Family Opportunity Act and Other Family-Friendly Provisions of the Deficit Reduction Act of 2006: Opportunities for Ohio

A publication of the Ohio Legal Rights Service (OLRS)
May 2006

The information provided in any OLRS publication is not a substitute for legal advice. You should consult with a lawyer concerning your rights in a specific case. Contact your local bar association or visit the Ohio State Bar Association Web site to find a lawyer in your area.

• The Act
• The FOA: Expanded access to Medicaid for low- and middle-class families
• Community based waivers for home services for children in institutions
• Immediate Medicaid coverage for newborns with disabilities
• Family-to-Family Health Information Centers

This booklet is protected by copyright under United States law and by international copyright laws and treaty provisions. You may copy and distribute the work provided that you use the work for personal, noncommercial use; do not add the work to a collection or use it with any other text, photographs, artwork, etc; do not modify or alter the work in any way or delete or modify any copyright; and do not publish or post all or any part of the work on any Internet site or in or on any other media without obtaining the prior written consent of Ohio Legal Rights Service.

Copyright © 2006 Ohio Legal Rights Service. All rights reserved.

The Act

The Family Opportunity Act (FOA), also known as the Dylan Lee James Act, S. 183, was introduced in the 109th Congress on January 26, 2005 by Senators Charles Grassley (R-IA) and Edward Kennedy (D-MA). On February 8, 2006, the FOA was enacted as part of the Deficit Reduction Act (DRA), Congress' final budget reconciliation. The FOA and other parts of the DRA will provide important opportunities to families and their children with disabilities:

1. expanded access to Medicaid for low- and middle-class families; (FOA)
2. community based waivers for home services for children in institutions; (DRA)
3. immediate Medicaid coverage for newborns with disabilities; (DRA)
4. Family-to-Family Health Information Centers. (DRA)

Return to top

The FOA: Expanded access to Medicaid for low- and middle-class families

A new optional eligibility category will allow states to expand Medicaid coverage to children with disabilities up to age 18, who would be eligible for SSI disability benefits but for their income or resources. This option builds on previous reforms including the provision enacted in the Balanced Budget Act of 1997 (BBA) and the Ticket to Work and Work Incentives Improvement Act of 1999.

These provisions permit states to offer a Medicaid buy-in for children with disabilities who would be eligible for SSI disability benefits but for their income, who are in families earning up to 300 percent of poverty (58,500 dollars for a family of four).

In order for a family to participate in the Medicaid buy-in for their child with a disability, a state must require a parent to take employer-offered insurance within the following guidelines: (1) the employer offers family coverage under a group health plan, and (2) the employer contributes at least 50 percent of the total cost of the annual premium for the coverage.

If such coverage is attained by the family, the state is required to reduce the premium charged for the buy-in, in an amount that reasonably reflects the parent's premium contribution for private coverage for their child with a disability.

Participating states may charge premiums up to the full cost of the premium as long as that premium does not exceed 5 percent of family incomes up to 200 percent of the poverty level and 7.5 percent of family incomes between 200-300 percent of the poverty level.

The state may waive payment of a premium in any case where the state determines that requiring a payment would create an undue hardship.

These provisions go into effect on January 1, 2007. The federal law includes a phase in approach. In the first year, states can offer Medicaid services to families with incomes up to 60,000 dollars for a family of four if their child is under the age of 6. In the next year, children up to age 12 can participate and in the third year, children under the age of 18 can participate.

States now need to pass legislation to implement the Family Opportunity Act.

FOA Opportunities

With the passage of the Family Opportunity Act, families will benefit in the following ways:

• Children with significant disabilities can receive the health care services they need to reach their potential.
• Parents can accept raises, promotions or new jobs that increase family income above the poverty line.
• Parents who have remained single to keep family income under the poverty line can get married.
• Parents no longer have to choose between paying for the health care for their child or other necessary family expenses such as food, clothing and shelter.
• Parents no longer have to place their child out of the home in order to access appropriate health services.
• Parents no longer have to forgo custody of their child in order to access appropriate health services.
• States can work in partnership with private-sector employers to insure families and their children with disabilities.
• States can design new alternatives to institutions, to bring children home to their families.

Return to top

Community based waivers for home services for children in institutions

The Deficit Reduction Act authorizes up to 10 demonstration projects in states to test the effectiveness in improving or maintaining a child's functional level and cost-effectiveness of providing home and community based-alternatives to psychiatric residential treatment facilities. Demonstration projects would be based on the same terms and conditions as the 1915(c) Home and Community Based Services waiver. A total of 218 million dollars would be appropriated over 5 years for the competitive demonstration projects.

Return to top

Immediate Medicaid coverage for newborns with disabilities

Newborns with significant disabilities will be presumed eligible for Medicaid and no longer have to wait for the first day of the next month for coverage. The Deficit Reduction Act restores only the Medicaid eligibility for children meeting the "presumptive eligibility" requirements under SSI without having to wait until the first day of the month following the establishment of eligibility.

Return to top

Family-to-Family Health Information Centers

The Deficit Reduction Act authorizes a total of 22 million dollars over 5 years to develop and support family-to-family health information centers in every state (25 centers the first year; 40 centers the second year; and 50 centers by the third year). These centers, staffed by both parents of children with special needs and professionals, would provide technical assistance and accurate information to other families on various health care programs and services available and appropriate for children with special needs, including identifying successful health delivery models.

In addition, these centers would act as a resource to healthcare insurers, providers, and purchasers in developing ombudsman models for collaboration between families of children with special needs and health care professionals.

Return to top

• Government Programs and Services
• Medicaid / Medicare
• OLRS Publications