A stricter standard of childhood disability in the new welfare law would mean that 135,000 children will lose their Supplemental Security Income (SSI) benefits, according to revised estimates by the Social Security Administration announced last month. Further, 45,000 children will lose access to benefits by the year 2002.

Because Medicaid coverage is linked with SSI eligibility in most states, an estimated 50,000 children, including those with mental and emotional disorders, could lose both benefits, according to Chris Koyanagi, director of government relations for the Judge David Bazelon Center for Mental Health Law, a legal advocacy organization in Washington, D.C.

Childhood disability is defined in the new welfare law enacted last August as "a physical or mental condition or conditions that can be medically proven and which results in marked and severe functional limitations," according to the new SSI interim final rules released last month.

Koyanagi told Psychiatric News that the higher standard of severity would apply to children who were eligible for SSI under the Individualized Functional Assessment (IFA). Forty-two percent of that group have mental disorders, and 32 percent have mental retardation.

The IFA was eliminated from the new rules, and references to "maladaptive behaviors" were removed from the functional standards in the childhood impairment list. However, the new SSI rules clarify that behavioral problems such as physical aggression or avoidance of interpersonal activities will be evaluated as part of a child's social functioning, according to a Bazelon Center paper commenting on the new rules.

APA plans to issue its comments on the new SSI rules after the Division of Government Relations obtains input from the relevant APA councils.

Officials in states providing automatic Medicaid coverage to children eligible for SSI will have to decide whether to keep ineligible children on their Medicaid rolls, said Koyanagi.

Medicaid coverage is critical for low- income families with disabled children because it covers early and periodic diagnostic testing and treatment in inpatient, outpatient, and residential settings.

Koyanagi called the change in SSI policy shortsighted.

"Children with mental and emotional disabilities still need services and will show up elsewhere in the system--in the schools, social services, and juvenile justice," she commented.

She also noted that most low-income families lack health insurance and cannot afford to pay for mental health services.

"Ideally, states would expand their current Medicaid pool to cover the children excluded from SSI coverage using the available Medicaid options," Koyanagi said. Eligibility depends on the child's age and family income. Children age 13 and younger are now guaranteed coverage, and older children will have coverage phased in through 2002, according to the Bazelon paper.

Another major change in welfare policy is that the federal government will contribute much less money to many social service programs than before, noted Koyanagi. States will be responsible for managing the programs with block grants.

The federal cutbacks for welfare recipients will have a ripple effect on other programs, predicted Koyanagi. Officials in states with large immigrant populations denied welfare benefits, including disability payments, will review the Medicaid eligibility rules for potential changes, surmised Koyanagi.

Because Medicaid eligibility is linked with funding, changes could have a detrimental effect on states that rely on Medicaid reimbursement to provide comprehensive community mental health services for low-income families, noted Koyanagi.

A ray of hope may be President Clinton's budget proposal released last month calling on Congress to allocate funds to continue Medicaid coverage for low-income children who lose their benefits because of changes in SSI eligibility rules.

Koyanagi commented, "This would be a significant step for families with children on SSI." She cautioned that the plan still has to be approved by Congress, where there is considerable opposition from the Republican majority.

The President also proposed restoring disability benefits for immigrants in his budget. This may reduce the upheaval in mental health programs reimbursed by Medicaid.

Koyanagi was less optimistic about children's health insurance bills that were introduced by congressional Democrats earlier this year and rely on tax credits or vouchers. "I suspect that if insurance coverage is decided by the purchaser, whether it be the states, employers, or parents, mental health benefits will be at the bottom of the list."

(Psychiatric News, March 7, 1997)