As early as next week the Senate might vote once again on the Family Opportunity Act (S.183/ H.R. 1443) , a bill expanding Medicaid coverage for children with significant disabilities. Despite attracting widespread, bipartisan support in both houses of Congress since authored by Senators Charles Grassley (R-IA) and Edward Kennedy (D-MA) in 1999, the Family Opportunity Act has yet to be signed into law. The Senate Finance Committee first approved the bill in 2002, and the measure passed unanimously in the Senate during the last Congress (then S. 622) but negotiations in the House broke down over disagreements about how to pay for it. (See July 2, 2004 Human Needs Report .)
Senator Kennedy is considering offering the Family Opportunity Act as an amendment to the Department of Defense Authorization bill early next week. If he does offer the amendment, the senator will argue the measure is relevant to the Defense Authorization bill because Tri-Care, the military health insurance plan, has Family Opportunity Act-like benefits. The case can be made that these benefits are appropriate for all Americans families with children with disabilities.

Medicaid is currently the only health insurance package with sufficient benefits to meet the needs of many children with significant disabilities. The Family Opportunity Act would allow families with incomes too high for Medicaid eligibility (but not in excess of 300 percent of poverty) to purchase Medicaid coverage in order to receive the critical services their children with disabilities need. The Act also allows for expanded home- and community-based services for children in inpatient psychiatric facilities, recognizes the help needed by children with potentially severe disabilities, and establishes Family-to-Family Information Centers to help affected families receive appropriate health care. Finally, the Act authorizes the Secretary of HHS to conduct demonstration projects in up to ten states to test the effectiveness of home and community-based alternatives to psychiatric residential treatment facilities for children.

Families who would benefit under the Family Opportunity Act earn between approximately $17,050 and $45,010 for a family of four and whose children receive inpatient psychiatric services, have disabilities as defined by the Supplemental Security Income requirements, or have the potential to meet the disability definition if appropriate health care services are not provided.

The Congressional Budget Office estimates the cost of the bill to be $2.3 billion over five years – and that price tag has been the major obstacle to Family Opportunity’s passage. Expanding Medicaid to cover more people seems particularly difficult in the current budget climate, in which Congress is expected to cut Medicaid by as much as $10 billion later this fall. However, because Finance Committee Chairman Grassley continues to support the Family Opportunity Act, it is possible he could include it in the reconciliation bill the committee must produce by September 16. The committee must cut a net total of $10 billion from programs under its jurisdiction in the reconciliation bill. Therefore including Family Opportunity would force the committee to cut an additional $2.3 billion on top of the $10 billion in order to offset the added cost.

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