Online Appendices 

Supplement to the National Council on Disability Report: 

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

 August 11, 2008 

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TABLE OF CONTENTS
 

ITEM 1: APPENDIX A: SIX MAJOR LIFE DOMAINS AFFECTED BY FINANCIAL INCENTIVES..............................3
 

1A – Education .....................................................................................................................................3
 

1B – Employment .................................................................................................................................8
 

1C – Transportation............................................................................................................................15
 

1D – Health Care and Long-Term Services and Supports.................................................................24
 

1E – Income Maintenance and Asset Development ..........................................................................44
 

1F – Housing ......................................................................................................................................62
 

ITEM 2 – APPENDIX B: BACKGROUND OF 529 PLANS .......................................................................71
 

ITEM 3 – APPENDIX C: RESEARCH ON PROMISING STATE INNOVATIONS (IDENTIFIED ACCORDING TO DOMAINS
 

AFFECTED)...............................................................................................................................................73
 

3A – EDUCATION: LOUISIANA START PROGRAM ......................................................................................73
 

Louisiana’s Student Tuition Assistance and Revenue Trust (START) Savings Program..................73
 

3B – LONG TERM SERVICES AND SUPPORTS: MISSOURI ASSISTIVE TECHNOLOGY PROGRAM......................78
 

Assistive Technology Legislative Initiative .........................................................................................79
 

Overview of Missouri’s Assistive Technology Program......................................................................81
 

3C – EMPLOYMENT: WISCONSIN’S MEDICAID PURCHASE PLAN (MAPP) ....................................................90
 

Wisconsin’s Legislative Initiative to Create a State Medicaid Buy-In Program..................................90
 

Effects of the Medicaid Buy-In Program for Wisconsin Participants ..................................................94
 

3D – TRANSPORTATION: MARYLAND’S STATEWIDE SPECIAL TRANSPORTATION ASSISTANCE PROGRAM .....96
 

3E – HOUSING: KENTUCKY’S UNIVERSAL DESIGN PROGRAM ...................................................................100
 

Kentucky’s Adoption of Universal Design Principles........................................................................100
 

3F – ASSET DEVELOPMENT: WASHINGTON’S INDIVIDUAL DEVELOPMENT ACCOUNTS ................................107
 

The Washington Statute and Program.............................................................................................107
 

ITEM 4 - APPENDIX D: EXAMPLES OF STATE LEGISLATION ON FINANCIAL INCENTIVES .........111
 

LOUISIANA..............................................................................................................................................111
 

MISSOURI ...............................................................................................................................................111
 

WISCONSIN.............................................................................................................................................113
 

MARYLAND .............................................................................................................................................118
 

KENTUCKY .............................................................................................................................................119
 

WASHINGTON .........................................................................................................................................120
 

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

Education, Employment, Health Care And Long-Term Services And Supports, 

Transportation, Income Maintenance And Asset Building, And Housing 

Many major federal programs that target eligible beneficiaries, such as programs 

administered under the auspices of the Social Security Administration (SSA), the 

Departments of Education (Education), Transportation (DOT), Health and Human 

Services (HHS), Housing and Urban Development (HUD) or carried out by the Internal 

Revenue Service (IRS), include elements of the three incentive types: direct, indirect, 

community-based. Nevertheless, by agreeing to forgo undue dispute over program 

features that split the difference or blur the boundaries, it should be possible to use the 

predominant features of each program for purposes of categorization. 

1A - Education 

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

The main source of federal funding in education of students with disabilities is the 

Individuals with Disabilities Education Improvement Act of 2004. While subject to the 

annual federal budget process, expenditures under this program have grown steadily 

over the years and are expected to continue to do so. How are these expenditures to be 

categorized? 

IDEA is not a statute intended primarily to provide incentives directly to individuals with 

disabilities, although local educational agencies (LEAs) utilize federal special education funds 

in conjunction with local resources to purchases goods and services for students based on 

Individualized Education Programs (IEPs). The purchases often include assistive technology 

(AT) or other devices given to students with disabilities for use in school and in connection with 

school. In addition, the levels of federal special education funding for particular states and 

districts are determined largely from child-find and counts of students receiving special 

education and related services. In its overwhelming design and function, IDEA provides 

resources to school systems to enable them to identify and meet the needs of eligible children 

and school-age youth with disabilities. 

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Perhaps the closest that IDEA comes to providing incentives directly to individuals is in two 

areas: in its recognition of the central role of individualized service-planning through the IEP, 

and in the authorization of attorney fees to parents who successfully litigate against school 

system placement or service decisions. Yet neither role constitutes a direct financial incentive 

to students with disabilities. 

It also is arguable that in authorizing the payment from public funds of certain special 

education costs on behalf of students attending non-public schools, IDEA provides a direct 

incentive to those students and their families. The incentive here consists in the degree to 

which the costs for attending private or parochial school are reduced below what they would 

otherwise have been if the family had been obliged to pay the add-on special education costs 

itself. If the premise is accepted that public support for such costs does constitute a direct 

incentive to attendance at non-public schools, then a further distinction must be made between 

status-based and purpose-based incentives. A status-based incentive, like a non–meanstested half-price mass transit fare to all people with disabilities, is available to anyone who 

meets the status requirement of having a disability. A purpose-based incentive is one, like the 

school example just noted, that is available in a particular context to those who make a 

particular choice, such as attend a private or parochial school rather than a public school. 

The rationale for supporting non-public school special education in this way is twofold. First, it 

is based on an equity argument, and in some instances on a religious freedom argument. 

Second, it is based on the assumption that in many instances the costs to the public school 

system of defraying these special education costs will be less than the costs of fully educating 

and serving the child in the public schools would be. This latter argument has efficacy, though, 

only if the policymakers or school administrators advancing it actually believe that the subsidy 

is an incentive to desired behavior. For if the special education payments did not actually 

increase the likelihood that students receiving the subsidies would choose private over public 

schools, then what would be the point of giving subsidies? 

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Another key question surrounding IDEA involves the allocation of federal funds between third 

party and community-based resources. Public policymakers must decide whether it is 

necessary to make a distinction between the public school system as a community-based 

resource or activity, on the one hand, and the consultants, teachers, and other personnel who 

actually provide services, on the other. Part of the answer to this question may hinge on 

whether special education funding to the public schools is regarded as a community-based 

expenditure at all, or whether such expenditures are regarded as expenditures intended to 

help people with disabilities exclusively. On that debate, far larger than can be addressed here, 

hinges much of the destiny of public attitudes toward special education in general, and toward 

mainstreaming in particular. 

For present purposes, and in the interests of supporting the policy goals of community 

integration and full participation that underlie IDEA, in this report NCD adopts the view that 

special education funds are community-based expenditures. Largely, the funds go to a major 

public sector institution, are community-based expenditures, made largely on behalf of 

students with disabilities, and as such fall within Category 3 (community-based financial 

incentives) of the NCD topology. Except in those cases where the status of individual service 

providers as independent contractors makes a critical difference to the nature or cost of 

services provided, or except where any sort of personnel costs raise issues that require indepth consideration, there is little basis for separating these out as Category 2 items (indirect 

financial incentives). Nothing in the wording of the federal law, or indeed in the structure of 

relevant line items in the federal budget, would warrant such further distinctions. 

Another area in which IDEA contemplates subsidies to individuals, albeit dispensed through 

community-based institutions, is in the area of personnel preparation. To the extent that IDEA 

appropriations may be available or used to help defray the tuition or other costs of people 

acquiring postgraduate credentials in special education–related disciplines, such funds 

properly can be regarded as intended to benefit individuals. Since the individuals receiving the 

funds are not the children with disabilities ultimately intended to benefit from the services of 

those with improved teaching skills, such subsidies are regarded as going to third parties for 

the benefit of individuals with disabilities. 

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As the examples show, IDEA provides incentives of all three types (direct, indirect, and 

community-based). However, IDEA is not the only source of financial incentives for students 

with disabilities in the educational context. 

1A:2 – The ADA and Section 504 

Important civil rights laws, including the Americans with Disabilities Act (ADA) and Section 504 

of the Rehabilitation Act (Section 504) require both public and private educational institutions 

to take various steps to make their facilities and programs accessible to students and staff with 

disabilities. These situations present three analytical complexities with respect to financial 

incentives. First, they involve not the direct expenditure of federal funds, but rather the use of 

federal law to leverage the expenditure of state, local and private funds. Second, precisely 

because of this indirect effect, estimation of the sums expended on accessibility is far from 

easy. Third and finally, to whatever extent such expenditures are counted in the overall 

assessment, a question arises regarding categorical fit. While one might see such 

expenditures as institutional or community-based expenses, their very specific nature requires 

treating ADA and Section 504 compliance-related costs as expenses incurred by third parties 

for the benefit of individuals with disabilities. Add to this reasoning the fact that the expenses 

likely would not have been incurred except for federal civil rights law and the consciousness 

the law engenders. 

This problem of defining and accounting for the costs of civil rights compliance and 

enforcement must in fact be confronted in each of the six domains or subject areas, because 

various federal civil rights laws apply to all of them. Reiteration of this discussion occurs in 

cases where identifiable federal funding, for example in the form of technical assistance, is 

provided to help achieve civil rights goals. IDEA authorizes some federal funds to be used by 

states in compliance monitoring, but this appears to be of a fairly routine administrative nature. 

1A:3 – Tax Incentives 

An important source of financial incentives, that suffuses every subject area, is the Internal 

Revenue Code. Although this report could address the tax law as a separate incentive 

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category, the relevance consists in the extent to which and the ways in which tax law 

subsidizes education, transportation, housing, and other life domains. Thus, tax issues will be 

addressed, as appropriate, within each of the six subject areas used in this study. 

As it relates to education, the tax law provides two kinds of incentives. Through the tax-exempt 

status of private educational institutions, the subsidy is to the people who make tax-deductible 

charitable contributions to the institutions. There is nothing particular to people with disabilities 

in this aspect of the law. 

Federal tax law also provides purpose-based financial incentives to individuals, including 

individuals with disabilities, but again, primarily, there is nothing specific to individuals with 

disabilities in these provisions. There are certain small provisions allowing families to liberate 

funds intended for higher education or other school costs when the disability of the student 

prevents the anticipated activity, but such provisions are likely of minimal significance. 

Where the tax law does provide important financial incentives to people with disabilities is in its 

treatment of certain out-of-pocket, non-reimbursed special education costs borne by families. 

These opportunities arise under the medical expense itemized deduction. 

While the law is clear in denying tax deductibility for any educational expense, those special 

education expenses that can be characterized as medical in nature (ranging from the costs of 

specialized services aimed at overcoming the effects of a disability, and the add-on costs of 

accessible transportation vehicles for getting to and from school, to the costs of specialized AT 

devices necessitated by a disability) do qualify for the medical expense deduction. 

The distinctions the law makes, as well as those it winks at, are slippery at best, putting a 

premium on expert use of language and on close familiarity with the law. These facts combine 

with the limitations on the number of taxpayers who can itemize at all, and further combine with 

the limitations on medical expense deductions (which must exceed 7.5 percent of adjusted 

gross income in order to be allowable). Such factors combine to form a rather rare incentive. It 

is available only to people with sophisticated tax-planning resources, the resources to expend 

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money first and wait for reimbursement, and with tax profiles that allow them to make 

maximum use of their special education expenses. In short, this is an incentive for the people 

already sophisticated and financially established. 

1B – Employment 

As indicated above, because of the close relationship and indeed in some cases inseparability, 

the information presented here is a result of consolidating job training, placement and 

employment into one subject area. Under the employment domain is information about 

vocational rehabilitation, Ticket to Work and Work Incentives Improvement Act, One-Stop 

Centers, the Office of Disability Employment Policy (ODEP), and other work and tax incentives 

to employment. 

1B:1 – Vocational Rehabilitation 

By far the largest and most important source of federal incentives for the vocational 

rehabilitation training and job placement of people with disabilities is the federal-state 

vocational rehabilitation system (VR). VR is a system that works through designated state 

agencies—called designated state units (DSUs)—in each state and territory to provide a 

variety of services to job-seekers with disabilities and to participate in a number of partnerships 

and collaborations with other entities involved in labor market issues. In addition to the VR 

programs in states and U.S. territories, American Indian Vocational Rehabilitation Services 

(AIVRS) programs are funded by the Department of Education. While the culturally relevant 

AIVRS programs serve only an estimated 10 percent of the federally recognized tribal nations, 

the AIVRS role as a source of financial incentives is similar to that of the VR programs in 

states and U.S. territories. Additional information is available about AIVRS challenges, 

promising practices, and suggested changes to programs for greater impact on the population 

served. The Rehabilitation Act also includes authorization and funding for independent living 

services and services to older adults with vision loss. These incentives defray the costs of 

services provided by others, to benefit the person with a disability, including the peer 

counseling and other peer services of independent living centers. 

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Although the VR Program addresses many activities, its largest and most important role likely 

remains in providing funds for direct case services to individuals. While some funds go to 

individual consumers under various circumstances (e.g., through experimental programs or as 

training stipends), the overwhelming majority of case services funds are channeled through the 

DSUs to a variety of private, other public and nonprofit sector service providers. 

Two points are initially important in categorizing these funds. First, the VR system differs from 

the special education system in that, unlike the school systems that receive IDEA funds, the 

state agencies that receive VR funding ordinarily do not regard themselves, and are not 

generally regarded by others, as direct service providers. That being so, it seems appropriate 

to characterize most VR incentives as paid to third parties for the benefit, through the provision 

of specified services, of individuals with disabilities. 

Properly, some VR funds are allocable to the other categories as well (indirect and communitybased). To the extent, for example, that some program funds may be used to subsidize longterm placements in extended employment (sheltered workshops, in common parlance), these 

would constitute direct incentives to individuals, but purpose-based incentives in that they are 

only available to individuals who are deemed eligible to and who opt to work in these settings. 

Generally, speaking with respect to the panoply of case services funding administered and 

provided through VR, the role of consumer-control is a theme of continuing controversy. A 

most notable example is the requirement for mutually-agreed upon individualized plans of 

employment (IPE) that serve, as IEPs do in education, to set forth almost by contract the 

services, activities and responsibilities of both parties, in this case the agency and the service 

recipient. However, to the degree that state agencies largely retain authority to accept or reject 

an individual’s determinations so far as long-term goals and interim measures for obtaining 

them are concerned, one would not characterize VR as a consumer-controlled or consumerdirected system. The researchers identified no instance (other than some limited experiments) 

under the VR Program in which funds go directly to individual service-recipients under 

circumstances that give them any discretion in their use. 

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In its partnership and technical assistance role, the VR system may be providing resources to 

various third parties for the benefit of individuals with disabilities. Job analysis and reasonable 

accommodation services provided to employers would be an example of this. Other forms of 

broad educational outreach may constitute community-based supports by not being directed 

toward any previously identifiable individual. 

An interesting variation of mainstream VR Title I expenditure is presented with funds used to 

provide AT devices to job seekers and employed people with disabilities. These funds are not 

specifically differentiated or line-itemed in federal appropriations, and may represent an 

incidental component of program expenditures. 

1B:2 – The Ticket to Work and Work Incentives Improvement Act 

(TWWIIA) 

The Ticket to Work and Work Incentives Improvement Act (TWWIIA) represents an innovative 

effort to broaden the range of service-providers able to work with job seekers with disabilities, 

and to reduce financial disincentives in the health insurance area faced by such individuals 

when they seek to enter or return to work. 

The most innovative thing this law does is create the Ticket, a voucher or authorization that 

enables individuals with disabilities (Ticket holders) who receive Social Security benefits to 

obtain services of a designated value from Employment Networks (ENs). These Ticket holders 

need to be new entrants to the job training and placement field, motivated by the opportunity, 

through providing services under the Ticket, of receiving federal reimbursement for their 

services. In fact, in more states, in part because of: 1) the high cost of serving people with 

significant disabilities, 2) the extraordinary complexity of the program, and 3) for other reasons, 

many state VR agencies also have emerged as the most likely EN to provide services to Ticket 

holders under TWWIIA. 

The Social Security Administration (SSA) administers TWWIIA through a series of 

administrative and implementing contractors. The non-Ticket funds paid to these contractors 

can be regarded as third party payments. The Tickets and the milestone-based payments that 

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ENs receive for their work contribute to the complexity. Because the Ticket is more a voucher 

than anything else, redeemable only at the company store, so to speak, it is difficult to view the 

Ticket as an incentive paid directly to individuals. 

The other major financial incentive to employment provided by TWWIIA is the preservation of 

health insurance under both Medicare and Medicaid for recipients who would otherwise lose 

such coverage upon going to work. This is a financial incentive for two primary reasons. First, 

because the continued provision of coverage costs the Federal Government money, and 

second, because the insurance has a clear monetary value to covered individuals, even if the 

amount is not precisely knowable, and even though no funds change hands. As such, 

continued eligibility for Medicare or Medicaid represents tangible, non-cash, financial incentive 

directly to individuals. It is probably among the most powerful incentives that go into influencing 

the calculation, assuming any opportunities for work exist, of how to respond to and deal with 

such opportunities. Incentives that combat disincentives are no less important, perhaps more 

important, whether they come in cash or in the rearrangement of program rules. 

1B:3 – One-Stop Centers 

The VR system is a complex combination of stand-alone and collaborative functions. In its 

collaborative role, the VR system is one component of the overall federal employment system 

operating under the auspices of the Workforce Investment Act (WIA). Central to the overall 

WIA scheme are the so-called one-stop centers, designed to centralize and rationalize the 

often bewildering array of federal jobs programs. Consistent with the nondiscrimination and 

accessibility provisions of WIA, one-stop centers are required to serve all job seekers, 

including people with disabilities. 

There are undoubtedly expenses, constituting incentives paid from federal funds that go for 

meeting these civil rights requirements of facilities and program accessibility, including 

expenses for making electronic and information technology (E&IT) accessible. Although it is 

widely believed that many centers have failed to comply fully with the mandate of full 

accessibility, or have taken the view that their core funding should not be used to meet what 

they regard as specialized expenses for high-cost clientele, these civil rights compliance costs, 

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as noted in the discussion of education above, are not an immediate concern. What is the 

concern here are the programmatic components specifically designed to meet the accessibility 

mandate and to give the one-stops incentives for doing so. 

Among these, one of the most interesting is the Disability Program Navigator pilot program 

(DPN). This program places liaison personnel in one-stop centers to assist their staff in 

working with service-applicants with disabilities, and in ensuring that such individuals are made 

aware of and given appropriate referrals to collateral services that may be of relevance. To the 

degree that the DPN is intended to directly aid both the one-stop-center staff and its servicerecipients with disabilities, it is a financial incentive falling within the indirect and communitybased, third party classifications. 

1B:4 – ODEP 

The Department of Labor’s Office of Disability Employment Policy (ODEP) serves a limited 

coordinating function with respect to disability-related issues within the Department of Labor. 

Additionally, it administers, with what must be regarded as discretionary funds, a number of 

outreach, education, technical assistance and training programs, the most notable of which 

probably being National Disability Awareness Month. Also, the employer-educational work of 

ODEP may be added to that of the Department of Justice’s Civil Rights Division and that of the 

Equal Employment Opportunity Commission (EEOC) in the disability nondiscrimination area. 

To these may be added certain aspects of the work of the Protection and Advocacy (P&A) 

system. 

Taken together, these programs, which may be regarded as incentives to the employment of 

people with disabilities, can be described best as community-based resources. Their 

importance lies in two features. The first is what they accomplish and the means for evaluating 

what they accomplish (to be addressed in a later phase of this study). The second is that they 

may represent the types of efforts that enforcement agencies increasingly will prefer to litigate 

in the civil rights area. 

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1B:5 – Other Work Incentives 

We normally think of SSA as an agency that distributes income-replacement funds. But 

features of both the Supplementary Security Income (SSI) and Social Security Disability 

Insurance (SSDI) programs are designed to facilitate employment by recipients of funds under 

these programs. 

The background of the work disincentives problems plaguing this nation’s social benefits is 

beyond the scope of this study as well. The two problems central here are: 1) that benefits are 

tied both to the ability to work and to the income and resources of recipients, and 2) that 

eligibility for health insurance is tied to SSI and SSDI Program eligibility. 

The way the law tries to avoid these problems is by creating circumstances in which various 

items of income or types of resources will be excluded from “countability” for eligibility 

purposes, including for example key eligibility for Medicare or Medicaid. The mechanisms in 

question include Impairment-Related Work Expenses (IRWE), substantial gainful activity 

(SGA), plans for achieving self-support (PASS), along with several demonstration and waiver 

programs, and (although not yet much used for people with disabilities) individual development 

accounts (IDAs). These exemptions constitute important purpose-based incentives to 

individuals with disabilities. 

1B:6 – Tax Incentives to Employment 

The tax system includes all three kinds of incentives to employment of people with disabilities. 

By way of direct incentives to individuals, there are the Impairment-Related Work Expenses 

(IRWE) deduction and the extremely important Earned Income Tax Credit (EITC). The IRWE is 

an itemized deduction that allows individuals with disabilities to deduct a number of disabilityrelated expenses incurred in order to work. Once again though, its obscurity, together with its 

status as an itemized deduction, probably limits its usefulness for most people with disabilities. 

This limitation is particularly egregious when it is recognized that the times at which people will 

most need to incur large disability-related expenses, such as for the costs of additional training 

or costs for AT, are likely to be times when people have the smallest income against which to 

absorb the value of this deduction. 

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As for the EITC, it is of course a broadly applicable and very important provision for all lowincome workers, particularly people with children. It has one provision that makes it of specific 

applicability to people with disabilities, however. Whereas the coverage of children is limited to 

those who are young (under 19 or under age 24 and a full-time student), in the case of children 

with serious disabilities whose parents remain their primary caretakers, the upper age limit is 

waived. Parents may thus continue to take these children into account for purposes of 

determining their eligibility for, and the amount of, the EITC. 

Provisions of the Internal Revenue Code (IRC) that provide incentives to third parties for the 

training or employment of individuals with disabilities include the Disabled Access Credit (DAC) 

and the architectural and transportation barriers removal deduction. While tax aficionados 

generally have thought of these two provisions as having their greatest impact in the area of 

public accommodations, both are available for use in defraying the costs of barrier removal 

and reasonable accommodation as well. 

For small businesses, as defined under the law, the Disabled Access Credit provides a 50 

percent tax credit of up to $10,000 per year in “eligible access expenditures,” including 

readers, sign-language interpreters, or the purchase or modification of equipment. The 

architectural and transportation barriers removal deduction allows businesses of any size a 

deduction of up to $15,000 a year for the removal, according to specified design guidelines, of 

access barriers to people with disabilities and elders. 

One may ask how these provisions act as incentives to the employment of people with 

disabilities. After all, although they may help offset any add-on costs associated with hiring 

employees with disabilities, would not such costs be tax deductible anyway, just as any other 

legitimate business expenses would be? What makes these into specific incentives is that they 

enhance and accelerate the value of the tax deduction. The expenses covered by the DAC 

normally would qualify as ordinary deductions. By converting them to a credit, they become 

worth more to the business. Related provisions also offer flexibility regarding when they can be 

claimed. The expenses covered by the architectural and transportation barriers removal 

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deduction normally would be characterized as capital expenses, meaning they would have to 

be allocated over a number of years equal to the useful life of the renovation or property. By 

re-characterizing them as an itemized deduction, they can be claimed in the year the expenses 

were incurred. 

Finally, there are a number of tax provisions that, though not directly targeting or specifically 

impacting people with disabilities, have the potential with minor changes to be of great 

incentive value to the employment of such people as members of a broader community. The 

provisions in question are the Low-Income Housing Tax Credit and New Markets Tax Credit 

Program. 

We need to recognize the role that accessible and affordable housing, in itself and as it 

interacts with accessible transportation, plays in employment. While the details of the changes 

that would be needed are beyond the scope of this paper, the tax provisions are noted to 

highlight the complex web of infrastructural underpinnings that underlie the employment 

destiny of given individuals. 

In-depth attention to a variety of other broad-based job-development efforts is warranted to 

identify simple and inexpensive measures that would make them more responsive to the 

aspirations of people with disabilities. A convergence of anti-poverty and disability-based 

efforts is required for this to take place. 

1C – Transportation 

Interaction between transportation and employment, and bearing in mind the close, if often 

ignored, connection between transportation and housing, health care and other pathways to 

community living, are complex. The ADA’s transportation requirements have multiple 

components. Although some public transit agencies had already provided accessible bus 

service because of political pressure and prior mandates, the ADA greatly accelerated this 

trend. For example, in 1989, before passage of the ADA, 36 percent of the national bus fleet 

was accessible. By 2002, 13 years later, 91 percent of public transit buses were ADA lift or 

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ramp equipped. Improvements of this type are attributed to general agreement that public 

transit bus use by people with disabilities has increased with the service improvements.1 

The principal point of note about transportation in America, evident throughout the culture and 

reflected in the allocation of public funds, is that the private automobile is the transportation 

modality of choice for most Americans. More important though, the design of the environment 

has contributed to this preference by making many trips difficult or impossible to complete by 

any other means. Even when public or mass transit is available, scheduling, routing, financing, 

capital investment, crowding and other factors, including inaccessibility, all may contribute to 

reducing its value for those people who would choose to utilize mass transit. 

So many sources of public funding converge to support the automobile society and culture that 

it would be impossible to list them all. They range from a number of indirect subsidies to keep 

down the cost of gasoline, to excise tax exemptions for trucks and light trucks (including 

SUVs), to tax credits for hybrid vehicles (apparently intended to compensate for the tax 

exemptions accorded to large SUVs), to vast federal expenditures for highway building and 

road maintenance, to literally dozens of others of a direct and indirect nature. 

For people with disabilities, therefore, the question is twofold: Does the emphasis on private 

automobile use affect relative freedom of movement differently than it does that of other 

people, and do the funding streams incorporate provisions that are designed to recognize or 

respond to any of these needs? 

There are people whose disabilities make traveling by means other than private automobile 

difficult and stressful, without regard to legal dimensions of accessibility. For them, the 

existence of the car culture and the fact that most locations are now designed to accommodate 

the automobile is likely a net advantage. On the other hand, for many people the inability to 

drive or even to afford an automobile is itself a serious social disability. Against this backdrop, 

let us look at various programs. 

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1C:1 – Automobile-Oriented Funding 

Considerable publicity during the summer of 2005 was directed to the federal highway 

legislation adopted by Congress after two years of gridlock. Whether the numerous, earmarked 

projects it authorized and funded are valuable contributions to the transportation infrastructure 

or other special expenditures, the question is whether the bill contained any specific earmarks 

of importance to people with disabilities. Pending a more thorough review of the lengthy 

enactment than has thus far been possible, initial indications are that if any of the earmarked 

projects were of special significance for people with disabilities, this was incidental. 

With regard to the broader provisions governing the use of highway funds under the law, there 

are a number of provisions that can be regarded as intended to enhance the transportation 

access of people with disabilities. To the extent that these provisions, though intended to 

recognize and benefit particular subpopulations, involve the imposition of requirements on the 

way states and municipalities spend their highway money, these provisions can be regarded 

as examples of infrastructural expenses targeted to people with disabilities. 

Provisions in question would include funds appropriated for specialized and experimental 

transportation programs for underserved areas and groups; provisions regarding accessible 

paths of travel in certain contexts; and (in conjunction with the Telecommunications Act) 

requirements for the compatibility of emergency roadside phones with the 911 emergency 

system, to name a few. 

The dollar value and net effect of these and related expenditures and requirements is not 

known and likely difficult to determine. It may be that the mechanisms involved are as 

important as the dollars expended, or perhaps more so. At issue here is the connection 

between regulation and funding. In subject areas like transportation, housing and health care, 

analysis of the nature and role of financial incentives requires careful assessment of the 

leverage value of regulations that guide the expenditure of funds. Regulations have been 

subjected to various kinds of cost-benefit analysis over the years. Their leverage value in 

influencing the expenditure of funds, when the funds were not appropriated with specific 

reference to the goals of the regulation but are subject to the regulation nonetheless, must be 

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an important area of study in the development of sophisticated cost-benefit measurement 

tools. 

The leverage value of pro-accessibility or disability-oriented funding categories, regulations, 

set-asides or similar mechanisms is heightened where matching state funds are involved. 

Federal regulations not only condition and direct the expenditure of federal funds, but where 

programs include matching fund requirements, or where federal funds provide seed money for 

state-based efforts, regulations help leverage the use of these funds as well. Discussion of this 

matter is at greater length in the civil rights section, below. 

1C:2 – Fixed Route Public Transit 

1C:2A. Intercity 

1C:2A(i) Air Transport 

The Air Carrier Access Act of 1986 (ACAA) imposes nondiscrimination and accommodation 

requirements on most commercial airlines operating in the United States. ACAA is an example, 

albeit a small one, of the kind of leverage mentioned above, because while in this case no 

federal funds are appropriated to implement ACAA (though some funds are used to support its 

enforcement by the Department of Transportation (DOT)), airlines are obliged to spend some 

money to comply with the law. 

Where federal funds come into the mix, again more interesting for the concept than for the 

amount, is in the exercise of the DOT authority to fine carriers for violation of the law. DOT has 

imposed several fines on carriers. If it is accepted that these fines become federal money 

when collected, it is interesting to note that the government has routinely remitted them, 

provided the sums are used for ACAA-related activities such as employee training in disability 

awareness. 

To the degree that the ADA requires municipal airport authorities to make certain expenditures 

for accessibility and accommodations, it, too, may be said to be an indirect source of disability18
 
specific infrastructure funding. This role is far more pronounced in the rail and bus 

transportation area. 

Another variable in the air transport context brings us face to face with the subject of user fees. 

The Transportation Security Administration (TSA) has embarked on a number of disabilityrelated initiatives. Activities of TSA, as well as other airport infrastructure, are funded partly 

from per-ticket fees, which are in effect excise taxes paid by air travelers. To the extent that 

any of these fees go to defraying access-related costs, they too can be considered, however 

unexpectedly, a form of federal financial support. 

1C:2A(ii) Rail Transportation 

Title II of the ADA is very much concerned with rail and bus transportation. There are a number 

of specific timeframes in the law applicable to the rolling-stock and station facilities of each. 

Amtrak, the nation’s passenger rail service, receives direct federal support, both for capital and 

operational expenses. As such, although neither the precise sums in question nor the 

specificity of appropriations language has yet been reviewed, it is clear that federal financial 

support to a third party (namely, Amtrak) does go toward making intercity rail travel more 

accessible. 

A question suggested by the interaction of regulations and funding must be addressed by the 

research. Can one properly speak of financial incentives where the disability-oriented 

expenditure is mandated and where failure to make such expenditure could put other funds at 

risk? For purposes of this report, the semantic liberty is taken of using the term incentives 

broadly, to include all identifiable expenditures that meet any of the financial incentives study 

criteria for disability relatedness. 

No data have been located concerning the amount that accessibility measures cost the 

National Passenger Railroad Corporation, or what percentage of such costs is covered by 

federal funds. Likewise, data on the impact of such expenditures have not come to light. Were 

such data to exist, it would have to be explained by the exploration of two questions in order to 

19
 
be fully meaningful. It would have to address the question of how many people with disabilities 

are motivated or enabled to use rail service that otherwise could or would not. In addition, it 

must ask what costs of relevance to federal policy or funding would have been incurred as a 

result of the inability or disinclination of such people to utilize rail service. 

1C:2A(iii) Inner City Buses 

Title II of the ADA, together with Safe, Accountable, Flexible, Efficient Transportation Equity 

Act: A Legacy for Users (SAFETEA-LU), includes clear and specific requirements for the 

accessibility of inner city buses and in some cases for the procedures that must be used to 

ensure that access is effective. There is significant public subsidization of bus travel, 

emanating from numerous sources (including local funds, bond issues and direct expenditures 

or tax forgiveness for the building or maintenance of transportation terminals), which helps to 

account in many cases for the price advantage held by bus over rail on various competitive 

routes. 

Whether regulation and funding are commensurate with one another, or put another way, 

whether federal funds pay for federally-imposed requirements, is a key question that should be 

considered. Alternatively, subject to insurmountable complications under currently existing 

accounting practices, is the question of whether other forms of public subsidization offset the 

costs of mandated accessibility, and whether, paradoxically, the costs of accessibility, however 

met, yield increases in revenue through more ridership that have a significant bearing upon the 

cost-benefit assessment. 

1C:2B. Fixed Route Public Mass Transit 

Depending on the city and region, public mass transit, including local buses, light rail, subways 

and commuter trains, play an important role in the morning and afternoon traffic reports that 

are a staple of almost every radio station and television newscast in the country. Robust mass 

transit is deemed important to the economic development of many metropolitan areas, but it 

also is important in the daily lives of individuals. 

20
 
So important has mass transit become in the lives of people, particularly older people who lose 

the ability or confidence to drive, that certain urban areas like New York City, with dense mass 

transit webs, have been dubbed NORCs (naturally occurring retirement communities). Of 

many people with disabilities of any age who cannot drive (or who cannot afford the add-on 

costs of vehicle accessibility) this is no less urgent an issue. The question then becomes: Do 

current financial incentives and support for mass transit recognize and respond to the 

identifiable and specific concerns of customers with disabilities? 

In the area of capital funds for equipment, federal funds are contemplated for use in meeting 

vehicle and station accessibility requirements. Once again, reflecting the interplay between 

regulations and appropriations, this occurs both in terms of the direct expenditure of funds and 

the risk of loss of other funds if requirements are not met or procedures not followed. 

Accessibility requirements supported with or leveraged by federal funds would include, for 

example, the percentages of bus fleets that must be wheelchair equipped, the accessibility to 

people with vision and physical disabilities of fare machines, and even the accessibility of 

transit system Web sites. Although these requirements are aimed at passengers with 

disabilities, they also are examples of universal or accessible design. In this context, they are 

the sort of amenities that benefit all passengers. For this reason, they represent the classic 

instance of disability-oriented measures, expenditures or incentives that have as their 

byproduct a benefit to the entire community. Perhaps, at least in some communities, inversion 

of the analysis may be appropriate. That is to say, it may be that awareness of the needs of 

passengers with disabilities or the desire to attract such passengers was an extension of more 

basic progress in awareness of what constitutes good design. 

In contrast to other incentives, useful data may be available about some of the consequences 

of accessible mass transit. Indeed, it is believed that the willingness of transit system 

owners/providers to take such measures as equipping new buses with wheelchair lifts may 

have arisen in some cases from calculations that the increased capital costs associated with 

such accessibility would be offset by savings in the paratransit program. Apart from the benefit 

of such savings, further evidence of savings and community integration could, without much 

21
 
difficulty or cost, be gathered through the use of already commonly used research techniques. 

Transit systems routinely survey riders to determine their needs and attitudes. It would be 

relatively straightforward to use standard research techniques, involving the surveying of 

voluntarily self-disclosing passengers with disabilities, to ascertain the extent to which system 

accessibility has increased their utilization of transit. Considerations of the quality of their 

experience and the impact of greater access to other spheres of life also could be addressed. 

1C:3 – Paratransit 

Perhaps the greatest change in the nation’s transportation system over the past generation 

has been the development of paratransit as a supplement or replacement for fixed-route transit 

for people whose disabilities make the general system unusable, despite its accessible design. 

Paratransit, as operated by local or municipal transportation agencies, represents one of the 

closest approaches to a direct transportation subsidy to individuals. The other near 

approximation to direct incentives to individuals is the reduced fares required by federal law to 

be provided to passengers with disabilities by municipal transit systems. Neither paratransit 

nor reduced fare is means-tested. Both are status based, in that the recipient of the service or 

discount must be an individual with a disability (or in the case of the fare subsidy an individual 

over the age of 65), but legal status alone is not sufficient to make one eligible for paratransit 

services. 

Eligibility for paratransit is determined on an individualized, case-by-case basis. Beyond even 

individualized eligibility determinations, there is a further concept, disliked by many, but legal, 

called trip eligibility. With trip eligibility people with disabilities, though eligible in principle, are 

granted or denied the service for particular trips or types of trips based on purpose of trip, 

destination, or other factors. 

Critics have maintained that disproportionately large amounts of paratransit resources have 

been dedicated to reviewing front-end eligibility screening rather than to delivering the service. 

Whether this is true or not, it presents an opportunity for asking how the character and 

implications of administrative expenses should be handled. As a general matter, the cost 

effectiveness of elaborate procedures for screening out ineligible recipients, in paratransit or 

22
 
other programs, largely has been exempt from outcome measurement. Simply stated, the 

existence of finite limitations on the resources available for any program, coupled with the 

desire to avoid furnishing of services to ineligible individuals, have led to a relatively 

unquestioned acceptance of the notion that sums spent on ensuring program integrity and 

focus are well spent. Rarely has this assumption been put to the test, especially in programs 

for people with disabilities. 

There is in fact room for disagreement over the primary characterization of paratransit. Except 

in cases in which taxi vouchers are used, neither funds nor scrip come into the hands of the 

riders. Moreover, because the vouchers can be redeemed only for one service, even if the 

recipient sometimes has choice over the selection of the provider, it would be hard to regard 

such a voucher as an individual subsidy. More precisely, the paratransit system can be seen 

as a tightly targeted incentive, available to transit agencies, to underwrite certain capital and 

operational costs associated with the provision of door-to-door service to individuals who have 

what are deemed transportation disabilities. 

1C:4 – New Freedom Initiative 

The President’s broad-based commitment to expanding the opportunities for and facilitating 

the integration of people with disabilities into all phases of community life is embodied in the 

New Freedom Initiative (NFI). Through the NFI a number of experimental and demonstration 

projects aimed at extending transportation services through innovative programs, using 

traditional and nontraditional providers, have been undertaken. These experiments vary in 

nature, and it is not the purpose to describe them in detail here. What matters is that thus far 

these projects have not generated a sufficient body of data to bring about any fundamental 

changes in the character of local and regional transportation services in this country. 

Even if standardized data collection and outcome criteria were used to ensure the collection of 

comparable data and to facilitate comparison among experimental approaches, a question 

remains regarding how and whether the results of the NFI transportation projects, under the 

Real Choice Systems Change Grants, for example, are being aggregated, disseminated and 

compared. Put another way, the question emerges whether the full value of these experiments 

23
 
is being harvested. Cumulative data must be aggregated and synthesized to generate broadbased conclusions. 

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

Both direct and indirect financial incentives are involved in the provision of health care, medical 

services and insurance coverage to people with disabilities. The incentives also are among the 

three categories of incentive recipients: individuals with disabilities, third parties and 

community-based resources. 

1D:1 – Private Health Insurance 

The most important health issue for most people is health insurance. Although governmentfunded programs, including most notably Medicare and Medicaid (both discussed below), are 

steadily growing in importance as sources of health insurance and care, private insurance 

remains the source of coverage for most employed Americans. As important, almost all 

proposals for health system reform make extensive use of the private insurance sector—some 

through managed care contracting with the government, and some giving them a far greater 

role. 

Although many people regard the effort as inadequate, judging from the lack of affordability 

and unavailability of insurance for many people, and although an estimated 45 million 

Americans are uninsured, in addition to an indeterminate number who are underinsured, the 

government provides financial support for the purchase and provision of private sector health 

insurance through a number of mechanisms. One question, after describing the principal ones, 

will be: Do those mechanisms respond to the unique insurance coverage issues facing people 

with disabilities? 

The means by which the government subsidizes health insurance can be summarized briefly. 

These means are concentrated in the area of employer-sponsored insurance. They include, 

among other modalities: tax deductibility to employers of premiums paid for employee health 

insurance and tax exclusion of the value of such premiums from the wages of employees; 

24
 
negotiation of private sector contracts that include fringe benefits for project staff health 

insurance in many instances; health savings accounts (that allow tax deferral and potential tax 

exemption of sums set aside for meeting co-payments under high-deductible policies); and 

direct subsidization under the Medicare Modernization Act of employer-sponsored retiree 

health and drug coverage (on the theory that this will be less costly to the public than would the 

abandonment by companies of these plans). 

In the area of individually-purchased coverage, financial incentives are less systematic, but 

they do exist. One that is particularly controversial is the exemption of the insurance industry, 

including the health insurance industry, from a number of legal requirements applicable to 

other industries. In exempting the insurance industry, to varying degrees, from civil rights laws, 

antitrust laws and generally applicable accounting practice (GAAP) requirements, the 

argument has been made that such exemptions allow the industry to extend coverage to more 

people and at lower costs. Arguments in favor of genetic anti-discrimination legislation 

currently pending in Congress largely are predicated on the contention that such legislation, 

however desirable in principle, would drive up the costs and hence reduce the coverage 

available to Americans. 

If the opponents of such regulation are consistent in their analysis, then it follows that the 

government’s forbearance to subject the industry to certain regulations constitutes an indirect 

financial subsidy. 

Although not within the scope of this study, owing largely to their variety, state funds play an 

important role in the availability of private health insurance. Modalities include high-risk pools, 

purchasing groups, regulation of premiums (for individual policies), and, in parallel with the 

Federal Government’s role in guaranteeing the solvency of employer-based plans, 

maintenance of oversight of the financial stability of insurers operating in the state. 

Against this brief backdrop, the major question for us is whether the federal efforts take into 

account people with disabilities and, indeed, what the issues are that such awareness should 

include. It generally is believed that lack of access to private sector insurance, whether through 

25
 
literal denial or through lack of affordability, is a major cause for the persistence of high 

unemployment rates among people with disabilities who cannot risk the loss of Medicare or 

Medicaid coverage that they fear would ensue from their entry into employment. To a 

remarkable degree, disability-based discrimination is overt and legal. Under a provision of the 

ADA, for example, activities of insurers are explicitly excluded from the law’s coverage if they 

involve underwriting or classification of risk. Despite the lapse of years since adoption of the 

ADA, no authoritative court decisions have been forthcoming regarding the burden of proof 

under this provision. It appears that the mere assertion by an insurer that its refusal to grant 

coverage to an individual, based on its assessment of risk, will begin an inquiry into whether 

that assessment was based on data or indeed on any rational considerations, or if it was solely 

the expression of stereotype and myth. 

In the employer-sponsored health insurance setting, governed by the Employee Retirement 

Income Security Act (ERISA), opportunities for the denial of coverage are somewhat limited. 

However, employer-sponsored discretion to structure the coverage, the benefit levels, the caps 

and the outright exclusions give rise to numerous opportunities and methods for limiting 

coverage for people with disabilities who have high, recurrent, or merely unusual expense, 

such as the costs of AT. 

Through research, NCD has been able to identify little in federal law or budgeting that targets 

private health insurance availability for people with disabilities. This is distinguished from longterm care insurance. 

Beyond the question of access to insurance, there is the question of what is covered when 

coverage is nominally forthcoming. People with disabilities may need specialized services or 

care, and may need auxiliary aids and services that enable them to participate actively in care 

planning and monitoring. If the Federal Government were going to respond to any of these 

needs, by funding, regulation, or both, how might it do so? 

It might fast-track U.S. Food and Drug Administration (FDA) review of AT devices (but in fact 

the current system for device review appears in several ways to have the exact opposite result 

26
 
with AT devices that come within FDA jurisdiction). The government might facilitate research 

into disability-related or disability-specific treatments and modalities through CMS, through its 

relationship with the Blue Cross Blue Shield research arm, or by other means, but so far as 

can be determined, it does not. The government could articulate nondiscrimination 

requirements or definitions of medical-necessity for use by insurers that enhance the 

availability of specialized goods and services. But there is no federal definition of medical 

necessity. Nor does federal law include any coverage mandates (comparable, say, to 

mandates at the federal or state level regarding coverage for mammography or of minimal 

hospital stays for childbirth) that would relate to goods or services of particular value to people 

with disabilities. Finally, federal law places almost no limits on caps or item exclusions. 

ID:2 – Medicare 

Medicare is the system of federally-financed medical insurance for people over the age of 65 

and people receiving Social Security Disability Insurance (SSDI). Since recipients of SSDI are 

people with disabilities, and in fact, many recipients over the age of 65 are as well, Medicare 

properly can be regarded as a program of insurance for people with disabilities. 

Although there are some situations in which beneficiaries receive cash reimbursement, these 

instances are rare, and in any case, such payments would be purpose specific and need to be 

used to pay for services already received. For the most part though, Medicare represents 

payments to third parties—hospitals, doctors, short-term skilled nursing facilities, certain homehealth-care providers, durable medical equipment (DME) suppliers, and now managed care 

organizations and pharmaceutical manufacturers—on behalf of beneficiaries. 

In terms of eligibility, Medicare for people with disabilities under the age of 65 differs markedly 

from the program for elders. People over 65 have automatic entitlement to Part A hospital 

coverage, and are subject to financial penalty if they fail to sign up for Part B and the new Part 

D as soon as age-eligible. But no requirement of disability and no income limit or means-test 

applies. By contrast, because of the link with SSDI, people with disabilities under age 65 are 

eligible for Medicare only if deemed unable to work according to the standards of the Social 

Security Act. 

27
 
Beyond the question of Medicare eligibility, there once again is the issue of coverage. To say 

that Medicare covers some people by virtue of their status as people with disabilities is not to 

say that it necessarily covers services that would be of particular importance to people with 

disabilities. In fact, as still a predominantly acute care program, Medicare appears distinctly illsuited to provide the rehabilitative, AT support services and specialized resources that many 

people with disabilities need. 

Many people fear that the enormous sums required to fund the new Medicare Part D 

prescription drug benefit will result in cuts in coverage for other services of particular 

importance to people with disabilities. Recent moves by CMS, apparently dictated by cost, to 

curtail the scope of powered wheelchairs and other mobility aids are particularly ominous in 

this regard, since such devices are disproportionately and uniquely needed by beneficiaries 

with disabilities. 

ID:3 – Medicaid 

Operated with federal and matching state funds, and implemented by the states, Medicaid is 

the federal-state system of health insurance for people who are poor and who in addition meet 

one of two other conditions: either they are people who are blind or have disabilities, or are 

people over the age of 65. Other categories have been added, including people whose 

earnings exceed normal maximums but who are allowed to receive or retain coverage under 

state buy-in programs and people covered under waiver programs. 

Given Medicaid’s significant focus on people with disabilities, attention once again shifts from 

the question of eligibility to that of the scope of coverage. Like Medicare, indeed like any health 

insurance, Medicaid focuses on traditional medical services, goods and practitioners. To do 

this it distinguishes between mandatory services, which states must provide as a condition for 

receipt of federal funds under the program, and optional services that states are free to provide 

or not as they see fit. 

28
 
In the provision of both mandatory and optional services, states have considerable discretion: 

some of it inherent in the design of the program, and increasingly much of it derived from 

authority given them by the Federal Government to waive the applicability of one or another 

ordinarily applicable requirement. 

1D:3A. Third Party Medicaid Incentives 

As a financial incentive, Medicaid, by design, affects people with disabilities. It impacts their 

lives primarily through payments to third parties—to health care practitioners, medical 

institutions, nursing homes or others—for the provisions of services and care. What is ironic is 

that although people with disabilities represent a key target population of the program, the 

specific needs of people with disabilities are not systematically addressed in the range of 

goods and services required to be provided. To the degree that there may in some cases be 

an overlap between disability and health problems or medical needs, those disability-related 

issues that are subsumed under standard medical treatment will be addressed. But when it 

comes to needs of a specifically disability-related, non-medical nature such as AT, PASS, 

home modifications, or rehabilitation services (which are in theory covered), the picture is quite 

different. While a number of these needs could be met by such services as vision and hearing 

services, orthotics and prosthetics, speech-language pathology, DME or rehabilitation, these 

low-incidence services fall almost exclusively within the discretionary area, and as such have 

been among the first casualties of budget cutting and cost-savings efforts at the state level. 

Moreover, even when they are covered, an enormous range of limitations on which diagnoses 

will trigger their use, how much or for how long they can be provided, how much they can cost, 

which practitioners are permitted to prescribe or implement them, which suppliers must be 

used for procurement, what prior authorization will be requested or what specific devices or 

kinds of devices can be used will combine to make the provision of disability-related services 

to Medicaid recipients with disabilities a challenging and uncertain prospect. 

For people with disabilities of low income, the availability of insurance coverage through 

Medicaid is of great significance. Economics, lack of employment and disability itself combine 

to make private health insurance unavailable or unaffordable to many people with disabilities. 

29
 
But once again, the fact of coverage and the content of coverage must be taken into account in 

determining the extent and value of this, or of any other financial incentive. 

A dilemma about Medicaid is whether it constitutes a financial incentive to community living. To 

say that it is a financial incentive provides little information until the question of what is 

incentivized has been fully illuminated. On balance, it would appear that Medicaid as a 

financial incentive to community living varies greatly from state to state, depending on targeted 

populations and the defined scope of services covered by the state plan and federally 

approved waivers. 

When Medicaid was created in 1966 it was not designed as an acute care program in the way 

that Medicare was designed. Nevertheless, many, if not most, of the concepts (independent 

living, community integration, deinstitutionalization, home- and community-based services, 

aging-in-place) that today dominate the Medicaid debate were unknown at the time of its 

creation. Likewise, many of the services of greatest importance and value for people with 

disabilities, such as those previously mentioned, were not part of policy and decision makers’ 

consciousness when the program was designed. Perhaps most important in this regard, the 

ADA did not exist when Medicaid came into existence. 

Although opinions differ regarding whether and how this can be modified, it is widely agreed 

that Medicaid resources disproportionately incentivize facility-based services at the expense of 

home- and community-based services. Hospital and nursing home services are mandatory; 

home- and community-based services are covered largely by waiver programs, making them 

more tenuous than optional services. Beyond this, specific services needed to support a 

community-based or community-integration model of health care are marginal within the 

Medicaid framework. 

The fit between this venerable statute, on the one hand, and emerging new needs and 

awareness, on the other, is dramatized nowhere more vividly than in the 1999 Supreme 

Court’s Olmstead v. L.C. decision and in its aftermath. The Olmstead case held unnecessary 

institutionalization a violation of the ADA’s community integration and least restrictive 

30
 
environment provisions. The Court provided a three-pronged test for determining when and 

how nursing home residents should or could be returned to the community. 

In the wake of Olmstead, the Federal Government, through the NFI and other initiatives, has 

assisted states in complying with the mandate of the case. Among other things, states have 

been expected to prepare Olmstead implementation plans, which are supposed to reflect 

progress, measurable goals and procedures for assuring the necessary interagency and 

service coordination. Opinions differ regarding the success and vitality of these efforts, but it is 

notable that because they have never been brought under the mandatory funding category of 

the law, the Olmstead implementation services and activities are more exposed to budgetary 

pressures and more vulnerable to new preoccupations than are traditional hard-core medical 

services. 

1D:3B. Direct Medicaid Incentives 

Although Medicaid operates primarily through payments to third party caregivers, a tiny but 

growing part of Medicaid funding is being directed to individuals and this trend is likely to grow 

over the coming years. Through a variety of experimental federal programs being launched 

jointly by CMS and SSA, under such rubrics as cash-and-counseling, life accounts, assetdevelopment and others, and as embodied in legislation such as Money Follows the Person, 

these initiatives have the related goal of increasing autonomy on the part of beneficiaries. For 

example, such programs reward beneficiaries for frugality by allowing them to keep a portion of 

what they save, reducing total program costs, and creating incentives for individuals to save 

program funds. As a result of these converging initiatives, a small but growing stream of 

Medicaid funds, potentially including federal funds and leveraged state matches, is likely to go 

directly to beneficiaries with disabilities. Two key questions will emerge in evaluating these 

initiatives: How effective are these funds in bringing about sanctioned activities or established 

goals of the program? How much choice will beneficiaries actually have in the way their 

individual funds are expended? 

From the standpoint of describing incentives, the second question is of more immediate 

importance. It seems likely that some program-related limitations will be placed on how these 

31
 
funds can be spent. The likelihood of political opposition to direct payments to recipients 

already exists, and if they are allowed to retain unspent funds, in derogation from existing rigid 

means-testing of the program, such opposition is likely to be greater still. Given prevailing and 

politically potent stereotypes about the reason poor people are poor, the absence of significant 

limitations on how permissibly the funds are to be spent probably would prevent growth of such 

programs beyond the isolated-experiment phase. That being so, the Category 1 direct-toindividuals Medicaid incentive will not be open-ended. 

What will be critical in this regard, and based on the design of early experiments does seem 

likely, is that the permissible uses will include disability-related expenses that cannot be met by 

available payments to third parties. Of course, if funds made available directly to recipients are 

obtained by being taken away from traditional program funding streams, then it may be that the 

nature but not the overall level of financial incentives will be changed. With this possibility in 

mind, it will be useful here to consider how proposals for Medicaid reform and restructuring 

bear upon the role of incentives for people with disabilities. 

1D:3C. Medicaid Program Reform 

State governors from both major political parties appear to agree that Medicaid is far too 

expensive to be sustained at its current rate of growth or under its current structure. Federal 

level policymakers in the Executive Branch and in Congress likewise appear united in the 

belief that current and projected rates of program growth are unsustainable, though strong 

ideological divergences emerge around the reasons this is so or what should be done about it. 

Proposed solutions take numerous forms, such as greater use of managed care as a means of 

achieving cost control; imposition of expenditure caps on the states; narrowing of program 

eligibility criteria; reduction in the scope of covered services; greater use of tax and other 

incentives to increase the availability of private insurance; and, of course, heard hardly as 

frequently, adoption of some form of single-payor or national health care which would 

essentially supersede Medicaid and dramatically broaden the funding base for medical care in 

this nation. 

32
 
It is beyond the scope of this research to discuss these proposals in any depth. The point of 

listing some of them here is to note the startling absence from the debate of any discussion or 

apparent awareness of the specific issues relating to people with disabilities in the current 

operation and potential reconfiguration of the Medicaid Program. 

With cost-saving emerging as the chief imperative of many Medicaid reform proposals, there is 

ground for fearing, especially in the absence of awareness of disability-related issues, that cuts 

will impact people with disabilities disproportionately. This is likely for several reasons, with the 

most significant being that although there is no necessary correlation between disability and ill 

health, extremely high-cost recipients are very likely also to be people with disabilities. As 

such, any cost-cutting measures that focused on reduction of per capita costs, control of highcost services, elimination of low-incidence services or similar measures would hit financial 

incentives for the care of people with disabilities harder than those for the care of others. So 

too would expanded use of managed care, unless accompanied by provisions reflecting 

awareness that people with disabilities may need specialized goods and services often 

available only out-of-network or out of their geographical areas, or from nonstandard sources. 

1D:4 – Electronic Medicine 

One major governmental initiative in the health care area relates to the creation, under 

authorization of the Health Insurance Portability and Accountability Act of 1996 (HIPPA) of an 

electronic medical records system over the coming decade. Many considerations, ranging from 

avoidance of costs to minimization of medical errors, have been cited in support of this 

initiative. What would make this initiative responsive or unresponsive to the health care needs 

of people with disabilities? 

Broadly speaking, what would make this forthcoming system more effective as an incentive to 

the provision of health care to people with disabilities, or for that matter for the participation of 

people with disabilities in the health care system on equal terms as those of people without 

disabilities? Accessibility in the design of the system, to assure equal access irrespective of 

disabilities, would be one measure that could help to bring this about. As such, employment 

would be implicated too, because more jobs in the growing health care system would be 

33
 
available for people with disabilities. Inclusion in the data sets of categories that are of 

particular relevance to people with disabilities and that would improve the quality of data on 

disability also would be of great value in this regard. 

1D:5 – Health Care Tax Strategies 

In health care as in every other sector, the tax law is coming to play an ever-larger role. The 

most tangible recent example of its increasing importance is the creation in 2003 of the Health 

Savings Account (HSA) under which people are encouraged, through tax benefits, to purchase 

high-deductible health insurance policies. This report discussed this and other ways in which 

the tax system supports the current insurance system. 

Beyond this, there are the medical expenses deductions, including expenses for many AT 

items that are available to taxpayers who itemize. Lastly, in this regard, there are provisions in 

the IRC allowing for waiver of the early withdrawal penalty tax when the premature withdrawals 

are used to meet medical costs. 

To the degree that such provisions help offset the economic consequences of catastrophic 

illness, they undoubtedly represent important and direct financial incentives to at least some 

people with disabilities. But for those people with disabilities whose specialized needs are of 

an ongoing nature, not to mention for those who lack retirement savings or who lack income 

against which to offset their deductions, such provisions are of limited value. 

As a general matter, except for definitions of “medical expenses” that include various AT 

devices, none of the provisions of the Internal Revenue Code that subsidize individually 

purchased health insurance or care reflect any specific awareness or particular concern to 

maximize the value of the incentives to people with disabilities or their families. 

1D:6 – Health Care Research 

1D:6A. Outcomes Measurement and Evaluation 

With evidence-based practice the watchword, outcomes and evaluative research have become 

central to many of the resource allocation and prioritization decisions made by and for the 

34
 
health care system. But health system outcomes are extremely difficult to measure, even 

compared to outcomes in other areas. 

The complexities encountered in measuring the efficacy of health interventions are well 

beyond the scope of this study. For present purposes it is enough to note that the government 

plays a major role in evaluations research, including through its expenditure of funds and 

through the private expenditure it commands by regulation. From studies conducted at or 

directly funded by National Institutes of Health or the Department of Veterans Affairs, to 

research funded through a variety of program rubrics administered under the authority of a 

number of agencies and departments, to the role of CMS and FDA in reviewing and validating 

research into pharmaceuticals, medical equipment and other interventions, the interests and 

resources of the Federal Government play a major role in determining what gets evaluated, 

when and according to what criteria or standards. 

Against this backdrop of these various incentives to outcomes and evaluative research 

provided with federal resources or under federal oversight, the question that arises is: What, if 

any, outcomes measurement is carried out in the health system of modalities of particular or 

specific relevance to health-system consumers with disabilities? The question applies in the 

area of treatment itself and in the realm of procedures designed to ensure effective outreach, 

follow-up, informed consent, compliance or the achievement of other system goals. 

1D:6B. Other Research 

The line between outcomes research and other types of research is sometimes difficult to find. 

But when it comes to research designed not to evaluate existing modalities but to create and 

implement new ones, government again plays major direct and indirect roles. Like evaluations 

research, these efforts can be regarded as incentives to the community, aimed at improving 

overall health. 

Among these research efforts are a number that relate specifically to people with disabilities. 

These include earmarked research projects and funds administered by the National Science 

Foundation and NIDRR, including rehabilitation engineering research centers (RERCs) and 

35
 
other rehabilitation research programs. While some of these projects are aimed at evaluating 

existing modalities within the medical or quasi-medical framework, including those designed to 

identify and promote best practices, others may be regarded as prospective in nature. 

Such research may be regarded as an incentive to the community, usually taking the form of 

competed discretionary funding, available to a potentially broad range of contractors, grantees 

or program operators, for the designated purposes. Needless to say, the use of these research 

funds is tightly circumscribed by the terms of the award or competition under which they are 

forthcoming. 

Any attempt to judge the overall impact of these and related research projects would require 

assessment of the mechanisms available for integrating findings into practice, and for drawing 

such connections between and among jurisdictionally or bureaucratically diverse programs and 

services as the data warrant. 

1D:6C. Prevention and Public Health 

Among the many types of medical and related research supported and encouraged by 

government, research into the prevention of disease represents an important category. As 

concern for long-term savings works itself into the policy equation at various points, the 

potential cost effectiveness of such research cannot be denied. For this NCD study the 

question is: How can such research be categorized in terms of the financial incentives with 

which are identified? Such research clearly is disability oriented but it typically offers little 

incentive of relevance to people with disabilities. Instead, the research is designed to create 

evidence-based data and sometimes behavioral incentives that will prevent the occurrence of 

conditions leading to disability. 

Definitional ambiguities aside, such research remains controversial. Sectors of the disability 

community believe that prevention research, and “cure” research that bypasses efforts or 

resources designed to address the day-to-day realities of living life with a disability, actually 

result in the diversion of resources that might otherwise be available for incentives of one kind 

or another in the health care and lives of people with disabilities. 

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

The line between health care and long-term services and supports or long-term care (LTC) is 

often difficult to draw. This line is important to everyone because of the overlap or gaps 

between public programs. But the distinction is particularly important to many people with 

disabilities who must face the vicissitudes of obtaining long-term services at a younger age 

than is typically the case for the general population. 

As major research supported by NCD has shown, this country has no LTC policy. At the risk of 

making unduly fine distinctions among health care, income maintenance and long-term 

services, it is possible to identify programs that fall within the medical sphere, as discussed in 

the previous section, and as discussed in the next section, that provide income maintenance. 

Though no consensus, let alone legal definition, of the concept exists, LTC programs generally 

are distinguished by the nontraditionally medical nature of the services being provided, by the 

circumstances under which and purposes for which they are offered, by the non-cash nature of 

the services in most instances, and by other features. 

1D:6D(i) Private Sector Insurance 

The private sector has intricate connections that bind federal funding and tax policies to the 

kinds of coverage offered by that sector of the insurance industry. Private insurance coverage, 

all of which is tax-favored to varying degrees, involves the provision of specified institutional or 

home-based services to covered individuals who meet the requirements for benefits. Disability 

as such is rarely an absolute prerequisite to the receipt of benefits (though measures of 

severity of limitation apply). Ordinarily, activities of daily living (ADLs) are the baseline for 

determining entitlement to benefits under these policies. Home-based services up to a given 

dollar value or for up to a certain period of time may be authorized; for example, two ADLs 

(such as bathing, dressing, feeding, toileting, and so forth) cannot be performed independently. 

Institutional services such as nursing home residence, again subject to policy limits, will be 

authorized at varying but usually higher levels of severity, frailty or risk. 

Nothing in the laws surrounding these policies overtly distinguishes between people with and 

without disabilities. It is widely assumed that inability to perform two ADLs would equate with 

37
 
disability under any of a number of medical or ADA-type standards. This is not necessarily so, 

particularly if the major life activity at issue is the ability to continue living in one’s own home. 

By the same token, people with sensory disabilities, communication disabilities, or mental 

illnesses, who need assistance with various functions in order to maintain a quality of life in 

their homes and communities, may not qualify for benefits, given the close association of ADLs 

with physical and cognitive abilities. Likewise in this connection, while it is certainly possible 

that individual insurers have provided AT to particular insured people under appropriate 

circumstances, research for this study has been unable to find any federal law that could be 

used, or at least that has been used successfully, to require provision of AT or home 

modifications under a private sector LTC policy. These AT and home modifications have, by 

contrast, been required under workers compensation insurance. 

Insurers and insurance products (i.e., policies) are licensed by either state or federal 

regulators. One might suppose therefore that in the case of a community incentive such as 

LTC insurance, governmental regulatory and approval power would be used, if not to ensure 

the availability of goods and services of specific relevance to people with disabilities, then at 

least to guarantee nondiscriminatory treatment of people with disabilities in terms of coverage 

offered, premiums charged and related matters. Along similar lines, the tax benefits offered to 

both providers and purchasers of LTC insurance do not appear predicated on any 

demonstrated willingness by the carrier to provide coverage on terms of equality to people with 

disabilities, subject to legitimate underwriting and classification criteria stemming from age, 

objective likelihood of utilizing services and similar established variables. 

Without any guarantees, the net result may be that adults with disabilities whose actual need 

for services may be little or no greater than those for people without identified disabilities, 

attributed perhaps to coping skills developed over a lifetime, may nonetheless be denied 

coverage or granted coverage only at higher cost. As such, governmental inaction or seeming 

even-handedness can constitute not an incentive for people with disabilities, but an anti- or disincentive to this group of citizens. 

38
 
The broader question raised by this discussion is again one of definition. When plausible 

government action, undertaken within the scope of existing authority or recognized policy 

prerogatives, could result in more nearly equal opportunities for people with disabilities than 

may otherwise exist, does the failure of the government to implement such equality measures 

constitute or amount to a financial anti-incentive so far as people with disabilities are 

concerned? 

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

One approach to LTC insurance coverage and through it to the provision of some long-term 

services and supports that does bear directly on people with disabilities is the LTC insuranceMedicaid partnership. Under this model private coverage and Medicaid coverage can be 

combined more seamlessly and with continuity in those states where it operates. Again, 

because of Medicaid’s inclusion of disability as one of its eligibility criteria, such programs 

represent a financial incentive, to people with disabilities directly (if they receive funds at any 

point to recruit and pay their own caregivers) or to third parties (if the funds are paid directly to 

home care agencies, nursing homes, care managers or other support and service personnel). 

1D:6D(iii) Medicaid 

One measure of the difficulty encountered in determining where health care ends and longterm care begins can be seen in the ambiguous and overlapping role of Medicaid. Although 

Medicaid is a medical insurance program, it also may well be the second largest funder, 

behind only self-payers, of nursing home services in this country. It is in incorporation of this 

service as much as in anything else that the differences between Medicare and Medicaid 

coverage can be glimpsed. 

In its coverage of long-term care, Medicaid makes few distinctions between beneficiaries with 

and without disabilities. Though these populations often face very different issues in when and 

whether they require institutional care, and in what their needs are in the context of such care, 

the Medicaid Program provides its incentives in an even-handed way that takes minimal 

account of these differences. Even the Civil Rights of Institutionalized Persons Act (CRIPA), 

while providing for a number of reviews and including other protections for the rights of people 

39
 
in custodial settings, and while implicitly assuming significant lack of autonomy among such 

people, does not recognize the different risks that different institutionalized subpopulations 

may face. 

As it relates to people with disabilities, the financial incentive involved in Medicaid coverage of 

nursing home care demonstrates this same relative inflexibility. For instance, states generally 

take the position that extra costs, such as for powered mobility or other AT devices, even if 

eligible for Medicaid coverage in the community, should be covered out of the facility’s 

standard daily rate for residents. As with all of Medicaid, whether predominantly health or longterm-care oriented, it recognizes disability as an economic limitation but typically not as one 

requiring differentiation in services. 

1D:6D(iv) Other LTC Supports 

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

Senior services, provided through a number of sources, including community development 

block grants (CDBG), Older Americans Act, and a number of other federal funding streams, 

represent another financial incentive to community living. A preliminary review of such sources 

doesn’t reveal any particular attention to disability, either in terms of its role in eligibility 

determination or in the identification and planning of services that eligible individuals may 

need. Programs to identify frail elders at risk of institutionalization may be presumed to focus 

on people who meet or come close to meeting accepted definitions of disability, but disability 

does not appear to be a formal criterion for the most part. 

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

These largely state-based programs, sometimes including federal funds from Medicaid or other 

sources, while relatively limited in impact, represent a model that could prove of relevance as 

an incentive to continued community participation for people with disabilities. Because the 

number, funding levels, eligibility criteria and scope of services characterizing these programs 

change so much even from year to year, it is unwise to offer too many generalizations about 

them here. One thing that is clear is that, by law or by practice, such programs tend to focus on 

elders, thus ensuring that a fairly high percentage of people with disabilities will be included 

40
 
among service recipients, but also largely excluding people with disabilities under the age of 

65 from benefiting from the incentives represented by such programs. 

A major cost issue with Medicaid, respite care, and other family support programs relates to 

their capacity to compensate family caregivers for their time and services. Any attempt by the 

nation to come to terms with the explosive costs for home- and community-based services will 

have to address this question. Its answers have implications for the relative value of current or 

future incentives to people with disabilities. Some glimpse of those implications may be found 

in an already existing program. 

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

One may ask how the rehabilitation system, geared primarily to employment as it is, could 

have anything to do with home- and community-based long-term services. The answer lies in 

two established features of the Rehabilitation Act and two federal funding streams that exist 

under this Act. 

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

In VR the law specifies a number of outcomes by which a case can be closed. Traditionally, 

homemaker has been regarded as a successful outcome, meaning that when a case is closed 

with the service recipient trained to and able to function as a homemaker, the VR agency can 

claim credit for a successful case closure for a “status 26 outcome” in VR parlance. 

Overuse of homemaker closures came under heavy criticism in the 1960s and 1980s. 

Resorting to this outcome goal was seen as an excuse for the inability to get people jobs or for 

the lack of effort in that arena. While the use of homemaker closures has declined 

dramatically, one underlying rationale for this outcome category remains valid and relevant— 

that equipping a person with a disability to function as a homemaker frees another family 

member to go out of the household in order to work. 

A number of VR services, whether targeted under an individualized plan of employment (IPE) 

or targeted to this or to another sanctioned VR outcome, include components that are relevant 

41
 
incentives to community living and participation, including various types of skills training, such 

as adaptive techniques, low-level assistive technology, or limited home modifications. As such, 

community living and participation is an incentive that is targeted directly to people with 

disabilities, and that provides support largely for the provision of goods and services by third 

parties. Moreover, the time-limited nature of these services, given the concept of case closure 

that informs VR, reminds us that services need not always be open-ended or long-term in 

nature to represent financial incentives to long-term community living. Presumably, the skills 

and resources provided remain viable for some time, and there is always the possibility, 

although reported to be fairly rare in practice but countenanced by the governing federal law, 

of reopening a case or applying for follow-along services if conditions or needs to which the 

system can respond undergo major change. 

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

An important component of the Rehabilitation Act, aimed largely at people with disabilities who 

do not have paid employment as their immediate goal, and reflecting the evolution of attitudes 

toward self-determination over the past generation, is independent living funding. Provided 

mainly through the network of over 400 independent living centers (ILCs) that have grown up 

around the country, these centers have come to represent a vital community resource for 

people with disabilities. As such, the federal funds that contribute to their operation, whether 

through direct grants or contractual services, represent an important incentive to community 

participation. 

Consistent with the independent living philosophy, rigid jurisdictional requirements for the 

receipt of these services are not imposed. Economic status and perceived ability to work are 

not issues. To be sure, the procedural rules surrounding the operation of ILCs receiving federal 

funds, together with the rules establishing their governance (such as rules for the composition 

of their boards), have grown more complex. But the range of services they provide remains 

consistent with the perceived needs of the population being served, subject again to emphases 

that may become more or less relevant with the passage of time. 

42
 
As it relates to the characterization of services, allowing independent living services between 

direct, indirect, and community-based incentives is sometimes difficult. In its ideal expression, 

embodying as it does the availability of a broad range of options and interactions to anyone 

who wants or needs them, independent living services are best described as a community 

incentive targeted specifically to people with disabilities. 

What are known as core independent living services are enumerated in the Rehabilitation Act. 

Subject to the possibility of change in the forthcoming reauthorization of the Workforce 

Investment Act (WIA) (the federal statute embodying the Rehabilitation Act), these include both 

mainstream services such as housing, and specialized services (with the peculiar exception of 

AT). Notwithstanding this omission, many ILCs are deeply involved in AT, either as serviceproviders under contract with state VR agencies, as demonstration or training sites working 

with state Assistive Technology Act funding, as partners in AT loan programs under the AT 

Act, or under other auspices. 

1D:6D(v) Tax Aspects 

We noted earlier that the tax system supports the purchase and sale of LTC insurance. It does 

this by allowing deductibility to the purchaser, both through the usual health expense 

mechanism and in some cases as a business deduction for self-employed people, and through 

the usual range of benefits that attach insurance companies who sell the coverage. But tax 

system subsidization of long-term services, care and supports in other respects does not live 

up to this encouraging standard. 

When it comes to home-based services such as personal assistants (PAs) or housekeeping or 

similar services, the tax law maintains unwarranted and outmoded distinctions between 

deductible medical services and nondeductible personal ones. To enforce this distinction, tax 

compliance officials resolve doubtful cases by looking at the skills and qualifications of the 

service provider (e.g., nurse or nurse’s aide) and the nature of services provided. Where both 

medical and non medical services are provided, some allocation between them may be 

required. By contrast, if one is in a nursing home for medical reasons, all one’s costs related to 

being there are tax deductible. 

43
 
Likewise, although the add-on costs of transportation attributable to vehicle modifications, for 

example, would be medically deductible, the entire cost of transportation is subsidized only 

when used for medical purposes. Although advocates believe that this limitation should be 

read expansively, present law still appears to support the notion that visits to ILCs for training 

or exposure to AT or peer counseling would not meet the applicable threshold for being 

classified as medical. Hence such costs would not be medically deductible. 

Subject again to all the usual limitations on the medical expense deduction discussed above 

(including ability to itemize, 7.5 percent AGI threshold, sufficient income to absorb any 

available deduction in the year of expenditure, and one or two others), home modifications too 

are deductible. This deduction is of little practical value to most people who need such 

modifications. 

The Earned Income Tax Credit (EITC) offers an incentive to home-care of people with 

significant disabilities in one interesting way. Whereas the credit, which is refundable and of 

great value to lower-income working families, normally can be used only by families with 

children, its upper age limit is waived for an adult child living and being cared for at home on 

account of disability. Since this age-limit exemption would not be available for adult children 

living in nursing homes, assisted living facilities, congregate care facilities or other community 

residences, this feature of the EITC represents one of the few tax law provisions or other legal 

provisions that differentially incentivize home-based or facility-based long-term services and 

living. 

1E – Income Maintenance and Asset Development 

INCOME MAINTENANCE 

Depending on one’s definition, income-maintenance and income-replacement probably 

represent the largest category of identifiable federal expenditures targeted to people with 

disabilities. Though varying in detail based on the prevailing assumptions at the time of 

enactment, all these programs take as their point of departure certain assumptions about the 

association of disability, in its own right or as mediated by inability to work, with poverty. 

44
 
Looked at globally, income maintenance or replacement programs can be divided into two 

basic groups: those that provide cash and those that provide in-kind assistance. A classic 

example of programs that provide cash would be the programs administered by the Social 

Security Administration (SSA). A classic example of programs that provide in-kind assistance 

that is more or less the equivalent of cash is food stamps. 

All of the nation’s income-maintenance programs are open to people with disabilities. Indeed, 

through §504 of the Rehabilitation Act if supported with federal funds, or through the ADA if 

operated by state or local government, all such programs are required to operate in a 

nondiscriminatory manner. Let us examine those programs that, controlling for poverty, appear 

to have the greatest impact on the lives of people with disabilities, and that were designed with 

this population particularly in mind. 

1E:1 – Social Security Disability Insurance 

Social Security Disability Insurance (SSDI) is one of the two key underpinnings of the nation’s 

social insurance system. Available to workers who have paid into Social Security and to their 

dependents, SSDI replaces income for those rendered unable to work by reason of disability 

prior to the usual retirement age. Benefit levels are predicated on meeting the SSA definition of 

disability, which includes both a diagnosis, a prognosis that the condition will last for at least a 

year or result in death, and a determination of the individual’s inability to work. Although not 

means-tested, this linkage to the ability to gain income through work amounts as a practical 

matter to the equivalent of means-testing in many cases. Benefit levels are linked to the 

amount of time one has worked, and to one’s wages or self-employment income during that 

time. 

SSDI was first added to the Social Security Act as Aid to the Permanently and Totally Disabled 

in 1955. Its purpose, as a logical and humane corollary to a program of social assistance for 

retirees, was to provide a safety net of income replacement for those prevented from 

completing their working careers on account of disability, as well as providing a measure of 

protection for their spouses and children. 

45
 
Although SSDI is vital to millions of American families, it is hard to characterize it as an 

incentive. Despite the suspicions of many about the program, it is unlikely that people would 

deliberately seek to become a person with a disability (as opposed to claiming falsely to have a 

disability) in order to qualify for SSDI. In the end, the program is a community resource, 

designed to ensure stability and prevent destitution and rapid downward mobility. It can best 

be described as a major clause in the social contract. 

But while disability is a necessary precondition for SSDI eligibility, it is not a sufficient one. An 

individual can meet the SSA definition of disability beyond any possible doubt yet be ineligible 

for benefits because of the failure to have amassed the minimum 40 quarters of covered 

employment. Moreover, while the diagnostic and functional dimensions of disability may be 

fairly straightforward in many cases, the determination of whether someone can or cannot 

work is a much more subjective one. This is because it is a legal, not a medical or functional 

definition. Among other things, it looks to whether the individual could perform any work that 

exists in the economy, regardless of qualifications or experience, and regardless of proximity 

to the individual’s home, and regardless of the services, supports and technology that might be 

needed in order for the individual to perform this hypothetical job. Fortunately, because no one 

is willing to find the individual this hypothetical job, or routinely pay the costs of making it 

accessible, or on the other hand witness large numbers of people with visible disabilities 

starving in the streets, the law has not been enforced literally. Yet, changes in official 

interpretations of its nominal provisions are unquestionably associated with increases or 

decreases in the number of people receiving benefits at various times. 

Other variables created by the governing law have resulted in the removal of people from the 

rolls at times, not necessarily because they have experienced miraculous cures. Often it has 

been because of technicalities in reporting or in documenting receipt of income or capacity to 

earn income, a lack of cooperation, or for other procedural reasons. 

Underlying these procedural vagaries, the fundamental problem that emerges is the SSDI 

treatment of disability, via employability, as an all-or-nothing, one-or-the-other matter. Yet 

46
 
experience and commonsense tell us that in this society, with appropriate attention to training, 

technology, transportation and accommodations, most people can perform, and want to 

perform, productive work. SSDI increasingly has functioned to absorb the provision of a safety 

net for those people whose costs of employment employers and government were unwilling to 

bear, or whose potential for productivity was considered lower than the wage that society 

would demand they be paid. 

A key factor in understanding the tool of SSDI as an incentive or disincentive in the lives of 

people with disabilities is its linkage to health insurance. Most people receiving SSDI also are 

eligible for Medicare. While some SSDI recipients will be able to maintain private sector 

insurance, assuming they had it when they worked, through the coverage of a spouse who 

works, or for a period of time through their former employment coverage under COBRA 

(subject to full assumption of the premiums and a 2 percent administrative fee) or through 

other affiliations, Medicare is as crucial or more so than cash benefits in the lives of many 

SSDI recipients. It is this close connection, resulting as it does in the potential loss of 

insurance coverage if work is obtained that does not include comparable insurance coverage, 

that perversely cements the relationship, and the destructive dichotomy, between disability and 

work in American public policy. 

Put another way, and emphasizing the connection between income replacement and health 

care, Medicare through SSDI makes insurance available to certain non-employed people with 

disabilities, under circumstances where comparable coverage is not generally available to 

people without disabilities who do not work. Conceived of at a time when health insurance was 

not such a looming concern or as costly as it is now, and at a time when the numbers of 

people obtaining such insurance through their employment was growing, this linkage made 

good sense. The linkage was based on the further assumption that disability equated with 

medical need, and that a meaningful response to it therefore should include health insurance. 

Health insurance coverage represents perhaps the most important in-kind income-replacement 

strategy available. 

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1E:2 – Supplemental Security Income (SSI) 

Supplemental Security Income (SSI) derives from many of the same premises as SSDI, but 

with several key differences. SSI extends the safety net to all people with disabilities 

regardless of age, and to all elders regardless of disability, who meet its strict income- and 

resource-eligibility standards. SSI also differs from SSDI in being strictly means-tested, beyond 

the capacity for earnings. Unearned income is taken into account in determining eligibility and 

benefit amounts, as are savings, along with employment. Lastly, SSI differs from SSDI in being 

linked not to Medicare but to Medicaid, meaning that the state plays two important roles in it 

that are not parallel to SSDI: the state may or may not add a state supplement to the standard 

SSI payment (the Federal Benefit Rate), and the state, through its discretion in administering 

the Medicaid Program, will determine to a large degree exactly which health services an 

individual will receive. For people whose route to eligibility comes through disability, rather than 

age, monitoring of disability status as well as of economic status becomes a standard 

component of the program. 

Because SSI is a direct cash payment of a relatively unrestricted nature to people of any age, 

the question of how to define disability related to children has caused recurring debate. No 

tests of employability and no actual evidence of work performance are of much use in 

determining the eligibility for SSI benefits of children. In place of ability to work, Congress and 

the courts have wrestled with various functional definitions over the years. 

On balance, at least as it relates to adults, the law governing SSDI and SSI eligibility alike has 

placed far more weight on diagnostic and medical assessments than on functional ones. To 

take an extreme case, what this amounts to is that if a person were unable to move, speak, or 

interact in any way, that individual still might not qualify for SSDI or SSI benefits in the absence 

of some plausible medical explanation for the condition. Short of such an extreme case, the 

problem that emerges is that while society has moved toward a contextually-based definition of 

disability such as that of the ADA, which looks to the nexus between a physical limitation and 

its impact on one or more major life activities, the incentives embodied in SSA programs 

continue to adhere to a strict medical model, at least regarding initial eligibility determination. 

48
 
There is one other key respect in which SSI must be distinguished from SSDI. Where SSDI is 

an income replacement program, SSI is for income maintenance. While this distinction may 

seem slight, it is in fact very important. Among other things, it means that the benefit levels 

available to SSI recipients, even though they are by definition “poor,” which SSDI recipients 

need not necessarily be, are generally far lower than workers with disabilities can expect. 

Not only is SSI a program that at best is aimed at maintaining people at or near poverty level, 

including formulas for “deeming” family or other household members’ income as shared by the 

recipient so that benefits can be adjusted, but it is a program that contains powerful 

disincentives to saving or to asset accumulation of any kind. While a web of provisions exists 

to mitigate the disincentive effects upon employment of the SSI rigid resource limitations, and 

allowing for the maintenance of health insurance coverage while work status is demonstrated 

and stabilized, as well as allowing for the saving of funds for self-sufficiency-related purposes, 

it is argued that the complexity, inconsistency and occasionally internally conflicting nature of 

these provisions combine to offset much of their positive intention. In this regard, it may be 

noted for example that such key work incentives as the Earned Income Tax Credit (EITC), 

while excluded from SSI income calculation, remain exempt from inclusion in countable 

resources for only nine months. Such money might of course be used during that nine-month 

window to meet the costs of Impairment-Related Work Expenses (IRWEs), or it might be 

deposited into an SSA approved plan for the achievement of self-support (PASS), but these 

options may be unavailable to many people. By far the more common and perhaps more 

sensible response will be simply to spend the refund, since if kept it could lead to countable 

resources exceeding the $2,000 limit. Cost benefits and a possible demand for return of 

overpayments might all too readily ensue. 

The work-incentive provisions in the law are intended as incentives to work and to saving for 

work-related or other self-sufficiency-related purposes. Whether these provisions have much 

effect in this regard cannot be known, but the low numbers of people leaving benefits rolls for 

work suggests that they do not. Whether work incentive provisions could have a significant 

effect if coordinated with other benefit, educational and employment programs, one can 

likewise only speculate, but the overwhelming likelihood is that they could. 

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1E:3 – Benefits Counseling 

Benefits counseling, along with its associated training and technical assistance, is applicable to 

virtually all incentives in federal law and to all targeted populations for those incentives. 

Placement is here because direct financial incentives of cash payments made directly to 

individuals present perhaps the most vivid illustration of where and how such counseling can 

be useful. 

Today almost every federal program of any size or note includes provisions for public 

education and outreach, and when enabling legislation or budgetary authorizations make no 

explicit provision for this component of their work, agencies find ways to use their Web sites or 

other means for public relations about all the good things they do. In terms of the incentives to 

program access and utilization represented by benefits counseling targeted to audiences in the 

disability community (including potential recipients and service-providers), two principal forms 

of such outreach efforts can be identified: information and training regarding the opportunities 

for people with disabilities embodied in mainstream programs, and information targeted 

specifically to people involved with disability-oriented programs. 

1E:3A. Generalized Public Outreach 

Generalized public outreach regarding mainstream programs takes many forms. From agency 

Web sites and hot-lines, to presentations at conferences, to public relations campaigns and a 

host of other means, government agencies and their partners, in delivering program resources 

or services, constantly barrage the public with information. In the fine print, so to speak, of 

these efforts often there is an equal opportunity notice, a disclaimer of any illegal 

discrimination, or an indication of a number or office to contact for further information or 

specialized assistance on accommodation, accessibility or other disability-related matters. 

These may be regarded as community incentives, perhaps only indirectly financial, but ones 

intended to have a specific impact on people with disabilities and to redound to their financial 

benefit. 

A significant recent example of the attempt to ensure fuller participation of people with 

disabilities in a mainstream program is the joint effort undertaken by a consortium of nonprofit, 

50
 
university and public sector agencies to make the services and resources of the Volunteer 

Income Tax Assistance Program (VITA) available to people with disabilities. Having the 

appropriate utilization of the EITC by these taxpayers as its immediate purpose, this effort has 

operated through the establishment of a variety of relationships between grassroots 

organizations, ranging from credit unions to ILCs, and VITA sites and sponsoring 

organizations. 

The financial incentive represented by such efforts at inclusion is indirect. That is, it does not 

directly benefit people with disabilities, nor put appreciable money into the hands of third 

parties or into the community. What it does, much like job training, or education, in the longerterm might do, is create the conditions for the infusion of new financial resources into the 

community through enhanced utilization of the EITC by low-income working families that 

include members with disabilities. 

1E:3B. Specific Public Outreach, Training, Technical Assistance and Train 

the Trainers Programs 

Similar kinds of outreach occur in connection with programs that are specifically created for 

use by or to serve people with disabilities. Two models are of particular interest here: outreach 

that focuses on relevant public audiences, and specialized training and technical assistance 

given to intermediaries whose work involves direct and sustained contact with individuals with 

disabilities. 

1E:3C. Civil Rights Enforcement 

One need not tune into radio or TV for too long before encountering a public service 

announcement regarding people’s rights to be free from discrimination and indicating sources 

of help if housing, job or other discrimination has occurred. Frequently these announcements 

list categories of discrimination that are not permitted. Almost always when such enumerations 

are provided, race, gender and nationality are listed. Disability sometimes is listed too, the 

uncertainty being a function partly of the coverage of the specific laws being relied upon and 

partly of other considerations. 

51
 
Whether such announcements and related public education and outreach constitute financial 

incentives once again depends on a fairly expansive reading of the concept of incentive. Civil 

rights have an important economic dimension in the form of many benefits arising from equal 

treatment and opportunity. Beyond that, discrimination may on occasion give rise to damages 

or at least reimbursement for losses. 

1E:3D. Narrowly Targeted Education and Outreach 

Increasingly the Federal Government has viewed education and technical assistance as 

important components of civil rights enforcement, with respect to those components in their 

own right and as their use as alternatives to enforcement by litigation. As such, the Federal 

Government has sought to make available as much information as possible about such laws. 

Numerous technical assistance manuals, booklets, Web sites, Q & As, educational videos, 

speaker programs and other means have been used by the Department of Justice, the Equal 

Employment Opportunity Commission, the Access Board, the FCC, the Department of 

Transportation and the Department of Housing and Urban Development to inform employers, 

airlines, architects, and many other groups of their obligations under a variety of civil rights and 

accessible-design laws. 

In particular, owing to the apparent persistence of widespread unfamiliarity in the building 

industry with applicable ADA and Fair Housing Act Amendments (FHAA) accessible-design 

requirements, and in view of the emphasis that HUD has placed on reports and statements on 

efforts to reach the building industry, fair housing enforcement appears an appropriate context 

for raising the question of how the value of these incentives can be measured or judged. 

1E:4 – Protection and Advocacy Services 

Perhaps the most vital example of highly specialized, targeted information-dissemination and 

counseling about benefits-related issues to people with disabilities is found in the programs 

implemented by state-based protection and advocacy programs throughout the nation. Under 

such rubrics as Protection and Advocacy for Developmental Disabilities, Assistive Technology, 

Voting Rights, Traumatic Brain Injury and several other categories, the organizations are 

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charged with certain responsibilities, including clarifying and communicating the meaning of 

these programs and helping (though now largely without the right to litigate against the 

government) to ensure that recipients understand and can maximize their rights. 

In an increasingly complex program and regulatory environment, such dedicated, expert 

resources are becoming ever more crucial if individuals with disabilities and indeed 

communities are to benefit fully from many of the financial incentives theoretically available to 

them. 

The Client Assistance Program (CAP) is perhaps the best-known variant of P&A services for a 

target population defined by disability, or by involvement with a disability-related service 

system. CAP programs, operating under the Rehabilitation Act, as amended, are designed to 

provide clarification and information (though again, not litigation) to individuals with disabilities 

in resolving disputes over services with their state VR agencies. They present yet another 

interesting window into the complexity of defining and analyzing financial incentives. 

CAP programs are intended in large measure to ensure that VR service recipients are able to 

access the services they need. As such, they certainly qualify as gateway assets, meaning 

that access to these programs helps bring about access to financially equivalent tangible 

resources such as services, vouchers, AT, tuition, and other services authorized under the 

Rehabilitation Act. 

But at the same time, reason exists for believing that CAPs save public funds by preventing 

some disputes from escalating to costly litigation. By helping to clarify misunderstandings in 

some cases, by informally brokering compromises in others, and by convincing service 

recipients that formal grievance processes, including administrative appeals or full-blown 

lawsuits would be fruitless, these programs in all likelihood do operate to prevent litigation in 

the VR area. As such, it is likely that they save the VR system money that otherwise might be 

expended in defending such suits. 

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ASSET DEVELOPMENT 

In today’s world, a great part of federal asset development policy involves efforts to strengthen, 

encourage and protect various sectors of society and the economy. As this section will show, a 

dynamic awareness of the changing nature and incredible complexity of these goals and the 

arrangements underlying them will bring us into contact with a number of areas of the law 

rarely discussed in relation to poverty or disability but increasingly central to the destinies of 

people characterized by these terms. 

To begin discussion, the line between income maintenance and asset development often may 

be difficult to draw. For purposes of this paper, income maintenance and asset development 

should be distinguished from one another based on three criteria: the nominal purposes for 

which funds are provided; the conditions governing their accumulation, availability and use; 

and the frequency or regularity with which they are received. 

Using this screening test, most programs and funding streams will fall predominantly on one 

side or the other of the line. Individual Development Accounts, for example, may be regarded 

as asset-development programs because their stated purpose is to provide capital for specified 

purposes, because penalties ordinarily apply to their withdrawal or premature use, and 

because, although funds are paid into them regularly, these funds are subtracted from planholders’ income for most eligibility determination and other programmatic purposes. 

By the same token, payments made under the SSI Program are a clear example of income 

maintenance. Amounts to be paid are based in part on ongoing expenses such as rent and are 

adjusted for household size; no expectation of accumulation exists or is ordinarily even 

permissible; and any accumulation above strict limits triggers penalties designed to offset the 

capital formation that has occurred. Of course, mechanisms such as PASS do allow for asset 

development through accumulation of capital to meet specified purposes, but these options are 

an exception, albeit an important and growing one, to the basic thrust of SSI. 

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Against this backdrop let us examine a number of key asset development strategies currently 

in use in this country, some disability-specific, others not, with a view to placing them in the 

context that has been established. 

1E:4A. Bond Programs 

Perhaps best known in the contexts of export guarantees to companies or disaster-recovery 

loans to individuals and organizations, the Federal Government plays a major role in economic 

activity through loan programs. Indeed, insofar as the federal deficit may in some sense be 

regarded as an intergenerational or at least inter-decade loan program, one may say that 

borrowed funds play a central role in almost every area of economic policy and activity. 

The Federal Government also facilitates the use of loans by state governments for a variety of 

economic development and infrastructure purposes. It does this by the tax-favored treatment 

accorded to a variety of private and economic activity bonds underwritten by states, and by a 

host of tax-based and other measures designed to assist states in marketing bonds to finance 

a host of activities. With respect to all of these, the key question is the extent to which any of 

these programs are designed with people with disabilities in mind. A subsidiary question asks 

whether these programs, especially if designed to impact the lives and opportunities of people 

with disabilities in any specific way, actually do so. 

It is a natural instinct, as well as a fervent hope, that broad-based economic development 

programs benefit all citizens. If a state or municipality provides tax breaks, bonding authority or 

other subsidies to a major manufacturer to locate a new plant within its borders, the jobs 

created will impact the economy in ways that benefit everyone. Leaving aside whether this is 

true, questions about the specificity and inclusiveness of planning are still warranted. Do such 

programs ever include commitments regarding the employment of people with disabilities 

among the new workers to be hired? Is accessibility ever made a formal requirement where 

retail facilities such as shopping malls are subsidized, or is that left to routine building code 

enforcement? Do any publicly-supported economic development programs target industries or 

activities that may be of particular relevance or applicability to people with disabilities? 

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Although instances abound in which the recipients of publicly-funded economic development 

incentives have pledged major discretionary contributions to education, health care or 

infrastructure in their host communities, during this study there was no indication that people 

with disabilities have been a specific object or topic of concern in these settings, except so far 

as medical research and care may be viewed by some as disability related. 

1E:4B. Small Business Development 

Through the Small Business Administration (SBA), the Small Business Innovation and 

Research (SBIR) Program, and a number of contractual preferences and set-asides, as well as 

through other methods, the Federal Government has sought to empower small business 

development among disadvantaged populations. These programs are best known, and have 

been most controversial, in application to businesses owned by people from diverse racial and 

ethnic backgrounds, but they also are well established in connection with women-owned firms. 

While SBA programs, such as the Section 8(a) Program, provide preferences to a number of 

populations, they expressly fail to do so for people with disabilities. Nevertheless, there are a 

number of other federal programs that attempt to provide economic development loans, grants, 

and technical assistance and other capital formation assistance specifically to people with 

disabilities. 

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

Established during the Depression, the Randolph-Shepherd Program authorizes states to own 

vending facilities in public buildings and facilities. These facilities are then licensed to people 

who are blind to run as business operations, subject to certain controls and oversight by the 

state. Among the resources made available to the entrepreneurs participating in this program 

are capital for the purchase of equipment and supplies, and technical assistance aimed at 

enhancing business success. The financial assistance received by the Randolph-Shepherd 

Program participants is regarded as asset-development rather than income-maintenance in 

nature because the individuals’ income is defined by the profit they derive from the business. 

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

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Two programs authorized under the Assistive Technology Act and administered by the 

Department of Education target loans for AT, vehicle modifications, telecommunications 

equipment or other technology directly to people with disabilities. 

Operated by state partners who slightly differ between the two programs and from state to 

state, these programs utilize credit standards and provide repayment terms aimed at 

surmounting the otherwise often insurmountable barriers to credit market access facing many 

people with disabilities. Indications are that repayment rates have been very high, but the 

Administration, after initially being very supportive of such programs, does not appear to have 

looked on them, or on any portion of the Assistive Technology Act, with favor in its last two 

budget proposals. Nevertheless, Congress has continued to appropriate funds for the AT Act, 

which constitutes largely indirect financial incentives or gateway assets to many people with 

disabilities. 

1E:4C. Individual Development Accounts 

Individual Development Accounts (IDAs), as authorized under at least two major federal 

statutes, represent a creative new approach to breaking the proverbial cycle of poverty by 

assisting low-income people to obtain funds for saving toward specified purposes. Although 

the two laws differ, all of the permissible savings goals, toward which earnings can be put and 

to which matching funds may be added, can be regarded as involving asset development or 

acquisition. 

To determine whether IDA programs have been designed to take the needs, situations or 

indeed the existence of people with disabilities into account, the following questions must be 

asked: Do their waivers of income- and means-based limitations include such limitations in 

programs such as SSI that are of particular relevance to people with disabilities? Are the 

programs marketed to disability-oriented community groups and are linkages encouraged or 

required between anti-poverty and disability-oriented community-based organizations? Are 

informational resources made available in accessible formats? Do the permissible assetaccumulation goals include AT, and/or accessible transportation vehicles, or do the goals 

reflect the extra costs of accessibility in a variety of situations? 

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As the number and character of IDA programs across the country grow, generalization on the 

points discussed above becomes increasingly hazardous. Yet, preliminary indications suggest 

that, by and large, the answer to most of these questions is no. Still it seems likely, given the 

considerable overlap between poverty and disability, that a significant number of people with 

disabilities may benefit, either directly as recipients or indirectly as family members, from IDA 

programs. 

1E:4D. Industry-Based Subsidy Programs 

Many major industries in this nation are the beneficiaries of federal subsidies, sometimes 

directly, often indirectly or through regulation. But whatever their form, these subsidies, 

including but not limited to tax subsidies, contribute significantly to the capital and resources of 

these industries. 

Although not generally targeted to individuals (except as business owners in these industries), 

the question may fairly be posed whether industries that employ people with disabilities, that 

provide products or services of particular use to people with disabilities, or that seek to make 

their mainstream products and services more accessible to people with disabilities are 

recipients of these financial incentives. 

1E:4D(i) Farm Subsidies 

Although frequently the target of criticism as the number of family farms in America and the 

percentage of the population living on farms shrink, agricultural subsidy programs surprisingly 

have withstood these attacks and remain a major component of food, land use, rural 

development and related policies in this nation. To the degree that the AgrAbility Program was 

incorporated into U.S. Department of Agriculture (USDA) funding in the 1990s as a method for 

providing assistance to farmers with disabilities, some recognition of this population has taken 

place. The current status and the impact of this program have not been determined. 

1E:4D(ii) Intellectual Property 

Through copyrights, patents and trademarks, U.S. law, beginning with the Constitution, grants 

protection to intellectual property of a literary, scientific, or other original nature. Increasingly, in 

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recent years, intellectual property law has been seen and used as a tool in the effort by various 

industries to enhance their economic position and safeguard return on their investments. To 

the degree that the government has adopted and enforced laws that dramatically have 

broadened the scope of intellectual property and the length of time under which much of it is 

protected, grounds exist for asking how this financial incentive has affected people with 

disabilities. 

1E:4D(iii) Print Media 

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

of print or electronic media to people with sensory or communications disabilities. From the 

legal right of people who are blind to scan copyrighted books onto computers in order to 

make them accessible, to the right of people who are deaf to have closed-captioning of the 

audio component of television programs and movies, these issues are being addressed within 

a rapidly evolving framework of laws ranging from the Copyright Act to the 

Telecommunications Act. 

These laws are not without recognition of at least some of the access needs of people with 

disabilities, but much of the concern appears to relate to technologies that increasingly are 

anachronistic and falling into disuse. For example, the copyright law provides exceptions to the 

ban on unauthorized copying in order to permit materials to be reproduced in accessible 

formats by nonprofit entities for use by people with visual disabilities. Along the same lines, 

provisions strengthening the availability of accessible textbooks and instructional media in 

schools were added recently to IDEA. At the same time, there has been an increase in legal 

protections that give owners greater control of the modification of software, including software 

that determines how material can be displayed. Web-based educational materials largely have 

gone unaddressed by the law. 

1E:4D(iv) The Internet 

In the Telecommunications Act of 1996, Congress recognized the central role of 

telecommunications to full participation and included provisions in Section 255 requiring that 

the manufacturers of telecommunications equipment and the providers of telecommunications 

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services make these goods and services accessible to and usable by people with disabilities, 

to the extent readily achievable. The Telecommunications Act provides many financial 

incentives to such companies, and as such, requiring them to make their goods and services 

accessible was regarded widely as a matter of simple fairness. Perhaps the greatest financial 

incentive provided to e-commerce, which directly benefits all those who sell 

telecommunications equipment and services, is the law largely barring state taxation of 

Internet-based transactions. Yet, through a complex series of administrative interpretations by 

the FCC, no action by Congress to modify those interpretations, and court decisions, including 

most recently a Supreme Court decision bearing directly on the subject, at this point so-called 

information services are not covered by the accessibility provisions of Section 255. Without 

going too deeply into the details, it has emerged that the “communications equipment and 

services” covered by Section 255 constitute only traditional voice-based telephone usage, 

while all data, graphics, Voice over Internet Protocol (VoIP) and other cutting-edge electronic 

technologies are not regulated by the FCC and are not subject to accessibility laws. Ironically, 

it is these very cutting-edge technologies and services that, because deemed closely 

associated with economic and productivity growth, are the recipients of the greatest amount 

and range of financial incentives. The conditions for ensuring that those incentives will benefit 

people with disabilities have yet to be defined by regulation or legislation. 

1E:4D(v) Government Procurement 

Government contracts for the procurement of goods and services represent major financial 

incentives to industry. In light of the leverage value they command, such contracts have 

provided the basis for imposition of all manner of conditions and advancement of all manner of 

government policies. From requiring major defense contractors to admit and bargain with trade 

unions during World War II, to requiring federal contractors to participate in the drug-free 

workplace program a half century later, the carrot and stick represented by receipt or denial of 

federal contracts represents a powerful incentive. As important, despite some shrinkage of 

federal expenditure as a proportion of Gross Domestic Product (GDP), such contracts are 

likely to grow in importance in the coming years, particularly in light of the increasing use of 

private sector entities to deliver services, and in light of the increasing centralization of 

technology procurements. 

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Use of the federal contracting power to advance the cause of equality, through 

nondiscrimination and even affirmative action requirements, in the areas of race, ethnicity and 

gender, go back to the 1960s. Efforts to use this asset development financial incentive of 

contracts to ensure equality of treatment for people with disabilities, whether as employees or 

beneficiaries, likewise have been established in one form or another for more than 30 years. 

But implementation of such policy goals may be very different than in the cases of other 

disadvantaged or marginalized groups. 

In the case of people with disabilities, equality of treatment often requires a degree of 

individualization, in the choice of accommodations or the structuring of tasks, that is 

diametrically opposed to the equality of treatment that often defines nondiscrimination for other 

groups. Moreover, accessibility of facilities, programs, goods and services is also necessary if 

the equality and nondiscrimination mandates are to be fully meaningful. 

Through Section 508 of the Rehabilitation Act, Congress has taken its largest single step in 

addressing these added dimensions of equal opportunity for people with disabilities through 

government channeling assets to industry. The law does this by requiring that electronic and 

information technology (E&IT) purchased by the government be accessible to and usable by 

people with disabilities, including federal employees and members of the public where 

applicable. 

Whether the transfer of federal funds as assets to industry for the performance of services or 

the furnishing of goods leads to full participation by people with disabilities in the benefits 

attributable to the industry assets or assets of nonprofit sector organizations depends in no 

small part on the interpretation and enforcement of the federal laws. Key questions raised in 

this context include: Do federal procurement processes treat Section 508 as an important 

condition, on a par with other federal policy goals embodied in procurement law? Are states 

required to adhere to similar standards in their purchase of comparable equipment when 

supported by federal funds? 

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These questions are far too broad to be answered here. However, a template can be 

suggested for addressing them. To the extent that employment, consumerism, public 

information or other benefits are expected among the end results of many contracts, it should 

be possible, through survey techniques and case studies, including laboratory experiments 

and usability tests where typical situations of access and use are replicated under controlled 

conditions, to determine whether people with disabilities can and do benefit or participate 

equally or continue to face barriers. 

Each dimension of, and barrier to participation translates into financial costs and benefits, and 

into life probabilities or opportunities that have direct and, at least in the aggregate, 

measurable consequences. As with education, access of the kind promised and represented 

by these technology-related provisions and structures translates into employment, consumer 

participation, and community living. That these incentives are granted or withheld so indirectly, 

indeed so subtly, makes them no less important or real. 

If current trends continue, it is likely that more and more national policy goals will be 

implemented through the private sector. As such, these less obvious, often lower-level 

decisions, though made with little focus on or attention to disability, may prove to have as great 

a financial impact on the lives of people with disabilities as will any of the more obvious and 

overt choices that are made. 

1F – Housing 

It would be difficult to overestimate the importance of housing in the lives and consciousness 

of Americans. In ways that are obvious to us and in ways that are not, housing options affect 

almost every other element of life. Housing affects multiple aspects of living—what public 

schools one’s children attend, why commuter rush hours exist on the roads into and out of 

every city or town of any size in America, the zip-code-based offers received via mail, to the 

availability of broadband—and as such, housing is a principal determinant of how people live. 

As housing prices have risen, preoccupation with the subject among Americans also has 

grown. From speculation about rising home values to fears of displacement, from increasingly 

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lengthy commutes to rising homelessness, increasingly the subject has come to permeate 

consciousness. 

For people with disabilities, yet additional layers, related to accessibility and affordability— 

insofar as accessibility bears upon the supply-and-demand equation—must be added to the 

discussion. Discrimination, too, inevitably plays a significant if unspecified role. 

Concerns for people with disabilities include a look at direct federal appropriations such as 

rental assistance, the effect and usefulness of home ownership initiatives, construction and 

renovation, relevant tax systems, mortgage interest deductibility, low-income housing tax credit 

through state building code certification, and fair housing enforcement. 

Our government has developed an elaborate web of funding streams and programs affecting 

public and private sectors and broadly aimed at increasing the amount, availability and quality 

of housing in this country. All of these affect people with disabilities and their families, with 

some directly targeted to this population and others impacting their lives as an incident of their 

broader sweep. This section will examine some major examples of each type, insofar as they 

involve financial incentives of the kinds explored and proposed by NCD. 

1F:1 – Direct Federal Appropriations 

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

1F:1A. Rental Assistance 

To a limited extent, federal housing subsidies still include some rental subsidies that allow lowincome people, and in some cases expressly allow low-income people with disabilities, to pay 

for rental housing that they could not otherwise afford. The role of such subsidy and voucher 

programs has steadily declined. Even when such programs were a more prominent component 

of national housing policy, and to the extent that they remain in use in conjunction with other 

programs, recognition of the issues facing people with disabilities appears to have focused on 

only one dimension of access. That is to say, while economic eligibility standards recognized 

the limited income and resources of many people with disabilities, for example, there never 

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has been any recognition in the Section 8 (or 811) Program that factors other than income, age 

or family size need to be taken into account in determining the amount of subsidy or the kind of 

housing that would be appropriate. Thus, these programs have not included sufficient elasticity 

to reflect possible needs for additional space, or the heightened costs imposed on affordability 

by the scarcity of accessible dwellings. 

It seems likely that the value of direct financial incentives, or of indirect incentives in the form of 

third party payments to landlords, may have been undermined significantly or limited by this 

failure. 

1F:1B. Ownership Programs 

The programs that today chiefly characterize federal housing policy, as described in detail in 

several NCD reports over the past five years, emphasize home ownership as the primary goal 

of federal involvement, and as the principal measure of policy success. These programs take 

two basic forms: programs, many administered under §202, for the construction or renovation 

of housing that is then made available to appropriate buyers under variously subsidized 

conditions; and in some cases they also involve direct subsidies or rent-to-own 

demonstrations. 

1F:1C. Construction and Renovation 

Programs operating in this vein include requirements for the setting aside of specified 

percentages of developments for people with disabilities, including people with physical and 

sensory disabilities. Such provisions certainly operate as a financial incentive to the availability 

of housing for people with disabilities, but the emphasis again appears to be on the eligibility 

criteria more than on the design of the property. While accessibility requirements apply to all 

federally-assisted housing, it does not appear that any clear or up-to-date definitions exist of 

what constitutes accessibility for people with sensory disabilities. From visual-alert doorbells to 

“talking” microwaves, technologies do exist to make independent living more viable for people 

with sensory disabilities, but the incentives in no way appear to take these possibilities or their 

implications into account. 

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Similarly, with respect to the well-established and better-known criteria for physical 

accessibility, grounds exist for concern whether the value of the housing subsidies to people 

with disabilities are maximized. Such accessibility standards also must consider the larger 

challenges of needs-based program limitations on the ability of potential purchasers to 

aggregate down payments or meet even subsidized mortgage commitments and the 

integration of key infrastructure elements such as transportation, accessible commercial 

facilities, health care or other community-based resources. Faced with a perceived lack of 

coordination among housing, transportation, economic development and health care planners 

and programs, questions may be asked about whether the number of individuals with 

disabilities who can benefit from these subsidies is as large as it might be. Questions of just 

this sort have been raised by critics of the federal and state response to the Supreme Court’s 

Olmstead decision. 

1F:1C(i) Other Homeownership Initiatives 

A number of other homeownership strategies, including subsidy, counseling and other 

programs, exist to facilitate and broaden homeownership. While the government frequently has 

cited increases in overall homeownership and in the percentages of group members from 

diverse backgrounds who now own their homes, no data tracking homeownership among 

people with disabilities have been published, but research indicates the percentages to be 

dramatically lower than for other demographic groups. From these facts alone—the relative 

failure of the government to articulate homeownership among people with disabilities as a goal 

of housing policy, and the comparative rarity of such ownership—it seems safe to ask whether 

the variety of homeownership incentive programs currently in operation are well suited to 

increasing this desirable outcome for people with disabilities. 

One evolving strategy that may be of particular interest here is the IDA, described earlier in this 

chapter. Under the major governing law, one of the permissible savings and matching 

objectives is home ownership. But the dollar limits on how much can be aggregated, coupled 

with the time limits applicable to how long the account can be funded, appear to leave many 

participants far short of being able to afford a down payment. Preliminary research findings 

indicate that, whatever it may have done to advance other goals, the IDA has had limited 

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impact in increasing home ownership among its participants. Nor is there any reason for 

believing that if IDA participants with disabilities were studied as a subset, their results would 

be any better. 

1F:2 – The Tax System 

Few areas of life have a better known relationship to tax law than does housing. Not only is the 

deductibility of home mortgage interest familiar to most middle class homebuyers or 

homeowners, but it has played a major role in subsidizing the residential real estate market 

over the years. Even more complicated provisions of tax law play a comparably important role 

in connection with commercial real estate. Two provisions are particularly worthy of attention 

here. 

1F:2A. Home Mortgage Interest Deductibility 

The question to be asked about the home mortgage interest deduction is whether it represents 

an incentive to home ownership for people with disabilities. One’s natural reaction might be to 

suppose that at least for some people with disabilities it does, but it may well be that for even 

more people with disabilities it has the opposite effect. 

But how could this be? To the degree that capital accumulation for use as a down payment 

may be the chief obstacle to home ownership for many people with low income, and 

particularly for people with disabilities who are restricted by needs-based assistance programs 

from saving material sums, mortgage interest deductibility may increase their problem. 

Because mortgage interest is deductible, the price of houses is subsidized by the tax law. If 

mortgage interest were not deductible, the real carrying cost of a $200,000 house would be 

higher than it is now. Because of this fact, fewer people could afford it at that price and its price 

would have to come down to a level that compensated for the lost tax deduction. As overall 

house prices rise or stay level, so too do down payments, as a percentage of those prices tend 

to remain high. Much of the tax deductibility of mortgage interest may help homebuyers to 

keep up with monthly mortgage costs; the same deductibility constitutes a potentially serious 

barrier to homeownership entry for many people with low income, including especially those 

with disabilities who have been hindered in their ability to save or invest. 

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In like measure, where the costs of accessibility drive up the costs of housing, the mortgage 

interest deduction takes this into account only in the crudest sense of allowing a larger interest 

deduction if one pays more interest. 

The tax law does allow the costs of accessibility-related home modifications to be deducted, 

but only as medical expenses available to people who itemize. Interest on home-improvement 

loans in certain circumstances and up to certain limits may be deductible, including when 

structured as home equity borrowing, but the parameters are complex and there is no special 

dispensation (except again potentially under the medical expense rubric) to ease or simplify 

the deductibility of interest attributable to such loans when their purpose is accessibility. 

Even when it comes to the medical deductibility of home-modification expenses, the 

interpretation of the law and rule relies upon a definition of accessibility that prevents this 

financial incentive from being of use to nearly as many people as it could or should. For the 

deduction to come into play, changes need to be made to the home itself. Other disabilityrelated factors, such as proximity to public transit for people prevented by disability from 

driving, proximity to medical facilities for people with health conditions, or proximity to key 

community-based resources crucial to the avoidance of institutionalization, may all play a role 

as important as the actual physical condition of the home in determining whether an individual 

with a disability can live in it. These factors, by restricting choice, may drive up cost, and they 

are every bit as much matters of accessibility, but, apart from the tax deductibility of the larger 

mortgage interest payment, the tax law accords them no recognition. As such, the law chooses 

to treat as mere matters of preference or convenience issues that are of central importance to 

the availability and usability of housing and to the ability of many people to live in the 

community. It is not far-fetched to suggest that the presence of a traffic light, a curb cut, a bus 

stop or some other public amenity or private facility may go a long way in determining the 

accessibility of a given home for a person with a disability. 

A related problem should be noted in connection with the interplay between tax and civil rights 

laws relating to rental property. The ADA and the Fair Housing Act Amendments make clear 

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that a rental tenant who needs to make accessibility modifications generally has the right to do 

so, provided he or she is willing and able to pay and provided the property is restored to its 

original condition when the tenant moves out. Although not as clearly articulated in the law as 

some might like, there appears little doubt that the costs of the modifications also qualify for 

medical-expense deductibility. Regrettably, people contemplating the use of the tax system to 

subsidize such costs must reckon with the fact that the costs of restoration of the property to its 

original condition likely will not be subsidized. Curiously, the owner’s costs, if incurred either to 

implement the modification or to remove it, would qualify for deductibility routinely in the 

context of the owner’s business activities of producing rental income and owning rental 

property. 

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

The Low-income Housing Tax Credit (LIHTC) allocates specified sums to the states for use in 

subsidizing various housing projects for people with low income. The logic is that if developers 

receive tax benefits for building such housing, they will do so, thereby bringing down, both 

directly and indirectly, the costs to the occupants. 

While it is clear that people with disabilities are represented among people with low income 

whose access to housing has been enhanced by this financial incentive to a third party, 

nothing in the law itself rewards developers for designing or building in ways that would make 

these facilities more accessible than what the law minimally requires. Many approaches could 

be fashioned that, consistent with well-understood precepts of tax administration, would 

encourage accessibility and heightened outreach to people with disabilities. In a growing 

number of states, the competitive process for awarding the LIHTC has begun to provide a 

competitive advantage to developers who consider affordability and accessibility needs of 

people with disabilities. 

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

Building codes are an important incentive to many health and safety goals because the codes 

obligate private sector entities to expend funds and implement designs that meet certain 

standards. ADA compliance is among these. 

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Under the ADA, the Department of Justice (DOJ) can certify state building codes as meeting 

the requirements of the ADA. Once this is done, although such certification does not totally 

immunize states against suits, considerable certainty is thought to be brought to the building 

community and to the permitting process. But as an inducement to ensuring developer 

investment in accessibility, DOJ certification may or may not be effective. Much depends on 

whether the states, after certification of their building codes, systematically enforce them. 

Regrettably, nothing in the ADA appears to contemplate regular monitoring or oversight of 

such enforcement, and unless there is a complaint regarding failure, laxity may never come 

to light. 

1F:2B(ii) Fair Housing Enforcement 

To the degree that fair housing laws are vigorously enforced, including through the levying of 

maximum fines for violations, fair housing laws can represent a financial incentive to people 

with disabilities. Faced with a risk of incurring costs for violating the law, building designers, 

owners, rental agents, etc. are less likely to engage in discriminatory practices, provided the 

risk of apprehension is real. This would in turn expand the supply of available housing, hence 

bringing down costs. 

After a period when enforcement seemed to focus largely on education and technical 

assistance, some renewed balance appears to have been introduced into the system by 

the Department of Justice (DOJ) levying fines against major builders and apartment 

complexes over the past two years. What would be crucial to making such penalties 

become financial incentives instead, would be the degree to which others regard the 

risk of similar consequences as serious, and the extent to which the practices of the 

respondents in these cases have been permanently altered. The point here is that 

deterrence can, in certain circumstances, have significant economic implications not 

merely for the entities or individuals being deterred but also for those affected by their 

conduct. Subject to the difficulty of designing reliable methodologies, an attempt should 

be made to conduct research that would probe the leverage value of such deterrence 

69
 
and that would assess its impact on the supply and thus the cost of housing for people 

with disabilities. 

70
 
Item 2 – APPENDIX B: BACKGROUND OF 529 PLANS 

There are a number of ways to save money for a child’s education. Two of the more 

popular are the Coverdell Education Savings Account (ESA) and state-sponsored 

college-savings plans commonly referred to as 529 plans. Among the advantages are 

tax benefits and asset control. Although contributions to either an ESA or a 529 plan are 

non-tax-deductible for federal income tax purposes, earnings on the contributions grow 

tax deferred. In addition, accumulated funds may be withdrawn free of federal income 

tax if used for qualified education expenses.2

 The question is: can these asset-building 

techniques become widely inclusive of individuals with disabilities, offering them better 

educational opportunities? 

The 529 plans are recent developments, but the plans are gaining in popularity because 

of their tax advantages and contribution limits. You may contribute up to the limit set by 

the state offering the plan, sometimes over $200,000, and there is no income limit for 

contributors. The Federal Government allows yearly contributions from single taxpayers 

of up to $12,000 or a lump sum of $60,000 in the first year of a 5-year period to avoid 

gift-tax consequences. Married couples may contribute up to $24,000 per year or 

$120,000 in a lump sum for that first year contribution.3 

ESA and 529 plans also offer the ability to transfer the assets to another child if the 

intended beneficiary does not attend college or does not use all of the assets. The 

beneficiary must use or distribute the assets of an ESA prior to becoming 30 years old. 

Thirty days after the beneficiary turns 30, the assets are deemed distributed and are 

subject to all taxes and penalties. There is no age limit on the use of 529 plan assets.4 

The 529 savings plans have public (state government) control and a centralized 

accounting system, which together constitute a policy structure that has the potential to 

be universal and progressive, and give everyone an account at birth and give greater 

subsidies to low-income households.5 

71
 
 

With 529s, in contrast to IRAs, inclusive innovations are occurring at the state level. 

Typically administered by the Treasury Department through a centralized plan, states 

dictate rules and oversee plan participation. Some states have a commitment to 

inclusion (with 529 plans) that does not occur with IRAs. These include much lower 

minimum deposit requirements, extensive outreach, matched savings and other 

features.6 

The direct involvement of state governments in 529 plans is beneficial for examining 

how a centralized system of inclusive accounts could operate in the future. Ultimately, a 

national savings plan may be preferable to 50 different state plans, but as in other areas 

of policy development in the United States, experimentation in the states can help set 

the stage for a national plan. Different approaches in the states can help identify the 

best policy features.7 

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

The most often-used methods to communicate are television, radio, and print 

advertisements. Efforts to reach wide segments of state residents include inserting 529 

plan information with mailings for birth certificate and motor vehicle registration, and 

distributing information via school systems, libraries, and day care centers.8 

A majority of plans require very low minimum contributions. In many states, people may 

open accounts with a $25 check, money order, electronic funds transfer, or with as little 

as $10 through an automatic plan deposit. Extensive efforts also are made for 

workplace enrollment.9 

Three states, Michigan, Minnesota and Louisiana, provide a savings match through 

state appropriations. The Louisiana Student Tuition Assistance & Revenue Trust 

(START) 529 savings plan matches a portion of deposits made by all state residents, 

with the match rate dependent on the adjusted gross income (AGI) of the account 

owner. The savings match rate ranges from a high of 14 percent of contributions for 

72
 
 

those families with an AGI up to $29,999 to a low of 2 percent for incomes of $100,000 

and above.10 

College savings plans may provide good partnerships with Individual Development 

Accounts (IDAs). Several states encourage participation in college savings plans by 

low-to-moderate income families through matched savings. Other states already have 

links to IDAs. These precedents for outreach and inclusion may offer lessons for future 

policy and program development.11 

Item 3 – Appendix C: Research on Promising State Innovations (Identified 

According to Domains Affected) 

3A – Education: Louisiana START Program 

Louisiana’s Student Tuition Assistance and Revenue Trust (START) Savings 

Program 

START is a program that encourages families to save for the education of their children 

and grandchildren after high school. Parents, grandparents and legal guardians may 

establish a college savings account to benefit their child or grandchild. The feature that 

makes the START Savings Program unique among savings plans is that for the 

average family that has less than $100,000 in annual income, the state of Louisiana will 

award an incentive to save by matching a percentage of the family’s annual deposits. 

Deposits into individual accounts are pooled, invested and managed by the State 

Treasurer. 12 

The program charges no enrollment or investment fees because the state pays all the 

costs of operating the program, which is assurance to account holders that every cent 

deposited will earn interest to their benefit. Parents may open a college savings account 

for each of their children and are encouraged to make regular monthly deposits into 

these accounts. Deposits and state-awarded incentives both earn interest at competitive 

rates, and earnings used to pay the cost of education are not taxed by the state. 

Federal taxes on earnings are deferred until the earnings are disbursed and then taxed 

at the beneficiary’s tax rate when used for educational expenses.13 

73
 
 

 

As of the end of the state fiscal year, June 30, 2003, START accounts totaled 9,170 and 

assets amounted to $27,802,406.83, according to START Division Director Carol Fulco. 

At that point in time, Fulco said net contributions to accounts totaled $26,887,374.18. 

Effective August 1, 2003, the new Maximum Allowable Account Balance (MAAB) will be 

$197,600.14 

START earnings exceeded projections during the first two quarters the program was in 

existence. Louisiana State Treasurer of record, Ken Duncan, reported earnings for the 

fourth quarter of 1997 in excess of 6 percent for both investors’ deposits and the state’s 

grant funds. START funds, which are placed in the State Treasury investment pool and 

in Agency securities, outperformed treasury bills, certificates of deposit and passbook 

savings accounts for both third and fourth quarters.15 

Duncan said that investor funds (START account holder deposits) earned an annualized 

rate of 6.12 percent for the fourth quarter, while grant funds (state appropriations 

earmarked for matching Tuition Assistance Grants) earned an annualized rate of 6.46 

percent. The combined annualized earning of investor and grant funds was 6.12 

percent. The average daily account balances as of Dec. 31, 1997, were $442,074 in the 

investor fund and $108,729 in the grant fund.16 

Louisiana Office of Student Financial Assistance Executive Director, Jack Guinn, 

praised the many public libraries across the state for playing a vital role in making the 

program a success during its inaugural enrollment period. The state’s libraries served 

as distribution points for START program enrollment materials.17 

In the latest 529 Plan Report, Louisiana’s START Program earned the highest rate of 

return of states reporting earnings for the first half of 2002, according to Louisiana State 

Treasurer John Kennedy. START’s annualized rate of 6.12 percent exceeded all other 

state plans regardless of whether their savings options were age-based, fixed income 

investments or equities.18 

START is categorized as a 529 plan with the lowest market risk because its monies are 

diversified in a variety of fixed income investments like government bonds and notes. 

74
 
 

 

 

The Treasury plans to diversify START even further next year by expanding account 

holders’ investment opportunities to include equities.19 

In addition to earning interest on diversified investments, START accounts receive 

matching funds from the state. The state matches 2 percent to 14 percent of START 

deposits depending on income and Louisiana residency. Historically, START accounts 

have earned 8 to 20 percent on annual deposits.20 

The Louisiana Legislature, with the passage of State Senate Bill 690 authored by Sen. 

Fred Hoyt (D), enhanced the benefits of START and enabled any benefactor to open an 

account for the purpose of assisting a student, the intended beneficiary, in paying for 

their college education. Originally, a START account could only be opened by a parent, 

grandparent, legal guardian, a person claiming the beneficiary on their federal income 

tax return, or an independent student who named him/herself as the beneficiary. The 

new law will permit accounts to be opened by anyone who wishes to assist a 

designated beneficiary in paying for his/her college education, including relatives, 

employers and other benefactors. Eligible account owners are categorized as follows: 21 

1. Category I - Original Class: Parents, grandparents, court-ordered custodians, 

[people] claiming the beneficiary as a dependent on their federal income tax 

return, and independent students, if, at the time of the agreement, either the 

account owner or beneficiary is a resident of the state. 

2. Category II - Members of Family: A person [or people] determined by the 

administering agency to be a member of the family of the beneficiary and, at the 

time of the agreement, the beneficiary is a resident of the state. Members of the 

family include adults related to the beneficiary as brothers, sisters, aunts, uncles, 

spouses, in-laws, step-parents and step-siblings. 

3. Category III - Other Persons: Any other person or juridical entity and, at the time 

of the agreement, the beneficiary is a resident of the state. 

4. Category IV - Other Persons/Non-Resident Beneficiary: Any other person or 

juridical entity who, at the time of the agreement, is a resident of the state and 

the beneficiary is not a resident of the state. 

75
 
 

In addition to regular earnings on investments, owners whose accounts are in 

Categories I and II will receive a contribution from the state to match a percentage of 

their annual deposits, ranging from 14 percent to 2 percent and determined by the 

account owner’s prior year income. Owners of Category III accounts will receive state 

contributions that match 2 percent of annual deposits. For example, if an employer 

opens a Category III account for the benefit of an employee’s child, that account will 

receive an annual state contribution that will match 2 percent of deposits made by the 

employer during the year. Owners of Category IV accounts are not entitled to state 

matching contributions; however, earnings on their investments will be tax-exempt and 

the owner may deduct up to $2,400 per year, per account, from their Louisiana taxable 

income.22 

Previously, START account owners were offered tax advantages in several forms, one 

of which was the ability to deduct the equivalent of their annual deposits in a START 

account from that year’s state taxable income, up to a maximum of $2,400 per account. 

The new law will benefit families who cannot take full advantage of this tax benefit every 

year, by allowing the owner who claims less than the maximum $2,400 per year to carry 

the difference forward to subsequent years. The state’s contributions to an account will 

no longer be restricted to the payment of tuition expenses and can be used to pay any 

qualified higher education expenses. Other program enhancements contained in the 

legislation include: accounts receiving annual deposits of less than $100 are now 

eligible for earnings enhancements; and, the calculation for earnings enhancements will 

be based on the account owner’s adjusted gross income reported for the previous year, 

which permits earnings enhancements to be allocated to accounts sooner and to earn 

additional interest. In addition, state Senate Bill 690 authorizes the Louisiana Tuition 

Trust Authority (LATTA), the administering agency for START, to create other 

investment options that will be made available to all classifications of accounts. One 

option will limit investments to low-risk securities that provide a stable, fixed return, 

while other options will permit investments in stocks and other securities that have 

market risk, but which offer the potential for greater returns over time. The redemption 

value of accounts invested in low-risk securities will be guaranteed. However, those 

76
 
 

investment options that include market risk will not be eligible for state-funded earnings 

enhancements, nor would investments (principal and earnings) be guaranteed.23 

During the same week that the Louisiana Legislature completed action on Senate Bill 

690, the U.S. Congress agreed upon revisions to the federal tax code that govern 

qualified tuition programs, such as Louisiana’s START Savings Program. As part of a 

$1.35 trillion package of tax cuts spanning the next 10 years, the U.S. Congress passed 

HR 1836, the Economic Growth and Tax Relief Reconciliation Act of 2001, which 

eliminates taxes on the earnings portion of disbursements made from Louisiana’s 

START Savings Program. Previously, earnings from contributions made to qualified 

tuition programs were exempt from state tax, and federal tax was deferred until earnings 

were disbursed. Upon disbursement, the earned interest portion of the disbursement 

was federally taxed at the beneficiary’s usually lower rate. The new federal legislation 

excludes the earnings portion of a disbursement from gross taxable income, to the 

extent that the disbursement is used to pay for qualified higher education expenses.24 

The final version of HR 1836 includes the following additional enhancements to 

Louisiana’s START Savings Program and to other qualified state-sponsored tuition 

programs: 

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

qualified tuition program. 

2. Provides for transfers of credits, or “rollovers,” from one qualified tuition program 

to another qualified tuition program for the benefit of the beneficiary, limiting such 

rollovers to one per 12-month period. 

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

4. Modifies the definition of qualified higher education expenses to include 

expenses of a special needs beneficiary that are necessary in connection with 

his or her enrollment or attendance at the eligible education institution. 

All provisions in the federal bill relating to qualified tuition programs were either 

suggested or endorsed by the National Association of State Treasurers (NAST) and the 

77
 
College Savings Plan Network (CSPN), of which Louisiana is a member. The majority of 

the provisions were effective for taxable years after Dec. 31, 2001.25 

The Louisiana Tuition Trust Authority has approved two emergency rule changes. One 

eliminates restricted enrollment periods, thus allowing year-round enrollment. The prior 

rule established a restricted enrollment period of July 1 through November 1 of each 

year for children over age one. Infants younger than one year of age were allowed yearround enrollment.26 

The Louisiana Legislature also approved legislation incorporating recent amendments 

to the Internal Revenue Code (IRC) that affect the state’s START Program. Section 

529, Internal Revenue Code, was amended by Congress, to allow the inclusion of room 

and board costs as Qualified Higher Education Expenses. Other principal features of 

the amendment are clarification of the gift tax treatment of contributions and an 

expansion of the definition of family members for purposes of rollovers and distributions. 

A bill introduced by State Representative Charles McDonald (D), which would amend 

current state law so that it would be consistent with changes to the IRC, became law in 

July of 1999. This legislation broadens certain savings limitations, making the START 

Program more beneficial for participants.27 

In 2003, Louisiana Governor M. J. “Mike” Foster signed into law SB 271, Act 221, 

making further changes to the START Program. Act 221 provides four new provisions 

for the administration of and participation in the START Program. The Act adds a new 

category of account owner to provide a higher state match for irrevocable donations 

made by philanthropists on behalf of needy students, provides that an account must be 

open for 12 months in order to earn interest, determines that accounts established by 

juridical people may not be refunded, but a beneficiary may be designated, and 

provides for the presumption of abandoned property if abandoned for a certain period of 

time.28 

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

78
 
 

Assistive Technology Legislative Initiative 

Missouri has many programs that effectively target individuals with disabilities by 

providing them with support for assistive technology to increase their independence and 

quality of life. Introduced and sponsored by Missouri State Senator Harold Caskey, 

SB721 was designed to improve statewide programs for individuals with disabilities in 

Missouri, and became law in August 2000.29 This Act revises programs for people with 

disabilities to enhance access to telecommunications, and to enable access to other 

assistive technologies. 

The Missouri Assistive Technology Advisory Council, as the program administrator, will 

provide a statewide telecommunications equipment and distribution program for people 

who, due to a disability, cannot use traditional equipment. 

The Public Service Commission will request annually, as a separate budget item, 

appropriations from the deaf relay service and equipment distribution program fund to 

deliver dual-party relay service. The Missouri Assistive Technology Advisory Council will 

request annually, through a separate line item, an appropriation from the same fund to 

deliver the telecommunications equipment distribution program. 

The Act also requires the Missouri Assistive Technology Council (Assistive Technology 

Council) to establish an Assistive Technology Loan Program. 

The Assistive Technology Council shall spend available moneys in four equal shares 

each quarter to ensure that the loan program will provide loans throughout the entire 

fiscal year. The Act creates the “Assistive Technology Loan Revolving Fund,” which 

shall be used to fund the Assistive Technology Loan Program. 

The interest rates for loans shall be lower than comparable commercial lending rates 

and shall be established by the Assistive Technology Council based on the borrower’s 

ability to pay. Loans may be made with no interest. Loan repayment periods shall not 

exceed ten years. The Assistive Technology Council shall promulgate rules to 

79
 
 

implement the program and file annual reports with the Governor and General 

Assembly. 

Impact of Federal Legislation 

On October 25, 2004, President George W. Bush signed into law the Assistive 

Technology (AT) Act of 2004 (HR 4278). The legislation supporting state assistive 

technology programs was scheduled to sunset on September 30, 2004. The AT Act of 

2004 supports the continuance of state AT programs and eliminates the sunset 

provision. Every state and U.S. territory has an Assistive Technology Act Program 

funded under the provisions of the Technology-Related Assistance Act of 1988. The AT 

Act of 2004 focuses on the development or continuation of specific programs that 

ensure direct access to technology, including assistive technology loan programs, 

device demonstration programs, device reutilization programs, and alternative 

financing.30 

In addition, AT programs are responsible for implementing training and technical 

assistance, with special emphasis on assistance for individuals with disabilities who are 

transitioning from school to work or continued education. The AT programs also are 

responsible for conducting public awareness activities, information and referral services, 

and coordination and collaboration with public and private entities that are responsible 

for programs, services, policies or funding of assistive technology services.31 

The AT Act of 2004 also clarifies states’ responsibilities to ensure access to electronic 

and information technology as defined under Section 508 of the Rehabilitation Act of 

1973. Activities carried out under and supported with federal funds received under the 

AT Act of 2004 are required to comply with Section 508 standards.32 

The ADA and Section 504 of the Rehabilitation Act do not specifically require 

information technology accessibility as does Section 508. The ADA and Section 504 are 

general anti-discrimination laws that require program and architectural accessibility, 

which could include the provision of accessible information technology as a reasonable 

accommodation or as an auxiliary aid or service necessary for equal access. The 

80
 
 

effective communication requirement of the ADA could also require the delivery of 

accessible information technology products. All of these requirements also might be met 

in other ways, such as by the use of human assistance or other program 

modifications. ADA and Section 504 information technology access decisions are made 

for individuals on a case-by-case basis, whereas Section 508 information technology 

access decisions are made by determining if products adhere to the Access Board 

standards. At the writing of this report, the Department of Justice has not adopted any 

part of the Access Board standards for IT access as standards for compliance with the 

ADA or Section 504. 33 

For purposes of Section 508, Missouri defines its covered entities as, “Each 

department, office, board, bureau, commission, or other unit of the executive, 

legislative, or judicial branch of state government, including public four-year and twoyear colleges and universities.”34 

Missouri defines information technology as, “Any electronic information equipment or 

interconnected system that is used in the acquisition, storage, manipulation, 

management, movement, control, display, switching, interchange, transmission, or 

reception of data or information, including audio, graphic and text.”35 

Missouri requires covered entities to provide access when developing, procuring, 

maintaining or using information technology so that individuals with disabilities have 

access to and use of information and data that is comparable to what is available to 

individuals without disabilities.36 

Overview of Missouri’s Assistive Technology Program 

Established by state statute in 1993, the Missouri Assistive Technology Council (MoAT) 

directs programs and initiatives pertaining to MoAT. The Council’s charge is to serve as 

an advocate for policies, regulations and programs and to establish a consumerresponsive, comprehensive assistive technology service delivery system. The Council 

meets at least four times a year, reports annually to the Governor and the general 

81
 
 

assembly on Council activities to increase access to assistive technology, and provides 

programmatic direction for all activities and services.37 

For the third year, the Division of Special Education provided funding to MoAT to 

reimburse school districts for assistive technology required in student IEPs. Districts 

applied for funding to MoAT for assistive technology expenditures. The minimum cost 

per student supported was $1,000 and the maximum was $5,000. It is hoped that 

additional funding will be available next school year.38 

Also in 2005, the MoAT Program Equipment Technology Consortium (ETC), which is a 

short-term equipment loan program, received funding through the Blindness Task Force 

in the Division of Special Education to increase the availability of vision-related adaptive 

devices in the loan pool. This reduced wait time for equipment in ETC. A little over 

$30,000 in additional funding was made available.39 

MoAT staff provided training on assistive technology to 1,824 Missourians through 30 

other training events. People on MoAT staff assist individuals with disabilities and 

service providers on a daily basis through phone and e-mail. Assistance is provided in 

obtaining assistive technology, securing device funding, accessing the various MoAT 

programs discussed in this report, and gaining disability policy knowledge. During this 

fiscal year, MoAT staff handled 17,957 inquiries and requests for assistance by 

telephone and e-mail. The major topics of discussion are listed below.40 

For the past 10 years, the state of Missouri has imposed a 13-cent surcharge each 

month on every telephone line in the state. Whether business or residential, mobile 

phone, or land line, the surcharge is collected and moved directly into a fund for making 

telephone equipment accessible to Missourians unable to hold a conventional telephone 

or hear or speak on one.41 

“The money was growing,” explains Dennis Miller, a disability rights advocate and 

assistive technology trainer, “but there wasn’t much awareness of it, and it was seen as 

helping only deaf people.” Last year, such organizations as the Missouri Council of the 

82
 
Blind, the National Federation of the Blind, and others worked in collaboration with the 

Missouri Assistive Technology Project to expand the purpose of the fund.42 

Telephones 

The Missouri Assistive Technology Project has identified phones in every imaginable 

configuration to solve the telephone access problem for people with hearing and other 

disabilities. TTYs (also known as TDDs)—telephone devices that connect to a phone 

line and allow the user to type messages that are read on a similar device at the other 

end of the conversation—are the most commonly known adaptive telephone devices. 

Add to this telephones with large buttons for easy visual identification; phones with 

Braille buttons; phones that respond to voice commands for dialing; phones that have 

no handset, but are speaker only; phones that allow a deaf person with use of his or her 

own voice to speak output but read input on a two-line display; phones that amplify the 

voice of an individual with speech difficulties or minimal vocal strength; amplification at 

every level—some that can even damage the hearing of a listener without a disability; 

phones that can be dialed by puffing through a straw; and many more. Some 

telephones on the approved list can be obtained through prescription only, but all can 

be installed with accompanying training from the Missouri Assistive Technology Project. 

Diane Golden, director for the Missouri Assistive Technology Project, explains, “Now, 

we have about 10 people around the state who help consumers figure out what will 

meet their needs. If consumers didn’t know what to choose, they chose nothing. The 

service almost immediately doubled when it was moved over to our office last August. 

The reason is that we added this consumer support piece to help people make sense of 

the vast array of choices.”43 

Online Access 

When the wording was drafted to expand the scope of the program, the initial idea was 

to assist blind and visually impaired Missouri residents in obtaining screen readers. The 

actual outcome goes well beyond those intentions. Although there is a list of 

recommended products, virtually any hardware or software that will make it possible for 

83
 
a person with a hearing, vision, speech, mobility, or other disability to access the 

Internet can be purchased under the Adaptive Telecommunications Equipment 

Program. For blind people, in other words, this could mean Window-Eyes, ZoomText, or 

JAWS for Windows—programs that enable the consumer to read the screen—but would 

not include a Braille printer or optical character recognition system, since these products 

are not directly related to Internet access. Screen readers, magnification software, 

refreshable Braille displays, head pointers, voice recognition software, and alternative 

keyboards are all products on the approved list of purchases. Perhaps the best news is 

that if you are eligible for the program, you also receive training to get you up and 

running.44 

Eligibility 

To be eligible for the Adaptive Telephone Equipment Program, a Missouri resident 

needs to have a standard telephone line and a disability that prevents conventional 

telephone access. Eligibility for the Adaptive Telecommunications Program requires that 

an individual first have access to the Internet (an Internet service provider) and a 

disability that prevents online access through a conventional computer keyboard or 

monitor. “If you didn’t have a disability, you’d need a basic computer,” Golden points 

out. “What we’re doing is just adding to that basic equipment whatever is required for 

access because of the disability.” The program will fund the additional accessories 

required for going online, but not the computer itself. The Missouri Assistive Technology 

Project also administers a low-interest loan program, which can be used as a means to 

securing the basic computer.45 

As long as the applicant earns less than $60,000 annually and has a certifiable 

disability, no other criteria need to be met. Trainers are evaluated and certified by the 

Missouri Assistive Technology Project to work with program participants once 

equipment has been selected and purchased. A waiting list of about 150 applicants 

already has been approved (the majority of them blind or visually impaired), and as 

soon as purchasing contracts have been released, the first year of the Adaptive 

Telecommunications Program will be off and running. Although many states have 

84
 
 

programs to help people purchase telephone equipment, Missouri is the first to expand 

such a program to include the purchase of screen readers and other equipment for 

Internet access. In keeping with the “show-me” tradition, other states could learn much 

from this Missouri model.46 

Missouri Rehabilitation Center 

Missouri Rehabilitation Center is home to one of the best-equipped assistive technology 

centers in the state. The Assistive Technology Assessment Center has been serving the 

needs of pediatric and adult inpatients and outpatients throughout the state of Missouri 

since 1997. Among the people receiving service are individuals who present sensory, 

motor or physical disabilities that prevent them from accessing a standard computer or 

communication device, and work-related injuries that require modification of job tasks or 

means to control their environment.47 

In order for clients to maximize their abilities, the Assistive Technology Assessment 

Center draws from a team of specialists with backgrounds in speech, physical, 

occupational and recreational therapy, and utilizes technical support personnel. The 

Assistive Technology Assessment Center is an approved evaluation site by Missouri 

Medicaid, the Bureau of Special Health Care Needs and Vocational Rehabilitation. 

Referrals are received from Independent Living Centers, Regional Centers, area 

schools, individual therapists, special educators, and client advocates. As a result of the 

evaluations performed by the Center’s Assistive Technology team, many individuals 

have overcome barriers in their day to day lives at home, in school, in the workplace, 

and in the community. 48 

Missouri’s Interagency Assistive Technology Short-Term Loan Program 

Missouri’s ETC Program: Equipment Technology Consortium is a short-term assistive 

technology equipment loan program for school districts and agencies. Agency 

representatives can borrow equipment on behalf of individuals with disabilities to try 

85
 
out the equipment before purchasing, for use during the time equipment is in for repair, 

or for other short-term needs. Agencies will be able to borrow the equipment for up to 

six weeks.49 

Before a district or agency can borrow a piece of equipment, they must complete an 

agreement form that needs to be signed by an authorized district or agency 

representative. The agreement form must be approved prior to borrowing equipment. 

Once an individual’s agreement form has been approved, he/she can proceed with the 

equipment request. Any of the listed distribution sites can process an equipment 

request for up to three items. There is no limit to the number of loans. ETC has a wide 

range of equipment available. Categories of devices are: 

• switches and mounts 

• computer access 

• environmental controls 

• hearing devices 

• home modifications 

• telecommunications 

• visual aids 

• augmentative communication devices 

Six years after it started, the ETC Program continues to experience yearly growth in the 

number of devices it lends and in the number of school districts and agencies who 

borrow from its inventory of over 1,000 assistive devices. During FY 2005, ETC lent 

1,471 devices throughout the state and 450 entities signed up for the program. 

Augmentative communication devices were again the devices most often borrowed, 

with computer adaptations and vision-related technologies comprising the second and 

third most borrowed types of technology. Strong consumer satisfaction continues to be 

a hallmark of the ETC Program with 98 percent of borrowers giving the program and its 

level of service strong marks.50 

86
 
 

There are three primary reasons that people borrow from the ETC Program. The first, 

and most common, is to borrow multiple items in order to compare them prior to 

purchase. The second reason is to borrow a loaner device when their personal device is 

being repaired. A third, and increasingly important reason, is to increase staff and 

student knowledge efforts by schools, colleges, universities and organizations. 51 

As more students with disabilities attend regular schools, today’s educators need to 

know about the various devices they may encounter in their classrooms. A solid 

understanding of assistive technology is also a necessary skill for tomorrow’s teachers, 

and occupational, speech and physical therapists. By tapping into the ETC inventory, 

local schools can conduct in-services with an array of devices present for staff to see, 

try and learn about. Higher education faculty can include devices in their classes to help 

students understand assistive technology and its specific applications for various types 

of disabilities. What is learned today will be applied tomorrow, exponentially increasing 

Missouri’s assistive technology knowledge.52 

MoAT Assistive Technology Reimbursement Program 

Funded by the Department of Elementary and Secondary Education, Division of Special 

Education, the AT Reimbursement Program helps school districts offset the cost of 

purchasing assistive technology for students with assistive technology needs written 

into their Individualized Education Programs (IEPs). This year, the program received 

219 applications from 60 school districts throughout the state. MoAT was able to fund 

111 applications, an increase over the previous year, divided among 46 different 

districts. The program aims to fund those forms of assistive technology between $1,000 

and $5,000, such as Braille embossers, augmentative communication devices, 

computer access systems and electronic enlarging.53 

Missouri’s school districts have taken favorably to the program. Many districts have 

indicated how pleased they are that this funding source is available and what an impact 

it has had on the students for whom they have applied. Follow-up surveying has 

87
 
 

uncovered many instances of students being more engaged in school and achieving 

higher academic success.54 

TAP Program 

The Telecommunications Access Program, mandated by SB721, includes the 

Telecommunications Access Program for Telephone (TAP-T) and Telecommunications 

Access Program for Internet (TAP-I). The Missouri Assistive Technology Advisory 

Council administers both programs. While both programs have many similarities in their 

administration, they are intended to provide different types of equipment.55 

For Missourians with disabilities, the two Telecommunications Access Programs 

(Telecommunication Access for Telephone [TAP-T] and for the Internet [TAP-I]) have 

made purchasing products, applying for services, searching for jobs and even attending 

college classes via the telephone and Internet commonplace. The TAP programs 

provide the adaptive telephone and computer equipment needed for basic access to 

telephone and Internet telecommunication for Missourians with hearing, vision, mobility 

and other disabilities.56 

A critical component of TAP programs is the delivery of consumer support services to 

assist individuals with disabilities in selecting the most appropriate adaptive equipment 

and to assist with installation and use of the equipment provided. TAP has provided 

training to staff from statewide agencies in Missouri, including the Centers for 

Independent Living, and Rehabilitation Services for the Blind, to assist consumers with 

the selection and use of the adaptive telecommunications equipment. 57 

In 2006, 7,470 adaptive telephone devices were provided by TAP-T. A network of 

Independent Living Centers provides consumer support and helps ensure appropriate 

equipment matches through the use of demonstration devices. Follow-up data from 

program beneficiaries indicates an overall satisfaction rating of 97 percent, with most 

reporting they used the equipment to make emergency calls, live independently, and 

communicate with family and friends. Many individuals also noted that the phone 

allowed them to improve access to education and to get or maintain employment. 

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Over 43 percent of individuals reported that they had been unable to use the phone for 

6-20+ years.58 

Missourians throughout the state continue to benefit from the Telecommunications 

Access for Internet Program. The program provided 1,327 adaptive devices a 14 

percent increase in one year. The program provides adaptive technology in four broad 

categories: alternative keyboards and pointing devices, software adaptations, speech 

and Braille output, and enlargement software.59 Though enlargement software is the 

most often requested adaptation, the program provided over 160 different forms of 

adaptive technology to consumers (during 2006). 

Consumers accessing the program range in age from 2 to 95+. Individuals with vision 

loss make up the largest disability category to obtain services through the program. 

Staying in touch with family and friends and making contact with businesses and 

government are the primary activities users perform. Missouri is unique in that it is the 

only state in the nation to provide free adaptive technology for Internet access.60 

Show-Me Loans 

Under 8 CSR 70 – 1.020, entitled Assistive Technology Loan Program, Missouri 

developed rules for its “Show-Me Loans.”61 During the past year, “Show-Me Loans” was 

able to provide $95,984 in low-interest loans to people with disabilities to obtain 

assistive technology in Missouri. Loans were made to make homes more accessible, to 

install wheelchair lifts for vehicles, and for a variety of other cross-disability assistive 

technology. The program’s interest rates were among the lowest of similar programs 

nationally, with an average rate of 3.23 percent. The average amount borrowed during 

the period was $3,479. Loan amounts ranged from $900 to $9,000 with an average repayment period of 39 months. The average period to process and review applications 

decreased from 20 days in 2003–04 to 17 days in 2004-05.62 

A full 70 percent of loan applications were approved during the past year. This is the 

case even though one-third of approved borrowers had annual incomes of $15,000 or 

less, and 74 percent had yearly incomes of $30,000 or less. During the year, borrowers 

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repaid a total of $64,641 in principal and interest. Even though borrowers had relatively 

low incomes, far less than 1 percent ($889) of the total amount borrowed has been 

defaulted since the program began. People living in every region of Missouri submitted 

loan applications.63 

3C – Employment: Wisconsin’s Medicaid Purchase Plan (MAPP) 

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

Lack of access to health care is one of the most significant barriers preventing millions 

of Americans with disabilities from working at an income level that could cause their loss 

of access to Medicaid benefits. The Balanced Budget Act of 1997 and the Ticket to 

Work and Work Incentives Improvement Act of 1999 authorized states to enact 

Medicaid Buy-In Programs for workers with disabilities. 

Wisconsin established its Medicaid Buy-In Program, also called the Wisconsin Medicaid 

Purchase Plan (MAPP), in March 2000 under the Balanced Budget Act of 1997. 

Enrollment growth was modest during the program’s first year of implementation.64 

Wisconsin MAPP offers people with disabilities who are working or interested in working 

the opportunity to buy health care coverage through the Wisconsin Medicaid Program. 

Depending on an individual’s income, a premium payment may be required for this 

health care coverage. 

To qualify for the Medicaid Purchase Plan, the following requirements must be met. 

The participant must:65 

•	 Be at least 18 years old. 

•	 Reside in Wisconsin. 

•	 Have individual countable assets of less than $15,000. (Countable assets 

include savings, life insurance policies, stocks or bonds. A home or one vehicle 

is not considered a countable asset.) 

•	 Be determined to have a disability by the Department of Health and Family 

Services’ Disability Determination Bureau. 

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•	 Be employed in a paid position or be enrolled in a certified Health and 

Employment Counseling Program. 

•	 Have an adjusted family income of less than 250 percent of the federal poverty 

level based on his/her family size. 

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

•	 Receive the same health benefits offered through the Wisconsin Medicaid 

Program. 

•	 May earn more income than another group of Medicaid recipients without the 

risk of losing health care coverage. 

• Are allowed increased personal and financial independence through savings 

opportunities, known as Independence Accounts. An Independence Account is 

any new financial account set up through a financial institution, such as a bank 

or credit union, and registered with a county/tribal human or social services 

department. Pre-existing retirement and pension accounts also may be used as 

Independence Accounts subject to similar contribution restrictions applicable to 

new accounts. By setting up Independence Accounts, participants can save 

earnings above the Medicaid Purchase Plan asset limit ($15,000) to buy 

independence-related items (i.e., a home or vehicle) or services. 

An Independence Account must be established after MAPP eligibility is determined. 

There is no limit on the amount or type of account that may be designated; however, 

the account must be registered with the County Economic Support Office. Deposits 

into Independence Accounts are exempt assets. The total deposit cannot exceed 50 

percent of total gross earned income during a twelve-month MAPP review period. 

Retirement and pension accounts may be designated as Independence Accounts, yet, 

at the time of application, they will be considered countable assets. 67 

Background of Wisconsin Legislation 

Consumers played an instrumental role in designing the study (of barriers) and were 

part of a consumer-based Advisory Council for the study. Over an 18-month study 

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period, the researchers used focus groups and individual interviews to gather 

information about the employment barriers faced by people with disabilities.68 

Loss of Medicaid benefits was a major concern of the surveyed individuals, as was the 

lack of comprehensive vocational services, including career planning, education, and 

job placement. The Advisory Council made recommendations on ways to remove the 

identified barriers, including the recommendation of a pilot program to coordinate the 

various service systems (vocational, health, housing) that serve people with 

disabilities.69 

Building on this work, the state, along with Employment Resources, Inc. (ERI), piloted 

the Vocational Futures Planning Process in 1994-1995. Vocational Futures Planning 

involved coordination of vocational services, long term support, and rehabilitation 

technology services, consumer mentors and employers to develop solutions to an 

individual’s identified barriers to employment. Based on work with an initial group of 

thirty participants, the process evolved into a model of individualized vocational services 

emphasizing benefits counseling. In 1997 and 1998, officials in Wisconsin began 

discussing the need for the Social Security Administration, SSI/DI, and Medicaid 

waivers to extend participation in employment initiatives activities.70 

In 1997, the Robert Wood Johnson Foundation, the state of Wisconsin, and Dane 

County jointly funded the Health Systems for Workforce Enhancement Research and 

Demonstration Project. Fifty-three individuals with significant physical disabilities were 

randomly recruited from Dane County’s long-term support programs. Those assigned to 

the experimental group were to receive benefits and employment counseling and an 

assurance that their health coverage would not be taken away if they worked for wages. 

But project managers quickly discovered that this demonstration project would not be 

possible without SSA and Health Care Financing Administrative (HCFA) waivers. 

Instead, they conducted a feasibility project, providing counseling along with guarantees 

that existing benefits would be held harmless during the project period.71 

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Wisconsin established the Pathways to Independence demonstration project as a 

continuance of the 1997-1998 project to provide coordinated vocational and health care 

advising to individuals with disabilities. The state passed legislation in 1997, intending to 

form a program similar to a Medicaid Buy-In by using a §1115 waiver, but the passage 

of the Balanced Budget Act of 1997 allowed Wisconsin to add a Medicaid Buy-In as a 

Medicaid state plan amendment instead. In addition to general funds, the demonstration 

was supported by grants from the Social Security Administration and the Robert Wood 

Johnson Foundation.72 

Role of the Wisconsin Executive Branch 

The Wisconsin executive branch took a strong leadership role in the development of the 

Medicaid Buy-In Program, based on consumer input and previous efforts to redesign 

delivery systems for children, elders and people with disabilities.73 

The Medicaid Buy-In Program was developed and implemented by the various 

departments and bureaus of the Medicaid agency, including the HCBS division, the 

Medicaid eligibility division and the aging/long term care division. The Wisconsin 

Department of Workforce Development’s Division of Vocational Rehabilitation 

collaborates and offers feedback in an advisory capacity through the Pathways 

Program. To maximize effective implementation, the premium collection, outreach and 

eligibility worker training sessions were incorporated into existing processes and 

administrative structures within the Department of Vocational Rehabilitation.74 

The Pathways program is run jointly by the Medicaid agency, the Department of 

Workforce Development and the Office of the Governor. The Medicaid agency largely 

serves as the program administrator, the Department of Workforce Development serves 

as rehabilitative services administrator and the Office of Governor provides additional 

support. Employment Resources, Inc. is under contract to provide benefits counseling. 

The Bureau of Community Mental Health (BCMH), Department of Public Health (DPH), 

and the Bureau of Developmental Disabilities Services (BDDS) also provide technical 

assistance at local sites.75 

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Effects of the Medicaid Buy-In Program for Wisconsin Participants 

Wisconsin provides an incentive for continued work effort by providing Medicaid Buy-In 

Program coverage during temporary periods of unemployment and before an individual 

finds a job. Wisconsin calculates separate payment obligations for earned and 

unearned income with proportionately smaller premiums assessed on income derived 

from work. For people liable for premiums, Wisconsin deducts the SSI income standard, 

Impairment Related Work Expenses (IRWE), and medical and remedial expenses, and 

then collects the remainder of the unearned income as part of the premium. The 

individual pays 3 percent of his or her earned income, in increments of $25, as a 

premium.76 

In Wisconsin, if a Medicaid Buy-In Program participant has been in the program for at 

least six months and has a health setback that makes him or her unable to work, the 

work requirement may be exempted for up to 6 months. The individual may also 

participate in the Health and Counseling Program for up to a year. However, individuals 

may only participate in the Health and Counseling Program twice in a two-year period 

with at least six months between each period of participation.77 

Wisconsin calculates premium liability by comparing the individual’s monthly income to 

the family income limit. If the participant’s gross individual monthly income is less than 

150 percent of the Federal Poverty Level (FPL) for the family size of which the 

beneficiary is a member, there is no premium obligation. For example, an individual in 

the Medicaid Buy-In with a family of three will pay a premium only if his or her individual 

income (earned and unearned) is at least $1,769 per month (150 percent of the FPL for 

a family of three).78 

The premium has two parts. The first component affects unearned income. An individual 

pays 100 percent of his unearned income, minus a standard living allowance 

($635/month in 2001), Impairment-Related Work Expenses and medical and remedial 

expenses. The second component of the premium is 3 percent of the individual’s 

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earned income. If unearned income deductions exceed actual unearned income, the 

difference is subtracted from earned income before assessing the 3 percent premium.79 

If Medicaid Buy-In participation is terminated because of failure to pay the premium, the 

enrollee must wait at least 6 months before reapplying and he or she will owe any 

unpaid premiums from the prior eligibility period. If the enrollee waits at least 12 months 

before reapplying, he or she may do so without repayment of past unpaid premiums. 

Premiums may be paid up to 12 months in advance or until the time of the next 

reapplication. Under Wisconsin’s Health Insurance Premium Payment Program, 

Medicaid may pay for insurance coverage for any individual eligible for Medicaid 

through his/her (or the spouse’s) employer’s health plan if doing so would cost less than 

Medicaid. People in the Medicaid Buy-In Program would pay the MAPP premium, and 

Wisconsin Medicaid would pay the insurance premium and cost-sharing expenses, such 

as co-payments. If a Medicaid Buy-In participant loses employment, he or she does not 

automatically lose Medicaid Buy-In eligibility. 80 

Wisconsin has sought two waivers from the Social Security Administration to provide 

income protections to people with disabilities. The SSI waiver, granted in January 2001, 

allows SSI recipients to count $1 of every $4 of wages as income, rather than $1 of 

every $2 as required by current law. The waiver also allows the state to increase the 

SSI assets limit from the current $2,000 to 50 percent of earnings (not to exceed 

$8,000). The waiver also eliminates disability reviews for people with permanent 

disabilities. In addition, certain types of unearned income—private disability insurance, 

workers compensation, and unemployment insurance—will be counted as earned 

income for the purposes of calculating the SSI cash benefit. The SSDI waiver request 

proposes a $1 for $4 reduction in SSDI benefits from earnings, rather than the current 

dollar-for-dollar benefit reduction. The waiver also proposes “stop the clock” provisions 

for the Trial Work Period, extended periods of eligibility, and continued Medicaid 

coverage. Disability reviews would be suspended unless medical improvement is 

expected. The SSDI waiver was submitted in June 2000.81 

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In the calculation of unearned income premiums, Wisconsin’s Medicaid Buy-In Program 

uses the state SSI supplementation program benefit standard for “living independently” 

as its base. People with gross incomes at or above 150 percent of the FPL can retain a 

total of $635 of monthly unearned income (an amount equal to the federal SSI payment 

plus the state SSI supplementation program plus $20). Any remaining unearned income 

is then returned to the state as a portion of the Medicaid Buy-In premium.82 

Wisconsin uses a work incentive provision from the SSI Program to increase the income 

level for Medicaid eligibility under the Medicaid Buy-In. To encourage employment, 

Wisconsin deducts Impairment-Related Work Expenses from the amount of an 

individual’s countable income. A similar deduction is made when calculating the amount 

of unearned income to be paid as a premium. This is, in effect, an individualized 

budgeting approach that increases both the income eligibility standard and the 

maintenance allowance for an individual with work expenses. Enrollment in the 

Medicaid Buy-In numbered 1,590 people as of July 2001. According to state data, 

approximately 10 percent of participants have earned income exceeding the $740 

Substantial Gainful Activity earnings test.83 As of March 31, 2005, Wisconsin Medicaid 

Buy-In Program participation rose to 8,265 people.84 

3D – Transportation: Maryland’s Statewide Special Transportation Assistance 

Program 

Maryland’s Statewide Special Transportation Assistance Program (SSTAP) is an 

example of an effective approach to the transit and paratransit needs of individuals with 

disabilities. In many areas across Maryland, jobs and job seekers are far apart, often 

crossing county and city lines. This gap is even wider for low-income people. In 

addition, many companies across the state face a shortage of workers, especially entrylevel employees.85 

With this in mind the Maryland Mass Transit Administration (MTA), in conjunction with 

Governor Glendenning’s Coordinating Committee for Human Services Transportation, 

worked with local jurisdictions to develop Maryland’s Job Access and Reverse 

Commute Program. This program has allowed the state to develop transportation 

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services to meet local community needs and link workers with job opportunities. A map 

describing projects funded through the state’s Job Access and Reverse Commute 

Program is available.86 

Maryland received $5.1 million in federal funds over the first two years of the Job 

Access Program, and will receive $2.4 million in year three. The Maryland Department 

of Human Resources (DHR) and the MTA work closely on the Job Access Program, 

with DHR providing significant funding to meet the matching requirement of the federal 

program. The Job Access and Reverse Commute Program also has resulted in 

improved collaboration among local transit providers and human services agencies and 

a more coordinated effort to connect people with jobs.87 

In addition, the State began looking to ensure that the Job Access Program could be 

sustained beyond the five-year federal authorization. This legislation was modeled after 

Maryland’s Statewide Special Transportation Assistance Program (SSTAP) that funds 

general-purpose transportation services for the elderly and People with disabilities. The 

Job Access bill passed the Maryland House of Delegates, but was not acted on by the 

Maryland Senate.88 

An example of how the SSTAP Program is administered at the local level in Maryland is 

St. Mary’s County. The St. Mary’s Transit System (STS), based in California, Maryland, 

provides public and specialized transportation services in St. Mary’s County. STS began 

operating the SSTAP services differently. Before the onset of the service change, STS 

made extensive efforts to publicize the change to customers and health care providers. 

Under a new approach, a different geographic area of the county, or zone, is served 

each day of the week. For example, on Mondays, the area south of Lexington Park is 

served, on Tuesdays service is provided in the north end of the county, and so forth.89 

In addition, STS worked with health care providers to encourage them to schedule 

appointments with SSTAP customers on the day of the week served by STS between 8 

a.m. and 5 p.m. The SSTAP route serves a percentage of the dialysis trips equally with 

ADA paratransit; SSTAP has approximately 624 dialysis trips a year. As a result, 

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SSTAP passenger trips are more effectively coordinated. Typical trips involve two or 

three customers sharing a ride, and many customers have indicated that they enjoy the 

social nature of the trip.90 

In terms of measurable efficiency and productivity improvements, management is 

continuing to monitor service performance statistics for the new service approach, and 

fine-tune the service. 

For example, one modification made after the first few months of monitoring operations 

was to serve the entire county on Thursdays, since demand was low for the geographic 

zone originally assigned to Thursdays. In addition to the new scheduling approach, STS 

has instituted several other changes to reduce inefficiencies, including requiring “noshows” to pay the regular fare for the missed trip ($3 per one-way trip), which has 

reduced the number of no-shows. The new no-show policy also requires customers who 

have missed two trips to call in to confirm that they will be riding subsequent trips. STS 

also has begun issuing confirmation numbers each time a trip is scheduled, which 

makes it easier for scheduling and dispatching staff to find specific trips whenever a 

customer calls. SSTAP trip reservations are accepted up to 30 days in advance. STS 

uses Excel and Access to schedule trips and maintain their database of approximately 

900 SSTAP customers, for which 17,000 trips per year are provided. STS also 

implemented a formal customer application process, which has been helpful in 

maintaining the customer database, and began issuing identification cards. STS hopes 

to purchase an updated routing system in the future.91 

People with disabilities will use an array of transportation options to access destinations 

enjoyed by their peers without disabilities. The Maryland Department of Disabilities 

(MDOD) explains that the goal is to create reliable, cost-effective transportation 

enabling people with disabilities to access destinations of their choosing at the same 

rate as their peers without disabilities. This way, people with disabilities will have 

improved confidence in the MDOT paratransit system.92 

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MTA, in conjunction with the Citizen’s Advisory Committee on Accessible Transportation 

(CACAT), will continue the training protocol for all MTA and Mobility personnel that will 

be conducted by consumers who use the paratransit system. MTA will continue to 

identify intersections of opportunity within agency planning exercises and procurement 

development to solicit input from the CACAT Committee. MDOD and MTA will consult 

with the members of CACAT, individuals with disabilities and representative 

organizations regarding ways in which to strengthen CACAT’s effectiveness, as well as 

continue to monitor MDOT’s on-time goal of 95 percent for paratransit trips.93 

MDOD’s plan included that by December 31, 2006, MTA would develop a reporting and 

monitoring process among stakeholders that includes performance criteria, Federal 

Transit Administration trends, and consumer feedback in the provision of paratransit 

services. MTA would extend the process of Taxi Access certification to include all 

certified paratransit users. MTA would expand the number of Taxi Access subcontractors, to include providers of taxi service to the users of wheelchairs. The goal 

was to increase the use by people with disabilities of fixed-route transportation in 

greater numbers.94 

On December 31, 2005, 100 percent of MTA buses would be fully accessible (e.g., low 

floored, Clever Devices) to enable a greater number of people to ride fixed routes. MTA 

will ensure compliance with procurement timelines to keep the acquisition of fully 

accessible vehicles on schedule. By December 31, 2006, MDOD would examine the 

feasibility of uniform standards to assess paratransit certification to be used by 

physicians to also include an assessment of whether or not travel training could allow 

an individual to ride fixed route.95 

By July 1, 2006, MDOD planned to convene a group of stakeholders to review the 

paratransit certification standards and ultimately, recommend ways in which the 

standards can be modified to enhance independence on the part of users. The group 

also should recommend ways to increase the availability and types of travel training 

provided. By July 1, 2006, MDOD would examine the technical feasibility, cost 

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feasibility, and schedule feasibility of providing cross-regional transportation capacity in 

both the fixed route and paratransit systems to enable people with disabilities to travel 

across regions using different systems. People with disabilities who rely on provider-run 

transportation to get to a human service program (DDA, MHA, DOA, etc.) would 

experience shorter trips, increased flexibility, and streamlined scheduling.96 

3E – Housing: Kentucky’s Universal Design Program 

Kentucky’s Adoption of Universal Design Principles 

Kentucky uses financial incentives to encourage the adoption of universal design 

principles in the building of affordable housing. In Kentucky, builders and developers 

whose rental housing and/or single-family home construction or rehabilitation projects 

are partially (50 percent) or wholly financed by the Kentucky Housing Corporation 

(KHC), must follow KHC’s Universal Design Policy. This policy, in effect since 2003, is 

designed to “ensure that much of the housing produced with KHC financing meets the 

needs of the greatest number of people for the longest period of time.”97 

Universal design is a concept used to achieve a number of goals. Universally designed 

homes allow homeowners to stay in their homes as they age because these homes are 

already adapted for possible changing physical needs. Universal design helps minimize 

or avoid the high cost of renovations and additions that may be required to meet 

changing physical needs. Universal design allows the greatest number of individual 

needs to be met – whether a guest or relative uses a wheelchair or the homeowner is 

experiencing a short-term loss of physical ability.98 

In 2001, Kentucky was awarded a Real Choice Systems Change Grant for Community 

Living from the Centers for Medicare and Medicaid Services (CMS). The purpose of this 

grant is to enable children and adults who have a disability or long-term illness to: 

•	 Live in the most integrated community setting appropriate to their individual 

support requirements and preferences 

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•	 Exercise meaningful choices about their living environment, the providers of 

services they receive, the types of supports they use, and the manner by which 

services are provided 

•	 Obtain quality services as consistent as possible with their community living 

preferences99 

With support from the CMS Real Choice grant and input from the public through public 

hearings and partners across the state, the Department of Design and Construction 

Review of the Kentucky Housing Corporation developed a Universal Design Handbook 

for use by builders and developers in the construction and reconstruction of affordable 

housing. The Universal Design Policy went into effect on January 1, 2003.100 

While housing that incorporates universal design can clearly benefit people with 

disabilities, the Department of Design and Construction Review’s definition of universal 

design does not target any group in particular. In fact, their definition is all-inclusive and 

stresses the wide-ranging and lifelong benefits of housing built according to universal 

design principles. Universal design is a building concept that incorporates products, 

general design layouts, and characteristics into residences in order to: 

•	 Make the residence usable by the greatest number of people 

•	 Respond to the changing needs of the resident 

•	 Improve marketability of the residence 

The Universal Design Handbook prescribes the following design guidelines: 

1. Finished hallways should be 42” wide. 

2. All doorways, including closet doors and entry doors, should be 32” wide at 

minimum. Specifications for entry platforms also are included. 

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

universally designed bathroom. 

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

tubs. 

5. Electrical outlets have to be installed at a minimum height of 15” and light 

switches, fan switches and thermostats at a maximum height of 48.” 

6. All units must have at least one universally designed bedroom on the ground 

level or elevator accessible floor. 

Specific actions for exterior accessibility, including parking areas and walkways, also 

are included and, as an acknowledgement of the fact that more and more members of 

the population own and regularly use personal computers, cabling for high-speed 

Internet access also is required. 

Universal Design Funding Resources 

There are several ways that universal guidelines are promoted at the federal, state, and 

local levels. Federal regulations, for example, set accessibility standards for large new 

or rehabilitated multifamily housing built with the help of federal funds, but not for 

smaller projects. Some states, such as Georgia, and cities, such as Irvine, CA, have 

developed their own accessibility guidelines that builders and developers may 

voluntarily adopt, although these guidelines apply mostly to privately funded projects. In 

Kentucky, the KHC has tied its universal design policy to its housing finance programs. 

Thus, as mentioned above, KHC universal design requirements are mandatory for any 

projects that receive debt or subsidy financing from KHC equal to 50 percent or more of 

the total cost for new construction (or reconstruction) of single-family or multi-family 

housing. The Department of Design and Construction Review offers a full array of 

technical assistance, and likes to begin working with developers from the inception of 

the project to ensure that they are meeting all building requirements, including the 

universal design guidelines. Once the project is built, the Department’s inspectors 

inspect the buildings and certify them. 

Many developers and builders around the country have been reluctant to incorporate 

universal design features into their projects because they believe the cost is prohibitive. 

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Consumers who buy new homes also are reluctant to request the features because they 

fear these features will add substantially to the cost of the housing. But several studies 

have shown that the added cost of universal design features is very modest.101 In 

Kentucky, KHC’s Department of Design and Construction Review has polled developers 

of multi-family and single-family dwellings and has found that, as a result of Universal 

Design Policy, additional building costs for a two-bedroom unit are between $900 and 

$1,500.102 “Retrofitting,” or renovating homes after they are built to accommodate the 

occupants’ changing physical needs, is considerably more expensive. 

According to the Department of Design and Construction Review, since the Universal 

Design Policy went into effect in 2003, at least 500 units have been built that meet 

universal design requirements. 

Kentucky Success Stories 

Housing corporations around the U.S. have given thousands of Americans access to 

affordable housing. In the past 31 years, KHC has helped many families find affordable 

rental housing, and its homeownership programs have assisted over 55,000 families in 

becoming homeowners, making Kentucky’s homeownership rate (74 percent) 

considerably higher than the overall national rate of 67.8 percent, according to 2001 

U.S. Census data.103 Whether they own or rent, not only do more people have access to 

affordable housing, with KHC’s Universal Design Policy in full effect, they will have 

housing that will meet their needs for a long time to come. The following are examples 

of recent projects built according to the Universal Design Policy Guidelines. 

Hilton and Lively Partnership is a builder of affordable housing in central and western 

Kentucky, and many of their clients are single parents, elders, and people with 

disabilities. Hilton and Lively receives some financing through KHC, so it has to comply 

with KHC’s Universal Design Policy. The firm works with manufactured housing, which 

does not normally incorporate universal design principles, such as wider hallways, 

generous space in bathrooms, and so on. But it has found a housing manufacturer 

willing to revise its construction plans to meet the universal design requirements and the 

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firm is standing behind the quality of the homes they build by providing warranties, 

construction reinforcements, a traditional-looking roof pitch, a permanent foundation, 

and higher insulation standards compared to other similar homes. 

Since 1998, Hilton and Lively has been helping provide affordable, quality homes in the 

central and western parts of the state. Lively receives some financing through KHC, 

which requires homes that include at least 50 percent of KHC financing to meet the 

universal design standards. “Not many developers are wanting to do the type of building 

we do,” said Lively. “We’ve always focused on affordable houses. We just see a great 

need. Many of our clients are single parents, elders and people with disabilities. We 

often receive referrals from USDA Rural Development and other service organizations.” 

It took some effort for Hilton and Lively to find a housing manufacturer willing to revise 

their construction plans to meet the universal design requirements, said Lively.104 

In spite of the some assumptions about manufactured homes, Hilton and Lively’s 

products have been described as high quality and are among the first in the state to 

meet KHC’s universal design requirements. 

Hilton and Lively’s most recently funded project, the Hilton and Lively Homeownership 

Program, will assist families in finding affordable housing in Big Clifty. The project 

received KHC financing through the Home Investment Partnerships Program (HOME) 

Program and the Housing Development Fund. Hilton and Lively’s service area includes 

Grayson, Hardin, LaRue, Hart, Ohio and Breckinridge counties.105 

Another project built with funds from the HOME Investment Partnerships Program is the 

South Main Street Apartments in Edmonton, Kentucky, which will serve older people 

with incomes at or below 50 percent of the average median annual income for the area, 

which is currently $32,500. Funds from the state’s Small Multi-Family Affordable Loan 

Program (SMAL) also were used to build the one-story, 11-unit complex. Through its 

Universal Design standards policy, KHC is helping to ensure the quality, affordability 

and sustainability of homes across the state. Lynn Luallen, KHC’s chief executive 

104
 
officer, said, “The families that obtain universally designed homes will benefit today and 

in years to come because of the standards and sustainability they provide.”106 

Created by Congress in 1990, HOME provides funding for various types of affordable 

housing production and rehabilitation. KHC awards HOME funding to successful 

applicants, such as local governments, housing authorities, private developers, and 

non-profit housing developers. KHC administers and monitors the HOME Program for 

the U.S. Department of Housing and Urban Development.107 

Kentucky is among a handful of states in the nation to fully embrace the variety of 

activities available under the HOME Program, enabling KHC and the agencies it funds 

to do a variety of activities, including homeowner rehabilitation, home buyer assistance, 

rental projection projects and tenant-based rental assistance.108 

Seven architects and design professionals from Kentucky, New York and California 

were winners of the KHC Universal Design Competition – Visions for a New Kentucky 

Home. A jury of five architectural and housing industry professionals named the winners 

based on criteria ranging from meeting KHC’s universal design standards to square 

footage, cost and general presentation requirements. 

In January 2005, the KHC Board of Directors announced the allocation of $430,750 

from the Affordable Housing Trust Fund (AHTF) to four projects throughout Kentucky. 

These projects will conform to KHC’s Universal Design policies. The following recipients 

were listed for funding:109 

105
 
Recipient Counties Served Population Served Amount 

Lexington Habitat 

for Humanity Fayette 

Families with 

children, single 

parents 

$100,000 

Habitat for 

Humanity of 

Owensboro/Daviess 

County, Inc. 

Daviess 

Families with 

children, single 

parents 

$78,750 

Frontier Housing, 

Inc. 

Magoffin, Menifee, 

Morgan, Wolfe 

Elderly, families 

with children, single 

parents, individuals 

with physical 

disabilities, and/or 

homeless 

$210,000 

Mountain 

Comprehensive 

Care Center, Inc. 

Floyd, Johnson, 

Magoffin, Martin, 

Pike 

Individuals with 

intellectual 

disabilities 

$42,000 

The AHTF was established in 1992 by the Kentucky State Legislature to address the 

critical housing needs of very low-income Kentuckians, including the people with mental 

health, intellectual and physical disabilities and people on the verge of homelessness. 

The fund supports projects that assist people at or below 60 percent of the area median 

income with a preference to help people at or below 30 percent of the area median 

income. To date, nearly $31,000,000 has been allocated from AHTF. What’s more, 

AHTF funds have stimulated additional investments of more than $168,000,000 from 

other sources. Since its inception, AHTF has financed the production of 4,865 homes or 

housing units for low-income and special needs Kentuckians.110 

Since 1992, funding sources for AHTF have included the state’s General Fund, 

Kentucky Health Services Cabinet, KHC and the Kentucky Lottery. Nearly 80 percent of 

the AHTF’s total funding came from a portion of the Kentucky Lottery’s unclaimed prize 

winnings. However, authorization for this resource expired June 30, 2003. For fiscal 

106
 
year 2003-04, the Kentucky General Assembly allocated $3,000,000 to replace the lost 

lottery funding. Governor Fletcher included $2,500,000 for the fund in the Fiscal Year 

2005 Spending Plan. Affordable housing advocates continue to seek a permanent 

funding source for AHTF.111 

3F – Asset Development: Washington’s Individual Development Accounts: 

The Washington Statute and Program 

Matched Savings Plans such as Individual Development Accounts (IDAs) are an 

emerging strategy for a growing number of states to support low-income wage earners 

and families to improve their economic status and escape poverty. IDAs were 

introduced by Michael Sherradan in 1988, who suggested that: “[1] saving and asset 

accumulation are largely a matter of structures and incentives, not merely personal 

preferences, and [2] assets may have a wide range of positive psychological, social, 

and economic impacts including deferred consumption.”112 

Low-income participants’ savings contributions must come from income they have 

earned. The state provides $2 for every $1 saved by the participant, up to a maximum 

match of $4,000 per participant (i.e., $2,000 savings + $4,000 match = $6,000 total). 

The state’s match is available for three years after the participant opens the account. 

Participants must attend financial skills-building classes to be eligible for the state’s 

match.113 

Eligibility 

Families who are eligible to receive assistance under Temporary Assistance for Needy 

Families (TANF), and families that have received TANF assistance in the past and 

whose incomes are less than 175 percent of federal poverty level, qualify to open an 

account. Families do not have to meet TANF eligibility criteria at the time their IDA funds 

are used.114 

When an individual beneficiary of SSI exceeds $2,000 in assets or a married couple 

exceeds $3,000, SSI benefits are jeopardized. The IDA savings, not including the 

match, are counted against these resource limits. Social Security reform to exclude 

107
 
IDAs from resource consideration will be essential to open up participation to the broad 

disability community. 

The cornerstone of IDAs is that earned income is necessary as a basic eligibility 

requirement. Beneficiaries of SSI and recipients of Social Security Disability Insurance 

(SSDI) who are not working but who would benefit through IDA participation are 

excluded from participation. For IDAs to be truly accessible there needs to be an 

allowance in federal IDA legislation for people with disabilities to apply their SSI or SSDI 

funds to their savings. 

Administrative Structure 

The state contracts with community-based organizations (CBO) using a competitive 

process. These CBOs recruit and enroll participants, and provide financial skills-building 

classes, individual counseling, and account management. CBOs that lack expertise in 

homeownership, higher education, or business start-up may partner with other 

organizations that can help participants invest responsibly in those assets. CBOs also 

partner with local financial institutions to hold the participants' deposits and restrict 

withdrawals. The participant’s match is held in “trust” until the participant is ready to 

apply the funds to an eligible use. Match funds are paid directly to the person or 

institution from which the asset is being acquired, not to the participant. For example, 

the funds would be paid directly to the educational institution or the seller of a house the 

participant is buying. Regular statements are issued to participants showing how much 

money is in their account. Participants are allowed to invest their contribution in any way 

allowed by the partner financial institution. The state matches 2-to-1 the amount at the 

time the participant is ready to apply his or her IDA funds to an eligible use. Any losses 

of the principal are borne by the participant. Participants are allowed to withdraw their 

own contributions for purposes other than home ownership, higher education, or 

business start-up, but they lose the state’s match if they do so. Specific provisions allow 

for a temporary ‘leave of absence’ from the program or withdrawal of funds due to an 

115 emergency.

108
 
Funding 

Funding for the IDA Program is currently from the state’s Temporary Assistance for 

Needy Families (TANF) reinvestment funds. A total of $3 million has been awarded to 

date, but no additional funds are anticipated. An estimated 567 accounts have been 

established by existing IDA providers. IDA contractors currently serve individuals in over 

a dozen counties.116 

Statute 

In 2005, Washington passed statute 43.31.460 entitled, SEED act—Individual 

Development Accounts Program—Rules,117 updating the IDA law, which states in 

pertinent part: 

(2) An individual development account may be established by or on behalf of an 

eligible low-income individual to enable the individual to accumulate funds for the 

following purposes: 

(a) The acquisition of postsecondary education or job training; 

(b) The purchase of a primary residence, including any usual or reasonable 

settlement, financing, or other closing costs; 

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

(d) The purchase of assistive technologies that will allow a person with a 

disability to participate in work-related activities.118 

Senate Bill Report 5469 states that the appropriation for this bill is $3,000,000 for the 

biennium ending June 30, 2007.119 

Legislative History 

The movement for IDAs in Washington began under the Washington WorkFirst Act of 

1997, where recipients of Temporary Assistance for Needy Families (TANF) were 

permitted to establish IDAs with earned income.120 The Department of Social and 

Health Services is directed to fund an IDA Program as well, under statutory provision 

RCW 74.08A.220. During the interim between the 1999 and 2000 legislative sessions, 

state staff researched potential design and implementation issues for a Washington 

109
 
 

state-supported IDA Program for TANF recipients. Their tasks included determining the 

actions and resources that would be needed to establish IDA programs, as well as the 

barriers that might hinder such programs. Research was completed on this project with 

the help of a coalition of community-based organizations and other interested parties. 

The coalition was facilitated by the Community, Trade, and Economic Development 

Department – whose successor, the Office of Trade and Economic Development 

(OTED), is the department under which the program now runs.121 

The state approved the use of $1.8 million per year in TANF reinvestment funds for 

matching dollars and administration costs for IDA programs. It is providing a 2-to-1 

match for the first three years after a participant opens an account. Community-based 

organizations (CBOs) with whom contracts would be possible were responsible for 

recruiting and enrolling participants, and for providing financial skills-building classes, 

individual counseling, and account management. CBOs also were required to partner 

with local financial institutions to hold participants’ accounts.122 

110
 
 

Item 4 – Appendix D: Examples of State Legislation on Financial Incentives 

Louisiana 

The final version of HR 1836 includes the following additional enhancements to 

Louisiana’s START Savings Program and to other qualified state-sponsored tuition 

programs: 

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

qualified tuition program. 

2. Provides for transfers of credits, or “rollovers,” from one qualified tuition program 

to another qualified tuition program for the benefit of the beneficiary, limiting such 

rollovers to one per 12-month period. 

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

4. Modifies the definition of qualified higher education expenses to include 

expenses of a special needs beneficiary that are necessary in connection with 

his or her enrollment or attendance at the eligible education institution. 

Missouri 

SB721 In Its Entirety: 

This act revises programs for the handicapped to enhance access to 

telecommunications, to enable access to other assistive technologies and to 

provide for blind screening and education. 

TELECOMMUNICATIONS EQUIPMENT PROGRAM - The act revises the 

program for telecommunications equipment for the hearing and speechimpaired. The act adds definitions to expand the scope of the program to all 

telecommunications equipment, including voice and text. 

The Missouri Assistive Technology Advisory Council, as the program 

administrator, will provide a statewide telecommunications equipment and 

111
 
distribution program for people who cannot use traditional equipment due to 

disability. 

The act specifies qualifications of the program administrator which include 

appropriate expertise and experience to provide oversight, customer service and 

accountability. Expenditures for program administration will not exceed 20 

percent of total program expenses. The Missouri Assistive Technology Advisory 

Council may enter into contracts to deliver consumer support and administrative 

services relating to equipment distribution. 

The Public Service Commission will annually request, as a separate budget item, 

appropriations from the deaf relay service and equipment distribution program 

fund to deliver dual-party relay service. The Missouri Assistive Technology 

Advisory Council will annually request, through a separate line item, an 

appropriation from the same fund to deliver the telecommunications equipment 

distribution program. 

The Deaf Relay Service and Equipment Fund surcharge will not be increased for 

2 years, subject to changes in federal requirements. After 2 years, the Council 

will annually adjust the Fund surcharge based upon the Department of Labor and 

Industrial Relations’ recommendation. The act requires means testing to allocate 

services efficiently. 

ASSISTIVE TECHNOLOGY LOANS - The act requires the Missouri Assistive 

Technology Council to establish an Assistive Technology Loan Program. 

The Council shall spend available moneys in four equal shares each quarter to 

ensure that the loan program will provide loans throughout the entire fiscal year. 

The act creates the “Assistive Technology Loan Revolving Fund,” which shall be 

used to fund the Assistive Technology Loan Program. 

The interest rates for loans shall be lower than comparable commercial lending 

rates and shall be established by the Council based on the borrower’s ability to 

112
 
 

 

 

 

pay. Loans may be made with no interest. Loan repayment periods shall not 

exceed ten years. The Council shall promulgate rules to implement the program 

and file annual reports with the Governor and General Assembly. This portion of 

the act is contained in SB 935 (2000). 

BLIND ASSISTANCE PROGRAM - The Blind Education, Screening and Treatment 

Program Fund is created. Applicants for registration of motor vehicles and applicants for 

a license may donate one dollar to the fund. Moneys in the fund may be used to provide 

eye screenings and treatment to prevent blindness. 

Wisconsin 

S. 49.472 Medical assistance purchase plan. 

(1) Definitions. In this section: 

(a) “Earned income” has the meaning given in 42 USC 1382a (a) (1). 

[a] “Family” means an individual, the individual’s spouse and any dependent 

child, as defined in 

http://nxt.legis.state.wi.us/nxt/gateway.dll?f=templates&fn=default.htm&vid=WI:D 

efault&d=stats&jd=19.42(7)#JUMPDEST_19.42(7) 

(b) “Health insurance” means surgical, medical, hospital, major medical or other 

health service coverage, including a self-insured health plan, but does not 

include hospital indemnity policies or ancillary coverage such as income 

continuation, loss of time or accident benefits. 

(c) “Independence account” means an account approved by the department that 

consists solely of savings, and dividends or other gains derived from those 

savings, from income earned from paid employment after the initial date on which 

an individual began receiving medical assistance under this section. 

113
 
 

 

 

 

 

 

(d) “Medical assistance purchase plan” means medical assistance, eligibility for 

which is determined under this section. 

(e) “Unearned income” has the meaning given in 42 USC 1382a (a) (2). 

(2) Waivers and amendments. The department shall submit to the federal 

Department of Health and Human Services an amendment to the state medical 

assistance plan, and shall request any necessary waivers from the secretary of 

the federal Department of Health and Human Services, to permit the department 

to expand medical assistance eligibility as provided in this section. If the state 

plan amendment and all necessary waivers are approved and in effect, the 

department shall implement the medical assistance eligibility expansion under 

this section not later than January 1, 2000, or 3 months after full federal approval, 

whichever is later. 

(3) Eligibility. Except as provided in http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%286%29 

%28a%29&softpage=Document - JUMPDEST_49.472(6)(a)sub. (6) (a), an 

individual is eligible for and shall receive medical assistance under this section if 

all of the following conditions are met: 

(a) The individual’s family’s net income is less than 250 percent of the poverty 

line for a family the size of the individual’s family. In calculating the net income, 

the department shall apply all of the exclusions specified under 42 USC 1382a 

(b). 

(b) The individual’s assets do not exceed $15,000. In determining assets, the 

department may not include assets that are excluded from the resource 

calculation under 42 USC 1382b (a) or assets accumulated in an independence 

114
 
 

 

 

 

 

 

account. The department may exclude, in whole or in part, the value of a vehicle 

used by the individual for transportation to paid employment. 

(c) The individual would be eligible for supplemental security income for 

purposes of receiving medical assistance but for evidence of work, attainment of 

the substantial gainful activity level, earned income and unearned income in 

excess of the limit established under 42 USC 1396d (q) (2) (B) and (D). 

(d) The individual is legally able to work in all employment settings without a 

permit under http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=103.70&softpage 

=Document - JUMPDEST_103.70s. 103.70. 

(e) The individual maintains premium payments calculated by the department in 

accordance with http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29 

&softpage=Document - JUMPDEST_49.472(4)sub. (4), unless the individual is 

exempted from premium payments under http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29 

%28b%29&softpage=Document - JUMPDEST_49.472(4)(b)sub. (4) (b) or 

http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%285%29 

&softpage=Document - JUMPDEST_49.472(5)(5). 

(f) The individual is engaged in gainful employment or is participating in a 

program that is certified by the department to provide health and employment 

services that are aimed at helping the individual achieve employment goals. 

(g) The individual meets all other requirements established by the department by 

rule. 

115
 
 

 

 

(4) Premiums. 

(a) Except as provided in http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29 

%28b%29&softpage=Document - JUMPDEST_49.472(4)(b)par. (b) and 

http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%285%29 

&softpage=Document - JUMPDEST_49.472(5)sub. (5), an individual who is 

eligible for medical assistance under http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%283%29 

&softpage=Document - JUMPDEST_49.472(3)sub. (3) and receives medical 

assistance shall pay a monthly premium to the department. The department shall 

establish the monthly premiums by rule in accordance with the following 

guidelines: 

1. The premium for any individual may not exceed the sum of the following: 

a. Three and one-half percent of the individual’s earned income after the 

disregards specified in http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29 

%28a%292m.&softpage=Document - JUMPDEST_49.472(4)(a)2m.subd. 2m. 

b. One hundred percent of the individual’s unearned income after the 

deductions specified in http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29 

%28a%292.&softpage=Document - JUMPDEST_49.472(4)(a)2.subd. 2. 

2. In determining an individual’s unearned income under 

http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29 

116
 
 

 

 

 

%28a%291.&softpage=Document - JUMPDEST_49.472(4)(a)1.subd. 1., the 

department shall disregard all of the following: 

a. A maintenance allowance established by the department by rule. The 

maintenance allowance may not be less than the sum of $20, the federal 

supplemental security income payment level determined under 42 USC 1382 (b) 

and the state supplemental payment determined under 

http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.77%282m%29 

&softpage=Document - JUMPDEST_49.77(2m)s. 49.77 (2m). 

b. Medical and remedial expenses and Impairment-Related Work 

Expenses. 

2m. If the disregards under http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29 

%28a%292.&softpage=Document - JUMPDEST_49.472(4)(a)2.subd. 2. exceed 

the unearned income against which they are applied, the department shall 

disregard the remainder in calculating the individual’s earned income. 

3. The department may reduce the premium by 25 percent for an individual who 

is covered by private health insurance. 

(b) The department may waive monthly premiums that are calculated to be below 

$10 per month. The department may not assess a monthly premium for any 

individual whose income level, after adding the individual’s earned income and 

unearned income, is below 150 percent of the poverty line. 

(5) Community options participants. From the appropriation under 

http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=20.435%287%29 

%28bd%29&softpage=Document - JUMPDEST_20.435(7)(bd)s. 20.435 (7) (bd), 

117
 
 

the department may pay all or a portion of the monthly premium calculated under 

http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=49.472%284%29 

%28a%29&softpage=Document - JUMPDEST_49.472(4)(a)sub. (4) (a) for an 

individual who is a participant in the community options program under 

http://folio.legis.state.wi.us/cgibin/om_isapi.dll?clientID=15953720&infobase=stats.nfo&jump=46.27%2811%29 

&softpage=Document - JUMPDEST_46.27(11)s. 46.27 (11). 

(6) Insured persons. 

Maryland 

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

MTA has a specialized, shared-ride, curb-to-curb service for people with 

disabilities who are not able to ride fixed-route public transportation. Paratransit 

service is provided within three-quarters of a mile of any fixed-route service (bus, 

light rail, or subway) in Baltimore City and Baltimore and Anne Arundel counties. 

To be eligible for Paratransit, individuals must provide a physician’s statement 

that confirms their physical disability. MTA then evaluates the individuals to 

determine which ones meet the criteria for the specialized service, which charges 

a $1.55 one-way fare. The estimated cost to the State is $22.96 per passenger. 

The intent of the legislation was that the Transportation Trust Fund expenditures 

would increase by $400,000 annually, beginning in fiscal 2004, to provide grants 

required by the bill. MTA can administer the program with existing resources. 

Approximately 508,000 people would qualify for the service due to their annual 

income. Under the 2003 federal poverty guidelines, a single-member household 

with an annual income up to $35,920 would qualify for the proposed service. The 

Maryland Department of Legislative Services notes in the record that it is unclear 

how the income will be verified. 

118
 
Local jurisdictions would have to provide up to $25,000 to receive a $100,000 

grant, if eligible. However, it is unclear how many local governments use 

volunteer drivers. The impact on smaller counties or municipalities was projected 

to be greater than on larger localities. 

During the 2001 Maryland General Assembly session the MTA, introduced a similar bill 

to create a State Job Access Program. This bill passed both the Maryland Senate and 

House of Delegates, and was signed by Governor Glendenning on April 20, 2001. The 

legislation outlines the application procedures and matching funding requirements, and 

while it does not mandate a specific annual allotment for the Job Access Program, it 

ensures that Maryland’s program will exist beyond the federal program. The State, 

though, anticipates that the Federal Job Access and Reverse Commute Program will be 

reauthorized and these funds can continue to support Maryland’s efforts to connect lowincome workers with employment opportunities. 123 

Kentucky 

The Universal Design Handbook prescribes the following design guidelines: 

1. Finished hallways should be 42” wide. 

1. All doorways, including closet doors and entry doors, should be 32” wide at 

minimum. Specifications for entry platforms also are included. 

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

universally designed bathroom. 

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

and tubs. 

4. Electrical outlets have to be installed at a minimum height of 15” and light 

switches, fan switches and thermostats at a maximum height of 48”. 

All units must have a least one universally designed bedroom on the ground level or 

elevator accessible floor. 

119
 
Washington 

In 2005, Washington passed statute 43.31.460 entitled, SEED act—Individual 

development account program—Rules, updating the IDA law. The pertinent section is: 

An individual development account program is hereby established within the 

department for the purpose of facilitating the creation by sponsoring 

organizations of individual development accounts for low-income individuals. 

(1) The department shall select sponsoring organizations to establish and 

monitor individual development accounts using the following criteria: 

(a) The ability of the sponsoring organization to implement and administer 

an individual development account program, including the ability to verify a lowincome individual’s eligibility, certify that matching deposits are used only for 

approved purposes, and exercise general fiscal accountability; 

(b) The capacity of the sponsoring organization to provide or raise funds to 

match the contributions made by low-income individuals to their individual 

development accounts; 

(c) The capacity of the sponsoring organization to provide or arrange for 

the provision of financial counseling and other related services to low-income 

individuals; 

(d) The links the sponsoring organization has to other activities and 

programs related to the purpose of chapter 402, Laws of 2005; and 

(e) Such other criteria as the department determines are consistent with 

the purpose of chapter 402, Laws of 2005 and ease of administration. 

120
 
(2) An individual development account may be established by or on behalf of an 

eligible low-income individual to enable the individual to accumulate funds for the 

following purposes: 

(a) The acquisition of postsecondary education or job training; 

(b) The purchase of a primary residence, including any usual or 

reasonable settlement, financing, or other closing costs; 

(c) The capitalization of a small business. Account moneys may be used 

for capital, land, plant, equipment, and inventory expenses or for working capital 

pursuant to a business plan. The business plan must have been developed with 

a business counselor, trainer, or financial institution approved by the sponsoring 

organization. The business plan shall include a description of the services or 

goods to be sold, a marketing strategy, and projected financial statements; 

(d) The purchase of a computer, an automobile, or home improvements; or 

(e) The purchase of assistive technologies that will allow a person with a 

disability to participate in work-related activities. 

(3) An eligible low-income individual participating in the program must contribute 

to an individual development account. The contributions may be derived from 

earned income or other income, as provided by the department. Other income 

shall include child support payments, supplemental security income, and 

disability benefits. 

(4) A sponsoring organization may authorize a low-income individual for whom 

an individual development account has been established to withdraw all or part of 

the individual’s deposits for the following emergencies: 

121
 
 

(a) Necessary medical expenses; 

(b) To avoid eviction of the individual from the individual’s residence; 

(c) Necessary living expenses following loss of employment; or 

(d) Such other circumstances as the sponsoring organization determines merit 

emergency withdrawal. 

General Information Regarding Medicaid Buy-In 

There is some support among consumers and advocates for broadened income and 

asset rules in the Medicaid Buy-In Program. The state is examining the feasibility of 

exempting Independence Accounts for all Medicaid eligibility categories.124 

As states face fiscal challenges, policymakers are seeking tools to enable them to 

reduce work disincentives in Medicaid with a minimal level of net costs. 125 When 

designing their Medicaid Buy-In programs, state policymakers are facing the challenge 

of simultaneously achieving their policy objectives and controlling costs.126 In designing 

a Medicaid Buy-In Program, state policymakers must weigh the amount of subsidy they 

can provide against the amount they will require the individual to pay as a premium. To 

help offset program costs, some states are considering premiums modeled on private 

health insurance premiums, with a cap pegged to the maximum premium amount 

required of a state government employee.127 

A high premium may discourage some people from participating in the Medicaid Buy-In 

Program. Their willingness to expend their resources is likely to depend on the relative 

value they place on the extra benefits available to them in the Medicaid benefits 

package. An individual anticipating extensive use of personal care or prescription drug 

services may not be discouraged by high premiums. On the other hand, a person 

whose primary health care needs are met through Medicare may be unwilling to pay 

high monthly premiums for wrap-around coverage.128 

122
 
 

 

 

 

The Balanced Budget Act of 1997 and TWWIIA authorized states to enact Medicaid 

Buy-In programs for workers without disabilities. These laws provided state 

policymakers and other stakeholders an opportunity to focus on issues associated with 

employment of People with significant disabilities. Every state starts from a different 

baseline as it relates to Medicaid eligibility rules, the relationship between SSI eligibility 

and Medicaid, SSI state supplementation, and the implementation of existing SSI work 

incentives. The purpose, function, and size of a state’s Medicaid Buy-In Program vary 

depending on its policies governing eligibility for cash benefits, work incentives, and 

health coverage through Medicaid. The design of a Medicaid Buy-In Program must be 

viewed in the context of a state’s overall Medicaid Program, other state-specific 

initiatives, and fiscal considerations.129 

Buy-In programs (enabling people with disabilities with increased earned income to 

continue Medicaid eligibility) have become a key component of state efforts. States are 

implementing Buy-In programs (and related programs and supports) not as welfare 

programs, but as programs that help states make productive use of all of their human 

capital resources. Many policymakers support Buy-In programs as a means to increase 

workers with disabilities’ participation as productive citizens of states. That is, such 

programs are seen as a means to “enhance a state’s economic status; not simply as a 

means to enhance access to health care.”130 

1

 National Council on Disability (NCD), The Current State of Transportation for People with 

Disabilities in the United States, Washington, DC: June 13, 2005. Available at: 

http://www.ncd.gov/newsroom/publications/2005/current_state.doc

2 http://www.statefarm.com/mutual/cover529.htm 

3

 Ibid. 

4

 Ibid. 

5

 Clancy, Margaret, et. al., Center for Social Development (CSD), George Warren Brown School 

of Social Work, Washington University. College Savings Plan: A Platform for Inclusive Saving 

Policy? Feb. 12, 2004. Available at: 

http://gwbweb.wustl.edu/csd/asset/529s_universal_asset_building.pdf

6

 Ibid. 

7

 Ibid. 

8

 Ibid. 

9

 Ibid. 

10 Ibid. 

123
 
 

 

 

11 Clancy, Margaret, Center for Social Development (CSD), Washington University in St. Louis, 

George Warren Brown School of Social Work. College Savings Plans and Individual 

Development Accounts: Potential For Partnership. March 2003. Available at: 

http://www.collegesavings.org/education/PolicyReport-529sandIDAs.pdf

12 STARTing Line, 1st Quarter Newsletter Topics. Available at: 

http://www.startsaving.la.gov/savings/news.jsp

13 Ibid. 

14 Ibid. 

15 Ibid. 

16 Ibid. 

17 Ibid.
 18 Louisiana’s College Savings Plan Outperforms Other States, Earns Highest Returns. Oct. 8, 

2002. Available at: 

http://www.treasury.state.la.us/newsroom/pressreleases2002/pr10082002.html

19 Ibid. 

20 Ibid.
 21 Louisiana Office of Student Financial Assistance. State and Federal Legislation Makes 

Sweeping Changes to START Savings Program. June 12, 2001. Available at: 

http://www.osfa.state.la.us/061201StartChanges.htm

22 Ibid. 

23 Ibid. 

24 Ibid. 

25 Ibid. 

26 STARTing Line, LATTA approves rule changes for START Saving Program. Spring/Summer 

1999 Newsletter Articles. Available at: http://www.osfa.state.la.us/startqrt3a.htm
 27 Ibid.
 28 STARTing Line, 2003 Legislature Tweeks START. Vol. VI, Issue 2, Third Quarter 2003. 

Available at: http://www.startsaving.la.gov/savings/pdf/qtr032003.pdf
 29 Kendrick, Deborah, One State’s Solution to Getting More People on Line. AFB Access World. 

Available at: http://www.afb.org/afbpress/pub.asp?DocID=aw020203
 30 Rehabilitation, Engineering & Assistive Technology society of North America (RESNA). 

Available at: http://www.resna.org

31 Ibid. 

32 Ibid. 

33 Ibid. 

34 Ibid. 

35 Ibid. 

36 Ibid.
 37 Missouri State Government. Available at: http://www.at.mo.gov/

38 Missouri Assistive Technology Council, 2004 – 2005 Annual Report, Assistive Technology 

Today. Assistive Technology Tomorrow. Available at: 

http://www.at.mo.gov/publications/AnnualReport2005Text.shtm

39 Ibid. 

40 Ibid. 

124
 
 

 

 

 

 

 

41 Kendrick, Deborah, One State’s Solution to Getting More People on Line. AFB Access World. 

Available at: http://www.afb.org/afbpress/pub.asp?DocID=aw020203
 42 Ibid. 

43 Ibid. 

44 Ibid. 

45 Ibid. 

46 Ibid. 

47 University of Missouri Healthcare. Available at: 

http://www.muhealth.org/~MOrehab/assist.shtml

48 Ibid. 

49 Rockhurst University. Missouri’s Interagency Assistive Technology Short-Term Loan 

Program. Available at: http://etc.rockhurst.edu/

50 Missouri Assistive Technology Council, 2004 – 2005 Annual Report, Assistive Technology 

Today. Assistive Technology Tomorrow. Available at: 

http://www.at.mo.gov/publications/AnnualReport2005Text.shtm

51 Ibid. 

52 Ibid. 

53 Ibid. 54 Ibid.
 55 Missouri State Government. Available at: http://www.at.mo.gov/

56 Missouri Assistive Technology Council, 2004 – 2005 Annual Report, Assistive Technology 

Today. Assistive Technology Tomorrow. Available at: 

http://www.at.mo.gov/publications/AnnualReport2005Text.shtm

57 Ibid. 

58 Ibid. 

59 Ibid. 

60 Ibid. 61 RESNA. Available at: http://www.resna.org/AFTAP/library/morules.htm
 62 Missouri Assistive Technology Council, 2004 – 2005 Annual Report, Assistive Technology 

Today. Assistive Technology Tomorrow. Available at: 

http://www.at.mo.gov/publications/AnnualReport2005Text.shtm

63 Ibid.
 64 Mathematica Policy Research, Inc., Enrollment Patterns and Medical Expenditures for 

Medicaid Buy-In Participants in Five States. Liu, Su, et. al., Oct. 5, 2004. 

65 Wisconsin Department of Health & Family Services, Wisconsin Medicaid. Available at: 

http://www.dhfs.state.wi.us/Medicaid1/recpubs/factsheets/phc10071.htm. Wisconsin Statute 

§49.472(2005). Available at: http://folio.legis.state.wi.us
 66 Ibid.
 67 Centers for Medicare and Medicaid (CMS), Medical Assistance Purchase Plan, Student 

Lesson Guide, January 19, 2006.

68 Law, Health Policy and Disability Center, University of Iowa College of Law. Available at: 

http://www.uiowa.edu/~lhpdc/work/States/Wi/WI_CaseStudy.doc

69 Ibid. 

70 Ibid. 

71 Ibid. 

125
 
 

 

 

 

 

 

 

 

 

72 Ibid. 

73 Law, Health Policy and Disability Center, University of Iowa College of Law. Available at: 

http://www.uiowa.edu/~lhpdc/work/States/Wi/WI_CaseStudy.doc

74 Ibid. 

75 Ibid.
 76 U.S. Department of Health and Human Services, The Medicaid Buy-In Program: Lessons 

Learned From Nine "Early Implementer” States, by Donna Folkemer, National Conference of 

State Legislatures, et. al., May 2002. Available at: 

http://aspe.hhs.gov/daltcp/reports/EIlesson.htm#chapII-B

77 Ibid.
 78 Law, Health Policy and Disability Center, University of Iowa College of Law. Available at: 

http://www.uiowa.edu/~lhpdc/work/States/Wi/WI_CaseStudy.doc

79 Ibid. 

80 Ibid. 

81 Ibid. 

82 Ibid. 

83 Ibid. 84 Centers for Medicare & Medicaid (CMS), Enrollment History for the Medicaid Buy-In 

Program for Workers with a Disability (As of March 31, 2005). Available at: 

http://www.cms.hhs.gov/TWWIA/downloads/BuyInEnrollment.pdf

85 Community Transportation Association (CTAA), Maryland Passes Legislation Establishing 

Job Access Transportation Program. Available at: http://www.ctaa.org/adaview.asp?pageid=776
 86 Ibid.
 87 Ibid. 

88 Ibid. 

89 The Maryland Rural Transit Assistance Program (RTAP), Maryland Department of 

Transportation, Maryland Transit Authority. The Maryland RTAP Update, Spotlight on SSTAP 

Service Innovations of St. Mary’s Transit System. Fall 2004, Vol. 3 Issue 3. KHF Group, Inc.: 

Bethesda, MD. Available at: http://www.kfhgroup.com/fall2004.pdf
 90 Ibid. 

91 Ibid.
 92 Maryland Department of Disabilities (MDOD). 2006 State Disabilities Plan. Kristen Cox, 

Secretary. Available at: http://www.mdod.state.md.us/pdfs/StatePlan2006.pdf

93 Ibid. 

94 Ibid. 

95 Ibid. 96 Ibid. 

97 Kentucky Housing Corporation (KHC), http://www.kyhousing.org
 98 Kentucky Housing Corporation (KHC), New design concept makes its first appearance in 

Grayson County, August 27, 2003. Available at: http://www.kyhousing.org/full.asp?id=303
 99 Kentucky Housing Corporation (KHC), http://www.kyhousing.org
 100 Kentucky Housing Corporation (KHC), Kentucky Housing Corporation Universal Design 

Standards Policy, Jan. 23, 2003. Available at: 

http://www.kyhousing.org/uploadedfiles/HFC/Design_and_Construction/UniversalDesignStanda 

rds.pdf 

126
 
 

 

 

 

 

 

 

 

101 Kentucky Housing Corporation (KHC), http://www.kyhousing.org
 102 Ibid. 

103 U.S. Census Bureau (2001).

104 Kentucky Housing Corporation (KHC), http://www.kyhousing.org
 105 Ibid.
 106 Kentucky Housing Corporation (KHC), New design concept makes its first appearance in 

Grayson County, August 27, 2003. Available at: http://www.kyhousing.org/full.asp?id=303
 107 Kentucky Housing Corporation (KHC), Programs Overview, 2005. Available at: 

http://www.kyhousing.org/uploadedFiles/Publications/ProgramGuide.pdf

108 Ibid. 109 Kentucky Housing Corporation (KHC), KHC Announces Latest Funding from Affordable 

Housing Trust Fund, Jan. 11, 2005. Available at: http://www.kyhousing.org/full.asp?id=277
 110 Ibid. 

111 Ibid.
 112 Putnam, Michelle, et. al. Building Financial Bridges to Economic Development and 

Community Integration: Recommendations for a Research Agenda on Asset Development for 

People with Disabilities. Journal of Social Work in Disability & Rehabilitation, Vol. 4(3) 2005, 

The Hartford Press, Inc. Available at: 

http://gwbweb.wustl.edu/csd/Publications/2005/JSWDR_Article_Putnam_etal.pdf

113 Washington State website. Available at: http://www.workfirst.wa.gov/resources/saving.asp

114 Ibid. 

115 Ibid. 

116 Ibid.
 117 RCW 43.31.460 (2005).

118 Emphasis added. 

119 SB 5469, As Reported By Senate Committee On International Trade & Economic 

Development, February 15, 2005. An act relating to individual development accounts, sponsored 

by Senators Schmidt, Regala, Fairley, Esser, Shin, Roach, Rasmussen, Kohl-Welles and Brown. 

120 Corporation for Enterprise Development (CFED): Washington, DC. Available at: 

http://www.cfed.org/focus.m?parentid=2&siteid=288&id=288

121 Ibid.
 122 Center for Social Development, George Warren Brown School of Social Work, Washington 

University: St. Louis, Missouri. Available at: 

http://gwbweb.wustl.edu/csd/policy/states/washington.html

123Maryland General Assembly, 2003 Session, House Bill 758, Fiscal and Policy Note. Available 

at: http://mlis.state.md.us/pdf-documents/2003rs/fnotes/bil_0008/hb0758.pdf 

124 Law, Health Policy and Disability Center, University of Iowa College of Law. Available at: 

http://www.uiowa.edu/~lhpdc/work/States/Wi/WI_CaseStudy.doc

125 Jenson, Allen, Center for Health Services Research and Policy, George Washington 

University and Donna Folkemer, National Conference of State Legislators. Developing Fiscal 

Estimates for a Medicaid Buy-in Program: Using Data from Early Implementer States. Revised 

draft July 26, 2002. Available at: 

http://www.uiowa.edu/~lhpdc/work/II_Policies/Estimating_Fiscal_Impact.doc 

127
 
 

 

126 For a more complete discussion of the possible focus and policy objectives of a state’s 

Medicaid Buy-In program see Policy Frameworks for Developing a Medicaid Buy-In Program 

and Related Work Incentive Initiatives at http://www.medicaidbuyin.org 

127 Ibid. 128 Jenson, Allen, Center for Health Services Research and Policy, George Washington 

University and Donna Folkemer, National Conference of State Legislators. Developing Fiscal 

Estimates for a Medicaid Buy-in Program: Using Data from Early Implementer States. Revised 

draft July 26, 2002. Available at: 

http://www.uiowa.edu/~lhpdc/work/II_Policies/Estimating_Fiscal_Impact.doc

129 U.S. Department of Health and Human Services, The Medicaid Buy-In Program: Lessons 

Learned From Nine "Early Implementer” States, by Donna Folkemer, National Conference of 

State Legislatures, et. al., May 2002. Available at: 

http://aspe.hhs.gov/daltcp/reports/EIlesson.htm#chapII-B

130 University of Nebraska Public Policy Center, The Impact of Earnings of Nebraskans with 

Disabilities on Their Eligibility for Selected Services and Programs. Prepared for: Medicaid 

Infrastructure Grant Program, Nebraska Department of Health and Human Services. Dec. 2002. 

Available at: 

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

128