shtm>

[^51]: Ibid.

[^52]: Ibid.

[^53]: Ibid*.*

[^54]: Ibid.

[^55]: Missouri State Government. Available at: <http://www.at.mo.gov/>

[^56]: Missouri Assistive Technology Council, 2004 -- 2005 Annual
    Report, *Assistive Technology Today. Assistive Technology Tomorrow*.
    Available at:
    <http://www.at.mo.gov/publications/AnnualReport2005Text.shtm>

[^57]: Ibid.

[^58]: Ibid.

[^59]: Ibid.

[^60]: Ibid*.*

[^61]: RESNA. Available at:
    <http://www.resna.org/AFTAP/library/morules.htm>

[^62]: Missouri Assistive Technology Council, 2004 -- 2005 Annual
    Report, *Assistive Technology Today. Assistive Technology Tomorrow*.
    Available at:
    <http://www.at.mo.gov/publications/AnnualReport2005Text.shtm>

[^63]: Ibid.

[^64]: Mathematica Policy Research, Inc., Enrollment Patterns and
    Medical Expenditures for Medicaid Buy-In Participants in Five
    States. Liu, Su, et. al., Oct. 5, 2004.

[^65]: Wisconsin Department of Health & Family Services, Wisconsin
    Medicaid. Available at:
    <http://www.dhfs.state.wi.us/Medicaid1/recpubs/factsheets/phc10071.htm>.
    Wisconsin Statute §49.472(2005). Available at:
    [http://folio.legis.state.wi.us](http://folio.legis.state.wi.us/)

[^66]: Ibid.

[^67]: Centers for Medicare and Medicaid (CMS), *Medical Assistance
    Purchase Plan,* Student Lesson Guide, January 19, 2006.

[^68]: Law, Health Policy and Disability Center, University of Iowa
    College of Law. Available at:
    <http://www.uiowa.edu/~lhpdc/work/States/Wi/WI_CaseStudy.doc>

[^69]: Ibid.

[^70]: Ibid.

[^71]: Ibid.

[^72]: Ibid.

[^73]: Law, Health Policy and Disability Center, University of Iowa
    College of Law. Available at:
    <http://www.uiowa.edu/~lhpdc/work/States/Wi/WI_CaseStudy.doc>

[^74]: Ibid.

[^75]: Ibid.

[^76]: U.S. Department of Health and Human Services, *The Medicaid
    Buy-In Program: Lessons Learned From Nine \"Early Implementer"
    States*, by Donna Folkemer, National Conference of State
    Legislatures, et. al., May 2002. Available at:
    <http://aspe.hhs.gov/daltcp/reports/EIlesson.htm#chapII-B>

[^77]: Ibid.

[^78]: Law, Health Policy and Disability Center, University of Iowa
    College of Law. Available at:
    <http://www.uiowa.edu/~lhpdc/work/States/Wi/WI_CaseStudy.doc>

[^79]: Ibid.

[^80]: Ibid.

[^81]: Ibid.

[^82]: Ibid.

[^83]: Ibid*.*

[^84]: Centers for Medicare & Medicaid (CMS), *Enrollment History for
    the Medicaid Buy-In Program for Workers with a Disability* (As of
    March 31, 2005). Available at:
    <http://www.cms.hhs.gov/TWWIA/downloads/BuyInEnrollment.pdf>

[^85]: Community Transportation Association (CTAA), *Maryland Passes
    Legislation Establishing Job Access Transportation Program*.
    Available at: <http://www.ctaa.org/adaview.asp?pageid=776>

[^86]: Ibid.

[^87]: Ibid.

[^88]: Ibid.

[^89]: The Maryland Rural Transit Assistance Program (RTAP), Maryland
    Department of Transportation, Maryland Transit Authority. *The
    Maryland RTAP Update*, *Spotlight on SSTAP Service Innovations of
    St. Mary's Transit System*. Fall 2004, Vol. 3 Issue 3. KHF Group,
    Inc.: Bethesda, MD. Available at:
    <http://www.kfhgroup.com/fall2004.pdf>

[^90]: Ibid.

[^91]: Ibid.

[^92]: Maryland Department of Disabilities (MDOD). *2006 State
    Disabilities Plan.* Kristen Cox, Secretary. Available at:
    <http://www.mdod.state.md.us/pdfs/StatePlan2006.pdf>

[^93]: Ibid.

[^94]: Ibid.

[^95]: Ibid*.*

[^96]: Ibid.

[^97]: Kentucky Housing Corporation (KHC),
    [http://www.kyhousing.org](http://www.kyhousing.org/)

[^98]: Kentucky Housing Corporation (KHC), *New design concept makes its
    first appearance in Grayson County*, August 27, 2003. Available at:
    <http://www.kyhousing.org/full.asp?id=303>

[^99]: Kentucky Housing Corporation (KHC),
    [http://www.kyhousing.org](http://www.kyhousing.org/)

[^100]: Kentucky Housing Corporation (KHC), *Kentucky Housing
    Corporation Universal Design Standards Policy*, Jan. 23, 2003.
    Available at:
    <http://www.kyhousing.org/uploadedfiles/HFC/Design_and_Construction/UniversalDesignStandards.pdf>

[^101]: Kentucky Housing Corporation (KHC),
    [http://www.kyhousing.org](http://www.kyhousing.org/)

[^102]: Ibid.

[^103]: U.S. Census Bureau (2001).

[^104]: Kentucky Housing Corporation (KHC),
    [http://www.kyhousing.org](http://www.kyhousing.org/)

[^105]: Ibid.

[^106]: Kentucky Housing Corporation (KHC), *New design concept makes
    its first appearance in Grayson County*, August 27, 2003. Available
    at: <http://www.kyhousing.org/full.asp?id=303>

[^107]: Kentucky Housing Corporation (KHC), *Programs Overview,* 2005.
    Available at:
    <http://www.kyhousing.org/uploadedFiles/Publications/ProgramGuide.pdf>

[^108]: Ibid*.*

[^109]: Kentucky Housing Corporation (KHC), *KHC Announces Latest
    Funding from Affordable Housing Trust Fund*, Jan. 11, 2005.
    Available at: <http://www.kyhousing.org/full.asp?id=277>

[^110]: Ibid.

[^111]: Ibid.

[^112]: Putnam, Michelle, et. al. *Building Financial Bridges to
    Economic Development and Community Integration: Recommendations for
    a Research Agenda on Asset Development for People with
    Disabilities.* Journal of Social Work in Disability &
    Rehabilitation, Vol. 4(3) 2005, The Hartford Press, Inc. Available
    at:
    <http://gwbweb.wustl.edu/csd/Publications/2005/JSWDR_Article_Putnam_etal.pdf>

[^113]: Washington State website. Available at:
    <http://www.workfirst.wa.gov/resources/saving.asp>

[^114]: Ibid.

[^115]: Ibid.

[^116]: Ibid.

[^117]: RCW 43.31.460 (2005).

[^118]: Emphasis added.

[^119]: SB 5469, As Reported By Senate Committee On **International
    Trade & Economic Development, February 15, 2005.** *An act relating
    to individual development accounts*, sponsored by Senators Schmidt,
    Regala, Fairley, Esser, Shin, Roach, Rasmussen, Kohl-Welles and
    Brown.

[^120]: Corporation for Enterprise Development (CFED): Washington, DC.
    Available at:
    <http://www.cfed.org/focus.m?parentid=2&siteid=288&id=288>

[^121]: Ibid.

[^122]: [Center for Social
    Development](http://gwbweb.wustl.edu/csd/index.htm), [George Warren
    Brown School of Social Work](http://gwbweb.wustl.edu/), [Washington
    University](http://www.wustl.edu/): St. Louis, Missouri. Available
    at: <http://gwbweb.wustl.edu/csd/policy/states/washington.html>

[^123]: Maryland General Assembly, 2003 Session, House Bill 758, Fiscal
    and Policy Note. Available at:
    <http://mlis.state.md.us/pdf-documents/2003rs/fnotes/bil_0008/hb0758.pdf>

[^124]: Law, Health Policy and Disability Center, University of Iowa
    College of Law. Available at:
    <http://www.uiowa.edu/~lhpdc/work/States/Wi/WI_CaseStudy.doc>

[^125]: Jenson, Allen, Center for Health Services Research and Policy,
    George Washington University and Donna Folkemer, National Conference
    of State Legislators. *Developing Fiscal Estimates for a Medicaid
    Buy-in Program: Using Data from Early Implementer States.* Revised
    draft July 26, 2002. Available at:
    <http://www.uiowa.edu/~lhpdc/work/II_Policies/Estimating_Fiscal_Impact.doc>

[^126]: For a more complete discussion of the possible focus and policy
    objectives of a state's Medicaid Buy-In program see *Policy
    Frameworks for Developing a Medicaid Buy-In Program and Related Work
    Incentive Initiatives* at
    [http://www.medicaidbuyin.org](http://www.medicaidbuyin.org/)

[^127]: Ibid*.*

[^128]: Jenson, Allen, Center for Health Services Research and Policy,
    George Washington University and Donna Folkemer, National Conference
    of State Legislators. *Developing Fiscal Estimates for a Medicaid
    Buy-in Program: Using Data from Early Implementer States.* Revised
    draft July 26, 2002. Available at:
    <http://www.uiowa.edu/~lhpdc/work/II_Policies/Estimating_Fiscal_Impact.doc>

[^129]: U.S. Department of Health and Human Services, *The Medicaid
    Buy-In Program: Lessons Learned From Nine \"Early Implementer"
    States*, by Donna Folkemer, National Conference of State
    Legislatures, et. al., May 2002. Available at:
    <http://aspe.hhs.gov/daltcp/reports/EIlesson.htm#chapII-B>

[^130]: University of Nebraska Public Policy Center, *The Impact of
    Earnings of Nebraskans with Disabilities on Their Eligibility for
    Selected Services and Programs.* Prepared for: Medicaid
    Infrastructure Grant Program, Nebraska Department of Health and
    Human Services. Dec. 2002. Available at:

    <http://ppc.unl.edu/reports_publications/price_program_integration.pdf>