```

[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]

 
          ``TICKET TO WORK AND SELF-SUFFICIENCY ACT OF 1998''

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 17, 1998

                               __________

                             Serial 105-35

                               __________

         Printed for the use of the Committee on Ways and Means

                               ----------

                     U.S. GOVERNMENT PRINTING OFFICE
50-548 cc                    WASHINGTON : 1998

                      COMMITTEE ON WAYS AND MEANS

                      BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
BILL THOMAS, California              FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida           ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut        BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky                WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania      KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri

                     A.L. Singleton, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                    Subcommittee on Social Security

                    JIM BUNNING, Kentucky, Chairman

SAM JOHNSON, Texas                   BARBARA B. KENNELLY, Connecticut
MAC COLLINS, Georgia                 RICHARD E. NEAL, Massachusetts
ROB PORTMAN, Ohio                    SANDER M. LEVIN, Michigan
JON CHRISTENSEN, Nebraska            JOHN S. TANNER, Tennessee
J.D. HAYWORTH, Arizona               XAVIER BECERRA, California
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.

                            C O N T E N T S

                               __________

                                                                   Page

Advisory of March 10, 1998, announcing the hearing...............     2

                               WITNESSES

Social Security Administration, Susan M. Daniels, Ph.D., 
  Associate Commissioner for Disability..........................     7

                                 ______

Abbot, Quincy, The Arc of the United States......................    29
American Congress of Community Support and Employment Services, 
  Joe Miller.....................................................    52
Arc of the United States, Quincy Abbot...........................    29
Burns, Robert, Council of State Administrators of Vocational 
  Rehabilitation.................................................    47
Consortium for Citizens with Disabilities Task Force on Social 
  Security, Subcommittee on Work Incentives, Tony Young..........    18
Council of State Administrators of Vocational Rehabilitation, 
  Robert Burns...................................................    47
Keller, Earl, National Alliance for the Mentally Ill.............    24
Kentucky Association of Community and Employment Services, Joe 
  Miller.........................................................    52
LifeSkills Industries:
    Joe Miller...................................................    52
    Joe Mobley...................................................    57
Miller, Joe, LifeSkills Industries, Kentucky Association of 
  Community and Employment Services; and American Congress of 
  Community Support and Employment Services......................    52
Mobley, Joe, LifeSkills Industries...............................    57
National Alliance for the Mentally Ill, Earl Keller..............    24
 National Association of Rehabilitation Professionals in the 
  Private Sector, Steven D. Shedlin..............................    43
National Center for Disability Services, Francine M. Tishman.....    59
National Council on Independent Living, Susan Webb...............    34
Ramstad, Hon. Jim, a Representative in Congress from the State of 
  Minnesota......................................................     5
Shedlin, Steven D., National Association of Rehabilitation 
  Professionals in the Private Sector............................    43
Tishman, Francine M., National Center for Disability Services....    59
United Cerebral Palsy Associations, Inc., Tony Young.............    18
Webb, Susan, National Council on Independent Living..............    34
Young, Tony, United Cerebral Palsy Associations, Inc., and 
  Consortium for Citizens with Disabilities Task Force on Social 
  Security.......................................................    18

                       SUBMISSIONS FOR THE RECORD

EXCEL! Networking Group, Inc., Merrifield, VA, Robert S. Rudney, 
  statement......................................................    70
Mental Health Liaison Group, Columbia, MD, statement.............    71
Minnesota Consortium for Citizens with Disabilities, Golden 
  Valley, MN, Anita Boucher, statement and attachments...........    74
Paralyzed Veterans of America, statement.........................    76

          ``TICKET TO WORK AND SELF-SUFFICIENCY ACT OF 1998''

                              ----------                              

                        TUESDAY, MARCH 17, 1998

                  House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 3 p.m., in 
room 1100, Longworth House Office Building, Hon. Jim Bunning 
(Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE

March 10, 1998

No. SS-15

                    Bunning Announces Hearing on the

           ``Ticket to Work and Self-Sufficiency Act of 1998''

    Congressman Jim Bunning (R-KY), Chairman, Subcommittee on Social 
Security of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing on the ``Ticket to Work and Self-
Sufficiency Act of 1998.'' The hearing will take place on Tuesday, 
March 17, 1998, in the main Committee hearing room, 1100 Longworth 
House Office Building, beginning at 3:00 p.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony will be from invited witnesses only. However, any individual 
or organization may submit a written statement for consideration by the 
Committee and for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    Social Security programs are vital to all Americans. The disability 
program is particularly important because it protects workers and their 
families against severe financial hardship that occurs when workers 
sustain severe illnesses or disabling conditions that prevent them from 
working. Due to advances in medicine, technology, and the field of 
rehabilitation, there are people who, despite serious disabilities, 
want to work and could work if provided the kind of rehabilitation 
services they need.
      
    Chairman Bunning and Rep. Barbara Kennelly (D-CT), expect to 
introduce this week the ``Ticket to Work and Self-Sufficiency Act of 
1998,'' to help Social Security and Supplemental Security Income 
recipients return to a life of economic security and self-sufficiency. 
The major provisions of the legislation would ease the transition of 
Social Security and Supplemental Security Income disabled beneficiaries 
into the workforce. Generally, the bill would provide Social Security 
beneficiaries with choice in selecting providers of services and choice 
in selecting the specific services they need to help them achieve 
gainful employment. Generally, the providers of services would be paid 
for outcomes and long-term results. The payment process would be 
designed to ensure that as many providers as possible are available to 
serve consumers of these services.
      
    One of the primary barriers confronting beneficiaries who would 
like to work is the fear of losing health care coverage. To help 
alleviate that fear, the ``Ticket to Work and Self-Sufficiency Act'' 
would extend Medicare an additional two years beyond current law to 
these individuals. This means that recipients would have Medicare 
coverage for a total of six years from the time they first make an 
attempt to work.
      
    Due to the nature of their disability, many individuals incur 
extraordinary costs in trying to get a job and maintaining that job. 
The legislation would create a tax credit of 50 percent of impairment-
related work expenses up to $10,000 a year. Also, to better help 
consumers transition into work, the bill would include a requirement 
that the Social Security Administration (SSA) test a gradual offset of 
Social Security Disability Insurance benefits by reducing monthly 
benefits $1 for every $2 in earnings over a determined level.
      
    In addition, the bill would create an Advisory Panel, made up of 
consumers, providers, and employer representatives. Finally, the new 
program would be gradually phased in, closely monitored, and thoroughly 
evaluated over time.
      
    In announcing the hearing, Chairman Bunning stated: ``During the 
last three years, we have learned a great deal about the barriers that 
prevent beneficiaries with disabilities from attempting return to work. 
The `Ticket to Work and Self-Sufficiency Act of 1998,' includes many 
provisions that help remove those barriers. I look forward to hearing 
the views of our witnesses to ensure that we are taking the best 
possible legislative action to provide real opportunities to persons 
with severe disabilities.''
      

FOCUS OF THE HEARING:

      
    The Subcommittee will receive the views of SSA, individuals with 
disabilities, and providers on the ``Ticket to Work and Self-
Sufficiency Act of 1998.''
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Any person or organization wishing to submit a written statement 
for the printed record of the hearing should submit at least six (6) 
single-space legal-size copies of their statement, along with an IBM 
compatible 3.5-inch diskette in ASCII DOS Text or WordPerfect 5.1 
format only, with their name, address, and hearing date noted on a 
label, by the close of business, Tuesday, March 31, 1998, to A.L. 
Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of 
Representatives, 1102 Longworth House Office Building, Washington, D.C. 
20515. If those filing written statements wish to have their statements 
distributed to the press and interested public at the hearing, they may 
deliver 200 additional copies for this purpose to the Subcommittee on 
Social Security office, room B-316 Rayburn House Office Building, at 
least one hour before the hearing begins.
      

FORMATTING REQUIREMENTS:

      
    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.
      
    1. All statements and any accompanying exhibits for printing must 
be typed in single space on legal-size paper and may not exceed a total 
of 10 pages including attachments. At the same time written statements 
are submitted to the Committee, witnesses are now requested to submit 
their statements on an IBM compatible 3.5-inch diskette in ASCII DOS 
Text or WordPerfect 5.1 format. Witnesses are advised that the 
Committee will rely on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.
      
    4. A supplemental sheet must accompany each statement listing the 
name, full address, a telephone number where the witness or the 
designated representative may be reached and a topical outline or 
summary of the comments and recommendations in the full statement. This 
supplemental sheet will not be included in the printed record.
      
    The above restrictions and limitations apply only to material being 
submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press 
and the public during the course of a public hearing may be submitted 
in other forms.
      

    Note: All Committee advisories and news releases are available on 
the World Wide Web at `HTTP://WWW.HOUSE.GOV/WAYS__MEANS/'.
      

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      

                                

    Chairman Bunning [presiding]. The Subcommittee will come to 
order.
    We welcome all our witnesses and our guests who have joined 
us today.
    We are here to discuss the Ticket to Work and Self-
Sufficiency Act of 1998, introduced on behalf of myself and 
Mrs. Kennelly, bipartisan legislation that will assist 
individuals who receive Social Security and Supplemental Social 
Security Disability benefits.
    Due to advances in medicine and technology and the field of 
rehabilitation, there are people who, despite serious 
disabilities, want to work and could work if they were provided 
the right kind of rehabilitation and support services. This 
legislation will help provide those supports and open the door 
to those wanting to pursue employment.
    In our Subcommittee hearings over the last 3 years, we have 
heard from individuals with disabilities, their advocates, and 
various providers of services. We learned a great deal about 
barriers that prevent beneficiaries with disabilities from 
attempting to work. Mrs. Kennelly and I have worked on a 
bipartisan basis to produce a bill that will help tear down 
those barriers. Let me emphasize the key elements of this 
legislation.
    The bill puts the beneficiary first. Beneficiaries can 
choose the providers they want and the services they want to 
assist them to enter the work force. Medicare will be extended 
2 additional years. The bill creates a tax credit equal to 50 
percent of up to $10,000 in impairment-related work expenses to 
workers with disabilities.
    To help beneficiaries more easily transition from benefits 
to wages, our bill includes a requirement that SSA test a 
gradual offset of SSDI cash benefits by withholding $1 for 
every $2 in earnings over a certain level.
    And finally, our bill enables as many providers of services 
as possible to participate through a payment system that 
rewards results.
    My goal in crafting this legislation was to provide 
individuals with disabilities the opportunity to obtain the 
tools and services they need to return to self-sufficient 
lives.
    I look forward to hearing the feedback of our witnesses 
today, so that we may move forward with the best legislation 
possible.
    In the interest of time, it is our practice to dispense 
with opening statements except from the Ranking Democrat 
Member. All Members are welcome to submit statements for the 
record.
    I yield to Congresswoman Kennelly for any statement she 
wishes to make.
    Mrs. Kennelly. Thank you, Chairman Bunning.
    I am very pleased to be holding this hearing today on 
helping disabled Social Security beneficiaries return to work. 
Chairman Bunning and I have worked on a bipartisan approach to 
this problem, and we are anxious to have additional input from 
both people with disabilities and providers of vocational 
rehabilitation services.
    The bill we have introduced offers three important bridges 
to employment. First, it gives beneficiaries a greater choice 
of vocational rehabilitation. Second, it offers more security 
in health care by extending Medicare coverage for an additional 
2 years. Third, it makes work pay by instituting a credit of 50 
percent of work expenses related to a person's disability--up 
to $10,000 in expenses.
    Finally, and equally important, it directs the Commissioner 
of Social Security to study a program under which Social 
Security disability benefits would be reduced gradually, as an 
individual's earnings increase. This would help to soften the 
loss of the disability benefits and further encourage 
individuals with disabilities to return to work.
    I appreciate the expression of support we have already 
received from a wide variety of groups representing people with 
disabilities and providers of service. I look forward to 
working with them and with Chairman Bunning and the 
administration to pass this legislation.
    I want particularly to welcome today Quincy Abbot, who is 
from my home district, and I'm delighted that he could be here.
    Thank you, Mr. Chairman.
    Chairman Bunning. Thank you, Ms. Kennelly.
    First, we will hear from our colleague from the Ways and 
Means Committee, Congressman Jim Ramstad of Minnesota. Jim, 
would you like to begin?

  STATEMENT OF HON. JIM RAMSTAD, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF MINNESOTA

    Mr. Ramstad. Thank you, Mr. Chairman, Ranking Member 
Kennelly, Members of the Subcommittee. I really do appreciate 
the opportunity to be here today before the Subcommittee to 
discuss the critical need to eliminate obstacles that prevent 
people with disabilities from working.
    I've been working to knock down the barriers for people 
with disabilities who want to work since I was first elected to 
the Minnesota Senate in 1980. When I came to Congress in 1991, 
I was surprised to find that, among all the caucuses and task 
forces in Congress, there was no group specifically focused on 
issues affecting people with disabilities. At that time, I 
started the Republican Task Force on Disabilities, and 
appreciate the help of the Chairman and other Members in 
focusing on these issues even back then.
    Because of my commitment, Mr. Chairman, to helping people 
with disabilities return to work, I introduced legislation back 
in 1993, not too dissimilar from this legislation, to remove 
some of the barriers. And like you, I've heard countless 
stories of frustrated people with disabilities who desperately 
want to work to better themselves and their families and to 
contribute to society. Unfortunately, as you know, they're 
literally prohibited from doing so because of the confusing 
Federal programs and rules that make working all too difficult 
or expensive.
    This legislation, thanks to you working in a bipartisan, 
pragmatic, thoughtful way, begins the process to finally let 
Americans with disabilities live up to their full potential. 
Preventing people from working, Mr. Chairman, runs counter to 
the American spirit, a spirit that thrives on individual 
achievements and the larger contributions to society that 
result. Creating work incentives for people with disabilities 
is not just humane public policy; it's sound fiscal policy. 
Removing the barriers to discourage people with disabilities 
from working will mean they can earn a regular paycheck, pay 
taxes, and move off public assistance. Eliminating the current 
barriers to work that so many people face is both the right 
thing to do and the cost effective thing to do.
    I have a very dear friend, Tom Haben, who happens to be a 
person with quadriplegia. Tom worked in my Minnesota office 
when I was first elected, but it became counterproductive. He 
had the risk of losing benefits, and quite frankly, couldn't 
have a high enough salary to justify working. Such a 
disincentive to work is wrong, and I appreciate your efforts 
here at correcting that situation, so that the many Tom Habens 
out there are able to work and be productive, as they want to 
be. So that they can enjoy the dignity of independent living 
and be like the rest of us who happen to be able bodied.
    I realize, Mr. Chairman, that some of the elements of 
comprehensive reform that I and many members of my own Advisory 
Committee on Disabilities back in Minnesota would like to see 
enacted are not part of the current legislation, but I am 
committed to working with you to pass this bill and future 
related legislation to achieve our goals. I realize that we 
have to do it in an incremental way, and I applaud your efforts 
at so doing.
    So let me just say, in concluding, Chairman Bunning and 
Mrs. Kennelly and Members of the Subcommittee, thanks again for 
your leadership on these critical issues. I also want to thank 
your Subcommittee staff for their excellent work on this 
important foundational legislation.
    I look forward to continuing to work with you on our shared 
goal of helping people with disabilities return to work, a 
very, very important goal. Again, I applaud your efforts and 
thank you for your leadership. Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Hon. Jim Ramstad, a Representative in Congress from the 
State of Minnesota

    Mr. Chairman, Mrs. Kennelly, I very much appreciate the 
opportunity to be here today before the Subcommittee to discuss 
the critical need to eliminate obstacles that prevent people 
with disabilities from working.
    I have been working to knock down the barriers for people 
with disabilities who want to work since I was first elected.
    In fact, when I came to Congress in 1991, I was surprised 
to find that among all the caucuses and task forces on the 
Hill, there was no group specifically focused on issues 
affecting people with disabilities. That's why I started the 
Republican Task Force on Disabilities.
    And because of my commitment to helping people with 
disabilities return to work, I introduced legislation in 1993 
to remove some of the barriers.
    I have heard countless stories of frustrated individuals 
who desperately want to work and contribute to society. 
Unfortunately, they are literally prohibited from doing so 
because confusing federal programs and rules make working too 
difficult or expensive. This legislation begins the process to 
finally allow Americans with disabilities to live up to their 
full potential.
    Preventing people from working runs counter to the American 
spirit, a spirit that thrives on individual achievements and 
the larger contributions to society that result.
    Creating work incentives for people with disabilities is 
not just humane public policy, it is sound fiscal policy. 
Removing the barriers that discourage people with disabilities 
from working will mean they can earn a regular paycheck, pay 
taxes and move off public assistance.
    Eliminating the current barriers to work that so many 
individuals face is both the right thing to do and the smart 
thing to do.
    I realize that some of the elements of comprehensive reform 
that I, and many members of my own Advisory Committee on 
Disabilities in Minnesota, would like to see enacted are not 
part of this legislation right now, but I am committed to 
working with you to pass this bill, and future related 
legislation, to achieve our goals.
    Chairman Bunning and Mrs. Kennelly, thanks again for your 
leadership on these critical issues. I would also like to thank 
your subcommittee staff for their excellent work on this 
important foundational legislation. I look forward to 
continuing to work with you on our shared goal of helping 
people with disabilities return to work.
      

                                

    Chairman Bunning. Thank you, Jim, and we appreciate your 
testimony and look forward to you working with us next week 
when we bring it to the Committee. Thank you.
    Mr. Ramstad. Thank you.
    Chairman Bunning. Testifying on our first panel today is 
Dr. Susan Daniels, Associate Commissioner of Disability. Dr. 
Daniels, you can start any time you choose.

 STATEMENT OF SUSAN M. DANIELS, PH.D., ASSOCIATE COMMISSIONER 
         FOR DISABILITY, SOCIAL SECURITY ADMINISTRATION

    Ms. Daniels. Thank you, Mr. Chairman. Good afternoon, 
Chairman, Members of the Subcommittee. Thank you for inviting 
me here today to discuss the initiatives to ensure that SSA 
beneficiaries with disabilities who want to work have an 
opportunity to work.
    As Administrator of the largest disability program in the 
world and as a member of one of our Nation's largest 
minorities, Americans with disabilities, I'm excited about the 
initiatives that will increase work force participation of 
individuals with disabilities. I would like to summarize my 
remarks and request that my full statement be submitted for the 
record.
    Chairman Bunning. Without objection.
    Ms. Daniels. I join Commissioner Apfel in applauding the 
spirit and intent of the proposed legislation, specifically, 
the SSA-related provisions. We believe that the ticket approach 
included in your proposal and in our proposal will allow many 
more beneficiaries to enter the work force. The ticket is a 
public/private partnership to give people receiving disability 
benefits what they want and what they need: Control and 
flexibility to secure services tailored for their individual 
requirements from their choice of providers.
    The provisions mandating that SSA develop a demonstration 
project to assess the effectiveness of reducing an individual 
disability benefit according to an amount of earnings are 
challenging and may be cause for concern. Our concerns are 
three: First, the cost constraints of conducting such a 
demonstration; second, testing features, especially induced 
demand, will be difficult; and third, ensuring fairness for 
current and future beneficiaries is of primary importance. We 
prefer the greatest possible flexibility.
    Our goal, like yours, is to provide customer choice, pay 
for outcomes and results, rather than services, and encourage 
innovation.
    Choice--Social Security beneficiaries desire and need 
choice and flexibility in pursuing services that will help them 
become gainfully employed.
    Paying for results--beneficiaries and providers alike 
should focus on the goal of stable, long-term employment. Our 
goal is to frugally use public funds by rewarding success.
    Innovation--the ticket will encourage innovations in the 
private and public sectors by creating opportunities for State 
agencies, providers, employers, and beneficiaries to work 
together.
    Based on our experiences and extensive collaboration with 
professional groups, advocates, and our customers, we have 
learned that many individuals with disabilities want to work 
and will work if they have access to the services they need. We 
have been working closely with you to refine the return-to-work 
proposals to ensure that they meet the needs of beneficiaries, 
the provider community, and the American taxpayer.
    Through our own current initiatives, we have, and will 
continue to gain, valuable experience that will ensure the 
success of this legislation. We are encouraged by results we 
have seen.
    First, it is clear that there are many results-oriented 
providers in the private sector who want to help. Over the last 
year, we have received 500 proposals in response to a 
solicitation and currently we have over 270 providers under 
contract. We have several providers with national areas of 
scope and contracts specifically in 41 States. We soon hope to 
have providers in every State. Many providers in our current 
reimbursement program have told us that they are eager to 
participate in a ticket-type program.
    Second, SSA's experience with the RSVP Project will help us 
better understand the concept of using a program manager, as in 
your legislation, to oversee service provision. Project RSVP is 
a project that uses private contractors to ensure that return-
to-work services are more readily available to SSA-referred 
individuals and improves the administration and cost 
effectiveness of our program.
    Third, we have been working to find new and innovative ways 
to bring more information about the work incentives to our 
beneficiaries. I'd like to mention four specific methods for 
delivering this information.
    First, we have a Web site now within the Social Security 
Web site with information about our work incentives.
    Second, we have developed new training and information 
packets that are user friendly and are issued in a variety of 
formats.
    Third, as part of our research agenda, we have been working 
with Virginia Commonwealth University to develop and test a 
decision-support software package called WorkWORLD for use in 
assisting customers and service providers in determining the 
effects of work on benefits. This will allow our beneficiaries 
to be making more informed choices and they will be able to see 
the advantages of working.
    And, we have created a kit called ``Graduating to 
Independence,'' aimed specifically at young people in 
transition to work. The kit contains a videotape and computer 
software that gives the facts about work incentives and 
introduces young people to adults with disabilities who are 
working.
    As a final point, Mr. Chairman, using our current SSI 
demonstration authority, we plan to solicit well-researched and 
comprehensive projects that will strengthen and facilitate 
coordinated service delivery at the State level, including 
benefits and health care. As you know, our demonstration 
authority under the Social Security Disability Insurance 
Program expired in 1996. We want to thank you and all of the 
Committee for your support in extending that authority, and we 
eagerly await action in the Senate.
    Mr. Chairman, I want to thank you and Representative 
Kennelly again for your efforts to assist people with 
disabilities who would otherwise remain on the rolls to return 
to work. We stand ready, willing, and able, when you enact this 
legislation, to implement it. I would be delighted to take any 
questions.
    [The prepared statement follows:]

Statement of Susan M. Daniels, Ph.D., Associate Commissioner for 
Disability, Social Security Administration

    Mr. Chairman and Members of the Subcommittee:
    Thank you for inviting me here today to discuss initiatives 
to assure that the Social Security Administration's (SSA) 
beneficiaries with disabilities who want to participate in the 
workforce have the opportunity to do so. As administrator of 
the largest disability program in the world, and as a member of 
one of the country's largest minorities, Americans with 
disabilities, this month, I have witnessed initiatives that I 
believe will be invaluable in increasing workforce 
participation for individuals with disabilities.
    Four days ago, the President signed his executive order, 
Increasing Employment of Adults with Disabilities, which is the 
largest national effort to date to increase the employment of 
adults with disabilities to a rate that is as close as possible 
to the employment rate of the general adult population and to 
support the goals of the Americans with Disabilities Act of 
1990. And just two days before that, you, Mr. Chairman and you, 
Representative Kennelly, introduced legislation which furthers 
this effort. Thanks to the President's leadership, and your 
efforts, we hope we can make real progress in this area, so 
that those individuals with disabilities who want to work can 
do so.
    When the President first offered a proposal for a ``Ticket 
to Independence'' last year, and when I accompanied then-Acting 
Commissioner Callahan as he testified before this subcommittee 
in July, we recognized that there were a number of issues that 
needed to be addressed. Today, I join Commissioner Apfel on 
behalf of our beneficiaries with disabilities to applaud the 
spirit and intent of the Social Security Administration (SSA)-
related portions of your proposed legislation.
    No one solution will be all things to all people, but the 
time has come, and the Agency is prepared, to work toward 
making the concepts of economic independence a reality. Today, 
I would like to reinforce the principles behind the SSA 
``Ticket'' proposal, which are similar to the provisions for 
improved access to VR services in the Bunning-Kennelly bill, 
and to give you some information about other initiatives we are 
involved in to help our beneficiaries return to work. Of 
course, as a representative of SSA, I cannot speak to the 
bill's Medicare or tax provisions which are beyond SSA's 
purview.
    We believe that the ``Ticket'' approaches included in our 
proposal and your bill, will result in many more opportunities 
for our beneficiaries to receive the services they need in 
order to work. The ``Ticket'' is a public-private partnership 
to give people receiving disability payments what they want and 
need--the control and flexibility to secure services tailored 
to their individual requirements from their choice of 
providers. The ``Ticket'' maintains fiscal discipline, since 
providers would be paid only for results.
    The President's proposal for a ``Ticket to Independence,'' 
which is similar to your bill, Mr. Chairman, is based on the 
following sound fundamental principles:
    Customer Choice: SSA's beneficiaries desire and need 
maximum flexibility and choice in pursuing services which will 
help them to become gainfully employed. Beneficiaries with 
disabilities must be able to choose a participating public or 
private employment or rehabilitation provider to access the 
services that they need to participate in the workforce.
    Paying for Outcomes: Beneficiaries and providers alike 
should focus on the goal of stable employment. A focus on 
outcomes and milestones is best achieved by linking it to 
financial rewards. Our goal is to reward success and frugally 
use public funds in an accountable and targeted way.
    Encouraging Innovation: We hope the competition in the 
proposed legislation would encourage innovations in the private 
and public sectors by creating opportunities for State 
agencies, local non-profit and for-profit providers, employers, 
and beneficiaries.
    The Administration-proposed ``Ticket,'' like the Bunning-
Kennelly bill, is based on a structure of bringing new service 
providers into this process. Both are based on developing new 
and innovative ways to return beneficiaries with disabilities 
to the workforce based on actual outcomes, working with service 
providers outside of the public program, and providing a good 
infrastructure of information and support services. Many of 
these concepts are currently underway at SSA, and I would like 
to take this opportunity to discuss some of our initiatives.
    First, however, there is one activity contained in your 
proposal that is a cause for concern. That is the provision 
that mandates SSA develop a demonstration project to assess the 
effectiveness of reducing a disabled individual's benefit 
amount on account of earnings. Planning this type of 
demonstration project presents certain challenges: meeting cost 
constraints; designing a demonstration project that would truly 
test the features, especially the potential for induced demand; 
and ensuring the fairness of the demonstration for current and 
future beneficiaries. Rather than this mandate, we would prefer 
the flexibility to examine the relevant issues and design any 
demonstrations through a general demonstration authority.

                           Where We Are Today

    As you are well aware, a very limited number of our 
approximately 8 million Social Security and Supplemental 
Security Income (SSI) disability recipients leave the 
disability rolls each year because of successful 
rehabilitation. In fiscal year (FY) 1997, SSA paid State VR 
agencies about $89 million for their services provided to 
approximately 8,300 beneficiaries with disabilities who worked 
at least 9 months at the substantial gainful activity level.
    Based on our experience and extensive collaboration with 
professional groups and advocates, we have learned that many 
more individuals with disabilities want to work and will do so 
if they have access to the rehabilitation services they need to 
reenter the workforce. We recognize the myriad of complex and 
sensitive issues that must be addressed to achieve the goal of 
removing barriers for our beneficiaries with disabilities to be 
successfully rehabilitated and participate in the workforce.
    With this is mind, we have made tremendous progress on a 
number of other initiatives in the return-to-work arena which I 
would now like to share with you.

Alternate Provider

    It is clear that there are many providers in the private 
sector who are willing to help. In March 1994, the SSA amended 
the VR regulations to provide more opportunities for people 
with disabilities to receive employment and rehabilitation 
services they need to return to work or enter the workforce for 
the first time. These regulatory changes allowed SSA to refer 
Social Security Disability Insurance (SSDI) beneficiaries and 
SSI recipients who are blind or disabled to VR service 
providers in the public or private sectors. The option of 
serving the beneficiary continues to be offered first to the 
states; however, if SSA does not receive notification that the 
state has accepted a beneficiary for services by the end of the 
4th month after the month of referral, we may arrange for an 
alternate provider to serve that individual. (Of course, this 
process will change when the ``Ticket'' legislation is passed.)
    During 1996, SSA mailed a presolicitation notice to more 
than 500 potential providers who had previously contacted us 
regarding participation in our program. Later in that year, we 
released a Request for Proposal (RFP) describing the 
requirements for the VR program and requested interested VR 
service providers to apply. As part of their proposals, 
potential alternate participants were required to specify the 
type of impairment(s) and geographic area(s) they can serve.
    We received 500 proposals in response to the solicitation, 
and currently have over 270 providers under contract. We have 
contracts with providers in 41 states and, although we 
currently do not have contracts with providers in every state, 
we do have several providers with national service areas. This 
is an indication that there are providers who are ready to work 
with our beneficiaries with disabilities and with SSA.
    It is important to note that this is not a competitive 
procurement with limits on the number of contracts awarded. SSA 
intends to expand the pool of providers who can serve our 
beneficiaries with disabilities, and, in fact, we expect to 
release another RFP later this spring to solicit more 
providers. We are very encouraged by the number of contracted 
providers who have already expressed interest in participating 
in SSA's VR program. The current list of qualified providers 
are serving a number of the approximately 86,000 available 
beneficiaries.

Project RSVP

    Our experience with Project RSVP (Referral System for 
Vocational Rehabilitation Providers) will help us better 
understand the concept of using a program manager to oversee 
service providers. The objective of Project RSVP is to assure 
that return to work services are more readily available to SSA-
referred individuals while improving the administration and 
cost-effectiveness of the program. RSVP is a 3-year 
demonstration project to test the advantages and the cost 
effectiveness of contracting out certain administrative 
functions under SSA's VR referral and reimbursement programs. 
On September 27, 1997 a contract was competitively awarded to 
Birch & Davis Associates, Inc. of Maryland. Birch & Davis has 
begun marketing efforts to alert potential VR providers about 
the project. In addition, a toll-free number to respond to 
questions as well as the contractor's bulletin board to refer 
individuals to Alternate Providers have become operational.

Delivery of Work Incentive Information

    As a part of our research agenda, we are working with the 
Virginia Commonwealth University to develop and test a decision 
support software package called WorkWorld for use in assisting 
consumers and service providers in determining the effects of 
work on their entitlement to SSA benefits as well as other 
federal/state benefits, such as food stamps. This will allow 
our beneficiaries to make more informed choices regarding 
employment opportunities.
    We have created an attractive education kit called, 
``Graduating to Independence'' (GTI), that is aimed 
specifically at youth in transition from education to 
employment and their families. It was designed for use by 
educators or professional organizations to instruct young 
beneficiaries and their families about SSA's work incentives. 
This multimedia kit contains a videotape and several computer 
disks, in addition to written materials, that combine facts 
with motivational examples. We have been very aggressive in 
distributing the GTI kits, sending them to school districts 
across the country, and handing them out at national 
conferences.
    Additionally, we publish a number of other training and 
public information materials on work incentives. These 
materials are provided in multiple formats and have been 
designed with significant consumer input to be user-friendly.
    And, we have developed an Internet website within the 
Social Security website which contains information about work 
incentive provisions, access to our publications, and 
information on our rehabilitation and employment programs.
    Through all of these initiatives, we have and will continue 
to gain valuable insight and experience that we will use to 
ensure the success of this proposed legislation. We are 
encouraged by the results. We have learned that many highly 
skilled, outcome-focused agencies and professionals are eager 
to assist our diverse population to return to work. And, we 
have learned that individualized planning and support is 
essential to successful work re-entry.

Demonstration Authority

    I would be remiss if I did not remind you that the 
demonstration authority of section 505(a) of P.L. 96-265 
expired June 9, 1996. I do thank those on this Committee for 
their support for an extension passed by the House and we 
eagerly await Senate action. In order to initiate any new 
projects under the SSDI program for promoting return-to-work, 
we seek the permanent demonstration authority as is available 
in the title XVI program so that we can test new approaches to 
accomplish our goals in this area. With this renewed authority, 
SSA can develop a comprehensive strategy that integrates 
earlier intervention, and identification and provides necessary 
assistance in removing barriers to work for applicants and 
beneficiaries.
    Using our SSI demonstration authority, under Section 1110, 
SSA plans to solicit projects which will determine the degree 
of interaction of State and Federal systems and benefits, and 
look for ways to overcome barriers to employment. We will 
initiate powerful, well researched, and comprehensive 
demonstration projects which are designed to: strengthen and 
facilitate the coordination and delivery of services and 
benefits at the State or local level; increase income through 
earnings; and be cost-neutral. To this end, at each site, the 
State will implement a team-based, comprehensive package that 
coordinates vocational planning and support, employer and 
employee coaching, financial planning, risk management, job 
search, job placement and ongoing job support, transportation, 
training, and other necessary supports.
    Just as these programs have already provided important 
information, we would continue to pursue other projects that 
bring us closer to our goal of supporting the active 
participation of our beneficiaries with disabilities in the 
workforce.

                               Conclusion

    Mr. Chairman, I want to assure you that the Social Security 
Administration stands ready, willing, and able to work with 
lawmakers on both sides of the aisle to enact fiscally 
responsible legislation to help thousands of Americans with 
disabilities, who with appropriate services and support, can be 
successful in obtaining work. We want to thank you and 
Representative Kennelly for your efforts to assist persons with 
disabilities, who would otherwise remain dependent upon the 
disability rolls, to participate in the workforce. I want to 
thank you for your time and would be happy to answer any 
questions.
      

                                

    Chairman Bunning. Thank you, Doctor.
    Let me start off by, while I recognize that our Medicare 
and tax provisions are, as you pointed out, beyond SSA's 
purview, in SSA's deliberation regarding the ticket to 
independence, didn't SSA discuss extending providing health 
care benefits for individuals who leave the rolls to return to 
work?
    Ms. Daniels. As we began to discuss within SSA the likely 
policies that support return to work, we certainly did hear 
from our customers that health care was an important provision. 
We also heard from our customers that they don't understand the 
current provisions that allow them to continue to receive 
Medicare premium-free for 3 years after they return to work and 
to buy in indefinitely in the future if they pay a premium. So 
we did take heed that the health care connection was an 
important one for our beneficiaries.
    Chairman Bunning. In almost every hearing that we've had 
over the last 3 years, from the community providers and those 
that are disabled and want to return, that was the number one 
issue with almost all of them.
    One of our witnesses today, Tony Young, who is testifying 
on behalf of the Consortium for Citizens with Disabilities, is 
suggesting that we include a provision to allow individuals to 
buy into Medicare, as you suggested, once their income reaches 
$15,000 for a premium of 10 percent of income. What is SSA's 
view on such a proposal?
    Ms. Daniels. Well, I can tell you that today the current 
law allows a beneficiary to buy in at a premium that's 
considered the fair actuarial value. It's a little over $300 a 
month. We have not analyzed this particular provision because 
it's not really within our purview, but we are very supportive 
of our current provisions.
    Chairman Bunning. OK. My last question: Has SSA or the 
Health Care Financing Administration researched this issue or 
discussed such an approach? How would such a provision be 
administered and by whom?
    Ms. Daniels. I'm afraid I would have to submit an answer to 
that question for the record. We have not discussed 
implementation.
    [The following was subsequently received:]

    Because it is not within the purview of the Social Security 
Administration, SSA has not developed an analysis of Mr. 
Young's proposal that would allow:
     individuals earning income less than $15,000 to 
receive Medicare premium-free, and
     individuals earning $15,000 or more to buy-in to 
Medicare at 10 percent of earned income above $15,000 capped at 
the full Part A Medicare premium amount.
    This question should be directed to the Health Care 
Financing Administration.
      

                                

    Chairman Bunning. OK, I have some other questions that I 
will submit to you in writing, and I would appreciate you 
responding in writing.
    Ms. Daniels. I'd be delighted.
    [The following was subsequently received:]

Questions and Subsequent Answers from Ms. Daniels

    1. In your testimony, you mention that in 1997, SSA paid 
State VR agencies about $89 million for services provided to 
approximately 8,300 beneficiaries. How many of these were SSDI 
beneficiaries, how many were SSI beneficiaries, and how many 
were concurrent beneficiaries?
    Out of the 8,337 vocational rehabilitation claims, 2,688 
were SSDI beneficiaries, 2,914 were SSI beneficiaries, and 
2,735 were concurrent beneficiaries.
    2. One of our witnesses suggests that Work Incentive 
Specialists be supported by customized software. You mention 
that you have worked with Virginia Commonwealth University to 
develop and test a decision support package called 
``WorkWORLD.'' Do you plan to make this software available to 
your employees or to consumers directly? How do you see this 
working?
    Virginia Commonwealth University (VCU) has begun 
development of WorkWORLD as decision support software for use 
with beneficiaries. The new decision support software will be 
in two iterations:
     Basic WorkWORLD-Personal (Basic WW-P), will permit 
users to determine the effect of work and earnings on benefits 
authorized under the Social Security Act (i.e., SSI, SSDI, 
Medicaid, and Medicare).
     Advanced WorkWORLD-Personal (WW-P) will contain 
all of the features of Basic WW-P. In addition, it will show 
the effect of work and earnings on food stamps, Section 8 
Housing, Temporary Aid to Needy Families, and other State 
programs.
    We will test both versions of the software in various 
demonstration settings.
    We expect Basic WW-P to be useful for our field offices and 
for others who counsel beneficiaries about working and work 
incentives. Whether work incentive specialists are SSA 
employees, rehabilitation counselors, teachers or others, we 
will make both the Basic and Advanced WW-P software available 
to them so beneficiaries may be as informed as possible. We 
believe beneficiaries will also be able to use WW-P themselves.
    Our goal is to have Basic and Advanced WW-P available to 
users, including beneficiaries, as a disk and/or as an 
interactive Internet tool. Our current work with VCU is 
intended to make the software very easy to use. The beneficiary 
will be asked to answer some simple questions, such as the 
types of benefits he or she is receiving, the number of people 
in the family, etc. WW-P will then calculate net income from 
all sources at varying levels of earnings and display it 
graphically as well as in text and tables.
    3. Mr. Young also suggests a provision which protects 
individuals from unwarranted CDRs. Under current law, payments 
to a beneficiary are protected against termination or 
suspension if the individual is participating in a program of 
vocational rehabilitation approved by the Commissioner. Why 
perform CDRs on beneficiaries who are currently receiving 
Vocational Rehabilitation services?
    As you noted, the current law provides that an SSI or SSDI 
beneficiary may continue receiving cash benefits after a 
determination of medical improvement if he/she is actively 
participating in an approved State or alternate vocational 
rehabilitation program. This ``301'' provision applies if 
completion or continuation of the program is likely to enable 
the person to work permanently. Our current process for 
determining when and how CDRs should be performed is well known 
to you, and we would not envision the ``Ticket'' environment to 
significantly change that process.
    We recently provided technical assistance to your staff 
about concerns raised by some on the need for performing CDRs 
for people who might be receiving return-to-work services under 
a future ``Ticket'' system. We discussed options that would 
encourage beneficiaries to take advantage of such services 
without fear that a CDR would be performed as a result of their 
actions. We have always envisioned that selection for issuance 
of a ticket would take into consideration the likelihood of 
early medical recovery, i.e., beneficiaries in the category 
would only receive a ticket upon continuation after an initial 
CDR. Where scheduled CDRs occur during a course of return-to-
work services, we believe your bill contains language which 
would extend the current ``301'' provisions to a ``Ticket'' 
environment. Other options to explore might be the potential 
deferral of CDR diaries for those in active ``Ticket'' status.
      

                                

    Chairman Bunning. Barbara.
    Mrs. Kennelly. Thank you, Mr. Chairman.
    Doctor, many smaller providers argue that they need 
milestone payments; that is, payments made before the 
individual's benefits cease in order to help finance the early 
costs of rehabilitation. The bill authorizes SSA to develop 
such payments. Have you taken a position on that?
    Ms. Daniels. As you know, our proposal did not include 
milestone payments. However, we believe it is possible to 
structure a milestone that is based on results. Mrs. Kennelly, 
we had proposed to pay the provider when the individual no 
longer received cash benefits, but we do think it is possible 
to structure a milestone payment, for instance, when a person 
starts a job or under some other scenario.
    I think it's also important to recognize that any 
additional milestones based on services will require SSA to 
monitor and account for those services and ensure that they 
are, in fact, provided. We thought focusing on outcomes is a 
better option because it keeps everybody focused on what it is 
we're there to do--not the services, but actually get jobs.
    Mrs. Kennelly. Thank you. Doctor, nearly every witness 
today, when you read the testimony, both the consumers and the 
providers, have suggested more involvement by outside experts 
in the return-to-work program. Now we also include that in our 
bill. We call it an advisory panel to assist the Commissioner. 
How do you feel about that?
    Ms. Daniels. I think we're very excited to work with 
providers and customers. I am not a lawyer, but I think there 
might be some technical problems with how people are appointed, 
but the Office of Government Ethics can advise you on that 
issue. We are eager to work with providers and customers in a 
collaborative way.
    Mrs. Kennelly. One last question, Doctor, and maybe it's 
not fair because you haven't heard the testimony, but a Mr. 
Burns, who is testifying later, cites rehabilitation services 
data which says that 210,000 people entered employment as a 
result of public rehabilitation in 1995, and then you go on to 
say, your testimony says, ``The State vocational rehabilitation 
agencies were paid for only 4,800 cases, SSI and SSDI benefits 
in 9 months of trial work that you had. Can you tell me why 
these numbers are so different, or is that unfair right now?
    Ms. Daniels. I'm not going to be able to verify the numbers 
that Mr. Burns has, but let me tell you that really it's likely 
that Mr. Burns is using a term ``employment'' that's different 
from what's defined in the Social Security legislation as 
employment. When we reimburse a State vocational rehabilitation 
agency, we reimburse them according to our current statute. The 
statute permits payment only when the individual has worked at 
substantial gainful activity for 9 months. That's our 
definition of successful work, and that's when we pay for 
rehabilitation services.
    The Rehabilitation Act of 1973, as amended, has a variety 
of other types of employment that are also considered 
legitimate closures--part-time employment, sheltered 
employment, home-based employment, homemaker employment--that 
do not meet our definition. So, basically, he's counting apples 
and we're counting oranges. There's some overlap between those 
two sets of figures, but the definition under the 
Rehabilitation Act is broader because the act serves a broader 
social service.
    Mrs. Kennelly. Thank you, Doctor. Thank you for your 
testimony.
    Ms. Daniels. You're welcome.
    Chairman Bunning. Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman.
    Thank you for being with us, Dr. Daniels.
    What do you see as the greatest strengths and challenges to 
your alternate participant program and how many individuals are 
actually receiving services from a provider at this time?
    Ms. Daniels. I think the greatest strength of the alternate 
participant program is to teach us an early lesson--that there 
are many results-oriented providers in the community that want 
to work with our beneficiaries. Nearly 500 came forward when we 
made the solicitation, and we have finished awarding contracts 
to over 270 of those providers. So I think it was a great 
lesson to learn that there are so many people interested in 
working with our beneficiaries.
    The program is very new. We are still signing up new 
providers. It's taken us awhile to implement this provision, 
the alternate providers, mainly because we used a method of 
contracting that threw us some curve balls that we didn't quite 
plan on. But we have gotten over those, and we are signing them 
up at a faster clip now than we were a few months ago. So it's 
too early to tell what the results will be, but considering 
their eagerness and their interest, I think it's going to be 
very, very good.
    Now how many people have actually gone through the program 
and finished? We have just started, and an individual must work 
9 months before the provider can submit a claim to us. So we're 
not far enough down this road to tell you how many people are 
going to be working. When we receive claims from the providers, 
we'll begin to know how many people have actually ended up in 
employment. But no money will be spent from the coffers until 
that outcome is achieved.
    Mr. Johnson. How long have they been on a work program?
    Ms. Daniels. We've been signing--Mr. Johnson?
    Mr. Johnson. To date?
    Ms. Daniels. We have signed up 270 providers.
    Mr. Johnson. Yes, but you said none of them have been 9 
months yet; is that true?
    Ms. Daniels. None of them have been in 9 months, no.
    Mr. Johnson. OK, and the process, as you indicated, was 
complicated and cumbersome. We also heard the electronic 
beneficiary and identification process wasn't working real 
well. Do you want to comment on that?
    Ms. Daniels. Well----
    Mr. Johnson. And can we improve it?
    Ms. Daniels. It certainly was a brandnew process to put up 
a bulletin board of such scope. We have a contract manager 
similar to that in Mr. Bunning's and Mrs. Kennelly's proposed 
legislation. They call it a program manager. We now have that 
program manager under contract. They have just taken over the 
bulletin board, and we feel that they will be able to manage 
this growing bulletin board very effectively. They have the 
skills and the background to do it.
    Mr. Johnson. Thank you, ma'am.
    Ms. Daniels. You're welcome, Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman.
    Chairman Bunning. The gentleman from Missouri.
    Mr. Hulshof. Thank you, Mr. Chairman.
    Dr. Daniels, thanks for being here. I'm happy to report 
that I'm cosponsoring this legislation, and I'm optimistic that 
we can pass this bill in the House, but I'm also of the opinion 
that it's going to take a great deal of effort to ensure that 
this legislation is addressed in the Senate. Will the 
administration support this legislation and help us with our 
colleagues in the other body?
    Ms. Daniels. Yesterday afternoon, I had a conversation with 
Commissioner Apfel, and he puts return to work as one of his 
highest priorities. I certainly can't tell you what he's going 
to do tomorrow. I don't want to predict another human being's 
behavior, but I'll tell you that he has expressed over and over 
to me, and to the people who are in this audience that I know, 
his commitment to return disability beneficiaries to work. I 
think he's good for his commitments.
    Mr. Hulshof. Let me ask about some of the concerns you've 
suggested. A couple of our witnesses, if I read their testimony 
correctly, suggest that the work incentives specialists who 
specialize in assisting individuals to understand work 
incentives--there's suggestion that these should not be SSA 
employees and should instead be private individuals. I'd like 
to hear your comment or reaction.
    Ms. Daniels. Well, it is true, and I want to be honest with 
you, that the work incentives are extraordinarily complicated, 
but there are many individuals in SSA and many individuals in 
the community--and I know a lot of them--who understand the 
work incentives very well. So I think that I could envision 
three scenarios. I can envision work incentive specialists 
being SSA employees. I can envision them being community 
support people under contract, and I can envision a 
combination.
    I think the most important thing here is having people who 
know the work incentives inside and out, and who really care 
about administering and getting this information across. I 
don't think they come in only one size.
    Mr. Hulshof. One of the other somewhat corresponding 
issues--in your statement you raise a concern over the 
provision requiring SSA to develop a demonstration project to 
assess the effectiveness of reducing a disabled individual's 
benefit amount due to earnings. And I recognize that there's a 
real challenge there, but I know that you want flexibility to 
conduct relevant issues and design demonstrations through 
general demonstration authority, and yet haven't you had that 
flexibility since 1980?
    Ms. Daniels. Well, certainly we have had the flexibility to 
design demonstrations off and on. There is an inherent problem 
here in creating a demonstration that actually answers the 
number one question, which is: What is the induced demand of 
such an offset in the DI Program? How many more people would 
become eligible for disability insurance? I think everybody 
recognizes that it's better to have a ramp-off than a cliff. I 
think everybody recognizes that. I think the question that has 
always been difficult is: What will it cost? And because we 
have to estimate the induced demand, and can't actually 
describe it as a result of data, people have a lot of different 
opinions about what it will cost.
    A demonstration that actually answers how many people would 
come on the rolls once you change the provisions is very hard 
to run because you have to change the provisions in order to 
find that out, and you have to make it so that people would 
make wise decisions, based on a fairly stable set of 
provisions. Doing that in a demonstration mode is very 
challenging.
    And I want to tell you that we will work very hard to do 
whatever needs to be done, but it is a very challenging 
question to answer in a demonstration project.
    Mr. Hulshof. Let me ask you, as a final matter--thanks, Mr. 
Chairman--that you mentioned demonstration project and 
operations called Project RSVP to test the advantages and cost 
effectiveness of contracting out certain administrative 
functions. What are the specifics of the contract and what's 
been your experience so far with this project?
    Ms. Daniels. This is a fairly new approach. We're trying 
this out. We have a contractor, Birch and Davis in Rockville, 
Maryland, who has taken over running the bulletin board that 
Mr. Johnson asked about. Birch and Davis has taken over the 
recruitment of providers and is trying to increase the provider 
pool. Birch and Davis is going to be running a hotline number, 
an 800 number, to provide information to providers and 
beneficiaries alike, as well as doing some outreach, and 
handling and helping us process the claims when they come in. 
So they will be a full-service center to help us keep the 
machinery of these alternate providers running. From the 
legislative language that I've read from Mr. Bunning and Ms. 
Kennelly's bill and yours as well, it appears that you envision 
such a contractor or contractors being involved. What we're 
doing now is testing that idea, seeing how it works, and 
working out the bugs.
    Mr. Hulshof. Thanks, Dr. Daniels. Thank you, Mr. Chairman.
    Chairman Bunning. Thank you for testimony, and we will 
submit some written questions for you. We appreciate your being 
here. Thank you.
    Ms. Daniels. It's a pleasure to be here, Mr. Bunning.
    Chairman Bunning. Testifying on the second panel today are 
Tony Young, public policy associate, United Cerebral Palsy 
Associations, Inc., and cochair, Consortium for Citizens with 
Disabilities Task Force on Social Security Subcommittee on Work 
Incentives; Earl Keller, Social Security disability 
beneficiary, on behalf of the National Alliance for the 
Mentally Ill; Quincy Abbot, president, The Arc of the United 
States; Susan Webb, executive director, Arizona Bridge to 
Independent Living.
    Mr. Young, if you would begin, please.

   STATEMENT OF TONY YOUNG, PUBLIC POLICY ASSOCIATE, UNITED 
CEREBRAL PALSY ASSOCIATIONS, INC.; AND COCHAIR, CONSORTIUM FOR 
   CITIZENS WITH DISABILITIES TASK FORCE ON SOCIAL SECURITY, 
                SUBCOMMITTEE ON WORK INCENTIVES

    Mr. Young. Thank you, Mr. Chairman. Good afternoon. I am 
Tony Young, public policy associate with United Cerebral Palsy, 
and a former SSDI beneficiary.
    Chairman Bunning. Can you move your mike just a little 
closer, please, so we can make sure it gets recorded? That's 
it. There, that will really help.
    Mr. Young. Maybe if I lean forward some, too. These 
wheelchairs are wonderful things, but they're also very bulky.
    Today I appear before you representing the Consortium for 
Citizens with Disabilities Subcommittee on Work Incentives. CCD 
is a coalition of almost 100 national disability organizations 
working together to advocate for national public policy that 
ensures self-determination, independence, empowerment, 
integration, and inclusion of children and adults with 
disabilities into all aspects of society.
    CCD congratulates Chairman Bunning and Ranking Member 
Kennelly, along with their staffs and the full membership of 
the Subcommittee on Social Security, for their success in 
crafting the Ticket to Work and Self-Sufficiency Act of 1998. 
H.R. 3433 implements needed changes in Social Security 
Administration disability programs right now, and sets the 
stage for important future improvements that will enable SSDI 
and SSI beneficiaries to work to the greatest extent of their 
abilities.
    It is important for SSA disability programs to begin the 
process of evolving from their original purpose solely as early 
retirement programs for injured workers. They must start moving 
toward including a new purpose of supporting individuals with 
disabilities in the work force. In this way, they are 
transformed from a safety net into a trampoline--not only 
catching people with disabilities as they fall out of work, but 
also giving them a boost back into work when they are ready.
    This benefits individuals by enabling them to remain in the 
work force as wage earners. It benefits employers by adding 
skilled workers to the labor pool. It benefits employment 
service providers by enabling them to serve many more 
participants. And it benefits taxpayers by assisting workers 
with disabilities to begin or continue to pay taxes.
    This bill does not immediately solve all of the barriers to 
employment facing individuals on SSDI or SSI. No single piece 
of legislation could. It does, however, meet three criteria 
that are critically important as we undertake the 
transformation of SSA's disability programs.
    First, it does no harm. No one receiving SSDI or SSI will 
be jeopardized by the passage of this bill.
    Second, it moves us forward now. It extends health coverage 
under Medicare for an additional 2 years after employment. It 
provides a tax credit for the extraordinary expenses of working 
with a disability. It establishes a corps of work incentive 
specialists. It expands the choice of employment-service 
providers to any public or private entity, and it requires an 
advisory panel of beneficiaries, service providers, and 
employers be created to advise SSA on these initiatives.
    Third, it begins the research and development necessary to 
achieve the ultimate goal of reshaping SSA's disability 
programs. H.R. 3433 authorizes SSA to conduct employment 
demonstrations, especially the critically important trial of a 
sliding-scale reduction in SSDI benefits.
    We acknowledge that this one bill cannot solve all the 
barriers to work for SSI and DI beneficiaries. CCD is striving 
to form a strategic partnership with the Subcommittee on Social 
Security and other relevant House Subcommittees, the Senate 
Committee on Finance, and SSA, and other agencies to further 
the progress we have made together to transform the disability 
programs.
    The Congress and the administration have a historic 
opportunity to meet the converging needs of SSDI and SSI 
beneficiaries, service providers, employers, and taxpayers. The 
Nation is watching our progress. CCD is ready to assist you to 
achieve this important goal.
    Thank you, Mr. Chairman. I'd be happy to answer any 
questions you might have.
    [The prepared statement follows:]

Statement of Tony Young, Public Policy Associate, United Cerebral Palsy 
Associations, Inc.; and Cochair, Consortium for Citizens with 
Disabilities Task Force on Social Security, Subcommittee on Work 
Incentives

These Signatory Organizations Support This Statement in 
Principle:

    Based upon a preliminary examination of HR 3433, these 
organizations are signatory to this statement. Additional 
organizations may choose to sign on prior to the closing of the 
record for the hearing on March 31, 1998.

Goodwill Industries International;
Inter-National Association of Business, Industry, and Labor;
National Alliance for the Mentally Ill;
National Association of Developmental Disabilities Councils;
NISH;
Paralyzed Veterans of America;
The Arc of the United States;
United Cerebral Palsy Associations, Inc.

    Thank you, Mr. Chairman and distinguished Members of the 
Subcommittee, for this opportunity to testify on the Ticket to 
Work and Self-Sufficiency Act of 1998. I am Tony Young, a 
Public Policy Associate with the United Cerebral Palsy 
Associations, Inc., and a former SSDI beneficiary. Today I 
appear before you representing the Consortium for Citizens with 
Disabilities Subcommittee on Work Incentives. The Subcommittee 
on Work Incentives consists of expert members in Social 
Security and Employment issues. CCD is a coalition of almost 
100 national disability organizations working together to 
advocate for national public policy that ensures the self-
determination, independence, empowerment, integration and 
inclusion of children and adults with disabilities into all 
aspects of society.
    CCD congratulates Chairman Bunning and Ranking Member 
Kennelly, and the full membership of the Subcommittee on Social 
Security, for their success in crafting the Ticket to Work and 
Self-Sufficiency Act of 1998. This bill sets the stage for 
important improvements in Social Security Administration (SSA) 
disability programs that will enable SSDI and SSI beneficiaries 
to work to the greatest extent of their abilities.
    It is important for SSA disability programs to begin the 
process of evolving from their original purpose as early 
retirement programs for injured workers. They must start moving 
toward including a new purpose of supporting individuals with 
disabilities in the workforce. In this way, they are 
transformed from a safety net into a trampoline; not only 
catching people with disabilities as they fall out of work, but 
also giving them a boost back into work when they are ready. 
This benefits individuals by enabling them to remain in the 
workforce as wage earners; it benefits employers by adding 
skilled workers to the labor pool; it benefits employment 
service providers by enabling them to serve many more 
participants; and it benefits taxpayers by assisting workers 
with disabilities to begin or continue to pay taxes.
    This bill does not immediately solve all of the barriers to 
employment facing individuals on SSDI or SSI. No single piece 
of legislation could transform this complex program. It does, 
however, meet three criteria that are critically important as 
we undertake the transformation of SSA's disability programs.
     First, it does no harm. No one receiving cash 
assistance under SSDI or SSI will be jeopardized by the passage 
of this bill.
     Second, it moves us forward now. It extends health 
coverage under Medicare for an additional two years after 
employment begins; it provides a tax credit for the 
extraordinary expenses of working with a disability, and it 
expands the choice of employment service providers to any 
public or private entity.
     Third, it helps to place us on a path to achieve 
the ultimate goal of reshaping SSA's disability programs to 
meet the needs of SSDI and SSI beneficiaries in the 21st 
century. It authorizes SSA to conduct employment 
demonstrations, especially the critically important 
demonstration of a sliding scale reduction in SSDI benefits.
    In my testimony of June, 1997, I discussed reports that 
demonstrate that there are five principal barriers to the 
employment of individuals with significant disabilities who are 
SSDI beneficiaries and SSI recipients (SSDI/SSI 
beneficiaries).These barriers are:
    1. The loss of health benefits;
    2. The complexities of current work incentives;
    3. Financial penalties of working;
    4. Lack of choice in employment services and providers; 
and,
    5. Inadequate work opportunities.
    I also discussed the legislative steps necessary to solve 
these problems. These solutions are:
    1. Extend Health Benefits;
    2. Streamline Work Incentives;
    3. Make Work Pay;
    4. Enhance Consumer Choice of Services and Providers; and,
    5. Help Employers to Employ Individuals with Significant 
Disabilities.

    CCD has reviewed the Ticket to Work and Self-Sufficiency 
Act of 1998 (TTW&SSA98) in light of the testimony it presented 
on these barriers and solutions. After a preliminary review and 
analysis, the TTW&SSA98 receives a highly favorable grade. Also 
as a result of this analysis, there are a few specific 
recommendations for improvements made below. Due to the brief 
period of time CCD has had to review this legislation, we will 
offer a more in-depth analysis prior to the closing of the 
record of the hearing on March 31, 1998.

                         Barriers and Solutions

                 Employment Barrier 1: Health Benefits.

    Access to private health insurance is increasingly cited as 
the key obstacle to employment, particularly in light of the 
increase in part-time work, which rarely brings access to 
health insurance. With underwriting practices and limits on 
benefits acting as critical disincentives, many people with 
disabilities must seek Social Security benefits in order to 
gain access to public health insurance.
Recommended Solution 1: Extend Health Benefits.

    Health coverage should be maintained for SSDI/SSI 
beneficiaries going to work in three ways: 1) Continue Medicare 
free until $15,000 of earned income, then with a buy-in at 10% 
of earned income capped at the full Part A Medicare premium 
amount; 2) Establish a Medicare-only buy-in similar to number 
one above for individuals with disabilities who would be DI 
eligible except for earning above SGA, capped at the full Part 
A Medicare premium amount; and, 3) Create an optional state 
Medicaid buy-in for working SSDI/SSI beneficiaries.

TTW&SSA98 Solution:

    Extend premium free Medicare for Two Additional Years 
(total six years premium free Medicare coverage before buy-in 
at full Part A premium).

CCD Analysis.

    This is a good beginning. However, because it does not 
institute a sliding scale for premiums it only postpones the 
onset of the expensive Medicare premium for two years. It also 
does not allow a buy-in to Medicaid for critical services--
personal assistance and prescription medications--that are 
vital to supporting people with disabilities who work, but that 
are not covered by Medicare.

CCD Recommendation.

    The bill should adopt the sliding scale Medicare program 
and the State Medicaid ``Work Incentive Services Waiver'' 
proposed by the Work Incentives Improvement Act of 1998 soon to 
be introduced in the Senate. If this is not possible, the 
Congress must use the six years of premium free Medicare given 
to disabled workers and should require HHS and HCFA to conduct 
extensive research and demonstration during next six years to 
determine how to continue to support disabled workers after 
their premium free Medicare coverage ends.

          Employment Barrier 2: Complexity of Work Incentives.

    The SSDI and SSI programs both have work incentives that 
are designed to assist beneficiaries and recipients to leave 
the rolls by going to work. These work incentives have the 
potential to be effective but they are complex and incomplete 
and therefore are underutilized. In addition, they are not 
coordinated for people who receive both SSDI and SSI. Despite 
intense efforts by SSA and advocacy groups to publicize and 
educate SSDI/SSI beneficiaries about these benefits, they are 
used by only a small fraction of those eligible. They also are 
very expensive to administer and too often result in benefit 
overpayments that must be returned by the payees.

Recommended Solution 2: Streamline Work Incentives.

    The work incentives must be simplified so that SSDI/SSI 
beneficiaries can understand and utilize them, and so there is 
a decrease in the expense of their administration. The goal 
should be to modify them into easily understood and usable work 
facilitators that encourage the transition from sole reliance 
on public benefits to economic security primarily through 
employment.

TTW&SSA98 Solution: Establish Work Incentives Specialists.

    The Commissioner will establish a corps of trained, 
accessible, and responsive work incentive specialists to 
specialize in SSDI and SSI disability work incentives to 
disseminate accurate information to disabled recipients.

CCD Analysis.

    The effective use of SSA work incentives is dependent upon 
1) the availability of knowledgeable, responsible staff inside 
SSA that can make timely, accurate decisions regarding any 
application to use work incentives; and, 2) the availability of 
knowledgeable, responsible consultants outside SSA that can 
offer timely, accurate information and analysis regarding any 
application of work incentives. There are countless horror 
stories citing massive overpayments, disrupted lives, and 
dashed hopes resulting from the current haphazard approach SSA 
uses to implement the work incentives.

CCD Recommendation.

    There are three actions required to solve this problem. The 
bill should mandate that a sufficient number of SSA employees 
by knowledgeable of and responsible for handling work 
incentives. The bill should also clearly state that the 
external consultants must be work incentive specialists who are 
employees of private, not-for-profit agencies or public 
agencies other than SSA. The bill should also direct SSA to 
contract with an appropriate vender to develop decision support 
software that will analyze individual situations and provide 
information on the impact work would have on net income for 
that individual.

               Employment Barrier 3: Financial Penalties.

    Enabling individuals who have been unable to afford to enter or re-
enter the workforce due to the economic disincentives inherent in the 
current system requires the redesign of the program. This should be 
done in a way that facilitates former SSDI/SSI beneficiaries to earn an 
income that enables them to survive. The current SSDI structure 
punishes rather than rewards people with disabilities who attempt to 
leave entitlement programs to work. The SSDI system eliminates 
eligibility for both cash assistance and in-kind support (e.g., health 
care) before the individual can earn a living wage. Whie the SSI 
program has Sec. 1619, SSDI has no similar work incentives. This sudden 
loss of support is known as the ``income cliff'' and represents a 
significant disincentive to work.

Recommended Solution 3: Make Work Pay.

    A combination of several financial mechanisms were recommended, 
including declining cash assistance similar to the SSI Sec. 1619 
program, disability expense related tax credits, and tax deductions 
will enable individuals with significant disabilities to work. We also 
recommended a change in the asset limitations for SSI recipients who 
work to facilitate savings and investment. This recognizes that some 
individuals with the most significant disabilities will need ongoing 
support due to their limited earning capacities.

TTW&SSA98 Solution: Disabled Worker Tax Credit and Demonstration 
Projects Providing for Reductions in Disability Insurance Benefits 
Based on Earnings.
     A tax credit in an amount equal to 50 percent of 
impairment-related work expenses up to $10,000 will be provided to 
disabled workers.
     Demonstration projects for the purpose of evaluating a 
program for SSDI recipients under which each $1 of benefits payable is 
reduced for each $2 of such recipient's earnings that is above a level 
to be determined by the Commissioner.

CCD Analysis.

    The tax credit for impairment-related work expenses is available to 
a wide range of workers with disabilities for expenses incurred on the 
job. The demonstration is required to be conducted and must be of 
sufficient scope, duration, and scale to permit a thorough evaluation 
of the project to determine the: (1) effects, if any, of induced entry, 
(2) extent to which the project is affected by the administration of 
the Ticket to Work and Self-Sufficiency Program, and (3) savings that 
accrue to the Trust Funds.

CCD Recommendation.

    The tax credit should be targeted to those workers with 
disabilities who are leaving SSDI or SSI, or reducing their reliance on 
SSI, and should include items connected with ``preparation for, and 
traveling to and from work, including the cost of a vehicle, 
orientation and mobility services and Durable Medical Equipment.

    Employment Barrier 4: Consumer Choice of Services and Providers.

     People with disabilities who are SSDI beneficiaries or SSI 
recipients have no choice in the providers of their services. 
Consumers are assigned to a service provider, which by law must 
be a state vocational rehabilitation agency, usually by type of 
disability rather than type of services required. Consumers who 
determine that they are not receiving appropriate or high 
quality services generally have no recourse other than to 
purchase services themselves from private vendors. Given the 
cost of private services and the state of most consumer's 
finances, this is an option very few can afford.

Recommended Solution 4: Enhance Consumer Choice of Services and 
Providers.

    CCD recommended consumer choice be implemented through 
several components:
    I. Consumers must be able to choose from among the many 
thousands of public and private rehabilitation, employment 
service, and related providers in the nation.
    II. The payment system should encourage work by all SSDI/
SSI beneficiaries, regardless of their ultimate work capacity. 
Payment should be made through a milestone approach.
    III. A Commission with equal representation from consumers 
and their self-selected representatives, providers, and 
employers be appointed and charged with responsibility to 
assist SSA in this endeavor.
    IV. Advocacy services specifically designated to assist 
SSA's beneficiaries to resolve disputes with providers should 
be made available.
    V. Management of the new program should be contracted to a 
private sector firm on a competitive bid similar to the 
arrangement in the current Alternate Participant program.

TTW&SSA98 Solution:

    Consumer choice is offered to SSDI and SSI beneficiaries 
through:
    I. The Ticket to Work and Self-Sufficiency offered through 
Individual Employment Plans and Employment Networks
    II. Outcome Based and Milestone/Outcome Based Employment 
Network Payment Systems
    III. Ticket to Work and Self-Sufficiency Advisory Panel
    IV. A method for resolving disputes between: recipients and 
employment networks, and program managers and employment 
networks.
    V. Program Managers.

CCD Analysis.

    The Ticket to Work program appears to meet the majority of 
the criteria specified in CCD's testimony. The outcome based 
and the milestone/outcome payment strategies both pay providers 
40% of the average disability benefit for each month that a 
recipient does not receive a benefit payment due to work 
activity. Using the average monthly disability benefit, rather 
than the individual monthly benefit will assist beneficiaries 
with lesser work histories to obtain services by increasing the 
potential payment available to them.

CCD Recommendation.

    Modify that payment system for individuals on SSI to allow 
providers to receive milestone/outcome payments based upon a 
reduction in benefit payment in addition to when a beneficiary 
does not receive a benefit payment due to work activity. This 
would encourage providers to work with many individuals who can 
work, but who are unlikely to ever have the capacity to earn 
enough from wages alone to become self-sufficient. Congress 
should also adopt a provision from the proposed Senate bill 
that protects beneficiaries from unwarranted Continuing 
Disability Reviews (CDRs) during the work attempt. These 
include: work activities will not trigger a CDR; work 
activities cannot be used as evidence that a disability has 
ceased; termination of work activities does not presume an 
inability to work.

          Employment Barrier 5: Inadequate Work Opportunities.

    Individuals with significant disabilities face competition 
from many directions in their efforts to work. Individuals who 
are leaving welfare, those who are graduating from schools and 
colleges, and those who are dislocated due to corporate down-
sizing and economic restructuring all are competing for a 
limited pool of jobs.

Recommended Solution 5: Help Employers to Employ Individuals 
with Significant Disabilities.

    The Committee should study the impact of an expansion of 
the Work Opportunity Tax Credit to employers for hiring and 
retaining former SSDI/SSI beneficiaries. It should also study 
other ADA and disability related employment incentives already 
available to employers.

TTW&SSA98 Solution: No provision for employer incentives.

CCD Analysis.

    Given the lack of consensus on the efficacy of employer 
incentives for hiring and promoting workers with disabilities 
CCD understands the hesitancy of the Congress to direct scarce 
resources into this area.

CCD Recommendation.

    Congress should ask the General Accounting Office to study 
the impact of an expansion of the Work Opportunity Tax Credit 
to employers for hiring and retaining former SSDI/SSI 
beneficiaries. It should also study other ADA and disability 
related employment incentives already available to employers.
      

                                

    Chairman Bunning. Thank you very much, Mr. Young.
    Mr. Keller.

     STATEMENT OF EARL KELLER, SOCIAL SECURITY DISABILITY 
    BENEFICIARY, ON BEHALF OF THE NATIONAL ALLIANCE FOR THE 
                          MENTALLY ILL

    Mr. Keller. Yes, thank you, Chairman Bunning and 
Representative Kennelly, and the Subcommittee, for holding this 
hearing. My name is Earl Craig Keller. My age is 37. I live in 
Rockville, Maryland. I first became mentally ill in 1982. I was 
diagnosed and then rediagnosed in 1988 as having a 
schizoaffective disorder. I graduated from college. I went back 
to college and finished my degree in political science with a 
minor in psychology, a B.A.
    Schizoaffective disorder is basically a lot of paranoia 
delusions, hallucinations, and some depression. So it's hard to 
work, obviously.
    I started receiving SSI and SSDI in 1987, and I received 
Medicare in 1989. Ever since then, I've been stuck in the 
system. What I mean by that is I can't earn over $500 a month. 
Let me explain why.
    My medication costs $1 a pill. I take three pills a day. 
That's 90 pills a month. My psychiatrist costs $60 for 15 
minutes to prescribe the medication. My therapy costs $100 for 
50 minutes once a week, and I see my therapist once a week.
    Currently, my Medicare and my Medicaid cover all the costs 
of that. Medicare and the Medicaid cover the cost of the 
therapy, and my Medicaid covers the cost of prescription drugs. 
It only costs me $1 per prescription.
    Many mentally ill people take more medication, more pills 
than just one, however, and within those pills they take more 
than one tablet. So you can see the cost is enormous. Newer 
medications like Clozarol and also Zyprexa can be $2 and up per 
pill. This does not take into account housing, food, and 
socialization.
    Concerning jobs, I've had over 25 jobs. I've had an 
intermittent work history because I've been mentally ill. I've 
been hospitalized 40 times over the last several years. I have 
a work history that has been typically minimum-wage jobs, 
although recently I received an $8-an-hour job in Rockville, 
but I can't work over 15 hours a week due to the fact that I'd 
be making $480, and I'm coming very close to that $500 limit. 
I'm able to work; I want to work, and I will work. The point is 
I can't work right now because the Social Security 
Administration and the current $500 limit punishes me for 
working.
    Vocational rehabilitation, concerning vocational 
rehabilitation, I was at vocational rehabilitation three times. 
The first time they tested me and told me that the testing--
they couldn't do anything for me. The case manager suggested I 
look through the Montgomery Journal together with him and 
possibly get a job. So I had zero options. It didn't happen. I 
didn't get a job. I didn't get training.
    The second time I was with VR I got less. I didn't get the 
testing. I didn't get anybody saying, Go through the paper. I 
got absolutely nothing.
    The third time I was with VR they said absolutely nothing 
and they did absolutely nothing.
    One of the programs I'm involved in is Threshold Services 
in Rockville, Maryland. It's an excellent program. It's a model 
program of psychosocial rehabilitation residential program. I'm 
not in the residential part of it, but it's a very good 
program. It's a model program for possibly in the future to be 
a provider such as the bill suggests for employment. It's a 
model program, and Kim Smith is the leader of the program 
there, as well as other staffmembers, and they do an excellent 
job. They treat people with mental illness as people, as human 
beings, rather than just as objects, like some of the programs 
I've been in in the past.
    This bill would give me the opportunity to work more hours 
and live a productive life. One aspect that needs to be added 
to this bill is insurance to pay for prescriptions. The bill 
would give me and others like me the opportunity to avoid VR 
and go to a provider that will actually help me to get a job, 
and will continue with me for 5 years. This is a very good 
bill, and I support this bill.
    Thank you, Chairman Bunning, Representative Kennelly, and 
the Members of the Subcommittee for allowing me to speak. Do 
you have any questions?
    [The prepared statement follows:]

Statement of Earl Keller on Behalf of the National Alliance for the 
Mentally Ill

    Mr. Chairman, Representative Kennelly, my name is Earl 
Keller. I am 37 years old and live in Rockville, Maryland. I am 
pleased to have this opportunity to offer my views on H.R. 
3433, the Ticket to Work and Self Sufficiency Act of 1998. As 
an SSDI beneficiary myself, I am excited at the potential this 
important piece of legislation offers in shifting the focus of 
the current SSDI program and related employment systems away 
from an inflexible ``one size fits all'' model, to a flexible 
consumer-driven system that places beneficiaries in control of 
their own future.

         My Experience With SSDI and Vocational Rehabilitation

    I was first diagnosed with schizo-affective disorder in 
1988. Schizo-affective disorder is a serious brain disorder 
that, while treatable, is very disabling. Like many people with 
this rare brain disorder, I was originally erroneously 
diagnosed with paranoid schizophrenia. This occurred in 1982. 
In addition, I have also been treated for depression.
    The illness I have has much in common with other severe 
mental illnesses. The symptoms of schizo-affective disorder--
including delusions and hallucinations--are very disabling. 
Like other severe mental illnesses schizo-affective disorder 
is, by its very nature, intermittent and episodic. Medical 
science has proven that schizo-affective disorder is a brain 
disorder. It is a severe mental illness that is a disease of 
the brain. It is not a result of a deficiency in character, nor 
is it linked to bad parenting or other social factors.
    More importantly, as advances in biomedical research have 
occurred, we know that treatment works. Medications, for the 
most part, are effective in controlling the symptoms that are 
part of the disease in a way that allows me function at a high 
level. At the same time, schizo-affective disorder does not 
follow a constant path. As a result, I can at times be high 
functioning. However, at other times, I can experience a break 
that can leave me unable to work, and in some instances, has 
required hospitalization--in my case, 40 separate times since 
the early 1980s.
    Despite the extreme disabling nature of schizo-affective 
disorder and other severe mental illnesses, I can and want to 
work. My own personal experience proves that work is possible. 
Since 1983, I have had 25 different jobs, nearly all of which I 
have found on my own. In addition, I have also earned a 
bachelors degree in political science, with a minor in 
psychology, in 1985. Despite this education and employment 
experience, I still struggle to stay in the workforce.
    My efforts are certainly complicated by my illness. 
However, I also believe that my struggle is also made difficult 
as a result of well intentioned government programs that are 
both hostile to work, and unresponsive to people's real needs. 
While a social safety net is certainly needed for people with 
severe disabilities, this safety net should not unnecessarily 
trap people in poverty by blocking part-time or intermittent 
work. As my employment history demonstrates, people with severe 
mental illnesses can find work on their own. However, my 
experience also demonstrates that, in the absence of ongoing 
supports and services, staying in a job is very difficult--
especially in cases where there has been a clinical change in 
the course of treatment.
    Mr. Chairman, millions of people like me who live with a 
serious brain disorder are able to work and be productive, 
taxpaying members of our communities. With access to effective 
treatment through health care coverage, people with severe 
mental illnesses who are on the SSI and SSDI rolls can move 
toward greater independence.
    Unfortunately, the current structure of the system, 
including both the pervasive work disincentives in the SSDI 
program, and the unresponsive nature of the state-federal 
vocational rehabilitation program, make work a frequently 
unachievable goal. Put simply, the current system is hostile 
toward work for people who can and want to work, but whose 
disability prevents them from moving rapidly and permanently to 
full employment. More importantly, the system has the perverse 
effect of trapping people in poverty. Allow me to explain.

                  The Existing SSDI Work Disincentives

    Mr. Chairman, as you know, SSDI functions as an ``all or 
nothing'' program. Once someone is able to prove that they are 
too disabled to work, and they begin receiving cash assistance, 
the program provides virtually no incentive to leave the rolls. 
In fact, just the opposite is true. It provides very severe 
penalties for beneficiaries who seek to move into the workforce 
through limited or part-time employment. Once an SSDI 
beneficiary begins earning more than $500 per month, they 
``fall off a cliff'' that can compromise both access cash 
assistance and medical coverage under Medicare.
    In my case, this $500 limit has a profound impact on my 
ability to work. I am now starting a new job as a telephone 
interviewer. The job pays $8 an hour--well above many of the 
minimum wage jobs I have had over the past decade or so. 
However, because of the $500 SGA limit in the SSDI program, I 
will be limited to 15 hours a week in order to avoid losing 
eligibility for cash benefits, and more importantly, the health 
care coverage that I must have in order to access treatment for 
my illness. I believe that in the proper work environment and 
with the right mix of supports and services, I could work more 
hours, perhaps as many as 30 hours per week. Unfortunately, 
anything above 15 hours is a massive step backwards for me, 
risking both essential cash benefits and critical medical 
coverage.
    Mr. Chairman, I am not arguing for a system that would pay 
cash benefits or extend Medicare coverage indefinitely. Such a 
system would not serve the interests of taxpayers and would 
fail to incentivize work and independence. At the same time, 
the status quo is indefensible. SSDI needs to be changed in 
order to allow beneficiaries a ``glide path'' rather than an 
abrupt ``cliff'' off of cash benefits. The proposed ``2 for 1 
offset'' demonstration contained in H.R. 3433 would help 
achieve this end. If done correctly, this demonstration program 
should prove what many people with disabilities and their 
families already know, that extending and gradually phasing out 
cash assistance in SSDI is a good deal for taxpayers and an 
equitable way to help people move toward work.

    Vocational Rehabilitation is Failing People with Severe Mental 
                               Illnesses

    Even in cases where government programs seek to help people 
either return to work or develop skills to enter the workforce 
for the first time, they fail to account for the unique needs 
of people with serious brain disorders. The most glaring 
example of this is the state-federal vocational rehabilitation 
(VR) system. In my case, the three separate attempts of the VR 
system to serve me have met with failure.
    This is not a reflection of any lack attention on the part 
of VR staff. Rather, it is a result of the basic structure of 
VR being inconsistent with the employment and training needs of 
people with severe mental illnesses. VR is directed almost 
exclusively toward a single goal--case closure. For VR, the 
process ends once a client is placed in a job for the required 
time period and a file can be marked closed. This inflexible 
goal fails to take into account the fact that illnesses such as 
mine are episodic and intermittent. Moreover, for many people 
with disabilities, this ``closure'' is only the beginning of 
the process. Ongoing supports and services are oftentimes 
critical to one's ability to stay in a job over the long-term.
    The current VR system spends too much time testing and 
assessing clients prior to employment, instead of actually 
placing people in jobs and providing ongoing supports and 
services that will help them stay employed, get of the rolls, 
and (eventually) reach full independence. People with illnesses 
such as schizo-affective disorder typically need assistance 
that is both flexible and ongoing to help them live with their 
disability in a way that will promote, rather than inhibit 
work.

         How H.R. 3433 Will Make a Difference in People's Lives

    At the outset, I would like to make clear that this 
legislation is not perfect. It does not fix every problem in 
the current SSI and SSDI programs and it does not propose a 
comprehensive solution to the massive shortcomings of the VR 
system. No single legislative proposal could satisfy all of 
these goals in a cost effective way. However, enactment of H.R. 
3433 will begin the process of making the SSDI program more 
equitable for beneficiaries who can and want to work. Passage 
of this bill would also open up the system of rehabilitation, 
employment, training and skills development and place people 
with disabilities in control of their future.
    By giving individuals a return to work ticket and placing 
them in control of their own return to work plan, you will be 
putting consumers in the driver's seat for the first time. 
Providers will be forced to compete for business on the basis 
of how well they meet the individual needs of consumers. State 
VR agencies will no longer be in control of the resources that 
are directed towards helping people with disabilities achieve 
work and independence. Extended Medicare coverage (beyond the 
current 39 month period) will help ensure that persons who move 
toward full-time work will have the health security that is 
essential to their staying in the workforce.
    Perhaps the best way to demonstrate how this bill is a vast 
improvement over current law is to look at my own personal 
circumstances.

1. Consumer Empowerment Through a Ticket System

    First, with a ticket to work, individuals such as myself 
would be able to skip the entire testing and assessment process 
within VR. By receiving a ticket directly, I would be able to 
go directly to a provider that is part of an employment 
network. This provider would be selected by me, on the basis of 
their relative experience serving people with severe mental 
illnesses and their record in placing, and more importantly 
keeping, people in jobs in the local market. No longer would 
consumers be forced to accept VR as the only game in town. You 
should strongly resist any effort to remove from the bill the 
provisions repealing a) priority referral by Social Security to 
state VR agencies and b) benefit deductions for persons 
refusing to accept VR services. If this system had been in 
place for me, I would have been able to avoid three 
unproductive and unpleasant encounters with the VR system. 
Moreover, I would have been to go directly to a program such as 
Threshold Services, Inc., the non-profit group in Rockville 
that is providing me with the support I need to work.

2. The Employment Network Payment System

    With regard to the payment of providers in the new 
employment networks, the bill offers great potential for 
extending services beyond the current 9 month limit that exists 
in the VR system. Relying on milestones and outcomes as the 
basis for payment of providers and extending payments for as 
long as 60 months, you will be able ensure that providers will 
not abandon consumers after only a few short months in a job.
    As I noted earlier, severe mental illness poses a unique 
challenge with respect to episodic and intermittent needs of 
consumers. Basing payment on milestones and outcomes that are 
linked to savings to the trust funds will, for the first time, 
give a provider a reason to follow up with me to make sure that 
I have the supports and services that I need, that treatment 
for my illness is progressing, that my housing situation is 
stable, that my transportation needs are being met, etc. In 
structuring the payment system, I would urge that there not be 
payment for an pre-employment milestones. This is necessary in 
order to ensure that a new set of providers does not enter the 
market to write employment plans, accept payment from SSA and 
then quickly abandon consumers.
    Likewise, protections should be added to ensure that 
providers are not able to engage in any form of ``cherry 
picking,'' risk selection, or ``creaming'' of consumers who may 
appear (at first glance) more likely to be employed over a 
sustained period of time. This is especially the case with 
severe mental illness where the episodic nature of the illness 
makes any accurate prediction of future prospects difficult.
3. Work Incentive Specialists

    In my experience, one of the biggest frustration that 
consumers face with SSI and SSDI is the Social Security 
bureaucracy. When trying to get straight answers about your own 
benefits and possible opportunities for work incentives, 
consumers often find that SSA field offices and headquarters 
staff give conflicting and confusing answers. No doubt, this 
flows from the complexity of the programs, especially in the 
case of PASS and 1619(a) and (b) for SSI beneficiaries. 
However, this complexity does not excuse wrong or misleading 
answers to basic questions and the (sometimes) complete lack of 
effective counseling about what the real options are. Putting 
work incentive specialists in SSA field offices will go a long 
way toward helping consumers cope with this new program. More 
importantly, these work incentive specialists should not be 
employees of SSA in order to ensure that the advice they give 
consumers is independent and free of the biases that we often 
see in SSA field staff.

4. The ``2 for 1'' Demonstration

    As I stated earlier, a ``2 for 1'' initiative would allow 
me to increase my hours to as much as 30 hours a week in my new 
job without having to go off the SSDI rolls altogether and, in 
turn, lose access to Medicare. As a demonstration program it is 
being put in place to test whether or not it would drain 
resources from the trust funds and create an inducement for 
people to enter the program who would not otherwise do so. In 
structuring such a demonstration, I would urge that Congress 
not limit the scope of this examination to the impact on the 
trust funds alone (although I believe that a properly designed 
program will render substantial trust fund savings). Instead 
Congress and SSA should design a program that looks at both the 
trust funds, the overall federal Treasury and the economy to 
examine the added benefit of more people with disabilities 
working. Some of these potential benefits to taxpayers include 
payment of income taxes, payment of state and local taxes, and 
a decline in subsidies for housing and other government 
services.

5. Extended Medicare

    As noted above, access to health benefits is a critical 
prerequisite for a person with a disability who wants to enter 
the workforce. If a person with a disability is uninsured, they 
are highly unlikely to be able to get the health-related 
services they need to stay working. While I strongly support 
this provision in the bill, I also believe that it can be 
improved by adding coverage for outpatient prescription drugs 
for SSDI recipients with severe mental illnesses who elect to 
return to work. Currently, I receive coverage for my 
medications through Maryland medical assistance. However, my 
eligibility for this program would be compromised once my 
income rises. Some way must be found for SSDI beneficiaries 
moving to work to get coverage for medications (which in the 
case of the severe mental illness is the principal means of 
treatment).

6. Disabled Worker Tax Credit

    Providing a tax credit directly to people with disabilities 
who move toward work is a great idea. Any such incentive in the 
tax code should go directly to consumers. Under the bill, this 
credit is limited to 50% of $10,000 in impairment related 
expenses. I would urge that you consider expanding this 
proposal to cover the costs of ``job coaches'' and forms of 
supports as impairment related expenses. Like personal 
attendant services and transportation, job coaches and other 
targeted supports help people with severe mental illnesses stay 
in the workforce once they have a job.
    Mr. Chairman, thank you this opportunity to share my views 
on this important policy initiative for people with severe 
mental illnesses and their families.
      

                                

    Chairman Bunning. Thank you, Mr. Keller. We'll ask 
questions after everybody is finished.
    Mr. Keller. Thank you.
    Chairman Bunning. Mr. Abbot.

  STATEMENT OF QUINCY ABBOT, PRESIDENT, THE ARC OF THE UNITED 
               STATES, WEST HARTFORD, CONNECTICUT

    Mr. Abbot. Thank you, Mr. Chairman and Members of the 
Subcommittee, for this opportunity to testify on eliminating 
the barriers to employment for Social Security disability 
beneficiaries through H.R. 3433.
    We appreciate the leadership of Chairman Bunning and 
Representative Kennelly in taking a serious and long-overdue 
look at the work incentive and barrier issues in the Social 
Security disability programs. As you know, The Arc of the 
United States has joined in support of your efforts for passage 
of H.R. 3433, along with the Consortium for Citizens with 
Disabilities Social Security Task Force and other disability 
advocates across the country.
    I am testifying in my capacity as president of The Arc of 
the United States and also as a parent. My daughter, Becky, is 
34 years old, has mental retardation, and is currently 
competitively employed at CIGNA corporate offices in 
Bloomfield, Connecticut. She operates a photocopy machine, 
earns about $15,000 a year, and receives health coverage 
through CIGNA. She does not currently receive SSI, SSDI, or 
Medicare. She did receive SSI for a few years while training 
for her job and currently receives some residential supports 
through a Medicaid waiver. She also has section 8 housing 
support.
    Let me emphasize that Becky's situation is not typical for 
people who have mental retardation severe enough to qualify 
them for the SSI or SSDI Programs. As I note in my testimony 
for the record, much of her success in becoming more 
independent of benefits is due to favorable circumstances which 
fell into place for her.
    She does continue to need the residential supports 
available to her through the Medicaid waiver and section 8 
housing support. Even now, if circumstances changed and she 
were unable to work, she would need to rely again on SSI and 
would also probably qualify for title II disability benefits, 
based on her status as my disabled adult child, and also from 
her own work history.
    On behalf of the 7 million Americans with mental 
retardation, I want to thank Chairman Bunning and 
Representative Kennelly for your bipartisan efforts to address 
all the issues raised to you in this Subcommittee's hearing 
last summer. We know there's still much work to be done, and we 
pledge to work with you to help bring H.R. 3433 to enactment in 
the 105th Congress.
    The Arc's position statement on self-determination for 
people with mental retardation states that people must control 
their own lives, control their own destinies. ``Tickets to 
Work'' will give them such control over getting a job and 
getting a work opportunity.
    Specifically, we commend you for including the following in 
the bill:
     ``Tickets to Work'' to create for consumers a new 
choice in providers of rehabilitation and other employment 
support services.
     Establishment of an advisory panel to advise the 
Commissioner of SSA in implementing and refining the program 
and designing the research and demonstration projects.
     Establishment of a corps of trained, accessible, 
and responsive work incentive specialists to assist 
beneficiaries with disabilities.
     Requirement for demonstration projects to test the 
gradual decline in cash benefits as earnings increase.
     Extension of the timeframe in which beneficiaries 
can continue to receive Medicare coverage when they return to 
work.
     Creation of a disabled worker tax credit, which 
will allow a worker with disabilities a credit of 50 percent of 
impairment-related work expenses up to $10,000.
    As you know from our testimony last summer, and through 
your staff's work with us, The Arc believes it's imperative 
that the gradual reduction in cash benefits as earnings 
increase--otherwise known as the 2-for-1 proposal--be added to 
the title II disability programs in a way similar to work 
incentives in SSI. We believe this is critical for people, 
including those with mental retardation, who tend to be low-
wage-earners or who will be able to work only intermittently.
    We recognize the efforts of Chairman Bunning and 
Representative Kennelly in attempting to incorporate this 
approach in the work incentives bill. We commend you for 
requiring SSA to test the 2-for-1 proposal in your 
demonstration projects.
    The Arc appreciates your dedicated work and the work of 
your staffs in crafting this bipartisan bill. Our goal is to 
make work incentives really work, to make them as sensitive as 
possible to the different needs of people with different 
strengths and limitations, and to have them incorporate the 
need to potentially support some people over a lifetime.
    We look forward to continued work with you toward enactment 
of comprehensive work incentives legislation to help tax users 
become taxpayers, like my daughter. Thank you.
    [The prepared statement follows:]

Statement of Quincy Abbot, President, The Arc of the United States, 
West Hartford, Connecticut

    Thank you, Mr. Chairman and Members of the Subcommittee, 
for this opportunity to testify on eliminating the barriers to 
employment for Social Security disability beneficiaries through 
H.R. 3433, The Ticket to Work and Self-Sufficiency Act of 1998. 
We appreciate the leadership of Chairman Bunning and 
Representative Kennelly in taking a serious and long overdue 
look at the work incentive and barrier issues in the Social 
Security disability programs. As you know, The Arc of the 
United States has joined in support of your efforts for passage 
of H.R. 3433 along with the Consortium for Citizens with 
Disabilities and other disability advocates across the country. 
I will use this opportunity to discuss key issues facing people 
with mental retardation who want to work and the potential 
impact of H.R. 3433 in addressing those issues.

                              I. H.R. 3433

    I am testifying in my capacity as President of The Arc of 
the United States and also as father of my daughter Becky. My 
daughter is 34 years old, has mental retardation and is 
currently competitively employed at CIGNA corporate offices in 
West Hartford, Connecticut. She operates a photocopy machine, 
earns about $15,000 per year, and receives health care coverage 
through CIGNA. She does not currently receive SSI, SSDI, or 
Medicare. She did receive SSI for a few years while training 
for a job and currently receives some residential supports 
through a Medicaid waiver. She also has Section 8 housing 
support.
    That said, let me emphasize that Becky's situation is not 
typical for people who have mental retardation severe enough to 
qualify them for the SSI or SSDI programs. I know that from my 
years of experience in The Arc and through knowing my 
daughter's friends who have mental retardation or other 
developmental disabilities. My daughter's experiences are 
instructive, however, for understanding various aspects of the 
quest for job security by people with mental retardation. In 
reviewing her story, it is easy to see those places where she 
would have been left without support and without a job, had the 
particular pieces of her life not fallen into place just right. 
Even now, if circumstances changed and she was unable to work, 
she would need to rely again on SSI and would also qualify for 
Title II disability benefits based on her status as my disabled 
adult child and also, probably, from her own recent work 
history.
     First of all, Becky is working at the corporate 
offices of the insurance company from which I retired as Senior 
Vice President of the Tax Department. After some vocational 
assessment in a sheltered setting, she spent 3 years at CIGNA 
in a supported employment enclave in the print shop, with a job 
coach providing assistance to her and to the other workers in 
her team with disabilities. Her productivity rate started at 50 
percent and it took those 3 years to bring her production rate 
up to 100 percent. She received SSI during those training 
years. She also received private health coverage through my own 
CIGNA policy since she was considered a disabled dependent at 
21 (not typical coverage).
     For some people with mental retardation, their production 
rate will never reach 100 percent. For others, the years spent 
reaching that level are not supported by an employer. For still 
others, even with full-time employment, they will not be fully 
covered by their employer's health insurance policy. Becky is 
still receiving critical support services through Medicaid. 
Some employers, of course, do not even offer health benefits.
     At that point, she was put on the regular payroll 
as a full-time employee. Many people with mental retardation 
never are hired on as full-time employees.
     Later, when the print shop operations moved to 
another state, Becky was moved elsewhere in the corporate 
offices to run a photocopier, where she continues to work. Many 
employers do not have the capacity or interest in continuing 
employment for their low wage employees in major corporate 
restructuring or moves.
    Becky's story is different than that of her friends. In the 
second section of my testimony, I describe the typical scenario 
for people with mental retardation when they do not have inside 
corporate executives as their advocates, long term training 
opportunities, job security, and health care coverage. I also 
describe the complicated aspects of the disability programs 
which create disincentives for the person with mental 
retardation who wants to work despite the need for health 
coverage and on-going, life-long supports, including income 
supports, in time of need. This is the side of the story that 
my daughter's friends, and so many others like them, face 
nationwide. In a recent survey of waiting lists across the 
country, The Arc documented over 64,000 people with mental 
retardation waiting for daytime support services such as 
vocational or employment support.
    On behalf of 7 million Americans with mental retardation, I 
want to thank Chairman Bunning and Representative Kennelly for 
your bipartisan efforts to address all of the issues raised to 
you in this Subcommittee's hearing last summer. We know that 
there is still much work to be done and we pledge to work with 
you to bring H.R.3433 to enactment in the 105th Congress. 
Specifically, we commend you for including the following in the 
bill:
     Tickets to Work to create for consumers a new 
choice in providers of rehabilitation and other employment 
support services.
     Establishment of an Advisory Panel to advise the 
Commissioner of SSA implementing and refining the program and 
designing the research and demonstration projects.
     Establishment of a corps of trained, accessible, 
and responsive work incentive specialists to assist 
beneficiaries with disabilities.
     Requirement for demonstration projects to test the 
gradual decline in cash benefits as earnings increase.
     Extension of the timeframe in which beneficiaries 
can continue to receive Medicare coverage when they return to 
work.
     Creation of a ``disabled worker'' tax credit which 
allows a worker with disabilities a credit of 50 percent of 
impairment related work expenses up to $10,000.
    As you know from our testimony last summer and from your 
staff's work with us, The Arc believes that it is imperative 
that the gradual reduction in cash benefits as earnings 
increase (otherwise known as the ``2 for 1'' proposal) be added 
to the Title II disability programs in a way similar to work 
incentive provisions in SSI. We believe this is critical for 
people, including people with mental retardation, who will tend 
to be low wage earners (often without employer-sponsored health 
coverage) or who will be able to work only intermittently.
    We recognize the efforts of Chairman Bunning and 
Representative Kennelly in attempting to incorporate this 
approach in the work incentives bill. We commend you for 
requiring SSA to test the ``2 for 1'' in demonstration 
projects.

                             II. Background

    This section of my testimony reviews some key points about 
work incentives for people with mental retardation. While these 
points were submitted to the Subcommittee last summer, I 
resubmit them here for the record.

Title II and People with Mental Retardation 

    Many people with mental retardation receive ``Title II'' 
Social Security benefits as adult dependents of their parents 
who have retired, become disabled, or died. To qualify in this 
way for benefits based upon a parent's work history, the adult 
``child'' must have been disabled during childhood. This group 
of eligible adults disabled during childhood are often referred 
to as ``DACs'' (disabled adult child).
    In addition, a growing number of people with mental 
retardation receive Title II disability insurance benefits as a 
result of their own work history (quarters of coverage) and 
disability.
    Since the eligibility criteria and work incentive 
provisions of the disability insurance program are applied to 
all of these categories of adults, the term SSDI (Social 
Security Disability Insurance) is often used in references to 
encompass all of the Title II disability programs (even though 
it is technically incorrect for encompassing all). It is 
important that improvements in any of the work incentives be 
applied to all people who receive Title II benefits on the 
basis of disability, not just those who are technically in the 
SSDI program.

The Lessons of Section 1619 and Title II Work Incentives

    Following are highlights of a number of key issues 
regarding work incentives for people with mental retardation, 
based on the experiences of people with mental retardation as 
reported to us over the years by themselves, their parents, 
their employers, and their service providers.
     People with mental retardation have a life-long 
disability. Although most can work, those who are severely 
disabled enough to qualify for SSDI or SSI benefits are likely 
to need life-long support of some sort even if they are 
working. That need for support will vary with the individual, 
depending on circumstances including age, health, skill 
development, severity of their disability, and family and 
community support, to name a few.
     Success for many people with mental retardation 
must be measured in decreasing dependence (financial or 
otherwise) and increasing productivity and community 
participation; success should not be measured solely in terms 
of elimination of benefits. The fact that many people continue 
to use Section 1619 of the SSI program without ``moving off'' 
should not be viewed as failure. For the people with mental 
retardation involved, they have increased their own financial 
stability while reducing the amount of cash benefits paid out 
of the general treasury.
     Due to the nature of the disability and to the 
nature of job opportunities traditionally open to people with 
mental retardation, many will start as low-wage workers and 
will remain at lower levels of income most of their lives, 
often in jobs which do not provide health or other benefits. 
Many will be the last hired, lowest paid, and the first to be 
fired in any restructuring or downsizing. Even with the 
additional support of the job coach in supported employment 
situations, it can be very hard to find jobs which are an 
appropriate match for the individual with mental retardation 
and the employer. Sometimes, fitting in with untrained or 
uninterested managers or co-workers can be an insurmountable 
hurdle. In spite of the fact that people clearly want to work 
and in spite of the Americans with Disabilities Act and the 
Rehabilitation Act, it can be difficult to find jobs which 
provide the right match for people with significant cognitive 
limitations. It is even more difficult to find those jobs which 
provide the long term stability and support needed by an 
individual with significant impairment over a lifetime. Typical 
seasonal jobs and other part time employment jobs do not 
provide health or retirement benefits.
     Therefore, the ``cash cliff'' in Title II (the 
loss of all cash benefits after reaching the substantial 
gainful activity (SGA) level of earnings for the 9 months of 
the trial work period (TWP)) and the cost of continuing 
Medicare are very real barriers to work. In the SSI program, 
Sections 1619(a) and (b) allow for a gradual decline in cash 
benefits as earned income increases beyond the SGA level and 
for continued Medicaid coverage, even beyond the cash break-
even point, for as long as the person needs continued Medicaid 
in order to continue working. The Social Security disability 
program does not have similar work incentives. There, people 
lose all cash after 9 months of trial work and Medicare is very 
expensive for lower income earners when the extended period of 
eligibility (EPE) is exhausted. It is important to note that, 
when the Section 1619 program was made permanent in 1986, the 
TWP and EPE were eliminated in SSI; with the gradual cash 
offset and the availability of continued Medicaid, TWP and EPE 
were no longer necessary.
     In addition, there are very significant 
complications for people who move from SSI Section 1619 work 
incentives to the Title II disability programs and for those 
who receive benefits from both Title II and SSI.
     We strongly believe that a parallel program to 
Section 1619 should be established in Title II, including 
elimination of the confusing TWP and EPE.
     In our experience, there is a very typical 
scenario for people with mental retardation and their attempts 
to work despite severe, life-long disability. Of course, there 
are innumerable variations, but the basic scenario is repeated 
over and over again across the country in family after family.
    --First, the young person, often upon becoming 18 years 
old, becomes eligible for SSI based on disability and low 
income and resources. The individual is able to increase income 
to the best of his/her ability using the Section 1619 program.
    --Then the individual's parent retires or becomes disabled. 
At that point, the individual becomes eligible to receive a 
benefit equal to 50 percent of the parent's benefit. As you 
know, an SSI beneficiary must apply for and accept all other 
sources of income or benefits he/she is entitled to, because of 
the nature of the SSI program as supplemental income.
    --As a result of this increase in unearned income, the 
individual may lose SSI completely OR may receive both SSI and 
SSDI simultaneously. It is at this step that it becomes clear 
that the work incentives in SSI and SSDI are not at all 
coordinated.
    --The next major change comes when the parent dies. For 
parents, their greatest fear often is not for their own 
futures, but for the future of their sons and daughters, 
particularly when they have significant limitations in their 
ability to anticipate and care for their own needs. At this 
point, the individual becomes eligible for a Title II benefit 
equal to 75 percent of what the parent's benefit was. Once 
again, the individual may lose SSI altogether and move 
completely into Title II, OR may continue to receive SSI and 
SSDI simultaneously.
    --Throughout all of this, the individual has not changed at 
all. There may have been no change in job status, no change in 
job or income, no promotion. Yet, the person, through no action 
of his/her own, may become ineligible for basic safety net 
support and is forced to choose between that critical support 
or work which cannot meet his/her needs.
    --The loss of SSI benefits and the loss of those work 
incentives which make it possible to improve financial 
stability, therefore, may also mean the loss of work and the 
loss of an important factor in quality of life. The individual 
with a significant impairment and the need for some level of 
life-long support simply cannot afford to work at this point 
unless potential income is high enough to skip over the cliffs 
and canyons created by the loss of the Title II cash benefit 
and medical coverage. For the individual whose income is likely 
to start and remain low, including most people with mental 
retardation, the loss of work is likely.
    --For people with mental retardation, as for many of us, 
loss of meaningful work also means loss of part of your 
identity: your work is who you are. For those who have nothing 
to do, or who are prevented from working due to the need for 
on-going support, lives are wasted.
     The movement between programs requires other 
trade-offs also. In SSI, the Sec. 1619 work incentives 
encourage work. However, a person cannot save meaningfully for 
the future because of the limits on resources. While in SSDI, 
the work incentives do not encourage work, so a person cannot 
earn. However, there are no restrictions on savings for the 
future. Both programs require that the individual give up one 
or the other of these essential components for future financial 
security, if not total financial independence. Families helping 
a person with significant cognitive impairment, like mental 
retardation, must be concerned for the future and the long-
term.
     In designing a series of changes for Title II and/
or SSI, remember that, for people with mental retardation, work 
is often for the first time and may require different 
approaches than for people who are ``returning'' to work.
     Finally, I would like to make a comment on SGA. 
The substantial gainful activity level needs an increase and 
should be indexed for inflation. Rep. Phil English has 
introduced a bill which is long overdue. We urge the Committee 
to address it as part of its work incentive improvement 
efforts. However, caution will be necessary to ensure that it 
works in the overall context of work incentives addressed here 
this week.
    The Arc appreciates the dedicated work of Chairman Bunning 
and Representative Kennelly and their staffs in working out 
this bipartisan bill. Our goal is to make work incentives 
really work, to make them sensitive to the different needs of 
people with different strengths and limitations, and to have 
them incorporate the need to potentially support some people 
over a lifetime. We look forward to continued work with you 
toward enactment of comprehensive work incentives legislation 
to help tax users become tax payers.
      

                                

    Chairman Bunning. Thank you, Mr. Abbot.
    Ms. Webb.

STATEMENT OF SUSAN WEBB, NATIONAL COUNCIL ON INDEPENDENT LIVING

    Ms. Webb. Mr. Chairman, Representative Kennelly, Members of 
the Subcommittee, I sat before you in July of last year 
representing the National Council on Independent Living. At 
that time, on behalf of NCIL's membership, I brought to you a 
proposal that represents what we believe is necessary to change 
the Social Security work incentives, so that thousands upon 
thousands of people with disabilities currently receiving 
Social Security benefits can start or return to work.
    Last week, you introduced the Ticket to Work and Self-
Sufficiency Act of 1998. Now, as the bill was only introduced 
last week, our full membership has not yet had a chance to look 
at it and analyze it and develop a formal position. Those will 
be forthcoming from us as an organization and from our 
individual members, as they deem appropriate.
    Today, however, I sit before you with an initial 
observation of the bill, and today I am excited and enthused 
about the future of our members. You clearly heard what we said 
last summer. Most notably, you heard us when we said a Band-aid 
will not work, that comprehensive reform is essential. We 
believe the legislation that you and your staff have crafted is 
fair and contains many of the provisions that we asked from 
you. We thank you.
    We told you last July that consumer control is essential. 
So you included a ticket to independence. We told you that 
consumer choice is essential. So you included not only a 
network of private providers, but you also preserved total 
choice by ensuring the viability of the existing State agencies 
to allow that total choice of whatever the consumer wants to 
avail themselves of.
    We told you that loss of health care coverage is a major 
barrier to employment. So you included an additional 2 years of 
Medicare coverage. We told you we needed quality assurance, 
accurate information, informed consumers. We told you that the 
2-for-1 offset was extremely important to us, and we told you 
we needed a tax credit. Mr. Chairman, Representative Kennelly, 
Members of the Subcommittee, you put it all in there, and we 
thank you.
    Now, unlike some of my colleagues here today, I kind of go 
out on a limb a little bit. So I'm going to suggest that maybe 
there are some things we can suggest to you today that might 
actually even strengthen the bill even further, and so I'd like 
to outline those very quickly for you now.
    We know that there's still very much to be done, but, first 
of all, we've been here before with disability-related 
legislation, and we know that there are some things we need to 
watch out for. One is that we really believe the bill should 
include a date certain for the promulgation of the regulations. 
We have seen over and over again that when law does not include 
deadlines for the Federal agencies who are required to do the 
regulations, they very often don't get them done on time, and 
so we end up with a law that takes awhile to implement.
    For example, that happened with the Rehabilitation Act of 
1973. It happened with the Fair Housing Amendments Act. But 
when the Americans with Disabilities Act was passed, Congress 
included dates for the implementation of the regulations, and 
guess what? It got done on time. So we encourage you to do 
that.
    Second, the Social Security Administration has told us on 
numerous occasions that they are not in the employment 
business, and that they support return-to-work services being 
done by those who are in that business. The bill does add 
significantly more responsibility onto the Commissioner's 
shoulders. We believe a provision should be added to the 
composition of the advisory panel that requires those appointed 
to have subject matter expertise. Having been a presidential 
appointee myself years ago, I know that very often these 
appointments do represent political paybacks. So we're real 
concerned that this advisory panel truly are people that do not 
have to be educated, will be able to hit the ground running, 
and assist the Commissioner in implementing this as far as 
promulgation of the rules, as far as overseeing the quality 
assurance program, deciding who the program and network 
managers should be, designing an effective 2-for-1 
demonstration project, and generally, being able to provide a 
high level of expertise to assist the Commissioner in 
implementation of this program.
    Third, since the issue of cost has been a major 
consideration throughout the drafting of this bill, we believe 
the requirement that employment networks undertake an 
employment evaluation as part of the development plan for each 
individual consumer smacks of bureaucracy and wastefulness. 
Those of us who are consumers looking for work, like every 
other adult, can tell the difference between somebody who's 
giving us a line and somebody who really wants to do a good 
job.
    Also, the outcome requirements to be paid that are included 
in this bill I think also will go a long way to assure that the 
people that are in this business are there to mean business and 
actually assist us in getting a job. By incorporating a lot of 
certifications, whether government or private, and requirements 
for evaluations, self-directed consumers are only hurt by that.
    There are several other recommendations that we have, and 
we will bring those forward. We understand the markup is coming 
next week, and so we will have a comprehensive list. In 
general, though, I would like to say, Mr. Chairman, that I 
thank you for inviting me back, and I applaud your commitment 
to this effort. I know in my heart that with passage of this 
bill, perhaps with a few amendments, many, many thousands of 
people with disabilities who are not now working today will be 
able to work and get out of poverty. Instead, we will move 
productively toward economic self-determination.
    Thank you.
    [The prepared statement follows:]

Statement of Susan Webb, National Council on Independent Living

    Mr. Chairman, Representative Kennelly, Members of the 
Subcommittee, I sat before you in July of last year 
representing the National Council on Independent Living (NCIL). 
At that time, on behalf of NCIL's members, I brought to you a 
proposal that represents what we believe is necessary to change 
the Social Security Work Incentives so that thousands upon 
thousands of persons with disabilities currently receiving 
Social Security Disability Insurance (SSDI) and Supplemental 
Security Income (SSI) can start or return to work. Last week 
you introduced the ``Ticket to Work and Self-Sufficiency Act of 
1998.''
    Now as the bill was only introduced last week, our full 
membership has not yet had the chance to analyze it and develop 
a formal position and comments. Those will be forthcoming, we 
expect, collectively from us as an organization and from 
individual members as they deem appropriate. We will do our 
part to ensure they have information about the bill as quickly 
as possible and ask for their response immediately.
    Today, however, I sit before you with an initial 
observation of the bill. And today I am excited and enthused 
about the future of our members. You clearly heard what we told 
you. Most notably, you heard us when we said a Band-Aid will 
not work--that comprehensive reform is essential. We believe 
the legislation you and your staff have crafted is fair and 
many of the provisions we asked for are included. We thank you.
    We told you last July that consumer control is essential. 
You included a ``Ticket to Independence.''
    We told you consumer choice is essential. You included not 
only a network of private providers but also preserved total 
choice by ensuring the viability of the existing State agencies 
in these reforms.
    We told you loss of health care coverage is a major barrier 
to employment. You included an additional two years of Medicare 
coverage.
    We told you we needed quality assurance in the provider 
network and effective implementation by the Social Security 
Administration. You included an Advisory Panel, a dispute 
resolution process, and significant data collection so that we 
can monitor the program's effectiveness and ``tweak'' it if 
need be.
    We told you we needed accurate information and informed 
consumers. You included a trained cadre of specialists.
    We told you we needed a ``2 for 1'' offset so that those 
who needed to ease into the work force, or move in and out of 
it, could be as self-sufficient as possible without falling 
over the ``earnings cliff.'' You included a ``2 for 1'' 
demonstration that we are confident will prove unequivocally 
that many more beneficiaries will reduce their dependency upon 
SSDI than will be induced to enter it, resulting in a savings 
to the Social Security Trust Fund.
    We told you we needed a tax credit to recoup actual 
expenses related to disability. You included a tax credit.
    Mr. Chairman, Rep. Kennelly, Members of the Subcommittee, 
we thank you.
    We know, however, that there is still much to be done to 
see this bill become law. In light of that, there are a few 
recommendations I believe I can make at this time that will 
further strengthen the bill and are consistent with NCIL's 
mission:
    1. The bill should include a date-certain deadline for 
promulgation and implementation of all regulations. 
Historically we have seen that not including a specific date 
delays the regulations and subsequently delays implementation 
of the Act (e.g., the Rehabilitation Act of 1973 and the Fair 
Housing Amendments Act of 1988). Conversely, when specific 
dates are included, such as was the case with the Americans 
with Disabilities Act, the statute is implemented on time. We 
recommend a deadline of one year from enactment.
    2. The Social Security Administration has told us on 
numerous occasions that they are not in the employment business 
and that they support return-to-work services being done by 
those who are in that business. The bill does add significantly 
more responsibility onto the Commissioner's shoulders. We 
believe a provision should be added to the composition of the 
Advisory Panel that requires those appointed to have 
demonstrated experience and expertise in employment and start/
return-to-work for Social Security beneficiaries. We also 
believe the Panel should include 50% consumer representation. 
The Panel, then, would share more responsibility for 
promulgation of the implementing regulations, overseeing 
quality assurance, deciding who the Program Manager(s) and 
Employment Networks should be, designing an effective ``2 for 
1'' demonstration project, and generally being able to provide 
a high level of expertise to assist the Commissioner in 
implementation of this program.
    3. Since the issue of cost has been a major consideration 
throughout the drafting of this bill, we believe the 
requirement that Employment Networks undertake an employment 
evaluation as part of the development of individual employment 
plans, is a drain on resources that could be more cost-
effective and consumer-friendly by drawing upon our experience 
with the Job Training Partnership Act and the Rehabilitation 
Act. Historically we have seen that such a requirement is of 
little or no use to many consumers who are self-directed. In 
fact, it is frustrating and sometimes demeaning to people who 
know what they want to do but are required to sit through 
lengthy and costly assessments because the ``government 
requires it.''
    We understand and support requiring Networks to offer such 
assessments to ensure that providers are giving beneficiaries 
the greatest number of options for their careers. We believe 
the way to address both sides of this issue is to add language 
to the bill that is similar to a provision in the 
Rehabilitation Act Amendments of 1992 allowing a consumer to 
waive their right to such an evaluation. Suggested language: 
``A beneficiary shall have the right to waive the employment 
evaluation requirement. Each beneficiary shall be informed both 
verbally and in writing of their right to waive the 
evaluation.''
    4. The ``2 for 1'' demonstration is of major interest to 
our members. We are pleased that you have authorized the Social 
Security Administration to include this element in the program, 
even if it is only a demonstration project at this time. 
However, the SSA has already been doing this with SSI 
beneficiaries for some years now. Therefore, we believe that it 
should not be an onerous administrative task for them to 
assemble the necessary infrastructure to manage such a program 
for SSDI beneficiaries. Because we believe this is such an 
essential element in enabling beneficiaries to return to work, 
we recommend that the demonstration project be national in 
scope, have a specific implementation date and duration 
included in the statute, and include a provision that the SSA 
must notify all beneficiaries of its availability.
    5. Several areas within the current bill include well-
intended provisions to ensure program integrity. We believe, 
however, that some of them could be less bureaucratic to 
encourage consumer control. For example, the bill requires the 
Commissioner to develop selection criteria for Employment 
Networks that includes some type of professional and government 
certifications. We believe consumers have the ability to 
determine whether providers of services are qualified and can 
do a good job without bureaucratizing the provider network. 
``Professsionalizing'' disability has historically not only 
created increased and unnecessary costs, it has perpetuated a 
``mystique'' around people with disabilities that we believe 
has caused the stereotypes that employers have of us. Doctors' 
releases, certified rehab plans, etc., serve only to stifle 
creativity and innovation and separate us out as ``different'' 
from other adults seeking work.
    Mr. Chairman, Members of the Subcommittee, I thank you for 
inviting me back. I applaud your commitment to this effort. I 
know in my heart that with passage of this bill, perhaps with a 
few amendments, many, many beneficiaries will no longer be 
trapped in poverty. Instead, they will move productively toward 
economic self-determination.
      

                                

    Chairman Bunning. Thank you, Ms. Webb.
    Let me ask anybody here on this panel to answer; you can 
choose up sides and find out whoever wants to answer. As you 
know, legislation passed by the House must be revenue-neutral. 
We are waiting for CBO and Joint Tax to tell us what the score 
on this bill will be; in other words, how much, if any, costs 
are involved. Depending on what CBO tells us, either we are 
going to have to find other ways to reduce benefits or we may 
not be able to include all the provisions we would like to 
include.
    It would be helpful to hear from you regarding the 
provisions you believe are the most important to include in 
this bill. Which three provisions do you believe are the most 
important to include? Mr. Young, would you like to start us 
off?
    Mr. Young. Well, clearly, from what we've heard over the 
last couple of years from the consumers, the health coverage is 
number one. No one is going to go back to work and give up 
their vitally needed health coverage.
    The second I think is the tax incentives. Folks just won't 
go to work for the privilege of paying more out of their pocket 
than they earn from the wages that they're going to be earning. 
No business would run that way; no family could run that way; 
certainly no individual can operate that way.
    And then, clearly, the ticket to work, the access to the 
services that the providers are going to help people with is a 
critical piece of the legislation. Some folks would be able to 
get back to work without the assistance, but many, many more 
would benefit from access to the wide variety of providers that 
the ticket offers.
    Chairman Bunning. Thank you. Someone else?
    Mr. Keller. I would say the health insurance is number one, 
along with the actual ticket, number two, the ticket-to-work 
program, and, number three, I would say the 2-for-1 option.
    Chairman Bunning. Ms. Webb.
    Ms. Webb. Mr. Chairman, I would agree that the ticket is 
very important, as well as the health care extension. However, 
I'd like to take a different approach, and that is that we have 
current work incentives right now in many respects that could 
be workable if they were administered better. I think one of 
the provisions in this bill that I think doesn't cost anything 
or very little that may get overlooked, and it worries me, is 
the privatization aspect and the advisory panel. It is very, 
very important that there be some other way to ensure that the 
Social Security Administration manages this program 
appropriately, or nothing is going to work.
    Too many consumers receiving services don't have a clue of 
what's available to them. If there is a provision in here that 
is very strong, that requires that consumers are educated about 
their options, this will work, and that piece has to be very 
strong, and won't cost that much money.
    Chairman Bunning. Mr. Abbot?
    Mr. Abbot. I would guess that maybe there's going to be a 
net savings and not net cost from this bill----
    Chairman Bunning. Well, we hope that's----
    Mr. Abbot [continuing]. Because----
    Chairman Bunning. We hope that's the case, too.
    Mr. Abbot [continuing]. I know personally a number of 
people who are unable to work, beyond a certain point, to earn 
money and pay taxes because of the barriers to employment. So I 
would urge that when they look at the figures, they look at the 
things outside of the box. It may take a little investment this 
year that produces return next year, and it's not just the cost 
in this bill; it's the savings from having additional revenues 
coming in from other places.
    Chairman Bunning. I think if Mrs. Kennelly and I were 
scoring the bill, it would be all right--[Laughter.]--but since 
CBO scores it, it's going to be a little different.
    One other question: Ms. Webb has suggested compromise 
language to allow the beneficiary the right to waive an 
employment evaluation requirement. What are your reactions to 
that?
    Mr. Young. I would agree with that option for the consumer.
    Mr. Keller. I do not understand. Can you explain more 
completely, sir?
    Chairman Bunning. Well, we have in the bill an employment 
evaluation requirement. Ms. Webb suggests that we waive that 
because she doesn't think, obviously, it's necessary.
    Ms. Webb. And may I clarify a little bit?
    Chairman Bunning. Go ahead.
    Ms. Webb. I'm not suggesting that we waive the requirement 
for the evaluation, but the evaluation should be offered by the 
provider to the consumer, but as we did in the Rehabilitation 
Act, the consumer has the option of waiving the evaluation and 
saying, ``I don't need that.''
    What we have today with, for example, the Job Training 
Partnership Act is that many people are required to go through 
expensive evaluation----
    Chairman Bunning. I believe I said the beneficiary has the 
option of waiving it.
    Ms. Webb. I'm sorry, Mr. Chairman, I misunderstood you.
    Chairman Bunning. That's OK.
    Ms. Webb. Yes, that's correct.
    Chairman Bunning. OK.
    Mr. Keller. I would agree.
    Chairman Bunning. OK.
    Mr. Abbot. My feeling is that you should be able to waive 
it. We spend I don't know how much time in evaluation and 
training, which for many people with mental retardation is not 
transferable into another situation. The best way to get them 
on the job and working is to get them on the job and working 
and provide the supports that they need to do the job there, 
rather than forever and ever training and evaluation, which 
doesn't get any place.
    Chairman Bunning. Barbara.
    Mrs. Kennelly. Thank you, Mr. Chairman.
    Mr. Keller----
    Mr. Keller. Yes?
    Mrs. Kennelly [continuing]. Under the legislation, as you 
know, you can choose the provider or rehabilitation service 
which best fits your need. The bill offers an incentive for 
providers to continue to support the individual by letting the 
provider share in part of the savings that result. You 
mentioned you have a nonprofit group in Rockville, Maryland, 
that you have been using. Do you think it would make a 
difference, this bill could make a difference to them, or do 
you think that it's just that some agencies give better 
assistance than others?
    Mr. Keller. I believe the Threshold Services and 
organizations like Threshold could be helped by this bill 
because they would basically--I think the bill would help with 
the 5 years for the individual, following the person for 5 
years, and also I think it's very ingenious because it allows a 
provider to get funding for 5 years, as opposed to not get 
funding for 5 years, and also the fact that it's incentive 
because the provider will want the individual, the disabled 
individual, to keep the job for up to 5 years and beyond, to 
follow through with us. I think it's a very good incentive for 
providers to be helped and the consumer to be helped as well. 
Do you understand?
    Mrs. Kennelly. Yes.
    Mr. Keller. OK.
    Mrs. Kennelly. Thank you. Thank you, Mr. Chairman.
    Chairman Bunning. Mr. Johnson.
    Mr. Johnson. No questions, Mr. Chairman.
    Chairman Bunning. No questions? Mr. Hulshof.
    Mr. Hulshof. Thank you, Mr. Chairman.
    Ms. Webb, let me kind of go back because I think when the 
bill was drafted, the intent, of course, was to provide as much 
program flexibility as possible, but at the same time 
emphasizing the consumer protections. I notice in your 
statement, you state that required individual employment plans 
may not be a good idea. Help us find other ways. You talk about 
trying to be less bureaucratic. What other suggestions might 
you have to improve the bill?
    Ms. Webb. Mr. Chairman, Representative Hulshof, we've been 
through this with the Rehabilitation Act since 1973 of the 
effect of bureaucratizing people with disabilities, and 
unfortunately, with many of these laws we end up creating a 
situation where people have no flexibility because of it, and 
the way to resolve that is to recognize that people with 
disabilities really are adult people that can make choices. I 
think inherent in this bill that's different from others that 
I've seen in the past is the incentive for the provider. They 
will not get paid unless they produce, and that, in and of 
itself, is enough to be sure that people are not going to be 
doing needless evaluations just to do evaluations.
    So leaving the flexibility in there for consumers to take 
control of their own plan, and watching as a wary consumer 
would, just as if I were buying a car, that is the way to 
assure the quality. The outcome-based payment itself will 
assure that quality, and the fact that we have choice. If we 
don't like what we're getting, just as the gentleman here to my 
right pointed out his experience, as long as we've got choice, 
if we don't like what we're getting one place, we can go next 
door. I think that that, in and of itself, the market-driven 
aspect of it, will assure the quality that we're looking for, 
and not pay money out of the trust fund that isn't earned.
    Mr. Hulshof. I appreciate that. Thank you, Mr. Chairman.
    Chairman Bunning. I want to thank you all for coming and 
appearing as witnesses today, and I want to let you know that 
we're going to submit some questions in writing to you, and we 
really appreciate your returning them in writing.
    [The following was subsequently received:]

Questions and Subsequent Answers from Mr. Young

    1. You suggest creating an optional State Medicaid buy-in 
for working SSI/SSDI beneficiaries. As Medicaid is under the 
jurisdiction of the Commerce Committee, have you shared your 
proposal with the Commerce staff, and what has been their 
reaction?
     CCD member organizations contacted staff of the Commerce 
Committee several times regarding a Medicaid buy-in. None of 
these contacts has resulted in any sign of interest on the part 
of the Commerce Committee to pursue this issue.
    2a. You recommend specific language be included in the tax 
credit, that it should include items connected with 
``preparation for, and traveling to and from work, including 
the cost of a vehicle, orientation and mobility services and 
durable medical equipment.'' Why do you believe it is important 
to specifically mention these items in the law?
     The tax credit language in HR 3433 only covers impairment 
related work expenses (IRWEs) incurred on the job. However, 
many times the IRWEs on the job are covered by the employer 
under the reasonable accommodations provision of the Americans 
with Disabilities Act. The disability related expenses of 
preparing for and traveling to and from work often exceed that 
which individuals with severe disabilities can afford and still 
meet ordinary expences such as rent, utilities, insurance, etc. 
These IRWEs are both the most critical for individuals with 
severe disabilities to go to work, and the most often denied by 
the IRS and SSA. Specifying these items in the law will prevent 
any uncertainty among implementing agencies as to the full 
intent of the Congress in regard to this provision.
    2b. Follow-up: You recommend that the disabled worker tax 
credit be confined to SSDI and SSI beneficiaries who are 
attempting to leave the rolls. As you know, it is important 
that we treat everyone fairly. Are you recommending that 
individuals who are already working with severe disabilities 
should be excluded from receiving this tax credit?
     This suggestion of limiting the tax cut to those leaving 
the rolls was an attempt to use DI and SSI status as a proxy 
measure for severe disability. There are other methods, 
including using the Disability Determination System, to qualify 
individuals with severe disabilities for tax cuts (or medical 
coverage). Targeting the tax cut to those leaving the rolls was 
also intended as one example of strategies to control the cost 
of an important work incentive while maximizing its impact. 
Those individuals with severe disabilities who have the lowest 
earnings and the highest expenses for work supports are the 
logical target for tax relief that can help them enter and 
remain in the workforce.
    A tax cut that covers impairment related work expenses 
related to preparing for, traveling to and from, and performing 
work for individuals with severe disabilities who have limited 
earnings is the best use of a limited funding.
    3. While you support our provision to establish Work 
Incentive Specialists, you believe that these individuals 
should be employees of private, not-for-profit, or public 
agencies other than SSA. Why? Shouldn't SSA employees be 
responsible for their own work incentives?
     Yes. SSA should employ workers who are knowledgeable of 
work incentives and responsible for making timely and accurate 
decisions on work incentives requests. However, beneficiaries 
need access to independent expert advisors who can assist them 
to make the best choice possible on an important decision. It 
is critical that these advisors have the best interest of the 
beneficiary at the center of their efforts. A complimentary 
external group of expert advisors working in conjunction with 
SSA staff would maximize the impact of these work incentives.
    4. I'm curious about your request that we include a 
provision to protect beneficiaries from unwarranted CDRs--these 
include requiring that work activities will not trigger a CDR, 
work activities cannot be used as evidence that a disability 
has ceased, and that termination of work activities does not 
presume an inability to work. Under current law, individuals 
with disabilities will not have benefits terminated if they are 
receiving rehabilitation services.
    There are individuals, as you know, whose condition will 
medically improve. Are you saying that work activity can never 
be an indicator of medical improvement?
     No, however, given the tenuous connection between work 
activity and medical conditions that result in disability, it 
is inadvisable for SSA to have the authority to conduct a 
Continuing Disability Review (CDR) solely based upon work 
activity. CCD strongly supports the use of CDR's at the 
regularly scheduled 3, 5, or 7 year intervals as a necessary 
mechanism for identifying beneficiaries who have medically 
recovered. While beneficiaries in the Medical Improvement 
Expected category may go to work because they have medically 
recovered to the extent that they no longer meet the SIDI 
definition of disability, beneficiaries in the Medical 
Improvement Possible and Medical Improvement Not Expected will 
rarely Medically recover to that extent. Yet, using the work 
incentives offered by this bill, many in the MIP and MINE 
categories will be able to work to some extent. Using work 
activity alone to trigger a CDR is veiwed by many beneficiaries 
as a not-so-veiled threat to the critical work supports and 
safety net offered by the SSA disability programs. This 
undermines the sense of confidence and security that is needed 
for a successful work effort.
    5. You recommend continuing Medicare free until an 
individual has $15,000 of earned income. Once this level of 
income is achieved, the individual would pay a premium equal to 
10% of earned income, capped at the full Part A Medicare 
premium amount. Have you discussed this proposal with the 
Administration and received their views regarding how such a 
buy-in would be administered or whether they would support such 
a proposal?
     CCD conducted informal discussions with the Administration 
regarding their support for and the mechanics of a Medicare 
buy-in. CCD believes that the current Medicare buy-in program 
can be modified without undue hardship to manage the proposed 
sliding-scale buy-in. We are eager to work with the Congress 
and the Administration to effectively implement a Medicare buy-
in, should one be enacted.
    6. You also recommend establishing a Medicare buy-in 
similar to your first suggestion, but for individuals with 
disabilities who would be eligible for disability except they 
earn above the $500 per month limit. Has anyone obtained an 
estiate regarding how much such a provision would cost?
     A request for a cost estimate for this proposal has been 
made to CBO by Senators Jeffords and Kennedy who have 
introduced S. 1858, the Work Incentives Improvement Act of 
1998. We do not believe this request has yet been answered.
      

                                

Questions and Subsequent Answers from Mr. Abbot

    1. We appreciate your sharing with us the experiences of 
your daughter and the supports she has received from her 
present employer. Becky has been fortunate in terms of her 
employer, but we appreciate the fact that her situation may 
well be unique.
    You mention some of the changes that may happen to an 
individual, through no fault of their own, for example that 
they may become eligible for SSI, then, when a parent retires 
or becomes disabled that are eligible to receive a benefit 
equal to 50% of the parent's benefit so may lose their SSI 
benefits and/or continue eligibility for both.
    This happens again when one of the parent dies, and they 
become eligible for 75% of the benefit. They then are forced to 
choose between the basic safety net which provides critical 
support or work and risk losing that basic safety net.
    You summarize the key challenges of interfacing programs 
based on need, such as SSI, with the basic insurances against 
disability, death, or retirement provided by the Social 
Security programs. I'm sure Arc has studied these circumstances 
over the years ... do you have any particular suggestions which 
we might keep in mind to address these important points as the 
bill moves forward?
    1. Regarding the key challenges of interfacing the SSI 
program and Title II programs--While the SSI program is means-
tested and the Title II programs are insurance programs, there 
are certain key ways in which they should be coordinated.
    We believe that it will ultimately be necessary to create a 
``2 for 1'' gradual decrease in cash benefits as earning 
increase for the Title II program. When that is eventually 
done, it will be important to ensure that other related aspects 
of work efforts in Title II be coordinated with SSI. That 
requires elimination of the Trial Work Period and Extended 
Period of Eligibility and requires allowing earnings above the 
substantial gainful activity level. Otherwise the complications 
caused for a dual SSI/Title II beneficiary will create more 
work disincentives. The TWP and EPE in SSI were eliminated when 
Section 1619 was made permanent.
    It would also be necessary for the order of ``2 for 1'' 
reductions to be clearly understood by dual beneficiaries. 
Since SSI is means-tested, it would seem reasonable for the 
reductions in SSI to occur before the reductions in Title II 
benefits.
    If the Title II programs were amended as described above, 
we believe that it would simplify work incentives for people 
who receive both benefits or for those who move from one 
program to another. Although it is possible that a different 
solution to the ``cash cliff'' problem in Title II could be 
devised, we believe that success is more likely if the solution 
is carefully crafted to address the needs of people who rely on 
both programs: hence, our recommendation to create a ``Section 
1619-type'' program in Title II.
    We also believe that it is important to develop all 
incremental steps toward the goal of simplified, coordinated 
work incentives in a fashion that will ultimately complement 
and facilitate that result. We believe that the provisions in 
H.R. 3433 would complement and not hinder a future ``1619-
type'' approach, including a gradual reduction in cash 
benefits.
    2. You mention that it is important that improvements in 
any of the work incentives be applied to all people who receive 
Title II benefits on the basis of disability, not just those 
who are technically in the SSDI program. Clearly that is our 
intent. In your view, is this not the case? Is there something 
in the bill we need to clarify?
    2. Coverage of people with disabilities--Upon careful 
review of H.R. 3433, we believe that you have, indeed, covered 
all people with disabilities within the Title II programs. As 
you can understand, since so many people with mental 
retardation are actually eligible for Title II benefits as 
``disabled adult child'' dependents or survivors, we simply 
wanted to note for the record the importance of covering people 
who do not fit technically in the category of ``disabled 
workers.'' Thank you for attention to this issue.

    Substantial Gainful Activity level--Finally, I urge you to 
consider taking some steps toward improving the SGA level for 
people who are not blind in both Title II and SSI. Since a 
full-fledged ``2 for 1'' does not appear to be possible at this 
time, it is particularly important to make at least some modest 
improvements for lower-income earners now. We urge you to 
consider including at full Committee mark-up a provision to (1) 
increase the SGA level to accommodate the recent increases in 
the minimum wage, and (2) direct the Commissioner to increase 
the SGA level annually to account for inflation and to allow it 
to gradually increase to the SGA level for people who are 
blind. This gradual catching-up could be done by ``double-
indexing'' the SGA level each year. We would be happy to 
explore this idea further with your staff.
    Again, we appreciate all of your hard work and dedication 
to passage of important work incentives legislation this year. 
We look forward to continued work with you on H.R. 3433.
      

                                

    Chairman Bunning. Thank you very much.
    Mr. Keller. Thank you, Chairman Bunning.
    Mr. Abbot. Thank you.
    Mr. Young. Thank you.
    Ms. Webb. Thank you.
    Chairman Bunning. Testifying on the third panel today are 
Steven Shedlin, chair, Government Affairs Section, National 
Association of Rehabilitation Professionals in the Private 
Sector; Robert Burns, assistant State superintendent, Division 
of Rehabilitation Services, Maryland State Department of 
Education, on behalf of the Council of State Administrators of 
Vocational Rehabilitation; Joe Miller, director, LifeSkills 
Industries, and president, Kentucky Association of Community 
and Employment Services, Bowling Green, Kentucky; Joe Mobley, 
client, LifeSkills Industries, Bowling Green, Kentucky; 
Francine Tishman, executive director, Edwin W. Martin, Jr., 
Career and Employment Institute, National Center for Disability 
Services.
    Mr. Shedlin, would you please begin.

   STATEMENT OF STEVEN D. SHEDLIN, CHAIR, GOVERNMENT AFFAIRS 
 SECTION, NATIONAL ASSOCIATION OF REHABILITATION PROFESSIONALS 
                     IN THE PRIVATE SECTOR

    Mr. Shedlin. Thank you. Chairman Bunning, Ranking Minority 
Member Kennelly, and Members of the Subcommittee, it is an 
honor to sit here before you today. My name is Steve Shedlin, 
and on behalf of the National Association of Rehabilitation 
Professionals in the Private Sector, NARPPS, I want to thank 
you for allowing me to testify on the Ticket to Work and Self-
Sufficiency Act of 1998, H.R. 3433.
    As the chairperson of the NARPPS government Affairs 
section, I'm here to extend our association's support for H.R. 
3433, and provide an analysis of the legislation from the 
perspective of private sector rehabilitation providers. I will 
cite how the bill benefits not just Americans with disabilities 
who receive SSI and SSDI payments, but all Americans, by virtue 
of allowing more of us to benefit from the intrinsic value of 
work, and by reducing the monetary support needed to assist 
Social Security beneficiaries, by helping those individuals 
return to productive and gainful activity, resulting in both 
savings to the Disability Trust Fund and new revenue in the 
form of payroll taxes.
    I am particularly pleased with the provisions that allow 
private sector vocational rehabilitation counselors and allied 
professionals the ability to participate in the process of 
helping SSI and SSDI recipients secure suitable gainful 
employment.
    I am a certified rehabilitation counselor who has worked in 
the rehabilitation field for over 19 years, almost 17 of those 
years as a private practitioner and businessowner in the 
Washington, DC/Baltimore, Maryland area.
    At prior hearings, you've had an opportunity to meet two of 
my colleagues with NARPPS who gave you information about our 
organization. So I will not go into great detail about us again 
today.
    However, briefly, NARPPS members, approximately 3,200 of 
us, are located in nearly every State in the country. Our goal 
is to assist an individual to reach the maximum level of 
productive activity, most preferably being a return or an entry 
to suitable gainful employment.
    Needless to say, NARPPS welcomes the consumer having a 
choice as to who will assist them with the provision of 
rehabilitation services. We are confident that the more 
professionals available to provide services, the greater the 
amount of SSI and SSDI recipients who will be able to find and 
keep employment.
    To that end, we welcome the continued inclusion of State VR 
agency participation, particularly those that opt to 
participate as part of the employment network, who by 
implication would be following strict, but reasonable criteria 
set forth in the bill for members of an employment network.
    We applaud the distinction of program managers and 
employment networks. I would anticipate that NARPPS will have 
members that will seek to become either a program manager or an 
employment network position. While recognizing the distinction 
that it is an ``either/or'' proposition, we are in favor of the 
quality control that program managers offer to the program 
itself.
    NARPPS supports the criteria outlined in the bill for 
employment networks as needing to demonstrate substantial 
expertise and experience in the field of employment, vocational 
rehabilitation, or other support services. NARPPS has published 
standards and ethics which each NARPPS member pledges to abide 
by, subject to peer review, as a condition of membership. As 
our membership tends to consist of certified rehabilitation 
counselors and nurses with advanced degrees, we welcome this 
requirement and hope that selection to participate in the 
employment network will look closely at applicants' background.
    We applaud loudly the choice of employment network payment 
plans. Some of our members, particularly those associated with 
large companies, may opt for the outcome payment system. 
However, as you have noted, this system would be untenable for 
any of our membership who work for smaller companies or as sole 
practitioners. The outcome milestone payment system will 
potentially allow participation of virtually all of our 
members, exposing the recipients to some very dedicated and 
talented professions who work in small business settings.
    NARPPS' preference would be that the program not be 
implemented gradually at phase-in sites, but that the bold step 
of full implementation be started immediately. However, we look 
forward to eventual full implementation, and it is our hope 
that if the program goes as well as we anticipate, that we will 
see full implementation sooner than the 6-year period 
identified in the bill.
    NARPPS supports the creation of the advisory panel, 
particularly the diversity of the panel as specified in the 
bill. We believe the panel must have consumer representation, 
as noted, as well as private employer participation. The 
inclusion of peers, the providers themselves, on the panel is 
also essential and greatly appreciated.
    A desire to work is often not enough to make finding and, 
more importantly, keeping a job possible. It goes without 
saying that the success of the program is dependent upon making 
it better to stop being an SSI or SSDI recipient than it is to 
continue as a recipient. Many SSDI recipients have been out of 
the labor market for years. SSI recipients have never had any 
experience whatsoever in the labor market. The beneficiaries 
may have experienced a catastrophic event or chronic illness 
that has altered virtually every aspect of their lives. 
Presently, there is a fear of attempting to return to work and 
subsequently failing and then losing benefits that keeps many 
recipients from even trying. The reductions in benefits based 
on earnings, the extensions of Medicare coverage to SSDI 
recipients, and the disabled worker tax credits are essential 
ingredients to help make it practical to return to work. 
Without these incentives, this program cannot be a success.
    I am confident that the Ticket to Work and Self-Sufficiency 
Program, particularly once it is fully implemented, will 
combine altruism with practicality, and be a winning solution 
for all Americans.
    On behalf of NARPPS and myself, I want to thank you for the 
opportunity to provide this testimony, and we remain available 
to work further with the Subcommittee. I'd be happy to answer 
questions at the appropriate time.
    [The prepared statement follows:]

Statement of Steven D. Shedlin, Government Affairs Section Chair, 
National Association of Rehabilitation Professionals in the Private 
Sector (NARPPS)

    Chairman Bunning, Ranking Minority Member Kennelly and 
members of the Subcommittee, it is an honor to sit here before 
you today. My name is Steve Shedlin, and on behalf of the 
National Association of Rehabilitation Professionals in the 
Private Sector, NARPPS, I want to thank you for allowing me to 
testify on the ``Ticket to Work and Self-Sufficiency Act of 
1998,'' H.R 3433. As the chairperson of the NARPPS Government 
Affairs Section of NARPPS, I am here to extend our 
association's support for H.R. 3433 and to provide an analysis 
of the legislation from the perspective of private sector 
rehabilitation providers. I will cite how the bill benefits not 
just Americans with disabilities who receive SSI and SSDI 
payments, but all Americans by virtue of allowing more of us to 
benefit from the intrinsic value of work, and by reducing the 
monetary support needed to assist Social Security beneficiaries 
and helping those individuals return to productive and gainful 
activity, resulting in both savings to the disability Trust 
Fund and new revenue in the form of payroll taxes. I am 
particularly pleased with the provisions that allow private 
sector vocational rehabilitation counselors and allied 
professionals the ability to participate in the process of 
helping SSI and SSDI recipients secure suitable gainful 
employment.
    I am a certified rehabilitation counselor who has worked in 
the rehabilitation field for over nineteen years, almost 
seventeen of those years as a private case practitioner and 
business owner in the Washington, D.C.-Baltimore area. At prior 
hearings you have had an opportunity to meet two of my 
colleagues with NARPPS who gave you information about our 
organization, so I will not go into great detail about us again 
today. However, briefly, NARPPS members, approximately 3,200 of 
us, are located in nearly every state in the country. We are 
private sector vocational rehabilitation counselors, nurses and 
allied health professionals who may be solo practitioners, a 
business owner, or a member of a regional or national 
organization. Our referrals come from workers compensation 
carriers, long term disability insurers, health insurers, 
managed care companies, employers, attorneys and persons with 
disabilities. Our goal is to assist an individual to reach 
their maximum level of productive activity, most preferably 
being a return, or an entry, to suitable gainful employment.
    We welcome many of the key points of H.R. 3433 including:
     The ticket to work and self-sufficiency.
     State VR agency participation.
     The employment networks.
     The use of individual employment plans.
     The employment network payment system.
     The advisory panel.
     The various incentives (i.e., $1/$2 offset, 
extended Medicare coverage and the disabled worker tax credit) 
making it viable for SSI and SSDI recipients to work.
    Needless to say, NARPPS welcomes the consumer having a 
choice as to who will assist them with the provision of 
rehabilitation services. We are confident that the more 
professionals available to provide services, the greater the 
amount of SSI and SSDI recipients who will be able to find and 
keep employment. To that end, we welcome the continued 
inclusion of state VR agency participation, particularly those 
that opt to participate as part of the employment network, who 
by implication would be following strict, but reasonable 
criteria set forth in the bill for members of an employment 
network.
    We applaud the distinction of program managers and 
employment networks. I would anticipate that NARPPS will have 
members that will seek to become either a program manager or an 
employment network position, while recognizing the distinction 
that it is an ``either/or'' proposition. We are in favor of the 
quality control that program managers offer to the program 
itself.
    NARPPS supports the criteria outlined in the bill for 
employment networks as needing to demonstrate substantial 
expertise and experience in the field of employment, vocational 
rehabilitation, or other support services. NARPPS has published 
Standards and Ethics which each NARPPS member pledges to abide 
by, subject to peer review, as a condition of membership. As 
our membership tends to consist of certified rehabilitation 
counselors and nurses with advanced degrees, we welcome this 
requirement and hope that selection to participate in an 
employment network will look closely at applicants' 
backgrounds.
    NARPPS unquestionably supports the inclusion of individual 
employment plans providing for consumer ``ownership and 
participation'' in their return to work, or entering work, 
journey.
    We applaud loudly the choice of employment network payment 
plans. Some of our members, particularly those associated with 
large companies may opt for the outcome payment system. 
However, as you have noted, this system would be untenable for 
any of our membership who work for smaller companies or are 
sole practitioners. The outcome-milestone payment system will 
potentially allow participation of virtually all of our 
members, exposing the recipients to some very dedicated and 
talented professionals who work in small business settings.
    NARPPS preference would be that the program not be 
implemented gradually at phase-in sites, but that the bold step 
of full implementation be started immediately. However, we look 
forward to eventual full implementation and it is our hope that 
if the program goes as well as we anticipate, and that we will 
see full implementation sooner than the six year period 
identified in the bill.
    NARPPS supports the creation of the Advisory Panel, 
particularly the diversity of the panel as specified in the 
bill. We believe that the panel must have consumer 
representation, as noted, as well as private employer 
participation. The inclusion of our peers, the providers 
themselves, on the panel is also essential and greatly 
appreciated. We look forward to the annual reports to the 
President and Congress that the panel will provide as a method 
of measuring and evaluating our progress.
    NARPPS also looks forward to the establishment of the corps 
of work incentive specialists. It is our belief that part of 
the problem to date in assisting disabled recipients from 
leaving the Social Security roles has been the lack of an 
effective way to disseminate information to them. Awareness of 
programs in and of itself should assist with a greater number 
of recipients attempting to enter the labor market.
    A desire to work is often not enough to make finding, and 
more importantly keeping a job possible. It goes without saying 
that the success of the program is dependent upon making it 
better to stop being an SSI or SSDI recipient than it is to 
continue as a recipient. Many SSDI recipients have been out of 
the labor market for years. SSI recipients have never had any 
experience whatsoever in the labor market. The beneficiaries 
may have experienced a catastrophic event or chronic illness 
that has altered virtually every aspect of their lives. 
Presently there is a fear of attempting to return to work and 
subsequently failing, and then losing benefits, that keeps many 
recipients from even trying. The reduction in benefits based on 
earnings, the extensions of Medicare coverage to SSDI 
recipients and the disabled worker tax credits are essential 
ingredients to help make it practicable to return to work. 
Without these incentives, this program cannot be a success.
    Throughout the years, studies have shown that there is an 
intrinsic value to working, particularly in our culture as 
Americans, that is a motivator even beyond the salary earned 
for providing a service or a product. Today it is a necessity 
that we look beyond purely altruistic measures and support 
programs that are cost effective. I am confident that the 
Ticket to Work and Self-Sufficiency Program, particularly once 
it is fully implemented, will combine altruism with 
practicality and be a winning solution for all Americans.
    On behalf of NARPPS and myself, I want to thank you for the 
opportunity to provide this testimony and we remain available 
to work further with the Subcommittee. I would be happy to 
answer questions at the appropriate time.
      

                                

    Chairman Bunning. Mr. Burns, please.

  STATEMENT OF ROBERT BURNS, ASSISTANT STATE SUPERINTENDENT, 
DIVISION OF REHABILITATION SERVICES, MARYLAND STATE DEPARTMENT 
OF EDUCATION, BALTIMORE, MARYLAND; ON BEHALF OF THE COUNCIL OF 
       STATE ADMINISTRATORS OF VOCATIONAL REHABILITATION

    Mr. Burns. Good afternoon, Mr. Chair, Mrs. Kennelly. It's a 
pleasure. I'm Bob Burns, and I'm the State director of the 
Rehabilitation Services Program in the State of Maryland, and 
it's a pleasure----
    Chairman Bunning. Mr. Burns, would you please bring the 
mike a little closer, so we can hear you better? Thank you.
    Mr. Burns. It's a pleasure to meet with the Subcommittee to 
discuss this very important topic this afternoon. I've 
presented written testimony on behalf of the Council of State 
Administrators of Vocational Rehabilitation, CSAVR, for the 
record.
    CSAVR is 81 State officials who administer the Nation's 
public rehabilitation program. We serve 1.2 million persons 
with disabilities each year with approximately 40 percent of 
those individuals SSI or SSDI recipients. In fiscal year 1995, 
the last year that national data is available, the public 
vocational rehabilitation returned to work over 200,000 
individuals with disabilities and about 25 percent of those 
individuals were Social Security beneficiaries.
    I believe that the written comments speak very well to the 
issues before us in returning SSI and SSDI beneficiaries to 
work. This afternoon I will not read those comments, but I want 
to speak really as a practitioner, someone in the field of 
rehabilitation that works day-in and day-out with over 28,000 
persons with disabilities each year in the State of Maryland, 
and also administers the State's Disability Determination 
Services Program that adjudicates and processes over 57,000 
claims for Social Security each year.
    I want to also talk as a service provider, someone who's 
been in the field for 20 years, someone who's actually put 
people with severe disabilities to work.
    First of all, I need to commend, and I want to commend, 
Chairman Bunning and Mrs. Kennelly for your leadership, and 
Members of this Subcommittee for your leadership on taking on a 
very difficult issue, but an extremely important issue. I 
pledge to you my full support and participation as this 
initiative goes forward.
    There are some very, very positive features in the proposed 
legislation, and let me speak to those first. The legislation 
begins to address the real--the real--disincentives that exist 
for Social Security beneficiaries to return to work. Those are 
loss of medical benefits and loss of cash benefits. Unless we 
are serious in addressing those issues in a very understandable 
and doable fashion, any attempt to return beneficiaries of 
Social Security to work will be significantly impeded.
    The proposed bill has a project to look at offsetting cash 
benefits with earnings, more or less, extending the 1619(a) 
waiver to the DI Program. This is an excellent objective--it's 
an excellent project. It must be done.
    The bill also extends Medicare coverage 2 additional years 
when a DI recipient returns to work. The recommendation of the 
Council of State Administrators looks at it as recommending a 
parallel to the 1619(b) waiver, where you continue to receive 
Medicare benefits and also to broaden the array of services 
covered under Medicare benefits. Again, these are excellent 
features of the bill, and they begin to address the true 
systemic issues in returning individuals with severe 
disabilities to work.
    We do, and I do, have some serious concerns about the bill, 
and those involve the return to work or the voucher component. 
The bill almost seems to discover this idea of vouchers. Since 
1992 the public rehabilitation program has used informed client 
choice. Not only does the individual get to choose their 
service provider, but the individual gets to choose the 
vocational objectives and employment goal.
    The bill also discussed alternative providers, and again, 
almost seems to discover that concept. I don't know of one 
successful public rehabilitation program where our partnership 
with alternate providers or community rehabilitation providers 
is not strong. All State VR agencies must work in collaboration 
with community providers to be successful. We must complement 
each other's strengths. We cannot compete. We don't need 
competition; we need synergy in terms of a return to work.
    The bill fails to address the issue of timing of referrals. 
This is critically important. People struggle for 2 years, up 
to 3 years sometimes, just getting on the SSI/SSDI rolls, and 
then as soon as they're allowed, they're referred for 
rehabilitation. Really, at that point in time, it is not the 
appropriate time to begin that return to work.
    The testimony of CSAVR goes at many other issues and 
recommendations. Essentially, we would ask the Subcommittee to 
direct the Social Security Administration to work in 
collaboration with the public VR program to use the existing 
expertise and knowledge in place to address these issues, and 
not building an untested service delivery approach.
    Thank you, Mr. Chairman, very much.
    [The prepared statement follows:]

Statement of Robert Burns, Assistant State Superintendent, Division of 
Rehabilitation Services, Maryland State Department of Education, 
Baltimore, Maryland; on Behalf of the Council of State Administrators 
of Vocational Rehabilitation (CSAVR)

    Chairman Bunning and distinguished Members of the 
Subcommittee, it is a privilege to have the opportunity to 
provide testimony on behalf of the Council of State 
Administrators of Vocational Rehabilitation (CSAVR) regarding 
the employment of Social Security Disability Program 
beneficiaries.
    The CSAVR is composed of 81 state officials who administer 
the Public Vocational Rehabilitation Program in the 50 states, 
the District of Columbia and the territories. This program, as 
authorized by the Rehabilitation Act of 1973, as amended, 
provides Vocational Rehabilitation services to beneficiaries 
under the various Social Security Disability Programs and has 
provided these services since the inception of the Social 
Security Disability Insurance (SSDI) and Supplemental Security 
Income (SSI) programs.
    Our goal today is to relate the previous recommendations 
made by the CSAVR in a White Paper titled ``Vocational 
Rehabilitation and Social Security'' (June, 1997) relative to 
reform of the Social Security Disability Programs to the 
``Ticket to Work and Self-Sufficiency Act of 1998''.
    The CSAVR believes that the recommendations made in the 
White Paper are as valid today as they were last June, and can 
be implemented without spending additional time and fiscal 
resources on the development of a new administrative structure, 
such as would be necessary if the ``Ticket to Work and Self-
Sufficiency Act of 1998'' were passed as it stands today. It 
would be more cost effective and advantageous for beneficiaries 
if the CSAVR could work with the Social Security Administration 
and Members of the Congress to build on an already existing and 
effective program of Vocational Rehabilitation for Social 
Security Disability Program beneficiaries.
    The CSAVR is proud of the history and the achievement of 
the Public Vocational Rehabilitation Program in annually 
assisting thousands of beneficiaries of the Social Security 
Disability Programs to prepare for, enter, and maintain 
employment. Of the 1.2 million people served annually through 
the Public Vocational Rehabilitation Program, approximately 40 
percent are estimated to receive SSDI and/or SSI benefits at 
the time they enter or during the Vocational Rehabilitation 
process. In Fiscal Year 1995, data from the Rehabilitation 
Services Administration shows that 209,848 individuals entered 
employment as a result of their efforts with the Public 
Vocational Rehabilitation Program. Of these individuals, 
52,753, or 25 percent, were SSI and/or SSDI recipients. The 
level of partnership with consumers, families, and other public 
and private rehabilitation programs exhibited in the delivery 
of services through the Public VR Program is exemplary and this 
partnership has brought about the success of the Program.
    We have had the opportunity to review a Discussion Draft of 
the ``Ticket to Work and Self-Sufficiency Act of 1998,'' and 
although the draft we have access to may not be a current 
reflection of the goals of the proposed Act, we would like to 
submit the following for consideration.
    During the past several decades of working with 
beneficiaries of the Social Security Disability Programs, two 
primary reasons why beneficiaries do not enter employment at 
the level of Substantial Gainful Activity (SGA) continue to 
resonate: the fear of loss of cash benefits, and the fear of 
loss of medical benefits. There have been Demonstration 
Projects, General Accounting Office Reports, and Reports 
directly from the Social Security Administration supporting 
these issues. A recent Longitudinal Study conducted by the 
Research Triangle Institute clearly demonstrates that these 
issues are keeping beneficiaries from working. In delineating 
the reasons why Public Vocational Rehabilitation consumers did 
not go to work, this study cited three major areas of 
difference between beneficiaries and non-beneficiaries were: 
fear of losing medical benefits, fear that the beneficiaries 
would not be able to get back on benefits if they were to lose 
their job, and fear that earnings from employment would not 
equal the amount received from benefits.
    It is interesting to note that many of the more recent 
legislative proposals targeted at SSA system redesign have 
centered around a competitive private-sector referral model, 
opening up referrals of SSA Disability Program beneficiaries to 
alternate providers. It should be noted that the CSAVR has seen 
no actual data or substantive evidence to support the basis for 
these proposals, namely that access and choice are limited in 
the current system. The CSAVR strongly believes that it is the 
disincentives around the loss of cash and medical benefits, not 
choice of service providers, that has been the primary cause 
for the low rate of benefits termination resulting from 
employment. It is clear that changes in the SSA benefit 
structure must be made regardless of who provides 
rehabilitation services.
    Tax credits have also been included in some recent 
legislative proposals. The ``Ticket to Work and Self-
Sufficiency Act of 1998,'' specifically, offers a tax credit in 
an amount equal to 50 percent of impairment-related work 
expenses up to $10,000 for disabled workers. However, there is 
no evidence to suggest that a tax credit would alleviate the 
fears of losing cash and medical benefits.

                       Loss of Medical Insurance

    One of the primary issues keeping beneficiaries from 
employment is the lack of availability of continued eligibility 
for Medicare and Medicaid. This medical coverage helps with the 
costs of treatment, medication, and other necessary services 
that enable individuals with significant impairments to enter 
and maintain employment. There is broad agreement on these 
issues and we need to continue to work on various modifications 
to the Medicare and Medicaid structures in order to enable 
persons with disabilities to continue to have access to medical 
and rehabilitation treatments.
    In a summary of the Act, a plan is included to phase-in an 
extension of Medicare coverage for two additional years beyond 
current law for SSDI beneficiaries who return to work. While 
this phased-in extension is encouraging, it does not appear 
that the scope of the legislation will be sufficient to 
alleviate the fears of beneficiaries faced with the loss of 
medical coverage.
    Our recommendations around medical insurance, provided to 
the Subcommittee in the form of the White Paper titled 
``Vocational Rehabilitation and Social Security'' (June, 1997), 
are as follows:
     Protection of medical coverage for SSDI 
beneficiaries similar to the SSI 1619a and 1619b programs;
     Immediate Medicare coverage (elimination of the 24 
month waiting period);
     In any proposed medical insurance package, include 
provisions to cover personal attendant care services and 
prescription medications necessary to maintain employment

Loss of Cash Benefits

    The issue of loss of cash benefits affects both SSDI and 
SSI beneficiaries, but the disincentives are greater for SSDI 
recipients, where benefits awarded are often equal to or exceed 
the value of past or potential earnings, particularly when 
medical benefits are considered. There is no gradual phase-down 
of benefits when SSDI beneficiaries attempt work return, as is 
available to SSI recipients. This ``all or nothing'' approach 
to employment and public insurance for persons with 
disabilities, young or old, does not work, and often results in 
the under-employment of persons receiving SSDI benefits. The 
gradual phase-down of benefits based on earnings, as available 
to SSI recipients, is widely held as a stronger work incentive 
than the trial work period.
    Review of the Discussion Draft does show that the bill 
attempts to address the issue around loss of cash benefits. The 
legislation includes a $1 for every $2 earnings offset, which 
more closely parallels the provisions of the SSI Program. 
However, there is little information surrounding additional 
provisions of this offset approach. In theory, this is the type 
of systemic change the CSAVR would welcome, as it eliminates 
one of the strongest disincentives to employment for Social 
Security Disability Program beneficiaries. Again, without the 
specific provisions, it is difficult to assess the impact on 
Public Vocational Rehabilitation consumers, or beneficiaries in 
general.
    In addition to the two primary disincentives outlined 
above, there are other barriers to employment for Social 
Security Disability Program beneficiaries. Two of these issues 
are the timing of referrals, and the complexity of the 
Disability Program.

                          Timing of Referrals

    Referral from SSA to State VR Agencies occurs at the point 
of award/denial of Social Security Disability Program benefits, 
despite data that this is the time least likely to result in 
engagement by the individual in a process resulting in 
employment. Currently, the Disability Determination Service 
(DDS) refers 10 to15 percent of their applicants to the Public 
Vocational Rehabilitation Program at the time of disability 
determination, immediately following the completion of a 
complex process to prove their inability to work at the SGA 
level. As a result, only a very small percentage of the people 
referred actually follow through and apply for Vocational 
Rehabilitation services. An evaluation is necessary to 
determine the optimal time for referral of disability 
applicants or beneficiaries, and a process needs to be 
developed to capture these referrals. The Discussion Draft of 
the ``Ticket to Work and Self-Sufficiency Act of 1998'' does 
not address the issue of timing of referrals. It is CSAVR's 
understanding that the current law which authorized priority 
referral of recipients by the Social Security Administration to 
the Public Vocational Rehabilitation Program will be repealed. 
There is, however, no discussion of the replacement for such a 
system.
    The Social Security Administration needs to take the 
opportunity at every contact with a beneficiary or potential 
beneficiary to reinforce and promote employment. Data from the 
Rehabilitation Services Administration (911 Data, Fiscal Year 
1995) demonstrates that approximately 28 percent of all 
beneficiaries in the Public Vocational Rehabilitation Program 
come into the program as self-referrals, 14 percent are 
referred by Community Mental Health Centers, and approximately 
11 percent are referred by other individuals. The Social 
Security Administration needs, in its system redesign, to 
promote partnerships, not only at a national level, but also at 
the District Office level. Social Security District Offices 
need to be partnering with local Public Vocational 
Rehabilitation offices to ensure the highest quality, 
employment focused services for beneficiaries.

                               Complexity

    In a Report titled ``Defining a Work Employment Strategy 
for People With Disabilities (September, 1994), the Social 
Security Administration acknowledged that ``the complexity of 
the system makes it difficult for people with disabilities to 
understand, and makes it complex for SSA to administer.'' The 
Discussion Draft includes a provision for the development of 
Work Incentive Specialists to specialize in title II and title 
XVI disability work incentives. However; this does not address 
the core issue of complexity.

                                Summary

    The CSAVR is pleased to have the opportunity to testify on 
issues pertaining to the employment of Social Security 
Disability Program beneficiaries. Over the past several years, 
the Public Vocational Rehabilitation Program and the Social 
Security Administration have taken strides toward the 
development of a partnership designed to maximize employment 
opportunities for beneficiaries.
    The CSAVR has been trying to develop a collaborative 
relationship with the Social Security Administration, and 
together with the Rehabilitation Services Administration has 
been attempting to improve the current reimbursement system, 
and there has been some progress in this area. If we were able 
to develop a streamlined reimbursement system, this would 
increase the amount of fiscal resources available to the Public 
Vocational Rehabilitation Program for use in maximizing 
employment outcomes for Social Security Disability Program 
beneficiaries. For the first time in many years, Social 
Security has begun the process of evaluating the reimbursement 
program, and eliminating some of their capacity issues in 
claims processing.
    It is the CSAVR's belief that, once the current 
reimbursement program is functioning at an optimal level, the 
nation will have a clearer picture of the efficacy of the 
Public Vocational Rehabilitation Program and its ability to 
return beneficiaries to competitive, integrated employment 
settings consistent with the beneficiary's choice. Although the 
legislative proposal provides the option for choosing either 
participation in the employment network or continuation under 
the current reimbursement system, there is no demonstration of 
the need for a new system. The Public Vocational Rehabilitation 
Program serves approximately a half million beneficiaries 
annually, and as mentioned earlier, 25 percent of all 
successful rehabilitation closures in the Public Program are 
beneficiaries. The data from the Rehabilitation Services 
Administration shows that approximately 73% of these closures, 
who represent severely disabled individuals, are in competitive 
employment. These figures demonstrate that the Public 
Vocational Rehabilitation Program is an open system. These 
beneficiaries are able to access our services and enter into 
employment. The problem is that they are not willing to risk 
the loss of cash and medical benefits by returning to work at 
the level of Substantial Gainful Activity. They choose to limit 
their hours, and continue to keep their cash and medical 
benefits. Work becomes an adjunct to benefits, rather than a 
replacement.
    We strongly believe that the Public Vocational 
Rehabilitation Program has much to offer in terms of history 
and experience supporting individuals with disabilities in 
their return to work efforts, and we would like to work with 
the Social Security Administration and members of Congress to 
build on this history. Based on our experience, we have made 
some recommendations for Social Security Disability Program 
reform. To address the concerns of the Public Vocational 
Rehabilitation Program in their efforts to maximize employment 
outcomes for Social Security Disability beneficiaries, we would 
like to see most, if not all, of the following elements in any 
legislation:
     Implementation of a sliding scale system for 
reduced cash benefits for SSDI beneficiaries;
     Protection of medical coverage for SSDI 
beneficiaries similar to the SSI 1619a and 1619b programs;
     Provision of immediate Medicare coverage;
     Inclusion in any medical insurance package of 
provisions for personal attendant care services and 
prescription medications necessary to maintain employment;
     Implementation of an unlimited extended period of 
eligibility, to ensure that an individual would not have to go 
through a new eligibility determination for disability benefits 
as long as their medical condition remained;
     Simplification and full explanation of existing 
work incentives;
     Assignment of responsibility for development and 
approval of PASS Plans to Public Vocational Rehabilitation 
Counselors.
    Further recommendations to promote employment outcomes for 
Social Security Disability Program beneficiaries include:
     Accurate and timely exchange of information 
between the Social Security Administration and the Public 
Vocational Rehabilitation Program regarding SSI-SSDI status of 
persons served by the Public Vocational Rehabilitation Program;
     Evaluation of the significant impact similar 
benefits have in service delivery to beneficiaries at no cost 
to the Social Security Administration;
     Provision of more timely reimbursement for 
successful cases so funds can be reinvested in Vocational 
Rehabilitation Services.
    The CSAVR would like to commend Chairman Bunning and the 
Subcommittee for their consideration of ways to redesign the 
Social Security Disability Programs to maximize employment 
opportunities for beneficiaries. The Public Vocational 
Rehabilitation Program has been working with beneficiaries 
since the inception of the Social Security Disability Programs. 
The Public Vocational Rehabilitation Program provides a 
comprehensive array of services, partnering with private non-
profit and for-profit organizations to provide individualized 
services to persons with disabilities. We believe that choice 
of service providers, as well as choice in many other areas 
such as employment goal, objectives and measures of success, is 
afforded to each consumer in the Public Vocational 
Rehabilitation Program.
    We would like to stress, however, that the voucher system 
is an unnecessary step in reform. The development of a new 
system, based on the assumption that the current system does 
not work is futile. There is no evidence to suggest that 
changes to the service delivery system will increase employment 
outcomes for Social Security Disability Program beneficiaries. 
All of the evidence supports the need to fix the disincentives, 
to remove the restraints keeping beneficiaries on the 
Disability rolls. It is our strong belief that it is the 
disincentives inherent within the Social Security Disability 
Programs, not the service delivery system, that is keeping 
beneficiaries from employment at levels of Substantial Gainful 
Activity. These disincentives need to be addressed before 
implementing unproven, costly service delivery models. If 
systemic disincentives are addressed, a newly streamlined 
Public Vocational Rehabilitation Program that utilizes an 
existing Public/Private service delivery system is poised to 
address the return to work effort for SSDI/SSI beneficiaries.
      

                                

    Chairman Bunning. Thank you.
    Welcome, Mr. Miller and Mr. Mobley. We're glad to have you 
from Bowling Green.

 STATEMENT OF JOE MILLER, DIRECTOR, LIFESKILLS INDUSTRIES, AND 
  PRESIDENT, KENTUCKY ASSOCIATION OF COMMUNITY AND EMPLOYMENT 
   SERVICES; ON BEHALF OF THE AMERICAN CONGRESS OF COMMUNITY 
                SUPPORT AND EMPLOYMENT SERVICES

    Mr. Miller. Thank you. Mr. Chairman, Congresswoman 
Kennelly, and honorable Members of the Subcommittee, thank you 
for the opportunity to present testimony before you today. My 
name is Joe Miller. I am the director of LifeSkills Industries, 
an employment-service provider that assists people with 
disabilities, with jobs skills training, support, and 
placement. My employees and I are dedicated to helping people 
with disabilities achieve their greatest potential.
    I am also the president of the Kentucky Association of 
Community Employment Services. I'm here today to present 
testimony on behalf of the American Congress of Community 
Support and Employment Services. ACCSES is a national 
organization that represents more than 700 facilities like 
mine.
    Unfortunately, Mr. Chairman, our efforts to help people 
with disabilities achieve their greatest potential are hampered 
by Federal laws. I have included in my written testimony 
statistics about how bad the system is. Out of 4.2 million 
persons with disabilities receiving SSDI, only one-third of 1 
percent find and keep the jobs that earn them more than $500 a 
month.
    The Federal Government would save $3 billion for every 
percentage point of people on SSA's disability rolls placed in 
gainful employment. If the percentage of employed individuals 
were increased from one-third of 1 percent to just 10 percent, 
the government would save almost $27 billion.
    The Ticket to Work and Self-Sufficiency Act includes two 
provisions that would substantially improve the ability of 
employment service providers to place people with disabilities 
in good jobs. The first provision would open up a system that 
requires people with disabilities to go through their State 
vocational rehabilitation agency in order to find employment. 
However, only 1 out of 500 people with disabilities ever get 
counseling from the VR. Your bill would allow people with 
disabilities to access appropriate services and supports 
without having to wait and hope for VRs to act.
    The second critical provision provides benchmark payments. 
Benchmarks would pay set fees to providers for meeting certain 
goals. Without these payments, the financial risk of providing 
services for people with disabilities would be too high for 
most of the Nation's employment service providers. SSA has one 
program that allows a few people with disabilities to directly 
access private employment service providers.
    Providers like LifeSkills who participate are paid a 
portion of the savings that accrue to SSA if the job placement 
is successful. About 270 providers have contracted to 
participate. Yet, as of March 1, only 22 individuals with 
disabilities have entered the program. Of those individuals, 
nine have been placed. Now that's a good ratio. However, the 
fact that there are only 22 enrollees in this program indicates 
that many providers can't take on the risk involved in training 
and placing individuals with disabilities, then waiting a long 
period of time to be paid, if at all, for their services.
    I have the pleasure of being here with Joe Mobley. 
LifeSkills is helping him through SSA's special program. We are 
aware of the financial risk involved in helping Joe, but we 
believe with our support Joe will be able to leave SSA's rolls 
and become a tax paying citizen. I'm happy to introduce you to 
Joe, and Joe will tell you his story.
    Thank you again for providing me the opportunity to 
testify, and thank you for this legislation.
    [The prepared statement follows:]

Statement of Joe Miller, Director, LifeSkills Industries, and 
President, The Kentucky Association of Community and Employment 
Services; on Behalf of the American Congress of Community Support and 
Employment Services

    Mr. Chairman, Congresswoman Kennelly and Honorable Members 
of the Committee:
    Thank you for the opportunity to present testimony before 
you today. My name is Joe Miller. I am the Director of 
LifeSkills Industries, an employment service provider that 
assists people with disabilities with job skills training, 
support and placement. My employees and I are dedicated to 
helping people with disabilities achieve their greatest 
potential. Every year, we work with hundreds of disabled 
individuals, many of whom we help to place in good jobs. I am 
also the President of the Kentucky Association of Community and 
Employment Services. KACES represents providers like LifeSkills 
across the Commonwealth of Kentucky.
    I am here today to present testimony on behalf of the 
American Congress of Community Supports and Employment 
Services. ACCSES is a national organization that represents 
more than 700 facilities like mine. ACCSES and KACES do not and 
have never received grants, contracts or other support from the 
federal government. LifeSkills Industries of Bowling Green, is 
currently receiving a $60,000 grant through the Job Training 
Partnership Act and has not received any other federal grants 
or contracts in the past two years. Every year, ACCSES members 
assist thousands of individuals with disabilities in their 
efforts to find employment.
    Unfortunately, Mr. Chairman, our efforts to help place 
people with disabilities in meaningful employment are hampered 
by federal laws. I have included in my written testimony 
statistics that demonstrate the short comings in the current 
system. Out of 4.2 million persons with disabilities receiving 
Social Security Disability Insurance, only one third of one 
percent find and keep jobs that earn them more than $500 a 
month.
    For most people, working may be just a matter of waking up 
in the morning, fixing breakfast, getting dressed, and driving 
to work. For many people with disabilities, the act of going to 
work is a far more complicated affair. Many people with 
disabilities need assistance to fix breakfast or get dressed. 
People with mobility or cognitive impairments need assistance 
getting to work. And at work, more assistance may be needed. A 
person with blindness may need assistive technology to read e-
mail messages, an individual with mental retardation may need a 
job coach, a person with a spinal cord injury may need wide 
doorways for a wheel chair.
    In 1973 and 1990, Congress passed and the President signed 
legislation that made it the policy of the federal government 
to assist people with disabilities to become full fledged 
citizens of the United States. Through section 504 of the 
Rehabilitation Act and the Americans with Disabilities Act, 
Congress has declared that people with disabilities should be 
provided with equal access, equal rights and equal opportunity. 
And while Congress and the administration have assisted people 
with disabilities to overcome barriers faced in private 
industry and society, Congress and the Administration have not 
adequately addressed serious barriers to employment that 
continue to exist within the federal government. The process of 
change is beginning however. Just a few days ago, President 
Clinton signed an executive order mandating that the Executive 
Department implement measures to encourage people with 
disabilities to return to work, and today we are discussing 
legislation that will go even further.
    Ninety-five percent of federal dollars targeted to people 
with disabilities encourage dependence, not independence. When 
it was first created, the Social Security Agency's programs for 
people with disabilities were crafted with the belief that 
people with disabilities would be forever dependent. Like 
retirees, it was felt that people with disabilities would never 
return to work. The people who put the Social Security Agency's 
disability programs together could not have considered new 
technologies, medical breakthroughs and advances in providing 
rehabilitation services for people with disabilities. And so, a 
system of dependency was instituted that created significant 
barriers to employment for people with disabilities.
    For a lot of people with disabilities, all the new 
technologies, breakthroughs, and advances in the world cannot 
help them go back to work. And this is not because of their 
disabilities--it is because of the system. LifeSkills recently 
began working with a disabled individual. She wanted to work 
and we thought we could help her. We found an entry level job 
for her where she earned $6 an hour, but then we figured out 
that after her trial work period, her earnings would actually 
go down--substantially.
    Virginia Commonwealth University studied the problem of the 
earnings cliff faced by Social Security Disability Insurance 
(SSDI) recipients and found that people on SSDI earning $500 
had a monthly net income (including benefits) of about $1,000. 
But when SSDI recipients earned $750 a month, their monthly net 
income actually went down to $500. Another earnings cliff 
exists at about $1,500 a month when government sponsored health 
insurance benefits are cut off. At that point people with 
disabilities are often forced to purchase, at considerable 
expense, their own health insurance, if it is available to them 
at all.
    The U.S. General Accounting Office found that the federal 
government would save $3 billion dollars for every percentage 
point of people on the Social Security Administration's 
disability rolls who are placed in gainful employment. If the 
percentage of employed disabled individuals was increased from 
one third of a percent to just ten percent, the federal 
government would save almost $27 billion.
    The Ticket to Work and Self-Sufficiency Act of 1998 is a 
good first step in resolving some of the most significant 
barriers faced by persons with disabilities in their efforts to 
return to work. The most recent information suggests that the 
nationwide unemployment rate for persons with disabilities is 
close to 70%. The national unemployment rate for all residents 
is approximately 4.6%, the lowest it has been in the past 30 
years. Of those individuals with disabilities who are 
unemployed, fully one third would like to find employment. Yet 
the system we now have prevents this. As I stated earlier, 
people with disabilities face earnings cliffs. They also face 
the prospect of loosing their government sponsored health 
insurance coverage which, for many, is absolutely necessary for 
their survival.
    The Ticket to Work and Self-Sufficiency Act addresses both 
the earnings cliff and the loss of government sponsored health 
insurance. The ``two for one'' concept included in this 
legislation addresses the earnings cliff problem, however, this 
is just the first step. That provision must, in the future, be 
applied to all citizens with disabilities and not just those 
permitted to enter through a mandated demonstration program. 
The two year extension of Medicare benefits will also help 
people with disabilities in their efforts to return to work, 
however, further health care security measures must be 
instituted, otherwise many people with disabilities will still 
hesitate to leave the Social Security Administration rolls.
    Beyond the earnings cliff and loss of health care insurance 
is the lack of access to rehabilitation services, as well as 
the lack of access to job training, support and placement 
services. Of the 6.6 million persons with disabilities 
receiving assistance from the Social Security Administration 
only one out of every twelve or thirteen individuals (or 8%) 
are referred to State Vocational Rehabilitation Agencies. Of 
the individuals fortunate enough to be referred, only one out 
of sixteen individuals (or 0.48% of the total) are actually 
seen by their State V.R. Agency. In the end, only one out of 
500 disabled individuals receive counseling from their State 
V.R. Agency and only one third of one percent (0.33%) of 
individuals receiving SSDI are ever able to leave the Social 
Security Disability rolls due to work. Congress should not 
accept numbers like this.
    Mr. Chairman and Representative Kennelly, your legislation, 
the Ticket to Work and Self-Sufficiency Act, includes two 
provisions that would substantially improve the ability of 
employment service providers to place people with disabilities 
in meaningful employment. The first provision would open up the 
system. Currently, people with disabilities must go through 
their State Vocational Rehabilitation Agency in order to find 
employment. In short, they have no choices or options. They do 
not have the ability to access appropriate rehabilitation 
services or community supports from a provider that they 
believe will best suit their needs.
    There is no ``one size fits all'' solution to helping 
people with disabilities. Individuals who are blind require a 
different set of services than an individual who has mental 
retardation or a spinal cord injury. Private employment service 
providers, because they have a wealth of experience and 
knowledge and have developed programs specifically tailored to 
different disability groups are best able to support people 
with disabilities in their efforts to find employment and 
achieve more independent lives. Mr. Chairman, you have said 
``The payment process is designed to ensure that as many 
providers as possible are available to serve consumers'' and 
Ranking Member Kennelly, you have said ``People could choose 
the provider most able to assist them effectively in returning 
to work.'' Your legislation would do exactly that.
    As I mentioned earlier, only one out of five hundred people 
with disabilities receives counseling from their State V.R. 
Agency. These are truly staggering and dismal odds. Your bill 
would provide people with disabilities with the ability--the 
choice--to access appropriate services and supports without 
waiting for their State V.R. Agency to provide counseling or a 
referral. That is critical if your legislation is to succeed.
    The second critical provision would provide milestone 
payments to facilities that cannot afford to bear financial 
risks. Almost all employment service and community support 
providers are not-for-profits. We operate on very slim margins 
and often require charitable donations to make up for budget 
shortfalls. Milestones would pay set fees to providers for 
meeting certain employment goals for people with disabilities.
    Though your legislation leaves it to the Social Security 
Administration to determine when milestone payments are to be 
made, I expect, for example, that a payment would be made for 
the drafting of an employment plan. Without milestone payments, 
the financial risk of serving people with disabilities would be 
too high for most of the nation's employment service 
providers--they are simply too small and run on such slim 
margins. The most severely disabled individuals who require 
costly services would, in particular, not be served by risk 
averse employment service providers. The danger of never 
receiving payment for services provided to the hardest to place 
people with disabilities is too great for most providers.
    If clients should never reach nine months of substantial 
gainful activity, providers will not be compensated at all. 
People with disabilities, and particularly those with severe 
disabilities, are at a far greater risk than the non-disabled 
population for medical complications, secondary conditions and 
even violence. ACCSES is involved in federal efforts to prevent 
these occurrences because these events can diminish, slow or 
end a person's ability to return to work.
    The Social Security Administration crafted the Alternate 
Participant Program to allow a few people with disabilities to 
directly access private employment service providers. Clients 
are able to contract with providers without waiting for their 
State V.R. Agency to provide counseling or a referral. 
Providers, like my facility, who participate are paid a portion 
of the savings that accrue to the Social Security 
Administration if the job placement is successful. Success is 
met if the consumer earns more than the Substantial Gainful 
Activity income level for more than nine months. About 250 
providers have contracted to participate in this program, yet 
as of March 1, only 22 individuals with disabilities have 
entered the program. Of those individuals, nine have been 
placed--that's a good ratio when you consider that only 0.33% 
of SSDI enrollees leave the Social Security Administration's 
rolls due to employment. However, the grand total of 22 
enrollees in this program indicates that many providers cannot 
take on the risk involved in training and placing individuals 
with disabilities, then waiting a long period of time to 
receive compensation for their services.
    I have the pleasure of working with a young man that 
LifeSkills is helping through the Alternate Participant 
Program. His name is Joe Mobley. Joe has diabetes and digestive 
failure. LifeSkills is aware of the financial risk we bear in 
order to help Joe, but we believe that, with our support, Joe 
will be able to leave the Social Security Administration's 
rolls and become a taxpaying citizen. Like Joe, we hope that 
his progress through our programs is not impeded by medical 
complications and that he is able to reach his dream of having 
a good job.
    Joe and all people with disabilities should benefit from 
our nation's commitment to ensure that people with disabilities 
are made equal. We are not asking for a new hand out. Believe 
it or not, many people with disabilities would like to be tax 
paying citizens. Joe wants to take pride in his job and in his 
participation as an equal and contributing member of our 
society--just as I take pride in what I do and you take pride 
in what you do. Congress can and must change the old system of 
dependency to allow people with disabilities to become 
independent.
    Thank you again for providing me the opportunity to testify 
before this Subcommittee. I would particularly like to thank 
Chairman Bunning and Representative Kennelly for their ground 
breaking legislation. I urge all the members of this 
subcommittee and Congress to support passage of this 
legislation.
      

                                

Statistics on the Employment of People with Disabilities

    (1) Unemployment rate for persons with disabilities in the 
United States (1986 and 1994): 67%
    (2) Current unemployment rate for all individuals in the 
United States: 4.6%
    (3) Percentage of federal funding for persons with 
disabilities targeted for supporting dependancy: 95%
    (4) Number of persons with disabilities (PWD) receiving 
Social Security Disability Insurance in 1997: 4.2 million
    (5) Number of persons with disabilities receiving SSDI who 
were working in Sept 1997: 318,728
    (6) As a percentage of total case load: 6.1%
    (7) Percentage of people with disabilities earning over 
$500 after 12 month SSDI trial and grace periods: 0.33%
    (8) Approximate monthly net income of an SSDI recipient 
with earnings of $500: $1,000
    (9) Approximate monthly net income of an SSDI recipient 
after trial and grace periods with earnings of $750: $500
    (10) Number of Persons with Disabilities receiving 
Supplemental Security Income: 3.1 million
    (11) Number of Persons with Disabilities receiving SSI who 
were working in March 1997: ``A few''
    (12) Percentage of persons with disabilities receiving 
support from SSA who are referred to state V.R.s: 8% (13) Ratio 
of persons with disabilities referred by SSA to state V.R.s to 
number of referrals actually seen: 16:1
    (14) Chances that a person with a disability on SSI or SSDI 
will see the state VR for return to work counseling: 1 in 500
    (15) Chances that a person with a disability on SSI or SSDI 
would like to return to work: 1 in 3
    (16) Total number of persons with disabilities receiving 
assistance from SSA (accounting for overlap): 6.6 million
    (17) Weekly SSI and SSDI disbursements made by SSA to 
persons with disabilities: $1.21 Billion (18) Lifetime savings 
to SSA in SSDI and SSI disbursements for each 1% (66,000) of 
PWD returned to work: $3 billion
    (19) Number of SSI and SSDI beneficiaries in 1989: 5.5 
million; In 1997: 9 million. Percentage increase: 64%
    (20) SSI and SSDI disbursements in 1989: $34.4 billion; In 
1997: $62.9 billion. Percentage increase: 83%

    1, 3 ``Achieving Independence: The Challenge for the 21st 
Century,'' National Council on Disability, July 26, 1996.
    2 February 1998--U.S. Department of Labor, Bureau of Labor 
Statistics.
    4, 10, 11, 12, 15, 16, 17, 18: ``Social Security: Disability 
Programs Lag in Promoting Return to Work,'' March 17, 1997, U.S. 
General Accounting Office.
    5, 6: ``Quarterly Report on SSI Disabled Workers and Work Incentive 
Provisions,'' September 1997, SSA, Office of Research, Evaluation and 
Statistics.
    7 ``Removing Barriers to Work: Action Proposals for the 105th 
Congress and beyond,'' National Council on Disability, September 24, 
1997. (data from April 1996 analysis by the SSA Office of Disability 
for individuals under 59)
    8, 9: Employment Support Institute, Virginia Commonwealth 
University. Study cited in ``Social Security Disability: Improving 
Return-to-Work Outcomes Important, but Trade-Offs and Challenges 
Exist,'' September 1997, U.S. General Accounting Office.
    13, 14, 19, 20: Fallavollita, B., & Bordelon, B., ``Social Security 
Disability Programs Lag in Promoting Return to Work,'' National 
Association of Rehabilitation Professionals in the Private Sector 
Journal, October 1997.
      

                                

    Chairman Bunning. Mr. Mobley, would you like to speak?

     STATEMENT OF JOE MOBLEY, CLIENT, LIFESKILLS INDUSTRIES

    Mr. Mobley. Mr. Chairman, Congresswoman Kennelly, and 
honorable Members of the Subcommittee----
    Chairman Bunning. Please move the microphone closer, so we 
get it recorded. Thank you.
    Mr. Mobley. My name is Joe Mobley. It is an honor for me to 
be here to present testimony. It makes me proud to be an 
American citizen.
    For most people, working may be just a matter of waking up 
in the morning, fixing breakfast, getting dressed, and driving 
to work. But for many people with disabilities, including 
myself, it is more complicated than that. Many of us need 
assistance to fix breakfast, get dressed, go to work--things 
people take for granted.
    And the system makes it even harder for people with 
disabilities to go to work. Seventy percent of us are 
unemployed. I'm one of the lucky ones. SSA has contracted with 
LifeSkills to join the alternate participant program. I am one 
of the 22 people with disabilities in the entire country who 
has been given the chance to find a good job due to the 
program. I have Susan Daniels at SSA and LifeSkills to thank 
for that.
    Joe Miller and I know that there is a financial risk 
involved in helping me. LifeSkills found a job for one 
participant in this program who had to quit because she would 
have lost more benefits than the money she was making. Even 
though Joe's staff worked with her and helped her find a job, 
LifeSkills won't get paid for that. LifeSkills may not get paid 
for me either, even if something like a medical complication 
happens.
    There are a lot of people like me in this country. We want 
to be employed. We want to take pride in our jobs, but my VR 
didn't help me, and if it weren't for the alternate participant 
program and Joe taking a chance on me, I wouldn't be here 
telling you about how bad the system is.
    People like me shouldn't have to wait for VR to provide 
counseling. We should be allowed to go to a private facility 
and get the support we need to go to work, and providers like 
Joe shouldn't have to take a big risk to help people with 
disabilities find employment.
    Mr. Chairman and Congresswoman Kennelly, I want to thank 
you for recognizing this problem. I urge the other Members of 
this Subcommittee to support your bill, and so that people with 
disabilities have the opportunity to take pride in their work, 
just like you do.
    Thank you.
    [The prepared statement follows:]

Statement of Joe Mobley, Client, Lifeskills Industries

    Mr. Chairman, Congresswoman Kennelly and Honorable Members 
of the Committee:
    My name is Joe Mobley. It is an honor for me to be here to 
present testimony. It makes me proud to be an American citizen.
    For most people, working may be just a matter of waking up 
in the morning, fixing breakfast, getting dressed, and driving 
to work. But, for many people with disabilities, including 
myself, it's more complicated than that. Many of us need 
assistance to fix breakfast, get dressed, go to work--things 
most people take for granted.
    And the system makes it even harder for people with 
disabilities to go to work. Seventy percent of us are 
unemployed! I'm one of the lucky ones. SSA contracted with 
Lifeskills to join the Alternate Participant Program. I am one 
of only 22 people with disabilities in the entire country who 
has been given a chance to find a good job through this 
program.
    I have Susan Daniels at SSA and LifeSkills to thank for 
that. But, Joe Miller and I know that there is a financial risk 
involved in helping me.
    LifeSkills found a job for one participant in this program 
who had to quit because she would have lost more benefits than 
the money she was making. Even though Joe's staff worked with 
her and helped her find a job, LifeSkills won't get paid for 
that. LifeSkills may not get paid for me either if something 
like a medical complication happens.
    There are a lot of people like me in this country. We want 
to be employed. We want to take pride in our jobs. But my V.R. 
didn't help me and if it weren't for the Alternate Participant 
Program and Joe taking a chance on me, I wouldn't be here 
telling you about how bad the system is--I'd be living how bad 
the system is.
    People like me shouldn't have to wait for their V.R. to 
provide counseling. We should be allowed to go to a private 
facility and get the supports we need to go to work. And 
providers like Joe shouldn't have to take a big risk to help 
people with disabilities find employment.
    Mr. Chairman and Congresswoman Kennelly, I want to thank 
you for recognizing this problem. I urge the other members of 
this Committee to support your bill so that people with 
disabilities have an opportunity to take pride in their work--
just like you do.
      

                                

    Chairman Bunning. Thank you very much.
    Ms. Tishman.

STATEMENT OF FRANCINE M. TISHMAN, EXECUTIVE DIRECTOR, EDWIN W. 
 MARTIN, JR. CAREER AND EMPLOYMENT INSTITUTE, NATIONAL CENTER 
FOR DISABILITY SERVICES; AND MEMBER, BOARD OF DIRECTORS, INTER-
NATIONAL ASSOCIATION OF BUSINESS, INDUSTRY, AND REHABILITATION 
                            (INABIR)

    Ms. Tishman. Thank you. Good afternoon, Mr. Chairman and 
Members of the Subcommittee. My name is Francine Tishman, and 
I'm the executive director of the Career and Employment 
Institute, a division of the National Center for Disability 
Services, located in Long Island, New York.
    National Center is dedicated to empowering children and 
adults with disabilities to fulfill their academic and 
professional potential through education, training, and 
employment. I am here today as a representative of my own 
organization and as a member of the board of directors of 
INABIR, the Inter-National Association of Business, Industry, 
and Rehabilitation, which is comprised of more than 100 
Projects with Industry programs across the country.
    I want to thank you, Congressman Bunning and Representative 
Kennelly, and other Members of the Subcommittee, for your 
efforts over the last several years to create increased 
opportunities and incentives that will facilitate employment 
among SSDI and SSI recipients. Your bill addresses the most 
significant obstacles that confront SSA recipients with 
disabilities and providers of placement services.
    Statistics continue to demonstrate the devastating reality 
for 16.9 million persons with disabilities who have stated 
their desire to work. Of that number, only 4.5 million are 
employed, leaving almost 11.5 million without employment and 
dependent on benefit programs. Under the current system, less 
than one-half of 1 percent of all SSA recipients with 
disabilities become employed each year and leave the rolls.
    National Center has more than 30 years of experience in 
placing persons with disabilities into competitive employment. 
Over those years, I estimate that we have assisted more than 
10,000 persons to achieve employment, but during those years we 
have been, and continued to be, most challenged by persons who 
are Social Security recipients. Of the total number of people 
we serve each year, approximately 25 percent are recipients of 
Social Security benefits.
    My organization and PWIs across the country have the desire 
to assist recipients to go to work. The major difficulties 
under the current system are: Receiving direct SSA referrals, 
reimbursement under the current system, which is not a fiscally 
sound proposition for most of the Nation's nonprofit 
organizations, and finally, the authority remains within the 
State VR system to retain a case for 4 months before referring 
it to an alternate provider.
    Projects with Industry programs have an outstanding record 
of success. In citing recent statistics, in just 1 year, 11,000 
persons were placed into full- and part-time competitive jobs. 
Collectively, they earned over $112 million, paid almost $16 
million in taxes, and saved SSA programs a little more than $15 
million.
    The local economies across the country were stimulated at a 
rate of $3 for every dollar that SSA recipients earned. Or 
better stated, that represents almost $340 million each year 
going into local economies.
    We know that PWIs can play a significant role in assisting 
SSA beneficiaries to become employed because we recognize that 
both job seekers with disabilities and employers are our 
customers. SSA recipients have not been specifically targeted 
as a service population by PWIs and by other providers, due to 
the referral and reimbursement constraints under the current 
system. Projects with Industry transcend the traditional model 
of vocational service delivery systems by creating and 
maintaining strong partnerships with the business community in 
order to enhance and expand job opportunities in the primary 
labor market.
    Projects with Industry is perhaps the single most 
accountable program supported by the Federal Government through 
the Department of Education Rehabilitation Services 
Administration. PWIs must meet rigorous standards and 
indicators and are among the most creative in developing 
strategies to recruit and serve individuals with severe 
disabilities.
    Our center operates PWI placement programs in conjunction 
with Centers for Independent Living in seven cities. Centers 
for Independent Living provide other support such as housing 
and transportation assisting, peer counseling, and independent 
living skills in order to enhance employment potential. Our PWI 
expertise in working with the business community, along with 
the strong consumer focus service delivery of Independent 
Living Centers, are catalysts in overcoming the barriers to 
employment independence.
    The bill clearly reflects the respect for the individual, 
as well as the concern about its realistic implementation. SSA 
recipients seeking employment will clearly have independence 
and authority and the resources needed to achieve their 
employment goals.
    While creating opportunities, the bill also targets long-
overdue reform of significant work disincentives. Extended 
Medicare coverage, task credits for disability-related work 
expenses, and the gradual reduction of benefits are all 
necessary tools to achieve the Subcommittee's goals.
    From the provider perspective, we are especially pleased 
that the bill includes an earn-as-you-serve system that will 
now enable more alternate providers to bring their expertise 
and talents to addressing our country's significant 
unemployment rate among SSDI and SSI recipients.
    I cannot conclude my remarks without expressing some 
concerns about the time it will take to fully implement the 
provisions of the bill, and to stress to you that recipient 
disincentives must be eliminated simultaneously with the 
initiation of provider incentives.
    My final words congratulate you all and your staff for 
addressing these major obstacles and for demonstrating your 
understanding of what needs to be done to help people with 
disabilities on SSI and SSDI who want to work get to work. I am 
certain that the expansion of the provider pool made possible 
by this bill will have a direct and immediate impact on the 
level of employment and the strength of our economy.
    The National Center and Projects with Industry across the 
country are eager to support you and to assist the Social 
Security Administration in implementing this outcome-oriented 
program. Thank you.
    [The prepared statement follows:]

Statement of Francine M. Tishman, Executive Director, Edwin W. Martin, 
Jr. Career and Employment Institute, National Center for Disability 
Services; and Member, Board of Directors, the Inter-National 
Association of Business, Industry, and Rehabilitation (INABIR)

    Good afternoon Mr. Chairman and members of the 
Subcommittee. My name is Francine Tishman and I am the 
Executive Director of the Career and Employment Institute, a 
division of the National Center for Disability Services located 
in Long Island, New York. NCDS is dedicated to empowering 
children and adults with disabilities to fulfill their academic 
and professional potential through education, training and 
employment. I am here today as a representative of my own 
organization and as a member of the Board of Directors of the 
Inter-National Association of Business, Industry and 
Rehabilitation (I-NABIR) comprised of more than 100 Projects 
With Industry Programs across the country.
    I want to thank you, Congressman Bunning, Congresswoman 
Kennelly and other members of the Subcommittee for your efforts 
over the last several years to create increased opportunities 
and incentives that will facilitate employment among SSDI and 
SSI recipients. Your Bill addresses the most significant 
obstacles that confront SSA recipients with disabilities and 
providers of placement services.
    Statistics continue to demonstrate the devastating reality 
for 16.9 million persons with disabilities who have stated 
their desire to work. Of that number, only 4.5 million are 
employed, leaving almost 11 million without employment and 
dependent on benefit programs. Under the current system, less 
than one half of one percent of all SSA recipients with 
disabilities become employed each year and leave the roles.
    Our organization has more than thirty years of experience 
in placing persons with disabilities into competitive 
employment. Over those years, I estimate that we have assisted 
more than 10,000 persons with disabilities to achieve 
employment. But during those years we have been, and continue 
to be, most challenged by persons who are Social Security 
recipients. Of the total number we serve each year, 
approximately 25% are recipients of Social Security benefits. 
My organization and PWI's across the country have the desire to 
assist SSDI/SSI recipients to go to work. The major 
difficulties under the current system are:
     Impossibility of receiving direct SSA referrals
     Reimbursement under the current system is not a 
fiscally sound proposition for most of the nation's non-profit 
providers
     Authority remains with State VR to retain the case 
for 4 months before referring to an alternate provider.
    Projects With Industry programs have an outstanding record 
of success. In citing recent statistics, in one year, 11,000 
persons with disabilities were placed into full and part-time 
competitive jobs. Collectively they earned $112,200,000; paid 
$15,708,000 in taxes; and saved SSA programs $15,246,000. Local 
economies were stimulated at a rate of $3 for each $1 earned--
or better stated $336,600,000/yr.
    We know that PWI's can play a significant role in assisting 
SSA beneficiaries to become employed because we recognize that 
both job seekers with disabilities and employers are our 
customers. SSA recipients have not been specifically targeted 
as a service population by PWI's and by other providers due to 
the referral and reimbursement constraints under the current 
system.
    Projects With Industry transcends the traditional model of 
vocational service delivery systems by creating and maintaining 
strong partnerships with the business community in order to 
enhance and expand job opportunities in the primary labor 
market. Projects With Industry is perhaps the single-most 
accountable program supported by the federal government (U.S. 
Department of Education, Rehabilitation Services 
Administration). PWI's must meet rigorous standards and 
indicators and are among the most creative in developing 
strategies to recruit and serve individuals with severe 
disabilities.
    NCDS operates placement programs in conjunction with 
Centers for Independent Living which provide other supports 
such as housing and transportation assistance, peer counseling 
and independent living skills training in order to enhance 
employment potential. Our PWI expertise in working with the 
business community along with the strong consumer focussed 
service delivery system of independent living centers are 
catalysts in overcoming the barriers to employment and 
independence.
    The Bill clearly reflects respect for the individual as 
well as the concern about its realistic implementation. SSA 
recipients seeking employment will clearly have independence 
and the authority and the resources needed to achieve their 
employment goals. While creating opportunities, the Bill also 
targets long overdue reform of significant work disincentives. 
Extended Medicare coverage, tax credits for disability related 
work expenses and the gradual reduction of benefits are all 
necessary tools to achieve the Subcommittee's goals.
    From the provider perspective, we are especially pleased 
that the Bill includes an ``earn as you serve'' or milestone 
reimbursement system that will now enable more alternate 
providers to bring their expertise and talents to addressing 
our country's significant unemployment rate among SSDI/SSI 
recipients.
    I cannot conclude my remarks without expressing some 
concerns about the time it will take to fully implement the 
provisions of the Bill. Recipient disincentives must be 
eliminated simultaneously with the initiation of provider 
incentives. I cannot stress strongly enough that the success of 
this new initiative is dependent upon the effectiveness of its 
implementation strategies.
    My final words congratulate you all and your staff for 
addressing these major obstacles and for demonstrating your 
understanding of what needs to be done to help people with 
disabilities on SSDI and SSI who want to work . . . get to 
work. I am certain that the expansion of the provider pool made 
possible by this Bill will have a direct and immediate impact 
on the level of employment and the strength of our economy.
    Thank you.
      

                                

    Chairman Bunning. Thank you, Ms. Tishman.
    I will start out. Mr. Miller, you mentioned that there are 
many risks involved in providing services to people with 
disabilities under the alternative participant program. Since 
LifeSkills is participating in this program, can you tell us 
why you are helping Mr. Mobley and other consumers, in spite of 
the risk?
    Mr. Miller. We feel that we are large enough to accept some 
of that risk. We're also very confident that the people that we 
work with who have disabilities are able to work in the 
community and that we can be successful in placing them.
    Chairman Bunning. All right. There are plenty of other 
questions. Let me get back to general questions for the whole 
panel.
    As you may know, and most of you already have said 
something about this, our bill allows for the employment 
network to choose between two reimbursement systems--one being 
based on outcomes only, and the other being based on achieving 
milestones and outcomes. We define outcomes as no longer being 
eligible for cash benefits. We do leave it up to the 
Commissioner, with advice from the advisory panel, to set up 
this milestone payment process.
    What advice would you give us, and give the Commissioner, 
as to how to set up the milestone payment plan? Anyone?
    Mr. Shedlin. Well, NARPPS has taken the position that there 
can be several different milestones. One could be at the 
implementation of an individualized rehabilitation plan. 
Another could be at the point where the individual actually 
returns to work, and then at the actual outcome that you would 
utilize in the outcome-based plan. We'd look at those three 
spots as making it feasible for all rehabilitation counselors 
in the private sector, large or small, to be able to 
participate in this program.
    Chairman Bunning. Anyone else?
    Mr. Miller. I believe the same three elements: When one 
signs to a plan, when one begins work, and at the successful 
conclusion.
    Ms. Tishman. I would agree, except to say that in 
delivering individualized services, those milestones will occur 
over different time periods in people's lives. But, basically, 
something that does not rely necessarily just on venture 
capital of nonprofit organizations, of which we have none to 
contribute, would really bring more people into our systems, 
and obviously, we have been delivering outcomes for many, many 
years, would allow us to bring these services to individuals 
right now that we're not targeting, and for that reason.
    Mr. Burns. Mr. Chairman, if I could just respond to that 
question----
    Chairman Bunning. Go ahead.
    Mr. Burns. Currently, as you're aware, the public VR agency 
operates under--we're reimbursed after the individual 
terminates benefits, after they meet the substantial gainful; 
that's kind of the playingfield that we've operated under now.
    We in Maryland do work with community providers and are 
implementing a system that develops milestones in terms of 
payment relative to job development, job placement, and 
followup, as one of the other speakers commented. That seems 
like a very doable and workable approach.
    The only thing I would caution the Subcommittee on, that 
there have been--public VR agencies have experienced major 
problems in receiving reimbursement from Social Security under 
the current system, when the individual goes off of benefits. 
So any system that would have to be implemented, the critical 
feature is the capacity for Social Security to monitor, 
reimburse, and is doable, and we found that the current system 
results in some problems.
    Chairman Bunning. Thank you.
    Barbara.
    Mrs. Kennelly. Ms. Tishman, you mention that the State has 
the case for 4 months before it can be referred. In your 
experience, does the State refer or does the nonprofit have to 
go after the case? How does it work?
    Ms. Tishman. Well, since we're not out recruiting for 
individuals--they're referred to us--and we don't know at what 
point within that 4 months or after that 4 months they're 
referred to us, if they're coming through the regular VR 
system. They are not referred to us specifically as an 
individual who is on a Social Security benefit program. That's 
just incidental information and data that we gather about the 
individual as they come to us.
    Mrs. Kennelly. One of our earlier witnesses said that 
there's a lack of information about the benefits available to 
individuals. Do you think that they know after 4 months they 
can go to another agency?
    Ms. Tishman. I really couldn't attest to that. I'm not 
certain about that. I would think it was more in the hands of 
the VR counselor as opposed to the individual who's seeking the 
service.
    Mrs. Kennelly. Thank you.
    Mr. Burns, I asked about your figures earlier, and I was 
wondering if you wanted to take the opportunity to explain the 
difference between your 53,000 figure and the 8,000 
beneficiaries which SSA reimburses?
    Mr. Burns. Yes, Mrs. Kennelly, and Susan Daniels, I think, 
began to answer that question. The 210,000 figure are the total 
number of individuals that we returned to employment. Again, 
that's in a broader rehabilitation program that includes both 
SSA beneficiaries and just persons with disabilities not 
receiving Social Security. As I stated in my testimony, about 
25 percent of the 210,000 individuals, or just over 52,000 
individuals that we rehabilitated, were beneficiaries of Social 
Security.
    And you heard some consumers speak to what occurs--is that 
consumers will take part-time employment, so that they do not 
hit the substantial gainful threshold, and that, I mention in 
my testimony, is a very, very real issue--the critical issue of 
why it is not working to the degree that we all want it to 
work--you want it to work; the public VR agencies want it to 
work, and consumers want--are the economic disincentives around 
health care and cash benefits. Those are the critical issues 
that need to be addressed to have a successful return-to-work 
program.
    Mrs. Kennelly. Thank you, Mr. Burns. Thank you, Mr. 
Chairman.
    Chairman Bunning. That's why we have it in our bill. That's 
why there are two alternative programs that you and the private 
rehabers will be able to work with. So we're not leaving you 
out of the loop at all.
    Mr. Burns. The only concern, Chairman Bunning, on that is, 
again, you're setting up a two-track system, where my 
experience, as both a practitioner, a rehab counselor, and as 
an administrator, it works best when we collaborate. It's when 
we work together as a public VR agency and community 
rehabilitation providers----
    Chairman Bunning. Are you telling me, then, that you could 
do the job by yourself if we took and made these disincentives 
disappear?
    Mr. Burns. I'm saying that is the major problem for return-
to-work for SSA beneficiaries. We would never do any 
rehabilitation by ourselves. We work in collaboration with 
community providers. Again, they have a certain expertise. 
They've talked about their linkages with business, their 
placement abilities, their flexibility. But public VR agencies 
also have certain capacities to link-in and fund other services 
that are not typically provided by community rehabilitation 
programs.
    Chairman Bunning. Almost every consumer that has testified 
here has testified that health care, extension of health care 
coverage, is number one.
    Mr. Burns. I would agree. Health care, number one; cash 
benefits, number two.
    Chairman Bunning. We want to thank you all. It's impossible 
for some of the Members of the Subcommittee, obviously, to be 
here today. Therefore, we may be submitting additional 
questions in writing for you to answer for the record.
    [The following was subsequently received:]

Questions and Subsequent Answers from Mr. Shedlin

    1. We thank you for your testimony and your many positive 
comments about this legislation. Your organization represents 
3,200 member groups. Do you see real interest by your 
membership in terms of enrolling in the program as either an 
employment network or a program manager?
    1. The members of NARPPS unquestionably have an interest in 
enrolling in the program. A majority of our larger members will 
choose to enroll in the program as program managers and our 
smaller members (which comprise the largest part of our 
membership) will most likely select to become an employment 
network. The interest of our members has been demonstrated by 
the large number of providers who completed the RFP for the 
Alternate Participant program (although mostly our larger 
members due to the lack of milestone payments) and by the 
active involvement of our membership and the NARPPS Board in 
working with the Subcommittee staff regarding the introduction 
of this bill and our hope for the bill to be enacted into law.
    2. You may have heard Ms. Webb suggest that the legislation 
should not require the Commissioner of Social Security to 
develop selection criteria for employment networks, including 
professional and government certifications. What are your views 
on this suggestion?
    2. My understanding of Ms. Webb's comments regarding the 
selection criteria for an employment network was her opinion 
that the consumer could decide on their own who is or is not a 
capable provider. It is the NARPPS position that well educated, 
certified and experienced professionals should be selected for 
the employment network but we take no position as to whom 
should develop the selection criteria. We agree with Ms. Webb 
that consumers are capable of making their own choice of 
providers from the providers designated as an employment 
network.
    3. As you may know, our bill allows for the employment 
network to choose between two reimbursement systems, one being 
based on outcomes only, and the other being based on achieving 
milestones and outcomes. We define outcomes as no longer being 
eligible for cash benefits. We do leave it up to the 
Commissioner, with advice from the Advisory Panel, to set up 
this milestone payment process. What advise would you give the 
Commissioner as to how to set up the milestone payment plan?
    3. NARPPS would advise the Commissioner that milestone 
payments be provided to the employment network at the time that 
a return to work plan has been developed by the recipient and 
the provider, at the initial job placement, and that final 
payment should be made when the recipient is no longer eligible 
for cash benefits.
    4. I understand that the State Vocational Rehabilitation 
(VR) agencies receive priority referral of SSDI and SSI 
beneficiaries for services. Last year, SSA implemented an 
Alternate Participant program that allows private sector 
providers to serve SSDI and SSI beneficiaries who have been 
turned down by the State VR agencies. While this program seems 
to be a move in the right direction, I've heard there have been 
difficulties. Can you describe your experiences with the 
Alternate Participant program?
    Follow-up: Are their lessons learned that we should address 
in this legislation?
    4. The Alternate Participant program is definitely a step 
in the right direction. Missing from the program is the option 
of milestone payments to providers, which effectively precludes 
all but the largest private companies from participating and 
thus limiting the amount of qualified providers available to 
recipients. Also missing from the programs are incentives such 
as tax credits and extended health benefits for the recipient. 
As H.R. 3433 addresses these issues, NARPPS believes that when 
enacted and fully implemented, it will serve as a significantly 
more effective program than the Alternate Participant program.
    The lesson to be learned, as NARPPS sees it, is for 
consumer choice, consumer incentives and broadening the section 
of qualified professionals available to assist the recipients 
in finding gainful employment.

Questions and Subsequent Answers from Mr. Burns

    1. Is it true that State Vocational Rehabilitation (VR) 
agencies define successful rehabilitation as the beneficiary 
working and earning over $500 a month for 9 months?
    Follow-up: Most people would define successful 
rehabilitation as getting a job, maintaining that job, and 
ultimately coming off the Social Security rolls. The bill's 
payment system rewards providers in such a way that the 
provider will continue providing employment supports well after 
9 months of earning over $500 a month. In fact, the bill 
rewards providers up to 5 years as long as the individual is 
off the rolls because of work activity. Do State VR agencies 
continue working with beneficiaries after they have been 
reimbursed for an individual?
    The definition of a ``successful rehabilitation'' in the 
national public VR program is defined by federal law and 
regulation, not by state agencies. According to federal 
regulations (Section 361.56) promulgated by the U.S. Department 
of Education the following requirements must be met in order to 
claim a successful employment outcome: (a) The provision of 
services under the individual's IWRP has contributed to the 
achievement of the employment outcome; (b) The employment 
outcome is consistent with the individual's strengths, 
resources, priorities, concerns, abilities, capabilities, 
interests, and informed choice; (c) The employment outcome is 
in the most integrated setting possible, consistent with the 
individual's informed choice; (d) The individual has maintained 
the employment outcome for a period of at least 90 days; (e) At 
the end of the appropriate period under paragraph (d) of this 
section, the individual and the rehabilitation counselor or 
coordinator consider the employment outcome to be satisfactory 
and agree that the individual is performing well on the job.
    State VR agencies also participate in the Social Security 
reimbursement program for our clients who are Title II and 
Title XVI beneficiaries. In those instances, success is defined 
and determined by Social Security law and regulations which is 
the maintenance of employment that leads to the termination of 
Social Security benefits.
    Finally, state VR agencies can and do provide 
rehabilitation services to individuals after they have 
terminated Social Security benefits. The agency can provide 
those service under a ``post-employment'' option or can open a 
new service case if the individual is requesting a new and 
substantive Individualized Written Rehabilitation Program 
(IWRP).
    2. You say that State VR agencies serve approximately a 
half million beneficiaries per year. Yet, in 1996, State VR 
agencies were reimbursed for only a little over 6,000 
beneficiaries. I think that equates to about a 1% success rate. 
Recognizing that fear of losing health care benefits and cash 
benefits contribute to beneficiaries' reluctance to work, what 
are the keys to success, in your experience, that do enable an 
individual to work for beyond the 9-month trial work period?
    The critical element in a successful return to work program 
is the availability of work incentives that are effective, 
flexible, and do not result in a loss of a benefit until the 
individual with a disability can afford to or can accommodate 
the loss of the benefit. The current Social Security law and 
regulations do not provide effective, flexible, or non-punitive 
work incentives.
    Legislation, to be effective, must eliminate the so-called 
``earnings cliff'' and other powerful disincentives that exist 
in the current law. True work incentives would permit a 
graduated loss of benefits, both health care and cash, to 
assure that SSA beneficiaries only lose benefits after they 
have achieved an adequate level of self-sufficiency. In 
addition, work incentives should be flexible to permit the 
individual to return to a beneficiary status expeditiously if 
the employment situation fails.
    Social Security law, regulations, and policy maintain a 
bias of ``all or nothing.'' In SSA's view, the individual is 
either totally disabled or they are not disabled. This is a 
very significant shortcoming of the Social Security program; 
its failure to support the fact that persons with very severe 
disabilities can work, but may require an accommodation in 
order to do so. The accommodation that is required is a program 
of work incentives that is effective, understandable, and non-
punitive.
    An example of this bias within Social Security is the data 
presented by SSA that state VR agencies in 1996 were reimbursed 
for only a little over 6,000 beneficiaries. This figure greatly 
underestimates the number of beneficiaries that went to work as 
a result of VR services because it does not include individuals 
that use the existing, albeit ineffective, work incentives that 
are currently available (e.g., 1619 A and B waivers, PASS) or 
individuals that deliberately keep their earnings under the SGA 
so they do not fall off the ``cliff'' in terms of the loss of 
benefits on which they are dependent. Over and above the 6,000 
beneficiaries reimbursed annually by SSA, an additional forty 
thousand (40,000) plus SSI/DI beneficiaries go to work each 
year as a result of the work of the public VR program. The 
disincentives which exist in current SSA law encourage these 
individuals to limit or leave their work in order to retain 
benefits.
    Additionally, the record should reflect the following:
     16,000 represents the number of claims SSA is able 
to process, not the number of claims eligible for reimbursement
     VR agencies have increased the number of claims 
submitted for reimbursement by 21.5% since FY 96
     VR agencies have increased the number of claims 
submitted for reimbursement by 40% since FY 96
    3. You mention that currently, the State Disability 
Determination Services refer 10 to 15% of their applicants. Why 
is this percentage so low? Have VR agencies and State DDSs 
worked together in the past to see how they could increase the 
referral rate? In fact, don't the majority of State DDSs report 
directly to the State VR Director?
    The core issue is not the percentage of applicants referred 
or the referral rate. Both of those measures could be 
substantially increased and not impact the number of 
beneficiaries that go to work. The core issue is when 
individuals are referred for vocational rehabilitation services 
and who is referred. Traditionally both those issues (when and 
who) have been controlled by Social Security through its 
program operations manual system (POMS) under which state DDS 
agencies are required to operate. Although a number of state 
DDS agencies report to the State VR Director, Social Security 
has maintained very strong operational control, at a policy 
level, regarding all elements of administration.
    Clearly, the time the individual is most receptive to 
participate in vocational rehabilitation services is not after 
struggling with the SSA system for 1, 2, or 3 years, and 
finally being determined as ``totally and permanently'' 
disabled from working.
    Additionally, SSA needs to reexamine its POMS guidelines 
regarding appropriate referrals to VR. Nationally, 65-70% of 
SSI and SSDI claims are denied. It is not unusual or 
unexpected, therefore, to see state DDS agencies making 
significantly more referrals of ``denied'' claimants than 
``allowed'' beneficiaries. By weighting the referral pool to 
state VR services of ``denied'' claimants, the current system 
fails to get what should be the targeted group (allowed 
beneficiaries) efficiently into the service delivery system.
    4. You suggest an evaluation is necessary to determine the 
optimal time for a referral for rehabilitation services. How 
would you see such an evaluation working? Under this 
legislation, the individual receives the ticket once they are 
allowed benefits and upon a CDR. They then decide when to 
choose to use the ticket. Isn't the consumer in the best 
position to decide when it is best for them to take advantage 
of the ticket?
    As a practical matter, at present 40% of SSI/DI 
beneficiaries served by the Public Vocational Rehabilitation 
program are walk-in or self referrals. In contrast, only 4% of 
SSI/DI beneficiaries known to the Public VR program were 
referred by SSA or the state DDS agency. The reality is that 
beneficiaries are already exercising their choice of when and 
how to participate in a rehabilitation program. This again 
illustrates that the underlying barrier to an effective SSA 
return to work program is the availability of effective, 
flexible, and non-punitive work incentives.
    We would recommend that SSA utilize a pilot program to 
study the success rate of making referrals to state VR services 
at an earlier point than when the claim is fully adjudicated 
(which is the current SSA policy). There is a widely held 
belief that if the referral of appropriate individuals for VR 
services was done earlier in the process, rather than at time 
of final decision, the success rate in attaining SGA would be 
increased. Under a pilot program, in instances of a ``presumed 
determination'' (PD) of eligibility for benefits by the SSA 
worker at time of application, an individual would be referred 
immediately by the local SSA office for state VR services. The 
pilot would examine the success rates for attaining SGA for 
referrals from the pilot versus ``end-of-process'' referrals.
    5. You make what I consider a good recommendation--that SSA 
take the opportunity at every contact with a beneficiary to 
reinforce and promote employment. Can you provide more specific 
information on how SSA should go about promoting employment?
    Through a systematic process analysis, SSA should determine 
the ``critical junctures'' that its staff and organization 
interact with claimants, beneficiaries, and the general public 
to determine when and how information on employment and VR 
services is presented. The information can be as discreet as 
public service announcements (PSAs) relative to persons with 
severe disabilities working, to very specific information on 
the VR process and resources for a claimant or beneficiary to 
consider.
    There are significant potential benefits of a very 
aggressive and sustained public information and outreach 
approach that emphasizes disability benefits as a dynamic and 
flexible system rather than a permanent lifelong benefit for 
all beneficiaries. First, it begins to frame a national policy 
debate around the issue of disability and employment, i.e., 
that the concepts are not mutually exclusive and in fact the 
expectation is that persons with disabilities work and have 
meaningful careers. Secondly, the approach would begin to 
change the Social Security law which also sees and supports 
disability as a permanent inability to work thereby 
``creating'' a permanent barrier to employment.
      

                                

Questions and Subsequent Answers from Mr. Miller

    1. Mr. Miller, you mention that the two year extension of 
Medicare benefits will help, however you also say that further 
health care security measures must be instituted. What measures 
are you referring to?
    Question one concerning further health care security 
measures:
    There needs to be an allowable buy-in to either Medicare or 
Medicaid, depending upon the need, to provide wrap around 
coverage. The ability to have needed services not otherwise 
covered under an employers insurance program would enable those 
individuals who have that need to remain employed and 
productive. Personal attendant services would be an example of 
this need. Mr. Chairman as you are aware the fear of losing 
health care benefits and the inability to obtain affordable 
medical insurance is one of the major deterrents to people 
leaving the SSI/SSDI system. Individuals fear the difficulty in 
reinstating Medicare/Medicaid, when a medical problem reoccurs 
and they lose their job and their health insurance.
    2. As you may know, our bill allows for the employment 
network to choose between two reimbursement systems, one being 
based on outcomes only, and the other being based on achieving 
milestones and outcomes. We define outcomes as no longer being 
eligible for cash benefits. We do leave it up to the 
Commissioner, with advice from the Advisory Panel, to set up 
this milestone payment process. What advise would you give the 
Commissioner as to how to set up the milestone payment plan?
    Question two as to how to set up the milestone payment 
plan:
    I think most of us realize that besides reaching SGA there 
are two other defining points or milestones. The first would be 
the actual signing of the individualized employment plan. This 
is a moment of success because the individual and the provider 
have developed and agreed to a path or plan that results in the 
individual becoming as independent and self sufficient as 
possible. The next milestone would be the employment date for 
the job that is developed and expected to lead to SGA. Once SGA 
is achieved the current proposal that there would be a payment 
for each month the individual does not receive a benefit 
payment due to work activity for up to 60 months should be 
maintained. It should not be expected for Providers to assume 
all the financial risk. There is a substantial benefit 
available not only in a reduction of the monetary cost of SSI/
SSDI, but also to society and the economy as a whole. It has 
been my experience that endeavors that can be undertaken as a 
win-win situation for everyone involved will have the greatest 
chance of success.
    3. I understand that the State Vocational Rehabilitation 
(VR) agencies receive priority referral of SSDI and SSI 
beneficiaries for services. Last year, SSA implemented an 
Alternate Participant program that allows private sector 
providers to serve SSDI and SSI beneficiaries who have been 
turned down by the State VR agencies. While this program seems 
to be a move in the right direction, I've heard thare have been 
difficulties. Can you describe your experiences with the 
Alternate Participant program?
    Follow-up: Are their lessons learned that we should address 
in this legislation?
    Question three, experiences with the Alternate Participant 
program:
    The actual process to become an Alternate Participant is 
very lengthy and difficult to understand and complete.
    A real fear from the beneficiaries of losing medical 
benefits if they go to work.
    Local SSA offices need to be more familiar with the 
Alternate Participant program and be able to answer questions 
concerning a particular case as it pertains to the program.
    Preliminary information as to the benefits being received 
by the beneficiary needs to be available. Beneficiaries are not 
always sure of the mix of benefits they are receiving.
    The information on the bulletin board needs to be more user 
friendly. The format for referrals is such that the alternate 
participant must each month wade through a sea of numbers to 
see if anyone has been taken off or added.
    Some individuals are referred who are already receiving VR 
services.
    SSA Publication No. 05-10050, How Social Security Can Help 
With Vocational Rehabilitation, has wording under Refusal to 
Accept Rehabilitation Services that scares people into thinking 
they are going to lose their benefits, even if they are not 
able to participate.
    Lessons learned that could be addressed in this 
legislation:
    As we are all aware, the benefit of going to work has to 
outweigh the benefit of continuing to receive SSI/SSDI. The $1 
reduction for each $2 earned along with extended medical 
coverage is the right direction.
    The Alternate Participants should not be required to assume 
all the risk. If that remains the case then the number of 
individuals under the Alternate Participant program will 
continue to be small.
    Informing and educating beneficiaries as to the services 
available. It is important that SSI/SSDI beneficiaries 
understand and believe that the system can help them and that 
there are choices available to provide those services.
      

                                

Questions and Subsequent Answers from Ms. Tishman

    1. You mention that Project With Industries recently, in 
one year, placed 11,000 persons with disabilities into full and 
part-time jobs. Of these how many were SSDI beneficiaries and 
how many were SSI beneficiaries?
    Follow-up: Do you forsee Project With Industries programs 
being interested in becoming employment networks?
    Follow-up: What are the unique needs of SSI and SSDI 
beneficiaries based on your experience?
    1. Number of SSDI and/or SSI recipients who receive 
Projects With Industry Services:
    The Rehabilitation Services Administration initially 
required PWI's to determine whether recipients of PWI services 
were receiving SSDI or SSI when they were placed into 
employment. At that time (early 1990's) PWI's reported that 
approximately 2,420 (22%) of the 11,000 persons placed in one 
year had been receiving SSDI or SSI. RSA no longer requires 
this information to be tracked. However, our national PWI 
organization, I-NABIR, reports that those PWI's who do continue 
to track this information report that the percentages have 
remained about the same. I would assume that, based on the 
reporting relationship between RSA, the State VR programs and 
PWI's, that these numbers were included in those reported to 
your committee by CSAVR. My organization, the Career and 
Employment Institute, continues to track this information and 
during the last project year, 170 or 27%, of all persons we 
placed were SSI/SSDI recipients.
    Projects With Industry programs are extremely interested in 
becoming employment networks. PWI programs have clearly 
demonstrated their ability to achieve successful outcomes with 
SSDI and SSI recipients. PWI's have a very strong partnership 
with the business community through their business advisory 
councils, which have lead to meaningful employment for tens of 
thousands of persons with disabilities. PWI's also encompass a 
wide spectrum of providers including organized labor, trade 
associations and foundations, community colleges, for-profit 
providers and community rehabilitation programs. The Career and 
Employment Institute for instance, is utilizing centers for 
independent living as placement assistance sites. Our PWI 
expertise in working with business along with the strong 
consumer focussed service delivery system of independent living 
centers are catalysts in overcoming the barriers to employment 
and independence. In serving SSI and SSDI recipients we are 
most challenged by concern regarding their medical coverage and 
anticipated accompanying work related expenses. Most 
individuals would be more amenable to job pursuits if they had 
a better understanding of the benefit system.
    2. You mention your concern that about the time it will 
take to fully implement the provisions of the bill. How quickly 
a ramp-up time do you believe is realistic?
    2. Ramp-up time.
    The immediate elimination of the four-month period during 
which state VR has the ``right of first refusal'' would 
certainly expedite the process. The determination of milestone 
and outcome payments by SSA should be completed within 9-12 
months in order to quickly expand the service delivery pool 
available through alternate providers, PWI's and CARF 
accredited programs.
    3. I couldn't agree with you more that the success of the 
Program will depend on the effectiveness of the implementation 
strategies. We set up an Advisory Panel, made up of consumers, 
providers, and employers to advise SSA on how best to proceed, 
to ensure effective implementation. We are interested in any 
feedback you might have regarding how to optimize the 
effectiveness of the Advisory Panel. Do you have any 
suggestions at this time?
    3. Advisory Panel Effectiveness.
    While I agree with the composition of the Panel, I do feel 
that each member must be knowledgeable about the issues and the 
systems regarding employment incentives and disincentives. The 
process should be accessible to the community with specified 
reporting timeframes to Congress. Utilization of the Internet 
will create opportunities for increased involvement and 
dissemination.
    4. As you may know, our bill allows for the employment 
network to choose between two reimbursement systems, one being 
based on outcomes only, and the other being based on achieving 
milestones and outcomes. We define outcomes as no longer being 
eligible for cash benefits. We do leave it up to the 
Commissioner, with advice from the Advisory Panel, to set up 
this milestone payment process. What advise would you give the 
Commissioner as to how to set up the milestone payment plan?
    4. Milestone payment process.
    I would recommend milestone payment at the following 
intervals:
     After the development of the employment plan;
     Upon initial placement on the job;
     Upon nine months of employment; and,
     Based on monthly savings to the fund over a 60-
month period.
    5. I understand that the State Vocational Rehabilitation 
(VR) agencies receive priority referral of SSDI and SSI 
beneficiaries for services. Last year, SSA implemented an 
Alternate Participant program that allows private sector 
providers to serve SSDI and SSI beneficiaries who have been 
turned down by the State VR agencies. While this program seems 
to be a move in the right direction, I've heard there have been 
difficulties. Can you describe your experiences with the 
Alternate Participant program?
    Follow-up: Are their lessons learned that we should address 
in this legislation?
    5. Problems with the current Alternate Provider program.
    SSDI and SSI recipients should be given the opportunity to 
choose their provider at the beginning of the process. Under 
the current system, applicants must wait four months while VR 
determines whether or not they will serve the individual before 
referring on to another provider.
    The current Alternative Provider system assumes that 
organizations have the ``venture capital'' available to sustain 
the cost of service provision until people achieve nine months 
of employment; after which, providers will be reimbursed the 
actual cost of service. There is no provision to cover costs 
for persons who are not successful in achieving or retaining 
employment for whatever reason. SSDI and SSI recipients usually 
have serious and multiple barriers to employment. Success is 
not only impossible; it's an unrealistic expectation for any 
group. In the current system, state VR agencies use monies 
under the Rehabilitation Act to fund the services to SSDI/SSI 
recipients. In essence, VR is receiving funding from RSA and 
SSA for the same individual, but at different points in the 
service delivery.
      

                                

    Chairman Bunning. I would like to thank all of the 
witnesses today who have shared with the Subcommittee their 
comments on the Ticket to Work and Self-Sufficiency Act of 
1998. We appreciate hearing your views, and will examine each 
one of your recommendations as we move this legislation 
forward. For those interested, we hope to mark this bill in the 
Full Committee sometime next week.
    The Subcommittee will stand adjourned.
    [Whereupon, at 4:36 p.m., the hearing was adjourned subject 
to the call of the Chair.]
    [Submissions for the record follow:]

Statement of Dr. Robert S. Rudney, Chairman, EXCEL! Networking Group, 
Inc.

    Mr. Chairman and Members of the Subcommittee,
    As Chairman of the EXCEL! Networking Group, I strongly 
endorse the ``Ticket to Work and Self-Sufficiency Act of 
1998.'' EXCEL! is a nonprofit, Washington-area self-help group 
focusing on competitive employment and career development. Run 
entirely by and for people with disabilities, EXCEL! seeks to 
enhance their self-determination and advancement through its 
educational, training, mentoring, and outreach programs.
    Many of EXCEL!'s members are Social Security Disability 
recipients who are seeking to return to work. These members 
have expressed their acute dissatisfaction with the arcane 
regulations governing conditions for return to work, with the 
inability of many Social Security Administration employees to 
explain clearly these regulations, and with the incompetence of 
state vocational rehabilitation counselors to assist and advise 
them in their job searches.
    EXCEL! was explicitly established to empower people with 
disabilities by making them responsible for program design and 
implementation and thus overcoming the passivity and dependency 
traits so prevalent among clients of the vocational 
rehabilitation system. In the process, EXCEL! explicitly 
welcomes cooperative arrangements and partnerships with 
employers, counselors, and training organizations outside the 
rather insular disability community.
    The 1997 United Way Fairfax-Falls Church State of the 
Community Report; Partners in Progress cited EXCEL! in a 
special article for its efforts at developing partnerships with 
the business community. EXCEL! is actively involved in the 
Potomac Knowledgeway Project's Abilities Team, which seeks to 
ensure that people with disabilities are full members of the 
on-line community. The Potomac Knowledgeway Project is a 
coalition of high-tech companies and institutions working to 
make the Greater Washington region a global leader in the 
digital age. EXCEL! also participates in regular meetings of 
Project SAVE, a networking organization for corporate human 
resources professionals. In addition, EXCEL! is working closely 
with Integrated Disability Resources, a Kemper Insurance 
subsidiary, that is introducing innovative ``return to work'' 
programs to assist its disability claimants. For 1998, EXCEL! 
intends to focus on building additional bridges to the 
corporate sector, in part through a June 10th Washington 
conference, ``No More Crutches: New Approaches to Employment 
Counseling of Persons with Disabilities.''
    EXCEL!'s training efforts focus in three areas:
     personal accountability and goal-setting;
    On September 19-20, 1997, EXCEL! co-sponsored an intensive 
workshop on ``Crafting and Achieving a Life Vision,'' led by 
Lee Bussard of the Pacific Institute (Seattle). Bussard (who 
was born with cerebral palsy) has been instrumental in 
developing the Pacific Institute's award-winning Investment in 
Independence curriculum that teaches effective thinking skills 
and affirmation techniques to people with disabilities. 
Incorporating much of this curriculum, the EXCEL!workshop 
provided valuable tools for building self-esteem and self-
efficacy and for sustaining personal growth and career success. 
Six support sessions following the workshop reinforced 
Bussard's motivational teachings. EXCEL! seeks to incorporate 
this curriculum into its 1998-99 training program.
     job search strategies and techniques
    In November 1997, EXCEL! contracted with Morris Associates, 
a prominent Washington career counseling firm, to provide 
comprehensive workshop strategy sessions on career assessment, 
resums, interviewing, employment resources, and networking, 
followed by support meetings designed to keep participants' job 
searches on track. EXCEL! also maintains a productive mentoring 
partnership with the Washington Chapter of the International 
Association of Career Management professionals. In 1998, EXCEL! 
will work together with the Five O'Clock Club, a nationally 
recognized job search strategy group run by professional career 
counselors, to assist EXCEL! members in their job searches.
     computer skills acquisition.
    EXCEL! is arranging computer classes with three 
professional organizations: the Support Center of Washington, a 
training organization serving the local nonprofit community; 
HandsNet, a nonprofit providing hands-on Internet instruction; 
and the CURE Network, a self-help group of people with 
disabilities dedicated to bringing the benefits of information 
technology to the disability community. These three training 
organizations offer EXCEL! participants a large degree of 
flexibility and choice in pursuing instruction in computer 
applications best-suited to their career objectives.
    In summary, the EXCEL! program is a vivid example of the 
useful contributions that persons with disabilities themselves 
can bring to the networks of private service agencies 
envisioned under the proposed legislation. While ``client 
choice'' is key to assuring more responsive services, ``client 
participation'' is critical to developing creative and 
successful strategies for persons with disabilities to attain 
rewarding competitive employment.

For further information, please contact: Dr. Robert Rudney, 
Chairman, EXCEL! Networking Group, Inc.
      

                                

Testimony of the Mental Health Liaison Group, Employment and Income 
Security Committee

    The Mental Health Liaison Group's (MHLG) Employment and 
Income Security Committee focuses on the employment issues of 
persons with mental illnesses, including vocational 
rehabilitation, the federal social security and disability 
programs, and disability programs in the private sector. The 
Committee consists of members of the Mental Health Liaison 
Group, a coalition that represents the views of mental health 
consumers and providers to Congress and the federal government.
    Persons with mental illness are the fastest growing 
population on the Supplemental Security Income (SSI) program 
and the Social Security Disability Insurance (SSDI) program. 
People with mental illness make up the single largest 
population on the SSI and SSDI rolls. They come on the rolls 
earlier than people with other disabilities, and they remain 
dependent on SSI and SSDI longer than individuals with other 
types of disabilities. Consequently, the reforms considered 
today will have a great bearing on persons with mental illness.
    Despite numerous efforts in the past to reform the existing 
federal-state public vocational rehabilitation program, the 
existing public VR program simply does not meet the needs of 
people with disabilities who are on SSI or SSDI. Its time-
limited, short-term approach to rehabilitation ignores the 
episodic nature of mental illness and the likely intermittent 
nature of employment that most people with severe and 
persistent mental illness will face. Further, the public VR 
system lacks the resources necessary to provide the long-term 
employment supports needed by most people with mental 
illnesses. Although most state VR agencies have attempted to 
accommodate the vocational needs of persons with mental 
illnesses, the structure of public VR program severely limits 
this effort.
    The Social Security Administration currently refers social 
security beneficiaries to the state VR agency. It is then up to 
the VR agency to provide the appropriate VR services or find a 
provider that can meet those needs. This approach must change. 
Several reports indicate that a mere six to ten thousand social 
security beneficiaries leave the rolls through work each year. 
A person on the SSI/SSDI rolls is more likely to die on the 
rolls as a beneficiary than return to work. Clearly a new 
approach is needed.
    To be successful this new approach must:
     Take into account the episodic nature of mental 
illnesses and the likely intermittent employment patterns of 
most people with mental illnesses,
     Empower consumers to allow them to choose the 
provider that will do the best job for them,
     Provide fair and timely reimbursement to providers 
when successful outcomes are achieved, and
     Ensure that health care is available as the 
individual begins their work effort, in short it must end the 
current system that punishes people for trying to work.
    H.R. 3433, The Ticket to Work and Self-Sufficiency Act of 
1998, introduced last week by Congressman Jim Bunning (R-KY) 
and Congresswoman Barbara Kennelly (D-CT), is a tremendous 
improvement over current law. It will help vastly greater 
numbers of people with mental illness move from dependence on 
government benefits to independence through work. Here's why:

                           Empowers consumers

    Giving beneficiaries a Ticket they can take to ANY provider 
at ANY time gives consumers the choice they need to seek and 
receive services from the provider who can best meet their 
needs. H.R. 3433 ends the automatic referral to the state VR 
agency and ends state VR's right of first refusal to serve any 
beneficiary under the current Alternate Provider Program.

              Establishes a Fair and Timely Reimbursement:

    The current SSA Alternate Provider Program ``end loads'' 
the reimbursement to providers. Under current law, providers 
receive no payment from SSA until a beneficiary is no longer 
receiving Social Security cash benefits. This is unfair for 
three reasons. First, the vocational rehabilitation effort for 
persons with the most severe disabilities, including those with 
a mental illness, means that it may take months or years before 
an individual returns to work and then works their way off of 
benefits. End loading the payment forces the VR provider to 
weigh the ongoing costs of a long-term rehabilitation against a 
payment that may only occur years down the road, forcing 
providers to prognosticate the vocational capability of the 
consumer, something that is absolutely impossible to do when 
considering a person with a mental illness.
    Second, by ``end loading'' the payment, smaller providers 
that can not capitalize the long term costs of rehabilitation 
are severely disadvantaged. Only large, well-financed providers 
can afford to participate. Thus, smaller providers like 
psychosocial rehabilitation agencies and consumer-run agencies, 
as well as the people they serve, are treated unfairly.
    Third, the one-point-in-time reimbursement in the Alternate 
Provider Program provides no incentive to the provider to make 
sure the individual remains employed. Instead, like with the 
current public VR program, the consumer's case is ``closed'' 
when the payment is received. This is a serious flaw given the 
episodic nature of mental illness.
    H.R. 3433 will put an end to all three of these problems 
through the establishment of a ``milestone'' reimbursement 
system. Milestone reimbursements will allow providers to 
receive ``installment'' payments when the individual goes back 
to work and subsequently reduces their dependence on cash 
benefits. Furthermore, spreading the milestone payments over a 
60 month period will help ensure that consumers receive the 
long-term employment supports they need to stay on the job. The 
milestone system is a critical component of this legislation 
and key to the success of the Ticket-to-Work concept.
    In fact, Congress should repeal outright, on a state-by-
state basis, the Alternate Provider Program when the Ticket 
Program becomes available in a state. Providers currently 
participating in the Alternate Provider Program could be 
grandfathered into the new pool of providers under the Ticket 
proposal.

                          Extends Health Care:

    Consumers on SSDI and SSI openly admit that just the fear 
of the potential loss of health care benefits either stops them 
from working altogether or severely limits their work efforts. 
H.R. 3433 extends Medicare for two years, substantially 
reducing this fear.

               Establishes a Disabled Worker Tax Credit:

    This credit will benefit consumers by allowing them to 
account for the extraordinary expenses that many people with 
disabilities face when they return to work.

           Starts the Effort to End the SSDI ``Cash Cliff'':

    The abrupt and total loss of cash benefits and the 
consequences that has for health care coverage when a 
beneficiary goes to work is a severe obstacle to work. Again, 
consumers openly admit that the fear of suddenly losing 
benefits is a major barrier to work. We know that thousands of 
people with mental illness on the SSDI cash rolls could work 
more if the ``cash cliff'' were replaced by a graduated income 
offset like that in SSI. H.R. 3433 begins the process of 
eliminating the ``cash cliff'' by requiring the Social Security 
Administration to conduct cash offset demonstration projects.
    The legislation leaves some important issues to be 
resolved. Already noted is the fate of the Alternate Provider 
Program. Another important issue is how providers will ``sign 
up'' to be providers to persons with Tickets to Work. Under the 
current Alternate Provider Program, providers must complete a 
300+ page document called an RFP that has simply overwhelmed 
smaller providers who lack the expertise and staffing to 
complete such a document. The new Ticket system must be simpler 
if consumer choice is to be maximized. Thousands of providers 
sent ``Letters of Intent to Participate'' in SSA's Alternate 
Provider Program. Only slightly more than 200 have been 
accepted, and only a handful of persons have been served. 
Replicating these dismal results in the Ticket proposal would 
be tragic. The MHLG Employment and Income Security Committee 
believes that these issues, though critical, can be resolved 
simply and easily, and we will work with Congressman Bunning 
and Congresswomen Kennelly to achieve that goal.
    To the great credit of Congressman Bunning and 
Congresswoman Kennelly, H.R. 3433 does much more than simply 
establish new programs or end currently ineffective ones. It 
starts the long-delayed transformation of the nation's 
disability benefit program from one of being a cash-welfare 
benefit distribution system that demands total and permanent 
dependence to one where employment and work are supported and 
where independence is encouraged and favored.

 Mental Health Liaison Group Employment and Income Security Committee 
                                Members

    International Association of Psychosocial Rehabilitation 
Services
    Judge David L. Bazelon Center for Mental Health Law
    National Alliance for the Mentally Ill
    National Association of Social Workers
    National Council for Community Behavioral Healthcare
    National Mental Health Association
      

                                

        Minnesota Consortium for Citizens with Disabilities
                                                     March 15, 1998
The Honorable Jim Bunning, Chair
Subcommittee on Social Security of the Committee on Ways and Means
United States House of Representatives
B-316 Rayburn House Office Building
Washington, D.C. 20515

    Dear Congressman Bunning:

    The Minnesota Consortium for Citizens with Disabilities (MN CCD) is 
grateful for this opportunity to provide a written statement to your 
committee on the ``Ticket to Work and Self-Sufficiency Act of 1998.'' 
The Consortium is a broad-based coalition of organizations representing 
persons with a wide variety of disabilities. A listing of MN CCD 
members is attached.
    We strongly support your committee's efforts to remove barriers to 
employment faced by persons with disabilities. In particular, the 
provision for tax credits and the requirement that the Social Security 
Administration test a gradual offset of Social Security Disability 
Insurance (SSDI) benefits are both important steps forward.
    We are pleased that the committee recognizes the fear of losing 
health care coverage as one of the primary barriers confronting persons 
with disabilities who wish to work. The Act's extension of Medicare 
benefits will provide help for some, but does not get to the root of 
the problem. Neither employer-based health insurance, nor Medicare 
cover personal assistance services, nor do they offer comprehensive 
coverage of special medications, equipment, supplies and other long 
term supports commonly needed by persons with disabilities. Because 
such coverage is only offered by Medicaid, many individuals have no 
choice, but to rely on Medicaid, even if they have access to Medicare. 
To remain eligible for Medicaid under existing policies, they have no 
choice but to limit or forego employment, even if they are well 
qualified and highly motivated to work.
    The existing SSI 1619(b) program provides continued Medicaid 
coverage for some individuals with disabilities as an incentive to 
work. Unfortunately, persons on SSDI and many others with disabilities 
do not qualify for SSI 1619(b), even though they have prior work 
history and would be good candidates for successful employment, given 
the proper long term health care supports.
    The Minnesota House and Senate recently passed the attached 
resolution urging Congress to remove Medicaid policy barriers to 
employment. The resolution calls for legislation giving states the 
option to allow working persons with disabilities to receive continued 
Medicaid coverage to address unmet health needs when they become 
employed.
    Everyone would benefit from legislation removing Medicaid barriers 
to employment:
    Individuals with disabilities would gain opportunities to use their 
skills and become self-sufficient. They would no longer be forced into 
poverty to have their long term health needs met.
    Employers would gain an expanded pool of qualified, motivated 
candidates for positions that are difficult to fill in a shrinking 
labor market. Employers would not be expected to pick up any more 
health care costs than they would for non-disabled employees.
    Taxpayers would benefit as working people with disabilities reduced 
or eliminated their dependence on public programs, including Medicaid, 
SSI, SSDI, Medicare, Food Stamps, subsidized housing, and a variety of 
other federal, state and local programs. Tax revenues would increase as 
more people with disabilities became taxpayers themselves.
    While we understand that issues pertaining to Medicaid fall under 
the jurisdiction of the Commerce Committee, substantial savings to 
Social Security and Medicare could be gained if people with 
disabilities were no longer faced with the very real fear of losing 
long term health supports that are only covered by Medicaid.
    Thank you again for initiating this legislation to remove barriers 
to employment of persons with disabilities. We hope your committee will 
take further leadership in promoting legislation to remove the 
significant disincentives to employment created by existing Medicaid 
policies.
    If you have any questions, please don't hesitate to contact us. We 
deeply appreciate this opportunity to comment.
            Sincerely,
                                       Anita Boucher, Chair
                                   MN CCD Work Incentives Committee

Attachments
cc: Congressman Jim Ramstad
Congressman Martin Sabo
      

                                

  SF2699, as passed by MN Senate on 2/24/98 and by MN House on 3/10/98

A Resolution Memorializing the Congress of the United States to Remove 
Medicaid Policy Barriers to Employment for People with Disabilities.

    WHEREAS, seventy-four percent of working-age adults with 
severe disabilities are unemployed; and
    WHEREAS, many people with disabilities are highly dependent 
on local, state, and federal assistance for support and 
survival, particularly for necessary health care; and
    WHEREAS, a 1995 Lou Harris poll reported that two-thirds of 
unemployed people with disabilities are eager to work; and
    WHEREAS, advances in technology, the civil rights 
protections of the Americans with Disabilities Act, and the 
current labor shortage are opening up many new employment 
opportunities for people with disabilities; and
    WHEREAS, current government policies, particularly those 
relating to Medicaid, discourage people with disabilities from 
working; and
    WHEREAS, existing Medicaid work incentives are flawed and 
are completely unavailable to people with disabilities who do 
not qualify for the SSI 1619(b) program; and
    WHEREAS, removing policy barriers to employment would 
enable more people with disabilities to reduce their dependence 
on Social Security, Medicaid, Medicare, subsidized housing, 
food stamps, and other state, local, and federal government 
programs; and
    WHEREAS, becoming employed allows individuals with 
disabilities to contribute to society by becoming taxpayers 
themselves; and
    WHEREAS, employer-based health care and government 
programs, such as Medicare, Minnesota Comprehensive Health 
Association, and MinnesotaCare, do not typically cover long-
term supports needed by people with disabilities; NOW, 
THEREFORE,
    BE IT RESOLVED by the Legislature of the State of Minnesota 
that it urges the Congress of the United States to adopt 
Medicaid buy-in legislation that would allow people with 
permanent disabilities to retain Medicaid coverage to address 
unmet health needs when they become employed.
    BE IT FURTHER RESOLVED that such Medicaid buy-in 
legislation should require individuals to take advantage of 
employer-based health coverage, if available and affordable, 
and should further require individuals to purchase needed 
Medicaid coverage on a sliding fee scale, based on their 
ability to pay.
    BE IT FURTHER RESOLVED that the Secretary of State of the 
State of Minnesota is directed to prepare copies of this 
memorial and transmit them to the President and the Secretary 
of the United States Senate, the Speaker and the Clerk of the 
United States House of Representatives, and Minnesota's 
Senators and Representatives in Congress.
      

                                

Minnesota Consortium for Citizens with Disabilities

    The Minnesota Consortium for Citizens with Disabilities (MN 
CCD) is a broad-based coalition of organizations of persons 
with disabilities, providers and advocates, dedicated to 
improving the lives of persons with disabilities. We address 
public policy issues that affect people with disabilities by 
collaborating with others, advocating, educating, influencing 
change, and creating awareness for understanding. The Minnesota 
Consortium for Citizens with Disabilities includes:

Access Press
Accessible Space, Inc.
Advocating Change Together
Alliance for the Mentally Ill of Minnesota
Alliance Health Care
Arc Minnesota
Arc of Anoka and Ramsey Counties
Arc of Hennepin County
Arc Olmsted County
Association of Residential Resources in Minnesota
Becklund Home Health Care, Inc.
Brain Injury Association of Minnesota
Courage Center
Epilepsy Foundation of Minnesota
Executive Assistants
Fairview Multiple Sclerosis Achievement Center
Flaten, Kris, Consumer
Fraser Community Services
Gillette Children's Specialty Healthcare
Goodwill/Easter Seal of Minnesota
Independence Crossroads
Johnson, Cindy, Parent/Advocate
Lutheran Social Service of Minnesota
Mental Health Association of Minnesota
Mental Health Consumer/Survivor Network
Metro Work Center, Inc.
Metropolitan Center for Independent Living
MN Assn. of Community Mental Health Programs, Inc.
MN Assn. of Community Rehabilitation Organizations (MACRO)
Minnesota Disability Law Center
Minnesota Governor's Council on Developmental Disabilities
Minnesota Habilitation Coalition
Minnesota State Council on Disability
National Multiple Sclerosis Society-MN Chapter
Parenting Resource Center
Southeast Minnesota Center for Independent Living-UHHC, Inc.
Sister Kenny Institute
Slattery, Jamie, Consumer
Southern Minnesota Independent Living Enterprises and Services
Southwestern Center for Independent Living
St. Paul Rehabilitation Center
STAR Program
Tasks Unlimited
The Disability Institute
Tourette Syndrome Association, MN Chapter
United Cerebral Palsy of Central Minnesota
United Cerebral Palsy of MN

    (Please note: This is only a partial listing. MN CCD 
membership continues to grow.)
      

                                

Statement of Paralyzed Veterans of America

    Paralyzed Veterans of America applauds the efforts of 
Congressman Jim Bunning and Congresswoman Barbara Kennelly to 
refashion the Social Security disability insurance system so 
that beneficiaries can participate more fully as productive 
members of our society. By introducing the Ticket to Work and 
Self-Sufficiency Act of 1998, these Congressional leaders have 
taken a bipartisan step toward enactment of a law that removes 
the major barriers to work that now confront recipients of 
federal disability insurance.
    Because 78 percent of PVA members receive either Social 
Security disability insurance [SSDI] or supplemental security 
income [SSI], PVA has identified certain principles to which we 
believe any reform legislation should conform. Foremost is the 
need to assure that individuals who leave the rolls to attempt 
working should retain access to health care coverage. Right 
now, SSDI recipients who go back to work can remain covered by 
Medicare for free for up to 39 months, with a buy-in provision 
after that. However, if their job carries no health insurance 
coverage and they cannot afford to pay the full Medicare 
premium, they risk being uninsured when that time expires. By 
extending Medicare coverage for an additional two years beyond 
current law, the Bunning-Kennelly bill takes a step in the 
right direction. Ultimately, because employer-provided 
insurance is so often inadequate or nonexistent, PVA would like 
to see affordable Medicare coverage made available indefinitely 
to beneficiaries returning to work, along with ancillary health 
care benefits not covered by Medicare, such as personal 
assistant services.
    Second, PVA believes that SSDI and SSI recipients must have 
the freedom and opportunity to select the services they need to 
attain career and employment goals. By giving beneficiaries 
``tickets'' to buy vocational rehabilitation, employment and 
other support services from an expanded network of providers, 
this bill provides the kind of consumer choice that will 
improve the current system through increased competition.
    Third, we applaud the requirement that the SSA Commissioner 
conduct demonstration projects examining the merits of phasing 
out DI cash benefits as income rises so that beneficiaries no 
longer face the ``income cliff'' when they reach $500 a month 
in earnings. Too many SSDI beneficiaries feel compelled to keep 
their earnings below this ``substantial gainful activity 
level'' [SGA] in order to preserve their limited benefits and 
access to Medicare. This is a tragic waste of human potential. 
Absent a phasing out of benefits, PVA would prefer that the SGA 
limit, which has not been increased since 1990, be made 
consistent for all people with disabilities and indexed for 
inflation. However, we recognize that fiscal realities make the 
demonstration project the approach most likely to succeed in 
finding an answer to this difficult question.
    PVA has also called for tax incentives to assist SSI and 
SSDI recipients with work-related expenses. It is heartening 
that the sponsors of this bill have included a disabled worker 
tax credit that would be available to all participants in the 
program and that could be used to offset an array of expenses 
from assistive technology to personal assistant services. Too 
often, beneficiaries find that the costs of returning to work 
outweigh the benefits. This will go a long way toward ``making 
work pay.''
    PVA finds many positive elements in the Ticket to Work and 
Self-Sufficiency Act and looks forward to working with this 
subcommittee and others in Congress to strengthen its value for 
SSI and SSDI recipients. We commend Chairman Bunning and 
Congresswoman Kennelly for initiating this process and offer 
our commitment in transforming federal disability programs from 
barriers to work to bridges to opportunity.

                                   -
```