*
P
Inside Courage Center Awards — p. 8 PowerHockeyTM Results — p. 13
Possible State Strike — Page 2
September 10, 2001
1
“The man who does not read good books has no advantage over the man who can’t read them.”
—Mark Twain
Non-profit Org. U.S. Postage PAID Mpls. MN Permit No. 4766
Volume 12, Number 9
SOURCES
RESOURCES
September 10, 2001
SOCIAL SECURITY REFORM INDIVIDUAL ACCOUNTS WOULD REDUCE BENEFITS by Jeff Nygaard
F
Legislative Review 2001 Part 2: Changes In Community Support by Anne L. Henry Editor’s Note: This is the second of a three-part series explaining the ins and outs of the various laws and policies put in place by the legislature as they came out of the 2001 session. This month’s Part 2 has to do with the community supports that allow people to get out and stay out of institutions and live independently in the community. The final installment will elaborate on all of the “other” provisions that don’t fit into the first two categories. Provider Cost-of-Living Increase: Health and Human Services providers in long-term care and community support services received a 3% cost-ofliving allowance (COLA) increase for each year of the biennium. Intermediate Care Facilities for persons with mental retardation or a related condition (ICF-MR) and Day Training and Habilitation programs were given a 3.5% increase each year.
*
Consumer Support Grant (CSG) Program The Consumer Support Grant program is a state-funded program which allows persons to “trade in” their Medical Assistance (MA) home care or other community support services funded by MA, and obtain a grant equal to the amount of state funds (currently, that is 49 percent, which is the amount of MA funds that are provided by the state) in their MA services. As part of their biennial budget, the Department of Human Services (DHS) proposed major changes to the state-funded Consumer Support Grant program and estimated millions of dollars in savings if those changes were adopted by the Legislature. The DHS Consumer Support Grant proposal was amended in several significant ways during the session. Projected savings from changing the CSG program were used to fund other initiatives in the Health and Human
Services budget, but the program will remain available to those who need it under the following circumstances: 1. DHS had proposed a limit of 200 persons for the CSG program. Rather than capping the program at 200, the Legislature changed the way individual grant amounts are determined. Beginning July 1, 2001, new persons will be limited to grants based on a formula using the statewide average use of personal care assistant (PCA) hours and the individual home care rating category assigned as part of a home care assessment. 2. Two-hundred “exception grants” will be available for distribution to persons with exceptional needs as determined by the county. These exception grants will be provided on a firstcome/first-serve basis by DHS based upon the date of county request. The Leg. Review - cont. on p. 9
our years ago, Access Press reported on the likely effects of “privatization” of Social Security on that program’s disability benefits (see “Social Security and Disability: What Privatization Means” August 1997). In that article, we pointed out that any plans to “privatize” Social Security— which means to take some of the money that currently goes into a pool that covers everybody and shift it into private accounts that belong to individuals—would necessarily involve deep cuts in the disability insurance benefits now paid by the program. That’s still true, and that’s the bad news. The good news is that many people are coming to understand that so-called privatization would be a bad deal for people with disabilities (and others) and are making their voices heard. Back in 1997, Access Press was one of the few places in the country that was talking about the likely effects of Social Security “reform” on disability benefits. Now many groups and organizations have done the math, and they are coming up with similar results. We predicted in our previous article that the debate about the privatization of Social Security would reach “a fever pitch in the next few years.” Four years later, we see that it has. This past May President George W. Bush appointed a “Commission to Strengthen Social Security,” and directly charged it with the job of coming up with a plan to partially privatize the Social Security program. So it seems like a good time to take a look at the issue once again.
More Than a Retirement Program Despite many people’s perception that Social Security is simply a government-run retirement program, it is far more than that, as readers of Access Press well know. Almost 15 percent of all Social Security recipientssome 6.7 million people-are collecting the program’s disability benefits because they were themselves disabled or were the children of disabled workers. Social Security’s disability coverage is the equivalent of a $203,000 policy in the private market. Such policies “are either unavailable in the private market or very expensive,” according to a recent report published by The Century Foundation and the Economic Policy Institute. In addition, more than 90 percent of the adult disabled children who receive Social Security benefits do not receive disability benefits, but receive survivors benefits, because they are dependents of deceased or retired workers, according to the federal government’s General Accounting Office (GAO). When we factor in survivors benefits, we see that Social Security is both a large disability and a large life insurance program. Program-wide, about a third of Social Security expenditures pay for survivorship and disability benefits. Social Security Disability Insurance (SSDI) pays monthly benefits to workers who are no longer able to work due to a severe illness or impairment that is expected to result in death or to last at least 12 months. Benefits are based on the
disabled worker’s past earnings and are paid to the disabled worker and his or her dependent family members. There are racial, gender, and age factors to consider when thinking about the effects of privatization on Social Security’s disability and survivors benefits. African American workers as a group, for example, have lower lifetime wages, are more likely to hold high-risk jobs, and have a shorter life expectancy than EuropeanAmerican workers. As a result, African Americans are major beneficiaries of Social Security’s disability and survivors insurance programs. While African-Americans make up just 12% of the nation’s population, they constitute 18% of disability beneficiaries. Fifteen percent of the under-18 population is African American, yet they constitute 22.6% of all young survivorship beneficiaries and 20.8% of young disability beneficiaries. Many more women than men are dependent on their spouse’s income for much of their lives, and women live longer, on average, than men. This explains why women, who make up 52% of the population, constitute 72.3% of survivorship beneficiaries. And children under the age of 18—just 6% of the population—constitute 26.9% of survivorship beneficiaries and 22.1% of disability beneficiaries. The Basic Problem The basic problem with the concept of individual accounts in regard to disability and survivors benefits was SS - cont. on p. 10
*