ADDITIONAL VIEWS By Michael Stern In their review and consideration of the Supplemental Security Income program, a majority of the experts gave support to changes affecting virtually all elements of the program. When fully effective, these changes would increase Federal program costs by some $47 billion annually. (Federal program outlays in the current fiscal year are estimated at about $17 billion.) The experts did not attempt to identify those program changes which they would support if only a specified amount of additional funds were available, such as $300 million or $1 billion annually. There are a number of important things that could be done within a total limitation of about $300 million. Staffing increases.--In my view, the most important single need for the Supplemental Security Income program is to increase its staffing. Many of the difficulties the program is experiencing could be eliminated or substantially alleviated simply by having more staff available. Program simplifications.--The following relatively modest changes in the program hold the promise of improving equity, simplifying program operations and significantly reducing the incidence of overpayments: 1. Change the method for calculating overpayments that result from excess resources; the overpayment would not be greater than the amount the individual's resources exceeded the resource limit. 2. Accounting Issues: (a) Change the computation method from retrospective monthly accounting to prospective monthly accounting; changes that result in a reduction in payment would be effectuated two months later than the month in which the income changed. (b) Continue Medicaid coverage when SSI eligibility is lost solely due to a calendar-related income fluctuation (e.g., when there are five weekly paydays in a month). (c) Do not require income verification when it is not cost-effective. 3. Require Federal determinations of Medicaid eligibility in all States that use the SSI criteria to determine Medicaid eligibility. 4. Develop legislation that would mandate specific recruitment, training, and monitoring of representative payees and authorize the appropriation of funds to implement the program. 5. Increase the monthly payment limit for residents of institutions from $30 to $35 and provide for an annual cost of living adjustment. 6. Change the definition of substantial gainful activity so that, for purposes of establishing initial eligibility for SSI, an individual would be considered to be engaging in substantial gainful activity only if he is earning above the substantial gainful earnings level (generally $500 a month) without significant support services. (Wages and self-employment income would still count in terms of evaluating need and determining the benefit amount.) Perhaps the most complex administrative task in the SSI program is determining in-kind support and maintenance--food, clothing, or shelter that is given to a person or that a person receives because someone else pays for it. Most of the experts assigned a high priority to the elimination of this feature of the program, which would involve an average annual program cost in the area of $1 billion. In my view, the elimination of the in-kind support and maintenance provision with no other program changes would fail to recognize that the needs of a person living in quarters with someone else are lower than those of a person living alone. A proposal for restructuring SSI and eliminating determinations of in-kind support and maintenance is discussed below. A Cost-Neutral Proposal for Restructuring SSI Benefits and Improving Program Administration If no additional funds become available for SSI program expansion, consideration could be given to a cost-neutral restructuring of SSI benefits and improvement of program administration consisting of the following elements: 1. Any SSI recipient living in the same quarters as another person who is an adult (whether or not an SSI recipient) would receive a payment based on 75 percent of the standard for an individual living alone. (This rule would apply only to persons who become recipients after the proposal's effective date.) In the SSI program, as in the social insurance programs, a couple's benefits are set at 150 percent of an individual's benefits. This recognizes the fact that two individuals living together do not have twice the expenses of an individual living alone. (The current Federal poverty level for a couple is 134 percent of the poverty level for an individual.) Under the proposed change, two SSI recipients living in the same quarters would receive the same combined payment whether or not they are a couple. 2. For new recipients, the SSI in-kind support and maintenance rules would be eliminated. Under the first element of the proposal, any SSI recipient living with at least one other person who is an adult would receive a payment 25 percent below what he would receive if he were living alone. The principal reason for having an in-kind support and maintenance provision would no longer exist. 3. To assure no reductions in payments for persons already on the SSI rolls at the time the proposal is adopted, and whose payment amounts, but for this provision, would be affected by receipt of in-kind support and maintenance, I propose the following: a. If the recipient is not living in the same quarters as another person who is an adult, the payment would be based on 100 percent of an individual's standard, and the in-kind support and maintenance reduction would be eliminated. b. If the recipient is living in the same quarters as another person who is an adult, and if the recipient's in-kind support and maintenance reduction is equal to, or greater than, 25 percent of the Federal benefit standard, the payment would be based on 75 percent of an individual's standard and the in-kind support and maintenance reduction would not be eliminated. c. If the recipient is living in the same quarters as another person who is an adult, and if the recipient's in-kind support and maintenance reduction is less than 25 percent of the Federal benefit standard, the payment would be based on 100 percent of an individual's standard and the in-kind support and maintenance reduction would not be eliminated. 4. It would take some years for the restructuring to be fully effective, since present recipients would be protected from payment reductions. In the first two years, the savings would be applied largely to the staffing increases and program simplifications outlined above. Beginning in the second year, any program savings that exceed these costs would be devoted to increasing the SSI payment levels beyond the annual cost of living increases and at the same time as those increases. Based on the estimates provided me, the SSI payment levels could be increased about 11 percent over a four year period from FY 1994 to FY 1997. By the end of that time, substantial progress would have been made in increasing SSI payment levels to the Federal poverty level. Estimated Net SSI Program Savings (In millions of dollars) FY 1993 (85) FY 1994 (515) FY 1995 (985) FY 1996 (1,455) FY 1997 (1,930) Total (4,970) Estimated Benefit Increases Above the COLA's After Devoting $300 Million Per Year to Other Improvements FY 1993 NA FY 1994 .8 percent FY 1995 2.2 percent FY 1996 3.4 percent FY 1997 4.4 percent