The Leadership Conference on Civil and Human Rights

Congress has passed the Work Incentives Improvement Act (S. 331/H.R. 1180) which will allow individuals with disabilities to hold a job while retaining federally funded health benefits. The bill passed the Senate by a vote of 99-0 on June 16, 1999, and the House on October 20, by a vote of 412-9. The measure is expected to help about two million disabled adults move from welfare to the workforce.

Under current law, disabled workers who earn more than $500 a month may lose their disability benefits and health care coverage, or be required to pay a monthly premium. The law presents a dilemma for individuals with disabilities because even with an earned income, most would be unable to cover the cost of health care without government assistance. As a result, fewer than one half of one percent of the 7.5 million adults who currently receive disability assistance choose to work.

The major provisions of the bill will allow people on disability assistance to continue receiving Medicare coverage while working. The measure gives states the option of permitting people who might previously have been disqualified from health care coverage because of their salaries or improvement in medical conditions to buy into the Medicare program with their premiums rising based on a pay scale. The bill would also provide Medicaid to workers who are not actually disabled but have a reasonable expectation of severe disability in the absence of treatment. This category includes people infected with HIV.

Despite its unanimous approval in the Senate, the measure was held up for weeks in a debate over how the five-year $800 million cost would be financed. Sen. Jeffords (R-VT) and Sen. Kennedy (D-MA), co-sponsors of the bill, proposed eliminating a tax break for overseas corporate operations. However, Sen. Gramm (R-TX) blocked the legislation's passage until the tax provision was dropped, claiming that he opposed financing an "entitlement" program with a raise in taxes. The Senate finally skirted the issue by agreeing to spending cuts which will be specified at a later date.

The same dispute arose in the House which has found funding sources for approximately $300 million dollars of the projected five-year costs. President Clinton has aides looking at possible savings from reductions in Social Security and Medicare fraud and waste, and has expressed concern about some of the proposed funding sources including a provision that affects student loans. Chris Jennings, the White House's top health official expressed optimism that an acceptable proposal would emerge this fall: "It's not perfect yet, It's not adequately financed yet, but it's worth proceeding into the conference."