Medicaid Caps in GOP Bill Could Shrink Seniors’ Benefits

by | March 22, 2017

By Stephanie O'Neill

Before nursing home patient Carmencita Misa became bedridden, she was a veritable “dancing queen,” says her daughter, Charlotte Altieri.

“Even though she would work about 60 hours a week, she would make sure to go out dancing once a week — no matter what,” Altieri, 39, said. “She was the life-of-the-party kind of person, the central nervous system for all her friends.”

A massive stroke in March 2014 changed all that. It robbed Misa, 71, of her short-term memory, her eyesight and her mobility — and it left her dependent on a feeding tube for nourishment. Altieri, who has two small children, is unable to provide the 24-hour care her mother now gets at a Long Beach, Calif., nursing home three miles away — all of it paid by Medi-Cal, California’s version of the Medicaid program for low-income people.

But advocates for the elderly now worry that Misa and other low-income seniors who receive long-term care in facilities or at home could see their benefits shrink or disappear under Republican-proposed legislation to cap federal Medicaid contributions to states. The proposal is part of a broader GOP plan to repeal and replace former President Barack Obama’s Affordable Care Act.

“My mom is getting the basic of basic care,” Altieri said. “If they cut it, I don’t know what to do.”

Nationwide, Medicaid provides long-term care and support to more than 2 million low-income seniors. The program, funded jointly by the federal government and the states, pays more than half of all long-term care in the country — “more than Medicare, private long-term care insurance and out-of-pocket spending combined,” said Matt Salo, executive director of the National Association of Medicaid Directors.

And, he said, it’s the only public program that offers such care on an ongoing basis. The Medicare program — for people 65 and older — provides only limited long-term care to those who need it after being hospitalized.

The GOP bill, scheduled for a vote on the floor of the House on Thursday, would transform Medicaid from an open-ended system, in which the federal government matches state spending, to one in which it provides a fixed amount to each state, either through a lump-sum payment or on a per-capita basis.

In an attempt to overcome opposition to the bill among some Republicans, GOP leaders agreed Monday to add the option of a lump-sum payment, known as a block grant.

They also amended the bill to allocate additional money for elderly and disabled people on Medicaid. But Eric Carlson, a directing attorney in the Los Angeles office of the nonprofit group Justice in Aging, said such an allocation would not offset the wide funding gap created by caps on federal spending.

“It doesn’t matter whether it’s a block grant or per-capita cap,” Carlson said. “Either way the federal government is setting a hard limit on federal funding available, and states are going to be forced to make due with whatever is sent to them, and it’s not going to be enough.”

Carlson is co-author of a paper released by Justice in Aging that says capping federal Medicaid spending, with either per-capita funding or block grants, would harm older Americans, in part by forcing states to cut services for them “to the bone.”

“Federal payment for Medicaid would drop sharply, resulting in fewer services for everyone who relies on Medicaid, including older adults who account for over 22 percent of all Medicaid spending,” the report predicted.

In 2015, Medicaid spending topped $552 billion nationwide, including more than $85 billion spent on Medi-Cal enrollees, according to the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

Under the GOP proposal, nursing care in a facility would remain a guaranteed Medicaid benefit, though states could reduce how much they spent on it if they were forced to economize. And Republicans might well attempt to loosen or undo federal program requirements with subsequent legislation that would give states more control.

Such a shift would “decimate Medicaid’s current guarantee of adequate and affordable care,” according to the Justice in Aging paper.

In the meantime, states could do away with benefits not guaranteed under federal law, which include at-home nursing, personal care — which Medi-Cal covers for qualified beneficiaries — and even inpatient and nursing care in mental health facilities for the elderly.

A report released last week by the nonpartisan Congressional Budget Office suggests states might cut provider payments or eliminate some of their optional services to fill the funding gap left by the restricted flow of federal money.

Oren Cass, a senior fellow with the Manhattan Institute who specializes in anti-poverty law, doesn’t believe that means the GOP plan would necessarily harm elderly Medicaid beneficiaries.

“A state that wants to continue the spending it does on the elderly can do that if it would rather make cuts elsewhere,” he said. “Or it can put up more of its own money.”

Cass said that having more flexibility might appeal to California legislators and health care leaders.

“If you ask California today whether it would rather have Donald Trump run its Medicaid program or run it itself, I think most people there, especially liberal people, would say they would rather have the state making the rules,” he said.

For now, however, the debate over the GOP bill is largely speculative, since there may be enough Republicans with serious concerns about the legislation to sink or significantly amend it.

The CBO report shows the bill would reduce federal budget deficits by a cumulative $337 billion over a decade. The CBO also projected that the bill, if passed, would leave 14 million more people uninsured next year than under current law and 24 million more by 2026.

The cost savings may not be enough to overcome the reluctance of many conservative Congress members who call the bill “Obamacare Lite” because it retains some of the most popular features of the Affordable Care Act.

As the debate heats up in Washington, Charlotte Altieri of Long Beach remains hopeful that her mother’s nursing home care will be spared any cuts.

“We’re not at some grandiose nursing home right now,” she said, “Where are we going to find one that costs less than this one?”

This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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