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Reform laws and health care coverage: combating exclusion of persons with disabilities.

The quest for accountability and efficiency of health care in the United States has been a priority for almost twenty-five years. With the passage of the Health Maintenance Organization Act in 1973 and the subsequent acceptance of the concept of diagnostic related groups, the federal government attempted to better regulate health care delivery (Schriner & Batavia, 1995). However, not until the last few years has national health care reform become the focus of intense analysis, discussion, and debate. For the public at large, and for persons with disabilities in particular, it was the Clinton administration's push for reform of health care that moved the issue to a new level of national awareness. Though the Clinton administration's attempt at national health care reform did not succeed, there have been changes in health care service delivery. For example, there is a continuing shift from the more traditional fee-for-service approach of health care to what has become known as the managed care approach.

Managed care has been defined as any structured approach to medical service delivery that favorably affects the price of services, the site at which services are received, or their utilization (Hastings, Drasner, Michaels, & Rosenberg, 1990). Furthermore, Lepler (1995) noted that managed care is not only comprehensive but it involves planning and coordinating care, educating patients and providers, overseeing quality of care, and monitoring costs. Managed care attempts to lower costs by arranging for medical care at predetermined rates and specifying which doctors and hospitals a person can use while managing physician treatment and referral. Other aspects of managed care include preventive care, health education, and efforts to track and coordinate treatment plans (Lepler, 1995). The trend toward managed care in health care service delivery holds true both for persons who have health care coverage through their employers as well as for persons whose health coverage is provided by government programs such as Medicaid and Medicare.

There is considerable debate at the present time related to managed care and its regulation. Though there have been trends away from regulation, federal and state legislators have begun to explore legislation that will allow consumers greater autotomy such as choice of provider (Watson, Eilenberg, & Odulana, 1995). For example, legislators have already passed mandates requiring some degree of equity between medical benefits and mental health benefits within managed care systems (Sleek, 1996). In contrast, managed care organizations have argued that a free market system without regulation is the ideal method. Sleek (1996) has pointed out that states have enacted hundreds of new laws designed to protect consumers enrolled in health care plans. The areas of regulatory activity include the banning of managed care organizations' "gag" rules that restricted providers from disclosing all treatment options or advocating for their patients.

Clearly, health care policy can have a significant impact on the lives of persons with disabilities. Due to their special health care needs, greater risk for higher health care costs, and tougher approvals for private insurance coverage, the issues and concerns raised by the health care debate are of particular interest to the rehabilitation community in general and persons with disabilities in particular (Reno, 1994). Thus, it is critical that rehabilitation professionals have an understanding of changes in the health care system and its implications for persons with disabilities if they are to be effective as service providers and advocates. The purpose of this article is to illuminate some of the major components of reform law as it applies to health care coverage for persons with disabilities. First, a brief historical context of health care policy as it pertains to persons with disabilities will be presented. Second, the Americans with Disabilities Act (ADA) in regard to health care protection for persons with disabilities will be discussed. Third, current reform initiatives designed to ensure coverage for persons with disabilities will be examined. Finally, a model plan for health care reform along with implications for the rehabilitation community will be offered.

Historical Context

The disillusionment of persons with disabilities with respect to health care service delivery is rooted in historical practices of an health insurance industry that has traditionally worked against them (Schriner & Batavia, 1995). Persons with disabilities were often denied any health coverage or given only limited coverage on the basis that disabilities were perceived as a more costly health related responsibility. The use of preexisting condition clauses often prevented persons with disabilities from receiving coverage or extraordinary rates were charged for health care coverage. In addition, health care coverage was often very limited and any needed durable equipment such as wheelchairs was not included in the health care plan. While some persons with disabilities may qualify for public health coverage, they do so only by not working and living a marginal existence. For example, Watson, Eilenberg, and Odulana (1995) noted that "frequently, eligibility requirements force a decision between seeking employment or opting for health care" (p. 6-10). Persons with disabilities wanting to work find themselves trapped economically as it is impossible to work given their reliance on Medicare and Medicaid for health care.

In essence, the health care benefits of Medicaid and Medicare serve as a large work disincentive for persons with disabilities. Not surprisingly, during hearings held by the National Council on Disability during March and April, 1994 (NCD, 1994), the legitimate concerns and fears of persons with disabilities were expressed. For example, the fear of being excluded from any type of coverage, exclusion based on "preexisting" conditions, the high costs of health care including required co-payments, and inadequate or nonexistent coverage for needed medical equipment were all articulated.

Certainly, there has been great concern on the part of people with disabilities over the current focus on cost reduction of health services (Blendon, Brodie, & Benson, 1995). Whether treatments or interventions are appropriate is less an issue than how much the health services cost. Other areas of specific concern for persons with disabilities include the trend for health care providers and insurers to create alliances or to "band" together with the result that persons with disabilities are further alienated and excluded from health care plans. Alliances develop as the marketplace becomes competitive but rather than reform the existing system by making it more efficient, alliances may perpetuate the current inadequacies of the health care system. Policies are more often than not similar to those prior to reorganization with minimal effort given to take into account changing consumer needs.

Another area of concern for persons with disabilities is that of choice of health service providers (Blendon, Brodie & Benson, 1995). Physicians and other health care providers with experience and competence to work with persons having disabilities (e.g., spinal cord injuries, cerebral palsy, etc.) are not as plentiful as those skilled only with the general populace. These particular providers may not be a party to agreements or members of specific provider organizations. Current amalgamation and consolidation of health care has limited the access of persons with disabilities to those providers often with the most experience and interest in the specific health cafe problems associated with disabling conditions (Consortium for Citizens with Disabilities Health Task Force, 1993). Persons with disabilities are also fearful of a rationing process that further emphasizes cost containment. Furthermore, triage practices, based on a limited understanding of disabilities, places persons with disabilities at a distinct disadvantage within the current health care system.

ADA and Health Care Policy

Given the historically marginalized status of persons with disabilities in this country, it became readily apparent that a legislative document was needed to "speak" for persons with disabilities. The Americans with Disabilities Act (ADA) was passed by Congress and signed into law in 1990 prohibiting discrimination on the basis of disability or perceived disability in employment, state and local governments, transportation, public accommodations, and telecommunications. Conceived as civil rights legislation, the ADA sought to establish equality, opportunity, inclusion, and full participation of persons with disabilities into American society (Dart & West, 1995). According to Dart and West (1995), the ADA has been termed the following:

a revolutionary turning point in public policy for people

with disabilities -- away from the role of the federal

government as caretaker for people with disabilities

through the provision of special programs and services,

and toward the federal government as empowerer of

people with disabilities, supporting and facilitating the

exercising of individual fights and full participation

in the mainstream of societal life (p. 50).

Within the context of American society, an accessible and fair health care system can be considered a first step toward equality and inclusion.

In essence, the challenge of the ADA was to change the status of people with disabilities in this country. By rejecting the long-standing and outdated view of persons with disabilities as helpless, pitiful, and non-contributing members of society with the government functioning as a charitable provider, the ADA provided persons with disabilities with much needed validation by recognizing them as full citizens with rights to equal access and complete participation in mainstream society. In this regard, the role of the government is one of facilitator and supporter of such rights to equal access and inclusion.

According to Dart & West (1995), "The ADA affirms that disability is a natural part of the human experience. It rejects the notion that disability is somehow an experience separate and different from the experience of being human." Moreover, the ADA asserts that the source of problems for a person with a disability is not the disability itself, but rather the manner in which society responds to the individual with a disability (Dart & West, 1995). Social perception can create a host of difficulties for the community of persons with disabilities. As stated earlier, persons with disabilities may be denied any coverage or given only limited coverage based on the perception that disability is a more costly health related responsibility (Schriner & Batavia, 1995).

The differential treatment that persons with disabilities may receive within the health care system could be perceived as discriminatory. Dart and West (1995) suggest that the "overarching substantive requirement of ADA is the prohibition of discrimination" and notes that there are two central aspects to this requirement. First, a person must not be treated in a prejudicial manner because of "an individual, and often immutable, characteristic that has no bearing on the individual's skills or capabilities" (p 49). The second aspect involves paying attention to the individual and using "the interaction between the individual and society to ameliorate or end the limitation or exclusion to equal access" (p. 49).

Though seemingly comprehensive, the ADA as civil rights legislation has shortcomings in regard to issues of health care coverage. The interpretations of how ADA relates to health care is restricted to employment settings, specifically health benefit plans offered as part of employment. For example, Title I of ADA prohibits discrimination on the basis of disability in employment settings. This is interpreted to apply to the associated fringe benefits of employment such as medical coverage. Loverde, McMahon, and Morris (1992) noted that the ADA specifies that employer provided health insurance should be available to employees with disabilities at the same premium cost (Loverde, McMahon, & Morris, 1992). However, latitude is given to insurance carriers in establishing premiums for "statistically provable high-risk groups" (Loverde, McMahon, & Morris, 1992, p. 97). Unfortunately, many disability categories can be statistically demonstrated to require a disproportionately higher amount of medical and hospital care when compared to the general public (Loverde, McMahon, and Morris, 1992).

Jones (1991) observed that the ADA contains a specific exception clause relating to insurance. The clause stipulates that the ADA mandates cannot prohibit or restrict insurance carriers or providers (e.g., insurer, HMO, hospital, medical service company) from underwriting, classifying, or administering risks. However, the ADA indicates that the insurance industry cannot use the exception clause as a "subterfuge" to evade the purposes and requirements of the ADA. Therefore, "an employer could not deny a qualified individual with disabilities a job because the employer's current insurance plan does not cover the person's disability or because the employer's insurance costs would increase" (Jones, 1991, p. 47). The potential problem with the exception rule is in the interpretation of "subterfuge". Jones (1991) recommended that regulatory guidance is needed in defining the parameters of "subterfuge".

Clearly, the ADA needs to be more specific in its delineation of appropriate health care policy for persons with disabilities. In other words, if the ADA is to continue to be the "legislative voice" for persons with disabilities, it must assume a definitive stance on health care policy through appropriate amendments in order to ensure that persons with disabilities are treated fairly within the current health care system. However, it seems unlikely that such amendments will be adopted in the near future.

Health Care Reform at the State Level

While the ADA attempts to address the issue of health care delivery for persons with disabilities on a national level, a number of states (e.g., California, Louisiana, Maine, Minnesota, New Jersey, New York, North Dakota, South Carolina Vermont, and Washington) have implemented health care reform initiatives that may help improve the health care of persons with disabilities (Watson, Eilenberg, & Odulana, 1995). For example, small group market reforms may have a significant impact on the health care of persons with disabilities. There are six laws that comprise small group market reform: (1) guaranteed issue, (2) reinsurance, (3) ratings, (4) renewal, (5) portability, and (6) minimum loss ratio.

Guaranteed issue laws require insurance carriers to offer coverage to all persons regardless of their health status (e.g., disability) or experience with claims. The implementation of these laws is critical because they may prohibit insurance companies from excluding persons with disabilities based on preexisting conditions. Reinsurance laws require the establishment of a program to help insurance carriers provide coverage to all groups, including those groups considered to be high-risk (e.g., persons with disabilities). Ratings laws prohibit carriers from using experience, health status, claims experience, or age to set premiums (State Profiles: Health Care Reform, 1994).

Renewal laws demand that insurance carriers renew individual coverage except for specific reasons unrelated to health status (e.g., failure to pay insurance premium). Portability laws require insurance carriers to limit preexisting-condition waiting periods, credit waiting periods satisfied under previous coverage, or cover the entire group insured under a prior policy when a group's plan is replaced. While some persons with disabilities experience "job lock", a condition whereby insurance coverage would not be available for a certain period of time if a person changes employers, portability laws may help address this issue. Finally, minimum loss ratio laws regulate the amount insurance carriers are required to pay in claims (Watson, Eilenberg, & Odulana, 1995).

Similar to small group market reforms, small group insurance reforms (Watson, Eilenberg, & Odulana, 1995) are another state-level initiative that may increase and help maintain the health care coverage of persons with disabilities. According to Watson, Eilenberg, and Odulana (1995), nearly every state in the U.S. has enacted laws in this area since 1990. There is obviously some legislative overlap between these two state reform plans. As a result, only the areas where small group insurance reforms differ from small group market reforms will be discussed.

Small group insurance reforms, for instance, employ National Association of Insurance Carriers (NAIC) ratings. NAIC ratings limit the range of premiums charged to small groups based on experience and health status (i.e., disability). Accept/reject entire group refers to laws that require insurance carriers to either accept or reject an entire group but prohibit exclusion of certain persons from the group (State Profiles: Health Care Reform, 1994). Finally, mandate waiver laws permit insurance carriers to offer limited benefit plans (i.e., plans with a reduced number of state benefits and mandates).

Model Plan of Health Care

In the Operation People First project, the President's Committee on Employment of People with Disabilities (PCED) pointed out that persons with disabilities were just about unanimous in their support of priority of health care reform, the enforcement of the ADA, and empowerment (President's Committee on Employment of People with Disabilities, 1994). This is not surprising given that these three priorities are inextricably linked. The report further stated that "for real empowerment to occur, a health-care system must be established guaranteeing universal coverage, a comprehensive package of services to include long-term care, and affordable delivery of services in a manner that meets the needs of consumers" (President's Committee on Employment of People with Disabilities, 1994, p. 83).

The protections provided by the ADA with regard to employment have little meaning if persons with disabilities must give up appropriate health care to be employed. This is particularly true for persons with disabilities who receive health care benefits through Medicare and Medicaid. The Operation People First project summary noted that "implementation of a national health care plan with universal coverage for all Americans would do more to help people with disabilities enter the job market than perhaps any other measure" (President's Committee on Employment of People with Disabilities, 1994, p.89).

Given the general belief that reform of the current health care system is necessary, persons with disabilities have advocated for a model plan of health care. The plan endorsed by the Consortium for Citizens with Disabilities (CCD) was supported by most participants in the Operation People First project (President's Committee on Employment of People with Disabilities, 1994). The following core aspects of the plan included:

1. Comprehensive, universal coverage 2. Long-term care 3. Coverage for catastrophic illness 4. Personal assistant services and assistive technology, including durable medical equipment (e.g., wheelchairs, etc.) 5. Ensured access to specialists, drugs, and new medical technologies 6. Elimination of pre-existing clauses 7. Coverage for treatment of mental and psychiatric illness

Whether or not this plan will receive the support of federal legislators is an open question. As a result, persons with disabilities must assume a proactive stance with respect to the health care debate. First, persons with disabilities and rehabilitation professionals must understand how health care works in American society. It is difficult for a group of people to collectively lobby for change if there is not complete understanding of the issue(s) at hand. There must be educational outlets and opportunities (e.g., seminars, workshops) for these individuals to learn the intricacies of current health care policy.

Persons with disabilities, their families, and advocates must also have an understanding of the politics of influence and apply that influence to health care. Attendance at hearings and briefings along with a willingness to share personal stories is absolutely necessary if legislators are to understand the plight of persons with disabilities within the current health care system. In essence, persons with disabilities must have input into legislation related to health care at all levels (i.e., local, regional, national). Without the input of persons with disabilities, it is very likely that their needs and concerns will be ignored.

Advocacy organizations such as the Consortium for Citizens with Disabilities (CCD) must be prepared to examine the implications of current health care policy and aggressively argue for changes that will benefit persons with disabilities. Persons with disabilities must clearly outline the basic principles that will ensure that needs are met. They must be specific as to what issues are necessary elements of a quality health care plan and which issues are open to negotiation. They must also be knowledgeable of their rights and responsibilities within any particular context.

Consistent with rehabilitation principles, alliances and partnerships need to be established between consumers, professionals, and health care providers in order to strengthen the movement for appropriate-health care for persons with disabilities. In addition, an integrated approach in which consumers and professionals work with health care providers having competence and experience with disabilities is important if persons with disabilities are to receive the highest quality medical care. There must be support for research as well as other actuarial updates to ensure that accurate data is used in decision making. Furthermore, managed care staff, including administrators, utilization review panels, and health care providers, must have adequate education about disabilities and the implications for health service delivery.


Despite the existence of disability legislation such as of the ADA, there continue to be shortcomings in adequate protection against health care discrimination for persons with disabilities. Persons with disabilities will need to be empowered to pursue deficiencies in the law by utilizing legal action when appropriate. Removal of the loophole in protection is necessary to ensure the ADA's original intent of equal access and justice for persons with disabilities in American society. As the demand for reform in health care policy intensifies, the urgency becomes greater to apply the philosophy of the ADA as an overarching argument for equity in employer sponsored health care packages.

The CCD cautions that health care reform laws must be established upon the following five principles: (1) nondiscriminatory plan design, (2) comprehensive coverage, (3) appropriate levels of service, (4) equitable treatment, and (5) efficiency (Consortium for Citizens with Disabilities Health Task Force, 1993). Rehabilitation professionals and disability advocacy groups must challenge policy makers' preoccupation with cost containment. Legislators and judicial members must be encouraged to consider the humaneness of law rather than simply the efficiency and cost-effectiveness of law. The ethical principle of beneficence (promotion of well being) should be paramount to health care reform. Disability advocates must convey vigorously that exclusion of persons with disabilities in health care packages is counter to beneficence.


Blendon, R. J., Brodie, M., & Benson, J. (1995). What happened to America's support for the Clinton health plan? Health Affairs, 14, 7-23.

Consortium for Citizens with Disabilities Health Task force (1993). Principles for health care reform from a disability perspective. Washington, DC: Consortium for Citizens with Disabilities.

Dart, J., & West J. (1995). Americans with Disabilities Act. In Encyclopedia of Disability and Rehabilitation (pp. 47-53) New York: McMillan.

Hastings, D. A., Drasner, W. L., Michaels, J. L., & Rosenberg, N.D. (1990). The insider's guide to managed care: A legal and operational roadmap. Washington, DC: National Health Lawyers Association.

Jones, N. L. (1991). Essential requirements of the act: A short history and overview. In J. West (Eds.) The Americans with disabilities act: From policy to practice (pp.25-54). New York: Milbank Memorial Fund.

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Lepler, M. (1995). Managed care, capitation, and change raise issues in nursing leadership. Nurseweek, 8 (12), 24-25.

National Council on Disability. (1994). Making health care reform work for Americans with disabilities. Washington, DC: National Council on Disability.

Petersen, J. L. (1994). The road to 2015: Profiles of the future. Corte Madera, CA: Waite Press Group.

President's Committee on Employment of People with Disabilities (1994). Operation people first: Toward a national disability policy. Journal of Disability Policy Studies, 5 (2), 81-106.

Petricelli, R. E., & Lee, F. C. (1996). Employer based innovations in behavioral health benefits. Professional Psychology, 27 (4), 325-334.

Reno, V. P. (1994). Rethinking disability policy: The role of income, health care, rehabilitation, and related services in fostering independence. Social Security Bulletin, 57(2), 56-62.

Schriner, K. F., & Batavia, A. I. (1995). Disability law and social policy. In Encyclopedia of Disability and Rehabilitation (pp. 260-270). New York: McMillan.

Scher, P.L. (1992). Human resources support for current employees. In N. Hablutzel, & B.T. McMahon (Eds.), The Americans with disabilities act: Access and accommodations (pp. 89-100). Paul M. Deutsch Press: Orlando, Fl.

Sleek, S. (1996, November). State laws are reining in managed care. APA Monitor, 27 (11), 1.

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Title Annotation:Disability and Health Care Policy: Medical Coverage, Service Provision and Professional Preparation
Author:Leung, Paul
Publication:The Journal of Rehabilitation
Date:Jul 1, 1997
Previous Article:Managed care for people with disabilities.
Next Article:Medicaid policies and home health care provisions for persons with disabilities.

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