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It’s Budget Season in Washington; So Far These Are the Five Worst Things for People With Disabilities

/in /by The Arc

By Annie Acosta, Director of Fiscal and Family Support Policy

The President’s proposed Fiscal Year 2018 budget released last month would make unprecedented cuts to public education, health, transportation, housing, and countless other effective federal programs. These massive cuts would affect most Americans in one form or another, and would be particularly devastating to people with disabilities and their families. The budget is titled “The New Foundation for American Greatness” – but the reality couldn’t be more different. Here are five reasons the President’s proposed budget is anything but great for people with disabilities.

  1. More Cuts to Medicaid
    Under the President’s proposed budget, Medicaid, the primary health insurance and long term services and supports program for people with disabilities, would lose $610 billion over 10 years (on top of the over $830 billion in cuts in the American Health Care Act passed by the House of Representatives in March). The combined cuts roughly halve the program’s federal budget by 2027. Medicaid’s “optional” services, expected to take the brunt of such a drastic cut, include prescription drugs, physical therapy, and all home and community based services under state plan and “waiver” programs. Medicaid, including home and community based services, makes it possible for millions of people with disabilities to survive and to live and work in the community.
  2. Breaks the Promise on Social Security
    Despite President Trump’s promises to not cut Social Security, the budget also calls for over $72 billion in cuts to Social Security’s disability programs over the next 10 years, including cuts to Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Social Security and SSI benefits are modest, but absolutely essential for people with disabilities to put a roof over their head, food on the table, and to pay for their out-of-pocket medical expenses and disability related costs.
  3. Slashes Community Living Supports
    President Trump’s proposed budget would sharply reduce – or even eliminate – a wide variety of effective federal programs that help to make a life in the community possible for millions of people with disabilities. These include:

    • Supplemental Nutrition Assistance Program (SNAP), which provides essential nutrition assistance for millions of people with disabilities, would face a 29 percent cut over 10 years. By 2027, over 5 million households that include a person with a disability could lose their SNAP benefit under this cut.
    • Affordable housing programs at the Department of Housing and Urban Development would face a nearly 15 percent cut in 2018. The President’s budget targets the Section 811 Supportive Housing for Persons with Disabilities program for a proposed $25 million cut in 2018. This would leave the Section 811 program with insufficient funds to renew all existing project-based rental assistance contracts thereby placing current lease compliant tenants in 811 properties at imminent risk of homelessness.
    • Councils on Developmental Disabilities, independent living services, and traumatic brain injury services would see their funding to states eliminated and replaced with a new “innovation” program with less than half of the funding for the three programs. Click here to see a listing of discretionary programs and their proposed percentage cuts.
  4. Inadequate, Unworkable Paid Leave
    The President’s budget proposes a new paid leave program that would provide up to 6 weeks of paid leave for mothers and fathers to care for a newborn or newly adopted child. According to the Associated Press, “states would be required to provide leave payments through existing unemployment insurance programs and would have to identify cuts or tax hikes, as needed, to cover the costs.”The proposal has been widely criticized as both unworkable – creating an unfunded mandate to states that would burden and undermine already-fragile unemployment systems – and inadequate. It leaves out the 75% of people who take leave in the U.S. for family caregiving and medical reasons – including people with disabilities who need leave to address their own health, and people who need leave to care for a family member with a disability or illness. In addition, 6 weeks often simply isn’t enough – particularly if you have a disability, are caring for a family member, or have a newborn in intensive care. In comparison, the Family and Medical Leave Act provides 12 weeks of unpaid leave. Finally, benefits would likely be insufficient: on average, state unemployment insurance programs presently only cover one third of a worker’s wages.
  5. Uses Bad Math and Benefits the Most Prosperous
    President Trump’s proposed budget purports to cut $3.6 trillion in spending to balance the budget in 10 years, while also offering more than $5.5 trillion in tax reductions. The outsized tax cuts come primarily from reducing or eliminating taxes that are paid predominantly by wealthy households. These include the estate tax, the alternative minimum tax, and individual income tax on income earned through “pass-through” entities. The end result is that the budget would overwhelmingly benefit profitable corporations and wealthy individuals.In addition, the entire budget is based on bad math that virtually all independent economic analysts have dismissed.

    • It assumes massive amounts of new revenue from a 50% increase in economic growth resulting from tax cuts, renegotiated trade deals, and deregulation.
    • It claims there will be no deficit after 10 years as dramatic economic growth will allow the government to collect about $2 trillion more in tax revenue. However, the budget doesn’t include the cost of the proposed tax cuts, therefore relying on its tax cuts to both pay for themselves and add $2 trillion in additional tax revenue.

Next Steps in the House and Senate

Federal budgets are statement of our nation’s values – and it’s clear to The Arc that this budget simply doesn’t reflect what most Americans value. Fortunately, the President’s budget merely conveys the Administration’s priorities and is non-binding. The House and Senate must each develop their own budgets and reconcile any differences to implement their budget plans.

The House is presently developing its budget and may release it after the July 4 recess and the Senate could take the House’s budget shortly afterwards. The House budget may include many of the harmful provisions in the President’s Budget outlined above.

The Arc and numerous organizations representing civil rights, human services, and other communities are deeply committed to preventing the passage of harmful budgets. We’re working together to put a face on these proposed cuts and to urge Congress to reject the President’s proposed budget.

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New Video: How President Trump’s Budget Breaks a Promise to Protect Social Security and the Families That Rely on It

/in /by The Arc

Washington, DC – Today The Arc and the Center for American Progress released a video showcasing two personal stories about how Social Security is more than just retirement income. Social Security is a system that protects workers and families throughout their lives. If President Trump’s $72.4 billion in cuts to Social Security’s disability programs in his budget were to be implemented, the impact on families like those featured in this video would be dire.

“Social Security Disability Insurance and Supplemental Security Income are part of Social Security and the promise of that program must be honored for Katie, Will, Heather, and millions of people who need to access these basic but crucial benefits. Social Security is far too often the only thing keeping the lights on and food on the table for a person with a disability or a chronic condition.

“Heather, Katie, and Will are terrified by what this budget proposal could mean for them and for people who in the future need these benefits. This budget lays the cards on the table – and advocates across the country need to share their stories with elected officials and urge them to reject these cuts to Social Security,” said Peter Berns, CEO of The Arc.

This video highlights the stories of Will, a child with a disability, and Heather, a woman with terminal cancer. Will and his family relied on Supplemental Security Income (SSI) to pay for medication to prevent his seizures. SSI is part of Social Security that supports children and adults with disabilities. Without SSI, Will’s family wouldn’t have been able to afford his medicine or medical expenses, or meet his basic needs.

Heather was working internationally promoting fair elections and democracy when she got sick. By the time she was diagnosed, her cancer had metastasized and she feared she would end up impoverished paying for her cancer treatments. Social Security Disability Insurance (SSDI) helps American workers like Heather if they are faced with a life-changing disability or illness. Once her cancer spread Heather was unable to continue working. Without SSDI, she wouldn’t be able to afford chemotherapy and the prescription drugs that she relies on to survive.

These stories highlight the value of SSI and SSDI for those families who find themselves in need of additional support.

Share this video with your network to help people understand all that Social Security does to support families across the country.

Join Our Fight – as new threats to the civil rights of people with intellectual and developmental disabilities arise, we want to keep you in the loop with the most up to date information.

Read more about The Arc’s position on President Trump’s proposed budget.

If you are a member of the media and interested interviewing the people in this video, contact Kristen McKiernan, mckiernan@thearc.org or Sarah Bal, bal@thearc.org.

 

The Arc advocates for and serves people with intellectual and developmental disabilities (I/DD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with I/DD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

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“Don’t Take Away Javi’s Chance at a Future”: A Parent’s Plea to Eliminate Proposed Medicaid Cuts

/in /by The Arc

WASHINGTON, DC – Today, The Arc released a video which highlights how the House-passed cut to Medicaid funding negatively impact people with disabilities’ ability to live independently. The video features a conversation with Linda and her son, Javi, from Chapel Hill, North Carolina. Javi has autism and Ehlers-Danlos syndrome, a condition that affects connective tissues in the body and causes joint dislocations, bleeding, pain and fatigue. He has had multiple painful surgeries over the past decade and requires medication and other therapies to live independently. Due to his Medicaid-funded medical treatment and supports, Javi was able to attend college and graduate with skills that he can take into the workforce. If federal Medicaid funding is cut, Javi risks losing the supports he needs to be able to work in the community and live at home.

Recently, the House of Representatives passed the American Health Care Act (AHCA), which included over $800 billion in cuts over 10 years to federal funding for Medicaid programs. The Arc is launching this video amidst negotiations in the Senate on this bill, and on the heels of the Trump Administration releasing its first budget proposal with includes an additional $610 billion in cuts to Medicaid.

The AHCA cut would not only force states to cut eligibility for state Medicaid programs, but will also diminish the quality and quantity of services that are provided to people who are already enrolled in these programs. For many people with intellectual and developmental disabilities, Medicaid generally is the only source of funds for them to live and work in the community with friends and families and avoid costly, harmful, and segregated institutions.

“I lay awake at night worrying. Without Medicaid, I don’t even see a future (for Javi),” says Linda in the video. “If I were to say one thing to the President and Congress I would say: Don’t take away Javi’s chance at a future.”

“Javi is living a life of his choosing, contributing to his community and thriving. These drastic cuts to Medicaid could take it all away from Javi and the millions of other people with disabilities who rely on daily supports and services to be in the community. The AHCA takes away independence, dignity, and decades of progress. We must now rely on the Senate stop this catastrophe,” said Marty Ford, Senior Executive Officer, The Arc.

This video is the fifth in a series of videos The Arc is releasing, sharing the personal stories of people with disabilities and their families, and the impact of the Affordable Care Act (ACA) and Medicaid on their lives.

The Arc advocates for and serves people with intellectual and developmental disabilities (I/DD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with I/DD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.
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Numbers Confirm Worst Fears of People With Disabilities: AHCA Devastating to Medicaid

/in /by The Arc

Washington, DC – The Arc released the following statement in response to the Congressional Budget Office’s report on the House-passed American Health Care Act:

“Millions of people will be impacted by the American Health Care Act if it becomes law – yet astonishingly, Members of Congress voted without sufficient information on the real world impact of their actions. Now we know, and our worst fears are confirmed – 14 million fewer people enrolled in Medicaid by 2026, and $834 billion in spending cuts to Medicaid over a decade.

“The states will be hard-pressed to make up for the loss of funding from the Medicaid program and the per capita cap restructuring that permanently eliminates the federal guarantee to partner in delivering these services. The hole will be vast and it will consume decades of progress in investing in supports and services for people to be served in the community instead of in isolated and segregated institutions or facilities. People with disabilities and their families fear the loss of community based supports and a return to institutional services.

“We are at a critical juncture in our history as a disability rights movement. Now more than ever, people with disabilities, families, professionals in the field, and the general public need to rise up to protect the rights of people with intellectual and developmental disabilities to live a life like anyone else,” said Marty Ford, Senior Executive Officer, Public Policy, The Arc.

The Arc advocates for and serves people wit­­h intellectual and developmental disabilities (I/DD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with I/DD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

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Trump Budget and Health Care Cuts Devastating for People With Disabilities, Including Soojung’s Family

/in /by The Arc

WASHINGTON, DC – Today the Trump Administration released its first ten year budget proposal, and the numbers are devastating for people with intellectual and developmental disabilities (I/DD) and their families. On top of the more than $800 billion in Medicaid cuts already approved by the House of Representatives, the Trump Administration is planning for $610 billion in cuts to Medicaid; $72.4 billion in cuts to Social Security’s disability programs; and hundreds of billions more in cuts to other effective federal programs that are vital to people with I/DD.

“Where we invest our federal dollars is a measure of our values as a nation. Today the Trump Administration showed its cards, and coupled with the devastating Medicaid cuts already approved by the House of Representatives in the health care bill, the deck is stacked against people with disabilities.

“In the last few weeks, I’ve traveled to chapters of The Arc in Maryland, North Carolina, Wisconsin, and even Alaska. Chapters of The Arc sprang up in these communities and across the country decades ago because people with disabilities and their families were appalled by the segregation of people with disabilities in inhumane institutions, and they were determined to make progress. And we have fought for rights, closed institutions, opened up the community and classroom, and paved the way to employment. Two effective programs built on bipartisan policy over the years – Medicaid and Social Security – have been essential to this progress. Medicaid provides health care and long term supports that help make a life in the community possible for many people with disabilities, and Social Security is far too often the only thing keeping the lights on and food on the table for a person with a disability.

“That these proposed cuts come in the very same package that is proposing the largest tax cuts in our nation’s history is simply obscene. Giving $5 trillion in tax cuts that primarily benefit wealthy individuals and corporations while simultaneously threatening the lives of everyday people defies comprehension.

“This budget – this Trump card – along with the health care cards being played in Congress as we speak, will dismantle decades of progress for people with disabilities and their families. So I’m calling on all advocates to do what they have done for decades, band together to put a face on these cuts. Share your story in your community and with your elected officials, and tell them to reject these cuts, before we go back in time to an era of discrimination and isolation,” said Peter Berns, CEO, The Arc.

In tandem with this budget news, The Arc is releasing a video which shares the story of a Maryland family which risks losing access to critical care for one of their children due to impending cuts to federal Medicaid funding. The video features Soojung, whose 11-year old daughter Alice, has Rett Syndrome and relies on overnight nursing services to be able to live at home with her family. Soojung speaks about the challenges she and her husband faced accessing these services, including having their requests turned down by private insurers. After years of waiting and uncertainty, Alice was finally accepted to a Medicaid program that provides her with nightly nursing services. These services have led to a great improvement in Alice’s health, making 2016 the first year of her life without a hospital stay.

For many families like Soojung’s, their health and lives could dramatically worsen if the Trump Administration’s proposed Medicaid cuts became a reality or if the over $800 billion in cuts over 10 years to federal Medicaid funding, proposed in the House-approved American Health Care Act (AHCA), go into effect. These cuts would not only force states to cut eligibility for their Medicaid programs, but would also diminish the quality and quantity of services that are provided to people who are already enrolled in these programs.

This video is the fifth in a series of videos The Arc is releasing, sharing the personal stories of people with disabilities and their families, and the impact of the Affordable Care Act (ACA) and Medicaid on their lives.

The Arc advocates for and serves people with intellectual and developmental disabilities (I/DD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with I/DD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

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Passage of AHCA: Real Life Consequences for People With Disabilities

/in /by The Arc

By: Julie Ward, Director of Health Policy and Nicole Jorwic, Director of Rights Policy

They say that if you want to know about a person, look at how they spend their money; to know the values of a nation, the same is true. The current Affordable Care Act and Medicaid fight is showing a side of the political system that is disheartening and shameful. The American Health Care Act, passed by the U. S. House of Representatives, lowers taxes on wealthy individuals and corporations and pays for it by taking over $800 billion from the Medicaid program which serves low income children, seniors, people with disabilities, parents, and other adults.

The fundamental injustice of transferring wealth from low income people to businesses and wealthy people is compounded by the fact that these deep cuts in Medicaid will not make private health insurance more affordable or available, the stated goals of supporters of the AHCA. Instead the AHCA dismantles the main source of funding for long term supports and services (LTSS) for seniors and people with disabilities. The demand for these services, such as help to stay in a person’s own home, will grow as the population ages. Instead of addressing the need for an LTSS policy in a positive way, it makes devastating cuts and places a per capita cap on the Medicaid program.

An estimated 24 million people will lose their insurance coverage and millions are at risk of losing the supports and services that help them live in the community. Every one of those numbers represents a person. A person who will no longer be able to feel the peace of mind of health coverage, a person who now will worry that their guarantee to services under Medicaid is irreparably changed, a person whose supports to assist them to work are at risk, and a person who now has to fear that their son or daughter will end up in an institution, when they have fought their whole lives to keep him/her in the community.

Medicaid is the main source of funding for over 77% of the supports and services that individuals with intellectual and/or developmental disabilities (I/DD) use to live in the community and has been able to grow because of the widespread bipartisan support. They have had bipartisan support because disability knows no political, or geographical, ethnic, or socioeconomic boundaries. These supports and services provide dignity to people with I/DD by providing help with meals, bathing and dressing, toileting, in-home skilled nursing, and communication support, to name but a few. These supports are critical to people with disabilities to be able to live their lives in the community. In many cases, they can be the difference between life and death.

We fear that because home and community based services are not mandatory services, they will be cut first. States will return to outdated modes of serving people with disabilities, congregating large numbers of individuals in facilities with inadequate staffing and no real-life opportunities. The per capita cap proposal will pave a path backwards to institutional care and segregated services.

The AHCA has many other troubling provisions and The Arc has developed a summary of how the bill impacts people with disabilities.

As the Senate develops its health care reform proposals, we must be constant reminders that the services and supports to people with disabilities and their families CANNOT be what pays for health care reform and tax cuts. Lives depend on it.

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“Don’t Take Away Our Independence”: Watch Thelma as The Arc Denounces Massive Cut to Medicaid

/in /by The Arc

WASHINGTON, DC – Today, The Arc released a video which highlights how the House-passed cut to Medicaid funding (which exceeds $800 billion) will negatively impact people with disabilities’ capacity to live independently. The video features a conversation with Thelma, a long-time Washington, DC resident who relies on Medicaid to employ a health aid who helps her perform daily household tasks that she can no longer perform by herself. She, like many others in the disability community, fears that reduced federal funding for Medicaid will limit her ability to hire attendants or access other services she needs to live independently, in the community in which she has lived since her youth.

The video comes on the heels of the House of Representatives passing the American Health Care Act, which included over $800 billion in cuts over 10 years to federal funding for Medicaid programs. This cut would not only force states to cut eligibility for state Medicaid programs, but will also diminish the quality and quantity of services that are provided to people who are already enrolled in these programs. For many people with intellectual and developmental disabilities, Medicaid generally is the only source of funds for them to live and work in the community with friends and families and avoid costly, harmful, and segregated institutions.

“Thelma is part of her community because of Medicaid. And her community is Washington, DC, right in the backyard of where Congress is considering dismantling the program that provides services and supports to Thelma and millions of other people across the country. Every member of the U.S. Senate needs to hear Thelma’s plea, and listen to the thousands of people they represent who have a disability, or have a family member with a disability, or provide services. This is about peoples’ lives – nearly a trillion dollars in cuts will drastically impact the ability of people with disabilities to be a part of their communities. It is unacceptable and The Arc and our network won’t stand for it,” said Marty Ford, Senior Executive Officer, The Arc.

This video is the third in a series of videos The Arc will be releasing in the coming weeks, sharing the personal stories of people with disabilities and their families, and the impact of the Affordable Care Act (ACA) and Medicaid on their lives. The first video featured nine people who rely on the ACA and/or Medicaid, and each one has a personal message for Members of Congress and the Trump Administration. The second video illustrates how Congress’ proposed changes to the ACA and Medicaid would negatively impact Americans with disabilities and their families. The video features an interview with Toby, Lindsay, and Calvin from Fairfax, VA. Calvin has Bilateral Fronto-Parietal Polymicrogyria and Cerebral Palsy and relies on multiple insurance plans to cover his medical and therapeutic treatments.

The Arc advocates for and serves people with intellectual and developmental disabilities (I/DD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with I/DD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

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The Arc Video Offers Disability and Family Perspective on Looming Healthcare Reforms

/in /by The Arc

Washington, DC – Today, The Arc is releasing another video illustrating how Congress’ proposed changes to the Affordable Care Act (ACA) and Medicaid would negatively impact Americans with disabilities and their families. The video features an interview with Toby, Lindsay, and Calvin from Fairfax, VA. Calvin has Bilateral Fronto-Parietal Polymicrogyria and Cerebral Palsy and relies on multiple insurance plans to cover his medical and therapeutic treatments.

This family’s story is shared by thousands of families across the country who are imploring Congress to keep the ACA and leave Medicaid untouched to allow their loved ones to continue to receive the supports they need to live full and independent lives. Here are some of the key ways in which the passage of the American Health Care Act (AHCA) will impact Toby, Lindsay and Calvin, and others in the intellectual and developmental disability community:

  • Proposes a more than $800 billion cut to Medicaid over the next decade, the program which provides funding for essential services for people with intellectual and developmental disabilities to live independent and healthy lives;
  • Allows for insurance companies to discriminate against people with disabilities by using pre-existing conditions as a pretext for higher and often unaffordable health care premiums;
  • Places more pressure on states to support an already under-funded program, which will result in smaller budgets, less coverage and fewer services for people with intellectual and developmental disabilities.

“The Arc opposes the AHCA and the proposed changes to the bill, as both will have widespread and terrible consequences for people with intellectual and developmental disabilities and their families. Congress needs to realize that a vote for the proposed health care reform is a vote against the health and wellbeing of their constituents, which include people with disabilities,” said Marty Ford, Senior Executive Officer, The Arc.

This video is the second in a series of videos The Arc will be releasing in the coming weeks, sharing the personal stories of people with disabilities and their families, and the impact of the ACA and Medicaid on their lives. The first video featured nine people who rely on the ACA and/or Medicaid, and each one has a personal message for Members of Congress and the Trump Administration.

The Arc advocates for and serves people with intellectual and developmental disabilities (I/DD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with I/DD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

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The Arc on CBO Score of American Health Care Act

/in /by The Arc

Washington, DC – The Arc released the following statement in response to the Congressional Budget Office’s report on the American Health Care Act, the plan to repeal the Affordable Care Act:

“The numbers are in, and they are devastating for people with intellectual and developmental disabilities. The Congressional Budget Office’s (CBO) score of the American Health Care Act confirms what we already knew – this bill is dangerous and the price we will pay is the health of millions of Americans including those with disabilities. We were promised a replacement for the Affordable Care Act, yet the plan laid out by this bill is insufficient to keep people with disabilities insured or support anyone with complex medical needs. The numbers underscore how dire the situation is, estimating that by next year 14 million more Americans would be uninsured and by 2026, 24 million will be without insurance.

“This bill is paid for by permanently altering the federal/state partnership of Medicaid, the primary health insurance program for people with disabilities. Thanks to the Medicaid expansion under the Affordable Care Act, millions of people, including people with disabilities, their family members, and their support professionals, have gained access to health coverage. Medicaid also is the single largest source of funding for the long term supports and services people with disabilities depend on to live and work in the community, and to avoid even more costly institutional care.

“The American Health Care Act will undo all of that by cutting $880 billion from Medicaid in the next decade, leading to 14 million fewer individuals being covered by Medicaid by 2026. Lives have been saved because people have had access to affordable, comprehensive health coverage, including long term supports and services. It isn’t hard to imagine what the outcome

will be as this program is cut and restructured. CBO anticipated that, in response to changes made by the bill, states could ‘cut payments to health care providers and health plans, eliminate optional services, restrict eligibility for enrollment, or (to the extent feasible) change the way services are delivered to save costs.’ Supporters of this bill are putting the health, wellbeing, and freedom of their constituents with disabilities at risk.

“This bill shows complete disregard for the health of people with disabilities. Claims that this bill makes health insurance more affordable are simply untrue. Look at the numbers, they show the reality of what this legislation will do,” said Peter Berns, CEO of The Arc.

The Arc advocates for and serves people with intellectual and developmental disabilities (I/DD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with I/DD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

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Nuts and Bolts of Income Tax for Individuals With Disabilities and Their Families

/in /by The Arc

By Elizabeth L. Gray, CELA, Special Needs Alliance®

As we approach tax season, it is important to understand the different tax credits, deductions, and liabilities affecting individuals with disabilities and their families. This is a complicated subject. This article provides general information. If you would like to get advice for your situation, you should consult a professional with knowledge of both taxation and special needs planning.

Claiming a Dependent

The IRS defines an individual with disabilities as someone with a permanent and total disability that results in the inability of that individual to engage in any substantial gainful activity. A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. Substantial gainful activity is considered the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Full-time work (or part-time work done at the employer’s convenience) in a competitive work situation for at least the minimum wage conclusively shows that the individual is able to engage in substantial gainful activity.

You can claim an individual with disabilities as a dependent when:

  • they have lived with you for more than half of the tax year;
  • you have provided at least half of their support for the tax year; and
  • they are your child, stepchild, foster child, or a descendant of these; or
  • your brother, sister, step-sibling, father, mother, grandparent or other direct ancestor of yours.
  • they are not filing a tax return of their own.

Tax Credits and Exemptions

  • Child tax credit – For each “qualifying child” who will be under the age of 17 at the end of the year, you may take up to a $1,000 credit, based on a sliding income scale.
  • Child and dependent care tax credit – This helps to defray the cost of care services needed in order for you and (if you’re married) your spouse to work. Married persons must both work, or one must work while the other is a full-time student, has a disability, or is looking for work (provided that the spouse looking for work has earnings during the year). There is no income ceiling on this credit, which can equal 20-35 percent of expenses incurred, up to $3,000 for one qualifying individual, and $6,000 for two or more qualifying individuals. People with higher incomes get a smaller credit than those with more modest incomes.
  • Earned income credit – This is available for people who work and have a child meeting the dependent qualifications previously described. The child must be under 19, a full-time student under 24, or have a permanent and total disability
  • Personal exemption for dependent – The maximum allowable for tax year 2016 is $4,050.The dependent’s gross income for the tax year must be less than $4,000. Gross income does not include income from services the person performs at a sheltered workshop.

Medical Deductions

The following deductions should be considered both by adults claiming a dependent and by individuals with disabilities who are filing for themselves. For most individuals, these medical expenses are deductible only when they exceed 10 percent of the taxpayer’s adjusted gross income. Until tax year 2017, a 7.5 percent threshold applies to filers who are 65 and older. Typical examples include:

  • Unreimbursed health care expense – Must total more than 7.5 percent of adjusted gross income. Remember to include travel expenses to and from medical treatments, certain insurance payments from already-taxed income (i.e., long-term care insurance), uninsured medical treatments (eyeglasses, contact lenses, false teeth, hearing aids), laser vision corrective surgery, and most medically necessary costs prescribed by a doctor. For example, if the doctor prescribes a humidifier for the home to help with chronic breathing problems, the device and the additional electricity costs to operate it, could be partially deductible. Remember to keep all receipts for any special medical needs.
  • Special schooling, training, or therapy, including medically recommended exercise programs. This includes amounts paid for meals and transportation.
  • Aides required for the dependent to benefit from his or her education.
  • Diagnostic evaluations.
  • Certain home improvements and/or modifications required as a result of your dependent’s condition.
  • Special medically recommended diets.
  • Conferences and seminars that are medically recommended and that deal specifically with the medical condition the child has, and not just general health and well-being. Unfortunately, this does not include deductions for meals and lodging incurred while attending the conference or seminar.

Considerations When Filing for Yourself

If you receive Supplemental Security Income (SSI) payments, those benefits are not taxable. In addition, the SSI payments do not get included in Social Security benefits.

What about regular Social Security or Railroad Retirement benefits? Part of the amount received may be taxable. Generally, if the only income received during the year was Social Security or Railroad Retirement, then the amount would not be taxable. However, if an individual received income during the year in addition to Social Security or Railroad Retirement, then half of the Social Security benefits plus the other income may be taxable, depending on your filing status (individual, head of household, etc.) and the total.

If you are receiving disability benefits under a disability retirement plan that was funded by your employer, those benefits are considered earned income until you reach your minimum retirement age. However, payments received from a disability insurance policy under which you have paid the premiums are not earned income.

Other considerations include:

  • Impairment-Related Work Expenses deduction – This is for attendant care services necessary for you to maintain employment. Such services qualify as a trade or business expense. This is available only if the you have a physical or mental disability that is a functional limitation to employment or that substantially limits one or more major life activities (i.e., walking, speaking, performing manual tasks, breathing, learning, or working).
  • Elderly and disabled tax credit – Available to every U.S. citizen, who is 65 or older at any time during the tax year. Tax payers who are under 65 may claim the tax credit if they are retired on permanent and total disability under an employer’s plan, or if they receive taxable disability income during the year and do not reach mandatory retirement age by the first day of the tax year.

Special Needs Trusts and ABLE Accounts

Special needs trusts (SNTs) and ABLE accounts are two important financial planning tools that can significantly contribute to an individual’s quality of life. It is important to understand tax liability for each.

Special Needs Trusts

Income generated by a SNT is taxable and trust expenditures are eligible for deductions, but who is liable depends upon the type of trust involved:

  • A third party trust is set up by an individual for the benefit of someone else (for instance, a parent may establish a trust for a child). When the trust is revocable, meaning that the person who created it can make changes, it is considered a grantor trust and taxes are paid by the person who established it. Once the trust becomes irrevocable, it must report any taxable income or gross income of $600 or more in a given tax year. The trust may either pay the tax itself or issue a form facilitating payment by the beneficiary. Issuing the form to the beneficiary may not be a bad thing because trust tax rates are high, while the beneficiary may be in a low-income tax bracket. Given the personal exemption and, in many instances, the standard deduction, no tax payment may be due. Distributions that represent trust income become a tax liability for the beneficiary.
  • First party trusts, created with funds belonging to the beneficiary with disabilities, are automatically considered grantor trusts in most states (in some locations, it may be necessary to add appropriate language to the trust document), so the beneficiary is responsible for taxes.
  • If an SNT is structured as a qualified disability trust, it may be eligible for larger exemptions. In addition to other requirements, the trust must be irrevocable, and the beneficiary must be under 65 when the trust is created.

ABLE Accounts

As a quick reminder, ABLE (Achieving a Better Life Experience Act of 2014) accounts are modeled after the Section 529 savings accounts and enable certain individuals with disabilities to save funds without endangering their eligibility for means-tested government benefits. Contributions to an ABLE account are not tax-deductible and are made with after-tax dollars. However, ABLE account earnings grow tax-free unless distributions in a given tax year are not made for the designated beneficiary’s qualified disability expenses. Qualified disability expenses consist of a wide range of expenditures: education, housing, transportation, employment training and support, assistive technology and personal support services, health prevention and wellness, and more. In addition, distributions for qualified disability expenses are not considered income.

This overview is not intended as tax advice. Individuals with disabilities and their families should consult a tax professional about their specific circumstances.

The Special Needs Alliance (SNA)® is a national non-profit comprised of attorneys who assist individuals with special needs, their families, and the professionals who serve them. SNA is partnering with The Arc to provide educational resources, build public awareness, and advocate for policies on behalf of people with intellectual/developmental disabilities and their families.