Statement by John Callahan,
Acting Commissioner of Social Security,
Accompanied by Susan Daniels, Associate Commissioner, Office of Disability before the

July 24, 1995


Mr. CALLAHAN. Thank you very much, Mr. Chairman, for inviting us here today. We would like to commend you and Congresswoman Kennelly and other Members of the Subcommittee for holding these hearings. They are very, very important hearings, and I think we arc all starting down this road of dismantling barriers for return to work. So my commendation to you and the Ranking Member.

Today, too few of our approximately 8 million Social Security and Supplemental Security Income recipients leave the disability rolls each year to work. Many more of our customers with disabilities tell us they want to work, and they will do so, if the incentives are right and the services they need are available. We look forward to working with this Subcommittee to turn their dreams of economic independence into a reality.

I am enthusiastic about the possibilities for the future, particularly the President's Ticket to Independence Proposal, which we have sent forward to the Congress. The Ticket to Independence is a good public-private partnership. The partnership would give people receiving disability payments what they want and what they need: The control and flexibility to secure services tailored to their individual requirements, from their choice of providers. The Ticket Program is also, I would add, fi scally respons ible, since providers would only be paid for results, that is, placing individuals in aj ob and eliminating Federal cash assistance.

The Ticket to Independence is grou nded on four principles. The first is customer choice. SSA's customers desire and need maximum flexibility and choice in pursuing services that will help them become gainfully employed. Beneficiaries with disabilities will receive this Ticket to Independence to use with a participating public or private employment or rehabilitation provider of their choice.

The second principle is innovation. The employment strategy in our proposed legislation encourages widespread innovations in the publ ic and private sectors by providing opportunities for State agencies, local nonprofit and for-profit providers and employers to work with willing beneficiaries.

Third, paying for results. This is very important. The focus on outcomes, we believe, is best achieved by linking it to financial rewards. The provider will be paid only when the beneficiary's earnings from work result in bene fit savings.

And finally, health care incentives. We a ll know that one of the key barriers to returning to work is fear of losing health care. Opportunities to obtain employment should be as health-care-neutral as possible.

The Senate reconciliation bill does contain a proposal similar to that proposed by the President that would allow workers with disabilities to buy into Medicaid. We urge the conferees to adopt the President' s proposal in that regard. The President's proposal for a 4-year demonstration to extend premium-free part A Medicare benefits beyond the current period of Medicare eligibility is not included in reconciliation. We believe that is still important and would want to pursue that demonstration authority in the future.

Very quickly, this is how the ticket will work. After SSA determines that individuals are eligible for benefits, it will issue them tickets. A beneficiary may give the ticket to his or her provider of choice in exchange for rehabilitation and employment services. We expect to select between 5 and 10 States to begin our pilot. Tickets will be issued and providers will be solicited for participation. State vocational rehabilitation agencies and alternate participants will also have an option to participate in either the Ticket Program or the current program.

Providers must satisfy certain criteria to be enrolled and be eligible to receive payments from SSA: They must be able to conduct business in the State where they enroll by whatever criteria are used in that State.

Very quickly, I see the light is running here, the beneficiary may have a ticket for up to 2 years. They may be able to renew it for another 2 years. Payments will be made to providers once these individuals terminate their cash benefits and become permanently employed.

We feel as a starting payment point that we will be prepared to pay 50 percent of the cash benefit, up to 5 years of gainful employment. We will select a contract administrator to administer this program, and we will report back to Congress on the 3rd, 5th, 7th and 10th year of the pilot.

In conclusion, the Ticket to Independence is a very frugally designed, resuIts-oriented innovation that can, first of all, create a public-private partnership between us and public and private providers, obtain significant savings to the SSA Trust Funds, give beneficiaries what they want, which is a choice to find a willing provider and minimize bureaucracy in the administration of this program. We believe these hearings are a starting point on a long road to fashioning constructive legislation, and we are committed to working with the Subcommittee and the administration to get legislation that will remove the disincentives to go back to work.