Act would allow paying to get Medicaid

WASHINGTON -- As a single mother of two struggling to make ends meet, Melissa Arnold was eager to advance her career. But in the late 1990s, when her employers at a local tourism office in suburban Maryland offered her a promotion and a pay raise, she turned them down.

''They offered me director of marketing, and an increase to $30,000," Arnold said. ''But I couldn't make more than $25,000, or Adam wouldn't be eligible for Medicaid. I said I'd do the work because the experience was good, but I couldn't take the money."

Adam, Arnold's younger son, has a rare birth defect that left one leg significantly shorter than the other. The expensive treatment and physical therapy the 16-year-old has needed since infancy aren't covered by most private insurers.

That left Medicaid as the only realistic option -- meaning Melissa Arnold was better off with a smaller paycheck.

If she had taken the raise, she and her son would be disqualified for Medicaid, the low-income medical program run jointly by states and the federal government.

For years, thousands of working-class parents like Arnold have faced a similar quandary.

Now, after more than six years of congressional lobbying by working-class parents, President Bush is poised to sign the Family Opportunity Act, which will allow parents of disabled children whose incomes exceed the federal poverty line to pay to join Medicaid, on a sliding fee scale based on their income.

The Congressional Budget Office estimated the act will give 115,000 disabled children access to Medicaid, an expansion that is expected to cost $872 million over five years.

''This is just enormously significant and important to parents," said Senator Edward M. Kennedy, a Massachusetts Democrat who has pushed for the change since 1999. ''It makes incredible sense to the children, and to the mothers. It really helps brings families together, and it holds families together."

At congressional hearings in recent years, lawmakers heard stories of parents rejecting career opportunities for fear of losing Medicaid coverage for their children.

Some parents have even reported transferring their children to state custody to ensure access to vital services.

''It's really an extraordinary cost, and it's forced terrible choices on families," said Richard Robison, executive director of the Federation of Children with Special Needs, a Boston-based statewide advocacy group.

The act was championed by a legislative odd couple: Kennedy, one of the Senate's leading liberals, and Senate Finance Committee Chairman Charles E. Grassley, a conservative Republican from Iowa.

Despite its high-powered sponsors, the bill foundered on Capitol Hill; the Senate passed it several times but the House failed to follow suit.

But on Wednesday, the House approved it in a broader bill designed to cut federal spending, marking one of the few expansions to a health program in this year's federal budget.

''It's a pro-work initiative because it lets parents work without losing their children's health coverage," Grassley said. ''It's pro-family because it encourages parents to work and build a better life for their children, rather than being forced to impoverish themselves to access healthcare."

The bill takes inspiration from Massachusetts' CommonHealth program, established in 1988 to allow higher-income parents in the Bay State to pay to join Medicaid for their disabled children.

CommonHealth has been an enormous benefit to people like Justin Taylor of South Yarmouth, who is now 18.

He has a congenital heart defect that required multiple surgeries when he was an infant, and his parents' health insurance premiums skyrocketed quickly, said Cathy Taylor, his mother.

She said the premiums grew so high that the auto shop that employed her husband started looking for a new insurance carrier, but couldn't find any insurers willing to cover her son.

Cathy Taylor said she and her husband were told they might have to divorce so their individual incomes would be low enough to qualify Justin for Medicaid.

''CommonHealth was a godsend to us, that we could stay married in an intact family," she said.

Arnold, who now lives in Omaha, said she is glad that her years of lobbying have paid off, and other parents won't face the choices she did.

''I was teaching [my children] how to work the system. That's how I had to do it. I had to teach my children how to stay poor," Arnold said. ''Now, they see that the process really works. Two very strong leaders in our country, coming from opposite [ideological] poles and opposite sides of America, can come together for something that helps people."