US Disability Services are Loans Not Benefits

Maybe you all knew this, but it has taken me a long time (too long!) to finally realize that there are no actual “Disability Benefits” in the US, there are just loans for Disability Services – and the US wants to be paid back.

I finally connected the last dot when I watched this video yesterday on Medi-Cal Payback Provisions and after I’d talked with another parent who was relying on state disability services to care for their adult disabled child.

Medicaid Estate Recovery

The US Medicaid Benefits system has “Estate Recovery” (sometimes called “Clawback”) as an important feature. Basically, when the Medicaid beneficiary dies, any assets in their estate are supposed to be used to first pay back the US for any benefits that they received while they were alive.

Now different states have different rules (because of course they do) about what the criteria are for estate recovery (some states have an exception for some level of funds, there are general exceptions for assets that are not owned solely by the individual, and, of course, there are legal ways that it is possible for disabled (or elderly) people who are fairly sophisticated financially to shelter assets (for example with a Third Party Special Needs Trust).

What I don’t know is how things work if you move to a different state (does each state handle Estate Recovery separately? Are the applicable rules only those for when you lived in that state?… this seems to be yet another can of worms)

(and another reason to look very closely at where you want to live!)

All or Almost All Disability Services are funded through Medicaid

This whole “Medicaid Estate Recovery” discussion is pretty familiar if you look at Medicaid for health insurance…. BUT, of course, all other disability services funding comes from somewhere.

And that somewhere is Medicaid.

Here in California, that means Regional Center services, In-Home Support Services (IHSS), … probably virtually everything that you think of in terms of disability services funding is funded by Medicaid and subject to the Medicaid Estate Recovery process.

(Again, your mileage may vary A LOT state-by-state!)

And, fun fact, no one says a thing to you about this when they talk to you about these services or “offer your child” these services (at least they didn’t for us and I haven’t heard anyone else be informed of this).

This may be (kind of?) good. Kids need these services and adding a complicated financial trade-off for parents seems like a bad idea.

… but the real bad idea is that these Disability Services that are described as “Benefits” are all Loans (granted with a hopefully very, very long payback period).

… and I don’t think that the people who are delivering these services THINK that they are basically making a long-term loan to disabled children and adults…

… and I suspect that the general public who kind-of-sort-of supports these programs don’t know about Estate Recovery and that it affects disability (and some elderly) services.

… and I suspect even the government officials and legislators who authorize and run these programs don’t think of them as “Loans” (to the extent they think of them at all).

Medicaid funding and planning for your future

Because the US seems to hate poor people, Medicaid is a routine target for budget cuts. Proposals for switching to block grants and other manipulations have the ultimate effect of reducing Medicaid funding.

Unfortuantely, what most people don’t realize is that Medicaid doesn’t just fund “health insurance for people who don’t want to work”, it funds health insurance for people who do work, but whose companies don’t pay them enough to have health insurance and it funds disability and elderly services.

And disabled people, elderly people, and poor people do not have well-organized lobbying organizations to protect and advocate for themselves.

My last newsletter on Disability Numbers highlighted Colorado as the “Best State” for disabled people to live… and is now making serious disability progam cuts.

We’ve had substantial cuts to disability programs here in California when the state has budget difficulties (no one ever seems to remove tax breaks for the wealthy or businesses when times get tough)… some programs were cut in the crisis of 2008 and were finally kind-of restored in the past couple of years.

So, how are parents of disabled children or disabled adults supposed to plan for their futures (o or even their present) when critical program funding is subject to political games where they aren’t even players, they are just chips on the table?

Anger

The petty cruelty of our US Disability Systems is hard to comprehend. This is a system that makes “thriving while disabled” harder by limiting life and financial options for disabled people. I’ve written a lot about how to work with (or around) our disability systems to provide some financial security.

But, this requires active effort (and resources) to succeed… by default, you are financially punished for being disabled.

And, even with these strategies, a disabled person is trading off financial security against financial and personal freedom (so much for marrying who you want and spending your money the way you want) – that any (every) other person would consider their birthright.

“Life, Liberty, and the Pursuit of Happiness”?… really?

Changes

Maybe it is time to stop being “nice” about all of this.

Call out our Disability “Benefits” as a routinely undefunded Loans with many strings attached.

Organize and work to restructure the basic model of Disability Services towards a system that is there to unlock the valuable potential of disabled people and not merely a minimal veneer of Pity and Charity that shows that “We Care”… without the work of actually caring.