Agency Pitches Plan to Pay Medical Costs

12/14/05, 6:59p

By MICHAEL J. SNIFFEN
Associated Press Writer

WASHINGTON (AP) - An independent agency is proposing a new way to pay the rising cost of long-term care for the disabled: An "AmeriWell" account for each American, funded with new taxes on wages, tax-deductible savings and a penny per transaction fee on stock trades.

In a report to President Bush, the National Council on Disability said that supporting the disabled from such accounts would:

_Largely separate long-term assistance from Medicare and Medicaid.

_End the requirement that the disabled be impoverished to get aid.

_Fill the gap in coverage for disabled people under 65 but not poor enough for Medicaid.

_Relieve a rising burden on state budgets.

_Replace a patchwork of more 200 federal programs with community- and home-based care driven by the recipient's preferences.

"The United States is a world leader in extending life and eradicating disease, but it has failed to develop a long-term services and supports public policy that truly integrates disability as a natural part of the human experience," said the report, which was being released Thursday.

"Americans at age 45 are more likely to become disabled than to die, and yet we continue to insure against loss of life rather than against the risk of disability," the report said.

The council said current services are inadequate and would be overwhelmed as baby boomers hit age 65, beginning in 2010.

It found that:

_Medicaid, the federal-state health care program for the poor, already consumes 22 percent of state budgets and pays for the lion's share of long-term care for the elderly and disabled: 45 percent of the $137 billion cost in fiscal 2000. Individuals and families pay a third of that cost out of pocket.

_The elderly and disabled overwhelmingly prefer care and support at home and in the community but federal programs favor institutional care. About 1.6 million people live in nursing homes or other institutions, and 2 million to 2.4 million are on waiting lists.

_The current over-65 population of 34 million will double in the next 20 years. Between 9 million and 12 million people need daily help bathing, dressing, getting out of bed, using the toilet, eating, cooking, managing money, shopping or using a telephone.

The council said an additional 25 million individuals under 65 with chronic severe disabilities need some support. But they are not counted because they fall outside disability definitions and cannot get aid because they are not impoverished. Many rely on informal care from relatives _ help worth an estimated $200 billion a year.

The council proposed incremental improvements, such as equalizing benefits between states and income tax deductions for people caring for a disabled relative.

But it clearly preferred the "clean slate" change it called "AmeriWell" accounts.

AmeriWell would be a third branch of the existing Centers for Medicare & Medicaid Services. This mandatory plan would provide long-term care for all people, from birth, based on their ability to function.

AmeriWell Part A would establish an individual/family account at birth that at first would be funded by premiums paid by the family's adult wage earners and later by the individual. A child born disabled could immediately tap parents' accounts.

A child without parents would get disability care from AmeriWell Part B. It also would provide health care and drugs for people eligible for Medicare and Medicaid because of disability or poverty.

AmeriWell Part B would be funded by a penny fee levied on each stock transaction to help states pay for the elderly and disabled poor. The council did not estimate how much money would be generated.

Families could supplement coverage with tax deductible savings of up to $10,000 a year in AmeriWell Freedom Accounts.

"It's creative," said Andrew Imparato, president of the American Association of People with Disabilities. "The penny fee on stock transactions is an interesting thought."

Imparato said the council's plan shared a key point with recent proposals for a disability payroll deduction or giving every child a $1,000 disability savings account. "They all focus on how we get people to save for disability when they are young and healthy," he said.

A spokesman for Medicare and Medicaid, Gary Karr, said, "We have a strong commitment to giving disabled people care in settings they prefer; we're willing to talk with anyone about ideas for that."

The 15-member council is appointed by the president and confirmed by the Senate to advise on disability issues.