The House Committee on Ways and Means, Subcommittee on Social Security (Shaw) on ways to encourage DI beneficiaries to return to work
Ken Apfel, Commissioner testified, accompanied by Susan Daniels, Deputy Commissioner for Disability and Income Security Programs,
March 11, 1999.
Mr. Chairman and Members of the Subcommittee: Thank you for inviting me here today to discuss initiatives to assure that the Social Security Administration's (SSA) beneficiaries with disabilities who want to work have the opportunity to do so.
I am accompanied today by Dr. Susan Daniels, Deputy Commissioner for Disability and Income Security Programs. Since President Clinton took office, the American economy has added nearly 18 million new jobs; and unemployment is the lowest in three decades. The unemployment rate among all working-age adults with disabilities, however, is nearly 75 percent. According to current estimates, about 16 million working-age adults have a disability that leads to functional limitations and 14 million working-age adults have less severe but still significant disabilities. In addition, individuals with disabilities also face multiple barriers to work, which include: lack of adequate health insurance, higher costs of work, a disconnected employment service system, and inaccessible or unavailable technology. Not only is it more difficult for people with disabilities to work; when they do work, their earnings are lower. As a nation, we are best served when all our citizens have the opportunity to contribute their talents, ideas, and energy to the workforce. There are a number of initiatives underway both at SSA and in Congress which promise to make this year one in which we see significant progress in doing just that. Today I will discuss the Clinton Administration's ongoing efforts to help people with disabilities participate in the workforce.
Clinton Administration Initiatives
I would like to tell you briefly what we have done and what we would like to do. As part of this Administration's continuing commitment to the return to work effort, President Clinton established the National Task Force on Employment of Adults with Disabilities on March 13, 1998 by Executive Order 13078. This high-level task force includes the Secretaries of Labor, Education, Veterans Affairs, Health and Human Services (HHS), as well as the Administrator of the Small Business Administration, the Chair of the Equal Employment Opportunity Commission, the Chair of the National Council on Disability, and the Commissioner of Social Security.Briefly stated, the purpose of the task force is to create an aggressive and coordinated national policy to bring adults with disabilities into gainful employment at a rate that is as close as possible to that of the general adult population. This involves studying existing policies to determine what changes are necessary to remove barriers to work, to develop health insurance options, and analyze the outcomes of programs related to employment for young people with disabilities.
The final report of the task force is due to be issued in July 2002, with the first interim report issued last month. As the first activity launched by the task force, Vice President Gore announced last September that SSA, in a collaborative effort with the Departments of Health and Human Services, Education, and Labor, would award grants to 12 States initially totaling over $5 million to develop innovative projects to assist adults to reenter the workforce. It is expected that the new approaches now getting underway in these States will create Federal/State partnerships and serve as models for other States to replicate. This is one of many activities recommended by and acted upon by the Administration. In fact, as of January, actions had been initiated on every recommendation in the Task Force's Interim Report. Last July, the President announced his commitment to enact affordable, feasible legislation to help people with disabilities maintain their health care-coverage and return to work.
In January, I announced that SSA will fund a Disability Research Institute to help provide policy makers with information and research data in the disability policy area, including ways to strengthen return-to-work policies for people with disabilities. The Disability Research Institute should be operational by the end of the year.
On February 12th we announced SSA's proposal to increase the amount that adult beneficiaries with disabilities can earn while still remaining eligible for benefits. The proposed increase, from $500 to $700 per month, may affect as many as 250,000 Social Security beneficiaries with disabilities. This year the President continues his commitment to improving opportunities for disabled Americans. The President's fiscal year (FY) 2000 budget contains a package of new initiatives that will remove significant barriers to work for people with disabilities. This three-part initiative, which invests over $2 billion over five years, includes: (1) the Work Incentives Improvement Act, which was introduced in the Senate by Senators Jeffords, Kennedy, Roth and Moynihan and includes the Ticket to Work proposal enacted by the House last year; (2) a new tax credit of $1,000 annually for workers with disabilities to help defray the monetary or in-kind costs incurred by people with disabilities who need transportation, special job equipment, or other assistance to return to work; and (3) expanded access to information and communications technologies. With these new proposals, the Administration will have taken action on every recommendation made in the President's Task Force on the Employment of Adults with Disabilities. As a further incentive to encourage beneficiaries to return to work, the Administration has developed a legislative proposal to assure cash and health benefits can be restored in a timely fashion for former beneficiaries who must stop working but continue to meet the disability standards. These individuals, whose entitlement was terminated because of work, could request reinstatement without filing a new application as long as it is within 5 years of the termination, and receive provisional benefits-cash and Medicare or Medicaid, for up to 6 months while SSA is making a determination.
Ticket to Work Provision
In 1997, the Administration first proposed its "Ticket to Independence," which was later included in the President's FY 1999 Budget. Last year, based on the Administration's proposal, two former members of this Subcommittee, Representatives Bunning and Kennelly, introduced the "Ticket to Work and Self-Sufficiency Act," which was passed overwhelmingly last year in the House and is a key part of this year's Senate Work Incentives Improvement Act. This proposal is included in the President's FY 2000 Budget. We believe that the Administration-proposed "Ticket" will result in many more opportunities for our beneficiaries to receive the services they need in order to work. The "Ticket" is a public-private partnership to give people receiving disability payments what they want and need-the control and flexibility to secure services tailored to their individual requirements from their choice of providers. The "Ticket" maintains fiscal discipline, since providers would be paid only for results. The ticket would enable an SSI and SSDI beneficiary to go to either a public or a participating private provider. Providers who accept the ticket would have more flexibility in selecting their preferred reimbursement. The Ticket proposal included in the President's Budget is based on the following fundamental principles:
Customer Choice: We believe that beneficiaries desire and need maximum flexibility and choice in pursuing services which will help them to become gainfully employed. Beneficiaries with disabilities must be able to choose a participating public or private employment or rehabilitation provider to receive the services that they need to participate in the workforce.
Paying for Outcomes: Beneficiaries and providers alike should focus on the goal of stable employment. A focus on outcomes and milestones is best achieved by linking it to financial rewards. Our goal is to reward success while using public funds in an accountable and targeted way. Encouraging Innovation: We believe the competitive spirit in the proposed legislation will encourage innovations in the private and public sectors by creating opportunities for State agencies, local non-profit and for-profit providers, employers, and beneficiaries. The Administration-proposed "Ticket" is designed to bring new service providers into this process. We want to develop new and innovative ways to bring beneficiaries with disabilities to the workforce based on actual outcomes, working with capable and committed service providers, and providing a strong infrastructure of information and support services. Many of these concepts are currently underway at SSA, and I would like to take this opportunity to discuss some of our initiatives.
Historically, a very limited number of our approximately 10 million Social Security, Old Age, Survivors and Disability Insurance (OASDI) and Supplemental Security Income (SSI) disability recipients leave the disability rolls each year because of successful rehabilitation. In fiscal year (FY) 1998, SSA paid State VR agencies about $102 million for their services provided to approximately 10,000 beneficiaries with disabilities who worked at least 9 months at the substantial gainful activity level. Although this was a record year for reimbursements, I believe we can do better.
Based on our experience and extensive collaboration with professional groups and advocates, we have learned that many more individuals with disabilities want to work and will do so if they have access to the rehabilitation services they need to reenter the workforce. We recognize the myriad of complex and sensitive issues that must be addressed to remove barriers to participation in the workforce. With this is mind, we have made progress on a number of other initiatives in the return-to-work arena which I would now like to share with you.
It is clear that there are many providers in the private sector who are willing to help. In March 1994, SSA amended its VR regulations to provide more opportunities for people with disabilities to receive the employment and rehabilitation services they need to return to work or enter the workforce for the first time. These regulatory changes allowed SSA to refer Social Security Disability Insurance (SSDI) beneficiaries and SSI recipients who are blind or disabled to VR service providers in the public or private sectors. The option of serving the beneficiary continues to be offered first to the states; however, if SSA does not receive notification that the state VR agency has accepted a beneficiary for services by the end of the 4th month after the month of referral, we may arrange for an alternate provider of rehabilitation services to serve that individual. Usually, these providers come to us from the private sector. (Of course, this process would change with passage of the "Ticket.")
To further expand the pool of alternate providers, we have released two RFPs, the second of which will remain open continuously. It is important to note that this is not a competitive procurement with limits on the number of the contracts awarded. We are interested in expanding the pool of providers who can serve our beneficiaries and will award contracts to all providers who qualify. Through the first week of March, we have signed contracts with 419 VR service providers nationally.
Some of these providers have begun to work with our beneficiaries. We just authorized payment for the first successful case, with several other cases soon to mature for payment. Alternate providers, like current VR providers, are reimbursed only after an individual has been working at the SGA level for at least nine months.
Our experience with Project RSVP (Referral System for Vocational Rehabilitation Providers) will help us better understand the concept of using a program manager to oversee service providers. The objective of Project RSVP is to assure that return to work services are more readily available to SSA-referred individuals while improving the administration and cost-effectiveness of the program. RSVP is a 3-year demonstration project to test the advantages and the cost-effectiveness of contracting out certain administrative functions under SSA's VR referral and reimbursement programs, and assist in managing the alternate providers. On September 27, 1997 a contract was competitively awarded to Birch & Davis Associates, Inc. of Maryland. Birch & Davis is marketing the project to potential VR providers. In addition, a toll-free number to provide technical assistance and respond to questions from beneficiaries and providers as well as the contractor's bulletin board to refer individuals to alternate providers is in place.
With the assistance of the RSVP contractor, we are expanding ways to provide SSDI and SSI recipients with disabilities or blindness increased access to rehabilitation and employment services to help them go to work. Under this process, these individuals have the opportunity to self-identify their interest in receiving return-to-work services by calling a toll-free number. Our contractor will obtain information from the caller, combine it with information supplied by SSA and transmit a referral to the State VR agency and/or the alternate provider(s) serving the individual's area of residence. We believe this initiative helps to support our intent to offer beneficiaries a more pro-active role in assessing services at a time that is most appropriate to their circumstances.
Through all of these provider initiatives, we have and will continue to gain valuable insight and experience that we will use to ensure the success of the proposed legislation. We are encouraged by the results. We have learned that many highly skilled, outcome-focused agencies and professionals are eager to assist our diverse population to return to work. And, we have learned that individualized planning and support is essential to successful work re-entry.
Delivery of Work Incentive Information
We are working with the Virginia Commonwealth University to develop and test a decision support software package called WorkWorld for use in assisting consumers and service providers in determining the effects of work on their entitlement to SSA benefits as well as other federal/state benefits, such as food stamps. This will allow our beneficiaries to make more informed choices regarding employment opportunities. We have created an attractive education kit called, "Graduating to Independence" (GTI), that is aimed specifically at youth in transition from education to employment and their families. The kit is designed for use by educators or professional organizations to instruct young beneficiaries and their families about SSA's work incentives. This multimedia kit contains a videotape and several computer disks, in addition to written materials, that combine facts with motivational examples. We have been very aggressive in distributing the GTI kits, sending them to school districts across the country, and handing them out at national conferences.
Additionally, we publish a number of other training and public information materials on work incentives. These materials are provided in multiple formats and have been designed with significant consumer input to be user-friendly. And, we have developed an Internet website which contains information about work incentive provisions, access to our publications, and information on our rehabilitation and employment programs.
Finally, SSA Operations and Program Offices are working together to assess our policies and procedures relative to our work incentive service delivery. Through this process, we are exploring ways we can improve the accuracy and timeliness of work incentive information in our field offices. Beyond that, we plan to develop methods to speed "on-demand" information to customers and stakeholders.
The demonstration authority of section 505(a) of the Social Security Disability Amendments of 1980 expired June 10, 1996. I want to thank the members on this Committee for their support for an extension passed by the House last year, which unfortunately was not enacted. In order to initiate any new projects under the SSDI program for researching return-to-work, the Administration seeks a permanent extension of demonstration authority so that we can test new approaches to accomplish our goals in this area. With this renewed authority, SSA can develop a comprehensive strategy that integrates earlier intervention, and identification and provides necessary assistance in removing barriers to work for applicants and beneficiaries.
With renewed authority we will pursue other projects that bring us closer to our goal of supporting the active participation of our beneficiaries with disabilities in the workforce.
Finally, although I would defer to HHS on the details, I would like to mention the issue of health care coverage, which is addressed in the President's legislative package and is part of S. 331, "The Work Incentives Improvement Act". Fear of losing health care coverage is frequently cited as the most common reason many disabled beneficiaries do not attempt to return to work. These initiatives would expand Medicare and Medicaid so that people can retain their health benefits coverage when they return to work. Under the proposal, Medicare coverage for disabled beneficiaries who return to work during the next 10 years would continue so long as they remain disabled and States would be permitted to allow disabled individuals to buy insurance through Medicaid. In many cases, people returning to work either work part-time and are not eligible for employer based health insurance or work in jobs that do not offer insurance. These health options, included in the President's budget, are essential complements to the Ticket to Work and other policies to remove barriers to work for people with disabilities.
Mr. Chairman, I want to assure you that the Social Security Administration stands ready, willing, and able to work with lawmakers on both sides of the aisle to enact fiscally responsible legislation to help thousands of Americans with disabilities, who with appropriate services and support, can be successful in obtaining or continuing to work. People with disabilities can bring tremendous energy and talent to the American workforce, but institutional barriers often limit their ability to work. We need new and innovative approaches so that Americans with disabilities can work. The President's three-part budget initiative in addition to the other initiatives I have discussed today represent not only new approaches, but also a continued commitment to make every effort to enrich the lives of people with disabilities and to help those who want to work do so.
I would be happy to answer any questions.