Obama Releases 2016 Budget Proposal

The President has released his Fiscal Year 2016 Budget. The plan reverses sequestration cuts and focuses on the needs of the middle class. The ambitious proposal includes spending increases in a number of areas and over a trillion dollars in tax increases, mainly impacting the wealthiest Americans. The President’s Budget also includes increased investments in specific disability related programs. 

Medicaid

The Budget includes proposals that would expand access to Medicaid home and community-based services (HCBS) as an alternative to institutional care for individuals with disabilities and elderly populations. First, the Budget expands and simplifies eligibility to encourage more States to provide HCBS in their Medicaid programs, extending and improving the Money Follows the Person (MFP) Rebalancing demonstration, and giving states the option to expand eligibility for the Community First Choice (CFC) and 1915(i) home and community-based state plan options.  The MFP proposal would extend the demonstration period through FY 2020 and provide additional flexibility to states to use MFP funds to prevent individuals from entering an institution in the first place, as well as transition services. The proposal would also reduce the institutional requirement from 90 to 60 days and allow skilled nursing facility days to be counted towards the institutional requirement. Lastly, this proposal would allow individuals in certain mental health facilities to transition to home and community-based services under the demonstration.

The CFC proposal would provide states with the option to make medical assistance available to individuals who would be eligible under the state plan if they were in a nursing facility. Under current law, any state interested in the Community First Choice Option must create or maintain a 1915(c) waiver with at least one waiver service to make the benefit available to the special income group or provide eligibility for the CFC benefit through another eligibility pathway. This proposal would provide equal access to services under the state plan option and provide states with additional tools to manage their long-term care home and community based service delivery systems, with $3.6 billion in costs over 10 years.

The Budget proposes to update eligibility requirements to increase states’ flexibility in expanding access to home and community-based services under section 1915(i). Under current law, certain non-categorically eligible individuals who meet the needs-based criteria can only qualify for home and community-based services through the 1915(i) state plan option if they are also eligible for home and community-based services through a waiver program. Removing this requirement would reduce administrative burden on states and increase access to home and community-based services for the elderly and individuals with disabilities, at a cost of $1.3 billion over 10 years. Another proposal would provide states with the option to offer full Medicaid eligibility to medically needy individuals who access home and community-based services through the state plan option under section 1915(i) at a cost of $38 million over 10 years.

The Budget also includes a comprehensive long-term care pilot for up to five States to test, at an enhanced Federal match rate, a more streamlined approach to delivering LTSS to support greater access and improve quality of care. This eight-year pilot program would create a comprehensive long-term care state plan option for up to five states.  Participating states would be authorized to provide home and community-based care at the nursing facility level of care, creating equal access to home and community-based care and nursing facility care.  The Secretary would have the discretion to make these pilots permanent at the end of the eight years.  This proposal “works to end the institutional bias in long-term care and simplify state administration,” according to budget documents.

Among other Medicaid proposals: The Administration proposes to create a pilot to expand Program for All-Inclusive Care for the Elderly (PACE) eligibility to individuals between ages 21 and 55. The proposal would create a pilot demonstration in selected states to expand eligibility to qualifying individuals between 21 years and 55 years of age, in order to “test whether the Program for All-Inclusive Care for the Elderly can effectively serve a younger population without increasing costs.” The President also proposes to create a state option to provide 12-month continuous Medicaid eligibility for adults who would otherwise be required to report changes in income, assets, or other life circumstances that may affect eligibility between regularly scheduled redeterminations. States already have a state plan option for continuous eligibility for children in Medicaid and CHIP and that authority would be broadened to include all adults or, at state option, only adults determined eligible for Medicaid on the basis of Modified Adjusted Gross Income (MAGI). This proposal is expected to run up $4.7 billion in net federal costs including $27.7 billion in Medicaid costs over 10 years. There is also a proposal to allow states to target their Health Home programs by age, which would cost $1 billion over 10 years. To protect access to programs, including Medicaid, for low income families and individuals, a proposal would treat the Consumer Price Index for All Urban Consumers adjustment for the poverty guidelines consistent with the treatment of the annual cost of living adjustments for Social Security Benefits, meaning the poverty guidelines would only be adjusted when there is an increase in the Index, not a decrease.

For more detail on the Administration’s budget proposal affecting Medicaid, go to http://www.cms.gov/About-CMS/Agency-Information/PerformanceBudget/Downloads/FY2016-CJ-Final.pdf.

Employment

The Budget provides $3.4 billion for the Vocational Rehabilitation (VR) State Grants program including an increase of $56.7 million over the 2015 level to fund implementation of new Workforce Innovation and Opportunity Act (WIOA) provisions. The budget also proposes to allow the Department of Education (ED) to operate the Disability Innovation Fund (DIF) on a continuous basis. Using redirected unspent Vocational Rehabilitation Funds, the DIF has provided $215 million to the Promoting Readiness of Minors in SSI (PROMISE) pilot to test and evaluate interventions that successfully improve child and family outcomes and reduce the need for children to remain in the SSI program. In 2015 and continuing in 2016, ED would use the DIF to fund projects designed to identify innovative transition services for youth with disabilities that lead to postsecondary education and/or competitive employment and projects intended to address the needs of individuals with disabilities who need to support to maintain employment. The Budget also provides new authority and $400 million in resources for the Social Security Administration (SSA) to test innovative strategies to help people with disabilities remain in the workforce, such as early-intervention measures like supportive employment services for individuals with mental impairments, targeted incentives for employers to help workers with disabilities remain on the job, and incentives and opportunities for States to better coordinate services.

For more detail on the VR and DIF proposals, go to http://www2.ed.gov/about/overview/budget/budget16/justifications/j-rehab.pdf. For the SSA proposal, go to http://www.socialsecurity.gov/budget/FY16Files/2016FCJ.pdf. 

Administration for Community Living (ACL)

Overall, the Administration for Community Living would receive about a 7 percent hike this year. The Budget includes $20 million for the Aging and Disability Resource Centers (ADRCs) program, which builds one-stop entry points into long-term care at the community level in states. Additionally, the Budget supports the Administration for Community Living’s (ACL’s) new initiative to develop best practices and an evidence base to better support young people with intellectual and developmental disabilities as they transition from adolescence into young adulthood across all systems – health, education, employment, human services, and community living. University Centers for Excellence in Developmental Disabilities (UCEDD) programs would receive an almost $1 million increase to cover the cost of living increase while maintaining funding for national training initiatives and technical assistance.  Projects of National Significance (PNS) would receive a $5.6 million increase to support the Administration’s Youth Transitions Initiative, inclusive employment initiatives, and targeted technical assistance for self-advocacy organizations.   Leadership Education in Neurodevelopmental and related Developmental Disabilities (LEND) programs would be level-funded. The President also proposes a new $15 million Family Support initiative within the Administration for Community Living to “develop and expand promising and evidence-based state and local approaches” to supporting families.  This new initiative is proposed in addition to increases to the National Family Caregivers Support program and a proposed doubling of the Lifespan Respite Care Act program to $5 million. The Budget also provides $111 million, an increase of $5 million over the 2015 enacted level, for the Independent Living program. 

For more detail on ACL’s budget, go to http://www.hhs.gov/budget/fy2016/fy-2016-budget-in-brief.pdf. 

Housing

The Budget provides $177 million to the Housing and Urban Development (HUD) Housing for Persons with Disabilities program (known as “Section 811”) to continue current assistance and expand this housing by about 700 units. The funding request for the Housing for Persons with Disabilities program includes funding for two primary activities: $150 million for Project Rental Assistance Contract (PRAC) renewals and amendments to fully fund 1,800 housing properties with more than 21,000 units; and $25 million for new Section 811 Project Rental Assistance (PRA) awards that will support about 700 new units. Section 811 PRA funding in fiscal year 2016 will support state housing agencies that have partnered with state health care agencies to develop an integrated health care and housing approach to serving persons with disabilities. The Department also requests continued authority to collect residual receipts as additional funding to support the Section 811 PRA program. There is also an additional $2 million for other program expenses, including property inspections.

For more information on the Section 811 Funding Request, go to: http://portal.hud.gov/hudportal/documents/huddoc?id=29-FY16CJ-HPDISABILITIES.PDF.

Education

The Budget provides $11.7 billion for the Individuals with Disabilities Education Act (IDEA) Grants to States and $10 million through IDEA Technical Assistance and Dissemination, for competitive Results Driven Accountability (RDA) Implementation grants, which “shift the focus of the Department’s monitoring efforts from compliance with red tape to improving results for infants, toddlers, children, and youth with disabilities,” according to budget documents released by the White House. These grants would provide funds to States and lead agencies for statewide technical assistance, professional development, or other coordinated activities to support States during the implementation of the Department’s RDA efforts. The Budget also provides $907 million for early intervention and preschool services for children with disabilities, an increase of $115 million from 2015 enacted. 

For more detail on the IDEA budget proposals, go to http://www2.ed.gov/about/overview/budget/budget16/justifications/i-specialed.pdf.

Outlook

No president’s budget has ever been passed in full by Congress. This is even less likely when a majority of legislators belong to the opposite political party from that of the president. Congressional opponents have already signaled their unhappiness with the spending totals contained in the President’s budget. However, budget proposals, particularly in the year before a presidential election, are often used to frame a national debate. 

FMI: The Obama Administration’s budget proposal for 2016, with all accompanying documents, is available at http://www.whitehouse.gov/omb/budget/.