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A Penalty for Hard Work

March 24, 2003

The United States is not supposed to be a place that lets kids -- especially disabled kids -- suffer because of their parents' deeds -- especially if the deed in question is working harder or leaving welfare for a job. That, however, is exactly what the nation's current Medicaid system does.

Many families of disabled children that receive federal disability benefits under Supplemental Security Income, or SSI, want to be more productive and independent. But if they increase their incomes, their children lose health-care coverage under Medicaid.

In a recent survey of 20 states, 64% of parents whose children are afflicted with cerebral palsy, autism and other chronic ailments report they are turning down jobs, turning down raises, turning down overtime and so remain unable to earn enough money to adequately provide for their families -- just so the children can keep receiving treatment or drugs through Medicaid.

As the nation tries to showcase its ideals to the world, now is a good time for Congress to fix the system by supporting the proposed Dylan Lee James Family Opportunity Act, which Sens. Charles E. Grassley (R-Iowa) and Edward M. Kennedy (D-Mass.) introduced March 13. The bill would allow the parents of disabled children to keep their Medicaid insurance so they can enter the workforce without losing lifesaving medical benefits.

The legislation is named after a 6-year-old boy from Mesquite, Texas, who died in 2000 after a struggle with Down syndrome. Months before his death, his parents received a letter from Medicaid declaring that Dylan had become ineligible for health benefits because his stepfather, a plumber, had received a raise that brought his salary to $33,000.

Two-thirds of U.S. senators have co-sponsored the bill. Yet, for each of the last three years, Senate leaders have allowed similar bills with equally strong backing to die, in large part because Sens. Trent Lott (R-Miss.) and Don Nickles (R-Okla.) have rallied opposition. Last year, Nickles argued that the measure's cost, $5.7 billion over 10 years, was unaffordable and a "massive expansion of Medicaid." He also said he worried about middle-income families "coming out of the woodwork" to take advantage of new coverage.

To win support from Senate skeptics, Grassley and Kennedy have scaled back the bill substantially since first introducing it in 2000. Like the original legislation, this bill would allow states to offer Medicaid coverage on a sliding scale for families with incomes well above the federal poverty level. To keep costs down, this year's version proposes an income ceiling of about $45,000 for a family of four and limits the benefit to children up to age 18.

Absent a complete overhaul of American health care, the proposed Family Opportunity Act is the best way to repair a perverse system that forces parents to stay poor so they can care for their disabled children.

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