No. 109-7
Date: October 28, 2005

House Ways and Means and Senate Finance Committees' Action on Budget Reconciliation Proposals

This week, both the House Ways and Means and Senate Finance Committees marked-up proposals to be included in budget reconciliation bills.

On October 26, 2005, the House Ways and Means Committee approved the Entitlement Reconciliation Recommendations for Fiscal Year 2006, by a vote of 22-17. The recommendations will now be sent to the House Budget Committee, where a comprehensive House budget reconciliation package will be compiled.

The recommendations include the following two Supplemental Security Income (SSI) provisions.

Review of State Agency Blindness and Disability Determinations

  • Would require the Commissioner of Social Security to conduct reviews of a specific percentage of SSI initial disability and blindness cases of individuals aged 18 and older that were allowed by State disability determination service agencies (DDS). The provision would be phased in as follows--for fiscal year 2006, the Commissioner would be required to review 20 percent of DDS allowances; in fiscal year 2007, the requirement would be 40 percent; and for fiscal years 2008 and thereafter, 50 percent of all DDS allowances would be reviewed.

  • Would be effective upon enactment.

Payment of Certain Lump Sum Benefits in Installments under the Supplemental Security Income Program

  • Would require that past-due monthly SSI benefits that exceed three times the maximum monthly benefit (Federal benefit rate plus State supplementary payment amount, if any) payable to the individual be paid in up to three installment payments, 6 months apart. Also, limits the amount of the first two installment payments to three times the maximum monthly benefit except in cases in which the individual has outstanding debt relating to food, clothing, shelter, or necessary medical needs. (Except for changing "12 months" to "3 months," the current law installment payment provision would remain unchanged.)

  • Would be effective 3 months after the date of enactment.

On October 25, 2005, the Senate Finance Committee approved recommendations by a vote of 11-9, and sent them to the Senate Budget Committee for inclusion in a broad reconciliation package. The recommendations did not include any SSI proposals, but did include the following Medicaid-related provision of interest.

Restoration of Medicaid Eligibility for Certain SSI Beneficiaries

  • Would begin Medicaid coverage for children who are eligible for SSI effective the month the SSI application is filed or the first month of SSI eligibility, whichever is later. (Under current law, Medicaid eligibility for such children begins the month following the month of the SSI application or first eligibility.)
  • Would be effective 1 year after the date of enactment.

Preserving And Improving Access To Health Care Provisions in the Family Opportunity Act

  • Would allow parents to work and earn above-poverty wages while maintaining health care for their disabled children by providing:

    • Medicaid "buy-in" for disabled children whose family income or resources are at or below 300 percent of the poverty level ($58,050.00 for a family of four in 2005);
    • Funds for demonstration projects in 10 states to provide services to Medicaid enrolled children with psychiatric disabilities at home, instead of in an institution; and,
    • Funds for information and outreach centers to serve families with disabled children.

    Would be effective January 1, 2008.

Reform of Medicaid Asset Transfer Rules and Loopholes

  • Would strengthen current Medicaid law concerning transfer of assets to limit the circumstances under which persons may intentionally shelter assets in order to qualify for Medicaid by:

    • Requiring States to apply partial month penalties;
    • Requiring States to accumulate transfers in computing the period of ineligibility;
    • Requiring that annuities are treated the same as trusts under current law;
    • Requiring that certain notes and loans are considered countable;
    • Requiring private annuities be based on actuarial life expectancy; and,
    • Limiting transfers to purchase life estates.
  • Would require States to provide a notice of the undue hardship waiver process to any individual applying for Medicaid who would be subject to a penalty period so they may request a waiver of the penalty period. Also requires States to provide for a timely process for determining whether an undue hardship exists.

  • Would be effective the calendar quarter that begins after the date of enactment.