Statement by John J. Callahan,
Acting Commissioner, Social Security Administration
before the House Ways and Means Committee
Subcommittee on Social Security

July 23, 1997

Mr. Chairman and Members of the Subcommittee:

A large and growing number of people with disabilities can work, and want to work. With the Americans With Disabilities Act, changes in societal attitudes, and advances in technology, it is clearer than ever that being disabled does not mean that you can't contribute to our nation's economy. However, people with disabilities face a variety of complex barriers to work. Now is the right time to launch new initiatives to help break these barriers.

Today, too few of our approximately 8 million Social Security and Supplemental Security Income (SSI) disability recipients leave the disability rolls each year because of work. In fiscal year 1996, SSA paid State vocational rehabilitation (VR) agencies about $65.5 million for their services provided to approximately 6,000 beneficiaries with disabilities who worked at least 9 months earning more than $500 per month. However, many State VR agencies have waiting lists for services, and many more of our customers with disabilities tell us they want to work and will do so if the incentives are right and the services they need are available. We look forward to working with Congress, the Rehabilitation Services Administration, and other Federal agencies to turn our customers' dreams of economic independence into reality. I am enthusiastic about the possibilities for the future, particularly the President's "Ticket to Independence" proposal.

This plan creates new ways to help people find work and achieve their goals. The Administration looks forward to working with the Hill to enact these proposals. Since there are members of Congress from both sides of the aisle who are also working to solve this problem. we are looking forward to a constructive dialogue with you on this issue that will lead to the enactment of legislation, and we believe that our proposal merits your support. The "Ticket to Independence" is a public-private partnership designed to expand opportunities for individuals with disabilities, including individuals who are blind. This partnership would 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 is fiscally responsible, since providers would be paid only for results, i.e., placing individuals in jobs and eliminating Federal cash assistance.

Some have been critical of the current system for not improving the work capacity of our beneficiaries. We know that many highly skilled, outcome-focused agencies and professionals could be successful in assisting our diverse beneficiaries to return to work and that individualized planning and support is essential to successful work re-entry. The President's proposal builds on this knowledge.

We believe that the "Ticket to Independence" proposal will result in more opportunities for our beneficiaries to receive the services they need in order to work. We must keep in mind, however, that many of our beneficiaries have disabilities so severe and permanent that they will be unable to work even with the best VR services.

The "Ticket to Independence" Proposal

Included in the President's fiscal year 1998 budget is a historic proposal to help more beneficiaries achieve their goals of obtaining a job and leaving the benefit rolls. This is the first time that a President has submitted a proposal to significantly expand return to work efforts. The"Ticket to Independence" is grounded in a four part vision.

- Customer Choice: SSA's customers desire and need maximum flexibility and choice in pursuing services which will help them to become gainfully employed. Beneficiaries with disabilities will receive a "Ticket to Independence " to use with a participating public or private employment or rehabilitation provider of their choice. Our experience indicates that customer choice is a key element in their decision to seek services.

- Encouraging Innovation: The Administration's proposal seeks to encourage widespread innovations in the private and public sectors by creating opportu nities for Federal and State agencies, local non-profit and for-profit providers, employers, and beneficiaries to work together.

- Paying for Results: Beneficiaries and providers alike should focus on the goal of stable employment. The provider will be paid only when the beneficiary's earnings from work result in benefit savings. The "Ticket to Independence" rewards success and frugally uses public funds in an accountable and targeted way. And, since stable employment is the only goal that reaps a financial return, fewer resources are needed to monitor methods, expenditures, case files, etc.

- Health Care Incentives: Health care security is viewed by beneficiaries as an essential factor in deciding whether or not to try to work. Opportunities to obtain employment should be as health-care neutral as possible for individuals with disabilities. As you know, the President's Budget proposal included two new approaches to removing disincentives to returning to work. We are pleased that the Senate Reconciliation bill includes a proposal similar to that proposed by the President that would permit states to allow workers with disabilities to buy into Medicaid. The Administration has urged the Conferees to adopt the President's version which would not limit eligibility for this program to people whose earnings are below 250 percent of poverty. Unfortunately, the Administration's proposal for a 4-year demonstration to extend premium-free Part A Medicare eligibility for beneficiaries who leave the cash benefit rolls and continue working beyond the current period of Medicare eligibility (39 months) was not included in Reconcili ation. The Administration continues to believe that such a demonstration, coupled with the "Ticket to Independence," is good policy and continues to support changes in Medicare to reduce disincentives to return to work.

How the Ticket Will Work

After SSA determines that individuals are eligible for benefits, we will issue them tickets. The beneficiary may still apply to the State VR agency for services regardless of whether it is participating in this program, or give the ticket to another participating provider of his/her choice in exchange for rehabilitation and employment services. If the beneficiary returns to work and benefits cease due to earnings, the provider holding the ticket will receive a portion of the savings for a fixed period of time.

Phased Roll-Out

SSA will select 5-10 States to begin. Tickets will be issued and providers will he solicited for participation. State VR agencies and alternate providers will have the option to participate in either the "Ticket to Independence" or the current SSA VR Reimbursement Program.

For State VR agencies or alternate providers which choose to participate in the pilot, claims filed under the current program prior to the start of the pilot will continue to be processed under that program. Also, the State VR agencies in pilot States will not have first priority access to referrals of beneficiaries who have tickets.


All disability beneficiaries in roll-out States, except those whose medical conditions are expected to improve, will be eligible to receive a ticket. Beneficiaries who are expected to improve will be eligible for a ticket if their benefits are continued as a result of a continuing disability review.


Providers must satisfy certain criteria to be enrolled and eligible to receive payments from SSA. Providers must be eligible to conduct business in the State where they enroll by whatever criteria are used in that State. SSA will not certify, license or regulate organizations or businesses.

Using the Ticket

A beneficiary may activate a ticket at any time by giving it to an enrolled provider, who then registers it for 1 or 2 years, at the beneficiary's discretion. The ticket can be transferred to another provider only if the original ticket holder agrees (except in situations where disputes between a beneficiary and a provider are resolved by withdrawing the ticket). The terms of transfer of the ticket from one approved provider to another, with the beneficiary's consent, are entirely up to the respective parties. Providers receiving tickets from other providers must notify SSA of the change to be eligible for payment. At the end of the period of registration, if no provider is being paid under the expired ticket, the beneficiary may request a renewed ticket and that ticket may be registered for 1 or 2 years with the same or a different provider. Only one ticket will be issued to a beneficiary at a time and only one provider may hold a beneficiary's ticket at a time.

Paying the Provider

When SSDI benefits or an SSI beneficiary's federally administered benefits stop due to earnings, the provider is paid a portion of each monthly benefit not paid to the beneficiary during a specified continuous period.

The provider payments begin with the first month that Social Security disability insurance benefits or Federally administered SSI payments are reduced to zero, due to earnings, after the ticket is registered.

Administering the Ticket

SSA will award a contract to an administrator to manage the enrollment of providers, the system of referrals, ticket registration, and to assist in paying providers. The administrator will also develop a data collection system incorporating information required for management reports, a beneficiary tracking system, and the evaluation of the impact of the "Ticket to Independence."

Evaluation and Expansion

The Commissioner of Social Security will report to the Congress on the operations of the "Ticket to Independence" Program. At the end of the 3rd, 5th, 7th, and 10th year of the pilot, the Commissioner will evaluate and report on the impact of the program and work activity of beneficiaries with disabilities. Based on the results of the evaluation, the Commissioner will determine whether to continue and expand to other States (if the ticket system has been sufficiently successful), to modify aspects of the models to gain better results (such as the payment formula or the length of the payment period), or to discontinue the project.

Protection and Advocacy

SSA will supplement the funding of the existing State Protection and Advocacy (P&A) system with funds specifically designated for assisting SSA beneficiaries when disputes with providers occur. The State P&A System is a long established federally mandated system operating in each State and territory that investigates, negotiates and mediates solutions to problems that certain persons with disabilities cannot resolve on their own.


The "Ticket to Independence" is a cost effective, results oriented innovation that can:

- Create a public-private partnership between Social Security and public and private providers with the goal of supporting beneficiaries who want to work.

- Offer potentially significant savings to the SSA trust funds by helping persons with disabilities to work.

- Give beneficiaries the control and flexibility they need in securing services they want.

- Minimize bureaucratic involvement.

Mr. Chairman, let me reiterate. We want to work with you to design new programs that can result in jobs for persons with disabilities who would otherwise remain dependent upon disability benefits. We believe the President's "Ticket to Independence" begins a deliberate process to roll out a federal initiative to achieve that end. I thank you for your attention and would be happy to answer any questions.