2016 ISSUE #9

Issue 9, 8/4/2016

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Since we first reported on the federal passage of the Achieving a Better Life Experience (ABLE) Act in December 2014, we have heard from dozens of readers who wanted to know more about it.  When Iowa passed its law creating an Iowa ABLE program during the 2015 legislative session, we heard from even more of you, excited and wanting to know how to get started.

Starting a new government program takes time – it took almost a year for the federal rules to be finalized and states to pass legislation allowing the creation of these state-based accounts.  Then state agencies had to write rules for the program, and find banks or investment firms to manage the accounts.  So while it seems like a long time since Congress passed the bill, things are moving along smoothly.  We wanted to take this issue of infoNET to update you on what’s going on, where our state is in the creation of its ABLE program, and changes to the law being proposed in Congress.

The other big issue of the year for our readers is Medicaid managed care.   Whenever we post information about this topic, we get hundreds of hits, and we've heard from many of you that this is an issue very important to you.  In this issue of infoNET, we will also update you on the recent Senate Human Resources Committee hearing, and the schedule for the Legislative Health Policy Oversight Committee.  Enjoy the rest of your summer – and good luck with your advocacy!

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Individuals with disabilities often struggle financially, because they are forced to live in poverty in order to remain eligible for programs that pay for the supports and services they need to live independently.  But these programs do not pay for everything that is needed, and do not allow people to save for a day when other family members may not be around to help with their daily living needs.  That's why Congress approved and the President signed the ABLE (Achieving a Better Life Experience) Act.

The ABLE Act allows individuals to establish savings accounts that allow the individual or their friends and family to save up to $14,000 each year.  The savings account can be used to pay for education, transportation, housing, assistive technology, employment support and training, personal support services, health care expenses, and other "qualified disability expenses."  In addition, these accounts can grow to $100,000 without risking eligibility for Social Security and other government programs, and people are able to keep their Medicaid coverage no matter how much money they save in an ABLE account. 

As Rik Shannon, Public Policy Manager at the Iowa DD Council, explains, “It recognizes there are added costs to individuals and families who are living with a disability.  For a long time we’ve had federally imposed asset limits that serve as a roadblock toward financial independence for many people who live with a disability.”  Shannon adds, “This is a program that supports people with disabilities to live independently in communities of their choice.”

Funds in the account are not taxed when used, and in Iowa, people contributing to the account can deduct up to $3,188 from state taxes (this amount mirrors Iowa’s 529 college savings plan program, and it is adjusted annually for inflation). One in every ten Iowans lives with some type of disability.  As of August 1, 47 states and the District of Columbia have passed laws allowing the creation of ABLE accounts.  Only four states are currently enrolling people in their programs (Nebraska, Ohio, Florida, Tennessee); all of the others (including Iowa) are currently developing their programs.

  • Click here to find out more about each state’s plans.
  • Click here to see ABLE legislation in each state.

Iowa passed its ABLE legislation in the 2015 session, including it in the Health and Human Services Budget Bill.  It was signed by the Governor, and directs the State Treasurer to develop and administer the program. Some things you need to know about Iowa’s program that is in development:

  • Iowans with disabilities (and friends/families) can contribute a total of $14,000/year.
  • You may save up to a total of $320,000 in an Iowa ABLE account.  
  • Only the first $100,000 in the account will be exempted from SSI.  If you save more than that, your SSI cash benefit will be suspended.  ABLE account savings (up to $320,000) do not affect Medicaid eligibility.

For more information about the ABLE Act, visit the ABLE National Resource Center at http://www.ablenrc.org/.

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The Iowa ABLE Act was passed by the Iowa General Assembly in 2015, and I am pleased to have been given the responsibility of administering the program for the state of Iowa.  This program has the potential to help thousands of Iowans with disabilities and their families save for critical healthcare and educational needs, while still qualifying for the federal and state benefits they deserve.  This will be an additional tool for families to care for loved ones that are in need of additional resources, as well as allowing Iowans with disabilities who are able to work, to save their hard earned money for their future healthcare and educational needs. 

My goal is to implement a plan for Iowans that is cost effective for participants and is simple and easy to use.  This is much like the model we used for the successful College Savings Iowa 529 plan. When the legislation was first passed, many people thought that a 529 Plan was a great model for these plans. While there may be some similarities, there are very distinct differences which have lead us to think outside of the box in the options available to us.

We are not alone in this dedication to bring a top-ranked plan to citizens with disabilities in our state, therefore we are working in partnership with a group of states to see if together we can lower costs and provide more options.  We believe that by joining together, we can enjoy the economies of a larger program while maintaining control over our own program. 

This process has taken longer than we originally anticipated, but it is critical to us that we explore every option before we launch a plan for Iowans.  Our goal is to have a program available for Iowans by the end of this calendar year or in early 2017. Our office is working diligently every day to make this happen.

We look forward to working with groups across the state to ensure that everyone eligible to open an IAble account knows this program is available. We know that many persons with disabilities already work with and trust the Iowa Developmental Disabilities Council to provide them with valuable resources and guidance. Our goal is to work in partnership with this organization and others around the state.  Please feel free to contact our office at any time with questions about the program.  

Michael Fitzgerald, State Treasurer
515-281-5368; treasurer@iowa.gov

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Even before most states implement their ABLE accounts, Congress is looking for ways to improve benefits and expand access.  A bi-partisan group of US Senators and US Representatives have introduced three bills so far:

  • The ABLE Age Adjustment Act (S. 2704/HR 4813) would raise the age limit for ABLE accounts to age 46.  Currently, individuals with a severe disability that occurred prior to the age of 26 are eligible to open an ABLE account. Many debilitating diseases and conditions can occur later in life, including multiple sclerosis, Lou Gehrig’s disease, or paralysis due to an accident. Increasing the age limit for ABLE accounts will allow more individuals to save money to help cover the costs of short, medium and long-term disability related expense.
  • The ABLE Financial Planning Act (S. 2703/HR 4794) would allow families to rollover savings in a 529 college savings plan into an ABLE account. Many families save for a child’s college education by opening a 529 account, sometimes before their child is even born, only to learn later that their child has a severe disability. In such instances, these families have funds trapped in a 529 that they could use to help cover their child’s lifelong disability related expenses. But if they withdraw the funds for anything other than college expenses, they face taxes on their withdrawals. The ABLE Financial Planning Act would help these families by allowing them to transfer funds from their 529 account without penalty into an ABLE account for their child with a qualified disability (and from a 529 ABLE account to a 529 college savings account).  It is important to note that the rollover from a 529 to a 529 ABLE account would still be subject to the annual contribution limit (currently $14,000).
  • The ABLE to Work Act (S. 2702/HR 4795) would allow individuals and their families to save more money in an ABLE account if the beneficiary works and earns income. Specifically, in addition to the $14,000 annual contribution cap, an ABLE beneficiary who earns income from a job could contribute from his/her compensation up to the Federal Poverty Level, which is currently at $11,770 (potentially increasing allowable annual contributions to $25,770). These additional funds into the ABLE account would only be allowed if the beneficiary was not participating in his/her employer’s retirement plan (like a 401k). The bill will also allow ABLE beneficiaries to qualify for the existing Saver's Credit when they contribute savings to their ABLE account It is important to note that beneficiaries would still be subject to the caps related to earned income and substantial gainful employment (SGA). This bill would not allow individuals with disabilities the ability to disregard earned income (even if it is contributed to their ABLE account) for purposes of eligibility for SSI and Medicaid. 

None of Iowa’s Congressional delegation has signed on as co-sponsors to any of these bills yet. Click here to ask US Senators Grassley and Ernst, and your US Representative to co-sponsor it.


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If you could pick an issue that defined the 2016 legislative session - Medicaid managed care would certainly be in the running for top honors.  There were countless committee meetings held to discuss it.  Providers, those who receive Medicaid services, managed care staff, and state Medicaid staff all testified.  In the end, legislators passed and the Governor approved a series of controls to make sure there was proper oversight on managed care organizations (MCOs).  One of those controls was the creation of the Legislative Health Policy Oversight Committee.  The following legislators will serve on ths committee: Senators Ragan (co-chair), Bolkcom, Costello, Mathis, and Segebart; and Representatives Heaton (co-chair), Forbes, Fry, Heddens, and L. Miller.  The committee will meet twice this year - the first meeting will be on August 29 at 12:30 pm in Room 116 at the State Capitol in Des Moines, and the second will be sometime after the November 8 election.  Watch Facebook and our News Alerts for more details and an agenda.

The members of the Senate Human Resources Committee didn't want to wait until August 29 for an update on Medicaid managed care, and knew the agenda would be too full to accommodate the providers and advocates that wanted to speak.  They held a meeting on July 26, which you can watch on video here.  Several providers talked about higher rates of preauthorization denials, delays in payments, and their need to take out lines of credit to pay their staff while they wait for MCOs to pay.  Medicaid members talked about conflicting answers to questions, services being denied, and provider network confusion.  Senators vowed to continue to host meetings to get answers - and to sort through the conflicting reports they hear about provider networks, denials, and payment delays.

Legislative Democrats also announced that they had surveyed more than 400 providers, and found that Medicaid providers are seeing higher costs in running their businesses. 

  • 90% said privatization has increased their administrative expenses.
  • 79% indicated they were not getting paid on time.
  • 28% had to borrow money to pay their bills while waiting for reimbursement.
  • 66% said when they do get reimbursed, it’s at lower rates than agreed upon. 

The full survey can be found here.  It should be noted that this is not a scientific survey - any provider could respond, and responses were not independently verified. The full survey results can be found here.  Of note:

  • 46% of providers say they plan to reduce services.
  • 61% said privatization has reduced the quality of services they can provide.
  • 38% said Medicaid patients can no longer see their out-of-network specialty providers.

While this has become partisan at the Capitol, nearly every legislator that we have spoken to is concerned about the problems that are occurring, and want to help.  If you are having trouble getting answers, contact your State Representative and State Senator.  Sometimes they can get answers faster, and they want to help.  You can find out who your legislatos are, and how to contact them, here.

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In case you haven't heard, Senator David Johnson has decided to become an Independent.  Many of you know him - he has been a strong advocate for disability rights and has been vocal about his concerns with Medicaid managed care. He has represented the NW corner of Iowa as a Republican, and has served on the Health and Human Services Budget Subcommittee, and was Ranking Member on the Senate Human Resources Committee.  

Sen. Johnson left the Republican party over differences he has with Republican presidential nominee Donald Trump, who made fun of a reporter with a disability and who has made "racist remarks."  Senate Republicans were shocked by his change to Independent after 18 years as a Republican legislaor.  They have removed him from committees, but he still attends even though he cannot vote in committee.  His change means the current balance of the Senate is 26 Democrats, 23 Republicans, and 1 Independent.  

If Senate Democrats were to lose a seat in the November 8 election, they would still control the Senate, but would need one Republican or Sen. Johnson to pass legislation (since it would be 25 Democrats, 24 Republicans, and 1 Independent). However, like all voter registrations, you can change them at any time, and Sen. Johnson has said that he will keep his options open.

Sen. Mark Costello is serving as the new Ranking Member of the Senate Human Resources Committee, and Sen. Jack Whitver was added to the committee since they are still actively meeting.  While Sen. Johnson was taken off the Education, Natural Resources and Environment, and State Government Committees, he has not been replaced since they have no plans to meet before January (when new committee appointments will be made).

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