People with disabilities caught up in effort to fix glitch in healthcare law

Efforts to fix a glitch in the healthcare reform law could backfire on thousands of people with disabilities, The Hill has learned.

Republicans and some Democrats want to change a part of the law that made 3 million middle-income people eligible for Medicaid. The law excludes Social Security income when determining eligibility for health insurance exchange subsidies or Medicaid, causing many middle-class people to become eligible for Medicaid starting in 2014.

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Some lawmakers want to change the law to ensure that Medicaid remains a program for the poor, but several advocates say simply counting Social Security benefits as revenue would hurt people with disabilities. Some 1.8 million people receive Social Security disability benefits but aren't eligible for Medicare, and the law in its current form would allow many of them to get onto Medicaid.

"I worry about a fix that could be painful to people who have major healthcare problems," said Ron Pollack, executive director of Families USA.

Rep. Diane Black (R-Tenn.) and Sen. Mike Enzi (R-Wyo.) introduced legislation changing the revenue definition on Monday, as did Sen. Ben Nelson (D-Neb.). 

The White House says it wants a fix that protects people with disabilities.

"We are examining this proposal and options to address this matter," an administration official tells The Hill. "We remain committed to protecting the health of people with disabilities."

The problem dates back to 1972, when Congress extended Medicare to people with disabilities. In order to incentivize employers to continue covering disabled workers — and to save the government money — lawmakers required people with disabilities to wait two years before they became eligible for Medicare.

Lawmakers tried to close the two-year waiting period during the healthcare reform debate, but the $110 billion price tag proved insurmountable.

"It was too heavy a lift to do it with this bill," said a spokeswoman for Sen. Jeff Bingaman (D-N.M.), who for years has led the charge in the Senate to phase out the waiting period.

Advocates say the healthcare reform law might be the next best thing, however.

Many of the 1.8 million people in the waiting period would qualify for Medicaid if their Social Security benefits aren't counted. Advocates say the long-term care services provided by Medicaid — help with getting dressed and eating, for example — are designed for people with disabilities.

Even if the law is changed and people with disabilities look richer because their Social Security benefits are counted, many of them would still be eligible for health insurance subsidies through private insurance companies. That's why advocates are currently lobbying regulators to include long-term services in the benefits that must be offered in the state exchanges starting in 2014.

"Many people are now focused on the [healthcare reform law's] Medicaid expansion and the exchanges as a solution to the two-year waiting period," said an advocate for people on Medicare.

Clarification: This post was updated Tuesday to reflect that Sen. Ben Nelson (D-Neb.) also has legislation to change the revenue definition.