In a display of bipartisanship, the House overwhelmingly approved a bill Wednesday to allow Americans with disabilities to open tax-free bank accounts to pay for expenses from education to housing and health care.
Modeled after tax-free college savings accounts, the bill would amend the federal tax code to allow states to establish the program. To qualify, a person would have to be diagnosed with a disability by age 26 that results in “marked and severe functional limitations.” Families then would be able to set up tax-free accounts at financial institutions, depositing up to $14,000 annually to pay for long-term needs such as education, transportation and health care.
The ABLE accounts would be able to accrue up to $100,000 in savings without the person losing eligibility for government aid such as Social Security; currently, the asset limit is $2,000.
A major accomplishment of the bill is that Medicaid coverage will continue, no matter how much money is deposited in the accounts. This affords individuals with disabilities the possibility of substantially more independence, as they can work without fear of losing Medicaid benefits, typically needed to cover higher than average medical costs.
“Too often, those with disabilities are required to focus only on meeting their expenses, rather than achieving their potential, which should not be the case,” said Nathan Diament, Executive Director of the Orthodox Union Advocacy Center.
Mr. Diament added that while all families caring for a disabled individual have higher expenses, in the frum community, where education costs are already higher since parents want to send to a day school or yeshivah, the relief that ABLE affords is even more essential.
The 404–17 vote approves the most sweeping legislation to help the disabled since the 1990s Americans With Disabilities Act, and affects as many as 54 million disabled people and their families, who often struggle to pay for intensive forms of care. It now goes to the Senate, where it is expected to move quickly to passage in the coming days.
At a time when Congress is bitterly divided over immigration, taxes and spending, House members touted the bill as evidence that both parties can get things done. First introduced in 2006, the legislation, called the Achieving a Better Life Experience Act (ABLE), lists 85 percent of Congress as co-sponsors, even after a conservative group criticized it as a “decisive step in expanding the welfare state.”
“People often speak as to how Congress is dysfunctional,” said Rep. Ander Crenshaw (R-Fla.), the lead House sponsor. “If we look at the ABLE Act, we have a chance to see what happens when people work together. … It simply gives those individuals with disabilities a chance for the American Dream.”
Rep. Dave Camp (R-Mich.), who chairs the House Ways and Means Committee, called it a commonsense bill that few could quibble with. “It’s not every day we have the chance to clear major hurdles in front of people who simply need a hand up. That’s what this bill does,” he said.
The bill’s passage wasn’t entirely free of controversy.
Some Democrats complained that it sets a bad precedent in which Medicare cuts are used to pay for programs.
“We should not be a part of ripping Medicare at the very bottom,” said Rep. Jim McDermott (D-Wash.). “Mark my words, when it comes time to offer another tax break, my colleagues from the other side will come after Medicare again.”
The conservative Heritage Foundation also criticized the ABLE bill, saying current asset limits on government welfare benefits are needed to ensure taxpayer aid goes to “those Americans who need them the most.” It worries that expanding aid eligibility could lead to additional potential for Social Security fraud and abuse, especially when it comes to mental disabilities, which can be sometimes difficult to diagnose.
More than 70 coalition groups which support the bill disagree, saying ABLE accounts would allow families to save money that is earned on their own.