CMS Report Confirms Medicaid Cuts Would Jeopardize Critical Services and Long-Term Program Stability

CMS Report Confirms Medicaid Cuts Would Jeopardize Critical Services and Long-Term Program Stability


The proposed American Health Care Act (AHCA) would make significant changes to the Medicaid program, which serves as a critical safety net for millions of people who deplete their life savings and turn to Medicaid for assistance as their ability to care for themselves declines. The bill would repeal the Medicaid expansion and implement a capped financing model for states. According to the nonpartisan Congressional Budget Office (CBO), the AHCA would cut $834 billion from the Medicaid program through fiscal year (FY) 2026. CBO projects that 23 million people would lose coverage as a result of the AHCA, most of them — 14 million — because of the changes to Medicaid.

The Centers for Medicare & Medicaid Services (CMS), which administers the Medicaid program, has released a new report suggesting, based on different assumptions, that 8 million people would lose Medicaid under the AHCA through FY2026. While the numbers differ between the CMS and the CBO, one thing is clear: The AHCA would cut Medicaid financing to states and millions of people would lose coverage for critical services. In its report, CMS also makes clear the danger of the bill for Medicaid enrollees, particularly for older adults and people with disabilities that rely on Medicaid for home- and community-based services.

Medicaid Home and Community-Based Services in Jeopardy

Zeroing in on the CMS report, an initial read suggests minor implications of capped financing for Medicaid. According to CMS, “There is no estimated impact on Medicaid enrollment because of the presence of the per capita allotments.” Reading between the lines, however, tells a much different story.

To reach this conclusion, CMS assumes that states will “(i) lower provider reimbursement rates; (ii) manage utilization and program efficiency; and (iii) reduce optional services.” When CMS refers to “optional services” it means services that are not required by the federal government and offered at the discretion of states. Home- and community-based services (HCBS) are generally classified as optional, and states have the flexibility to offer this support or to take it away. Notably, while “optional,” HCBS is often a more cost-effective option than nursing home care — not to mention what people tend to prefer.

According to analysis from the Center on Budget and Policy Priorities, most (88 percent) Medicaid spending on optional services went toward older adults and people with disabilities, and of this spending, more than half went toward home- and community-based services.

If, as CMS suggests, states are going to reduce optional services to make up for gaps caused by capped Medicaid financing, HCBS will almost certainly become a target. This is a potential unintended consequence of the bill — that is, states limiting access to Medicaid HCBS to stay within the caps and thereby likely increasing the use of more expensive services like nursing home care, which is required by law.

While HCBS are more in line with consumer choice and has the potential to limit cost growth, they are optional in Medicaid and thus in jeopardy if the bill becomes law. The new CMS report makes this clear, and suggests additional, long-term danger for Medicaid under the AHCA.

Long-Term Implications of the AHCA for Medicaid

In addition to the impacts of the per capita caps on HCBS, the CMS report makes clear that the proposed per capita caps in the AHCA may have long-term impacts that threaten how states run their programs.

The report states, Over a longer time period, it may be more difficult for States to operate their Medicaid programs without making more significant changes to their programs,” although no further explanation is available.

Additional research, however, has given insight toward the long-term impacts of capped Medicaid financing. A recent AARP report, for example, shows that the growing and aging of the 65-plus population will have significant cost implications for Medicaid that the AHCA does not take into account.

If a per capita cap structure is implemented in Medicaid, the impact will be felt for years beyond 2026. The limited growth rates allowed by the caps would lead to shortfalls in how much money states have to serve older adults, people with disabilities and low-income children and adults. As a result, states will be forced to cut services, restrict eligibility, cut provider rates — or a combination of any number of those.

Looking Forward

Whether it’s research from CMS or CBO, it is clear that changes proposed to the Medicaid program under the AHCA pose significant near- and long-term risks to states and to consumers. Reducing access to home- and community-based services — and Medicaid in general — will harm older adults and people with disabilities. Going forward, discussion around health reform should focus not on where to cut Medicaid, but rather on how existing funds could be used more efficiently to meet people’s needs.

 

Brendan Flinn is a policy research senior analyst for the AARP Public Policy Institute. He works on Medicaid, long-term services and supports, and family caregiving issues.



Source link

Coming June 14: All-New State Scorecard on Long-Term Services & Supports

Coming June 14: All-New State Scorecard on Long-Term Services & Supports


This is an exciting month for AARP’s Public Policy Institute. We’re set to release our third Long-Term Services and Supports (LTSS) State Scorecard Report on June 14, and this powerful tool is far more interactive and comprehensive than the 2011 and 2014 installments.

A lot has changed since 2011 when we first partnered with the Commonwealth Fund and the SCAN Foundation to conceive of the idea for a scorecard that would measure long-term services and supports for older adults as well as people with physical disabilities and family caregivers on a state-by-state basis.

At the time, I concluded in an article that, based on the report’s findings, even the best performing states had a long way to go to create a high-performing system of long-term services and supports. Certainly many states have made progress since then, and no doubt the 2017 Scorecard will continue to highlight that progress. But there’s also little doubt that the Scorecard will uncover a list of shortcomings and areas for improvement. That’s what the Scorecard was all about in its 2011 and 2014 iterations, and that’s what the 2017 Scorecard promises to illuminate.

Of course, the actual Scorecard release is not the most exciting part. What’s truly exciting is the impact it can have after its release. We’re encouraged by how policymakers and advocates viewed the 2014 Scorecard for what it was: a call to action. Many used the information in the report as a tool to make positive change in their states. With Americans living longer and LTSS demand continually growing, our call to action must be louder and more pronounced than ever.

Thanks to the efforts of all involved in compiling and organizing data for the 2017 Scorecard, I’m proud to say that—no question—it tops the 2014 installment in value as a key tool in the field. So, what’s the same and what’s different this time around? Like the first two installments, the 2017 Scorecard examines state performance across five key categories, or dimensions:

  • Affordability and access
  • Choice of setting and provider
  • Quality of life and quality of care
  • Support for family caregivers
  • Effective transitions


But this year, we’ve placed an emphasis more than ever on how the results are presented. The information on our website will be truly interactive and engaging than in years past. (The new version of the site, http://www.longtermscorecard.org/, will appear June 14.)   Users can easily customize data to suit their needs, no matter what role they play in LTSS and where they’re located. While our accompanying report remains an invaluable source of information, the interactive website has become the true centerpiece of the offering.

Other new additions of which we’re extremely proud: Visitors to the site will have access to videos, called Impact Stories, that show how improving on the Scorecard can impact the lives of real people. Users can also download Promising Practices such as this one as well as Emerging Innovations that states can use as they work to improve the lives of older adults, those with physical disabilities, and family caregivers. Better still, new and groundbreaking content will not stop with the June 14 Scorecard release. We’ll continue to bring you more Promising Practices and Emerging Innovations, as well as releases in our Impact Story video series, throughout the year.

My colleague Jean Accius, vice president for Independent Living/Long-term Services and Supports, who was instrumental in spearheading these changes, summed up their value succinctly when he said, “These concrete tools and innovative practices will help states improve their performance and, ultimately, the lives and well-being of others.” As for the addition of the Impact Story videos this year, he added that they “literally complete the picture—putting a face to the diversity of individuals whom the Scorecard examines.”

Will this year’s Scorecard illuminate shortcomings and challenges in LTSS as it has in the past? Absolutely. (Here’s a teaser: we’ve got a long way to go.) But I’m extremely excited that we’ll also shine a light on a path forward for all caregiving stakeholders.

Susan Reinhard is a senior vice president at AARP, directing its Public Policy Institute, the focal point for AARP’s public policy research and analysis. She also serves as the chief strategist for the Center to Champion Nursing in America, a resource center to ensure the nation has the nurses it needs.

 



Source link

The American Health Care Act Makes Unsustainable Cuts to Medicaid

The American Health Care Act Makes Unsustainable Cuts to Medicaid


Recent policy conversations related to the American Health Care Act (AHCA) have focused on  proposals that would eliminate the Affordable Care Act’s critical protection for people with preexisting conditions. This  controversial proposal has drawn  a lot of attention for good reason. Eliminating this important protection, which keeps insurance companies in the individual (non-group) market from considering health status when making coverage decisions, could hurt millions—especially older adults who tend to develop more health conditions as they age.

But the preexisting condition protection is not the only serious concern. The proposed legislation would also make huge cuts to Medicaid by taking  $880 billion out of the program by 2026. How?  By, among other things, fundamentally changing the way the program is funded. Under the AHCA, Medicaid funding would move from a federal guarantee to match all legitimate state expenditures on health care and long-term services and supports (LTSS) for eligible beneficiaries, to a capped payment system that would give states a fixed dollar amount per enrolled beneficiary.[i]  Although per enrollee caps respond to changes in enrollment, they do not respond to increases in health care costs attributable to medical or pharmaceutical innovation, nor do they respond to other changes in the health care environment that could affect per enrollee spending. Health care costs, we all know, are notorious for their rapid rise. The result: an ever-widening gap between cost and funding.

The impact of such a huge loss of federal Medicaid funds on people with disabilities and poor seniors will be devastating—especially for 11 million Medicare beneficiaries who are also eligible for Medicaid. These individuals—called dual eligibles, or duals—are the poorest and sickest of all Medicare beneficiaries and rely on Medicaid for critical LTSS services, like help with toileting, bathing, and eating.

Faced with major losses of federal funding for their Medicaid programs,  states would have limited options. They could plug the funding hole with state revenues, which is unlikely given competing demands on state budgets. States could also cut provider rates, which could lead to significant access problems for beneficiaires because many providers may choose not to serve the Medicaid population. States could also eliminate optional eligibility categories, including some that provide access to LTSS. Finally, states could reduce or eliminate access to optional services, including home and community-based LTSS. Limiting access to needed LTSS for dual eligibles will most surely result in increased use of emergency room and hospital services, ultimately shifting costs to the Medicare program—creating a “pay me now or pay me later” situation for the federal government.

Rather than take billions  of dollars out of Medicaid and shift significant costs to Medicare and states, it is time to have a reasoned conversation about how to improve the program in ways that don’t leave gaping holes in the health care safety net that millions of people  and their family caregivers rely on.

[i] States have the option of receiving block grant funding for children and non-elderly, non-disabled adults. Block grants are fixed amounts of money that do not respond to changes in enrollment or program costs.

 

 

Lynda Flowers is a Senior Strategic Policy Adviser with the AARP Public Policy Institute, specializing in Medicaid issues, health disparities and public health.

 

 

 

 



Source link

The American Health Care Act Makes Unsustainable Cuts to Medicaid

The American Health Care Act Makes Unsustainable Cuts to Medicaid


Recent policy conversations related to the American Health Care Act (AHCA) have focused on  proposals that would eliminate the Affordable Care Act’s critical protection for people with preexisting conditions. This  controversial proposal has drawn  a lot of attention for good reason. Eliminating this important protection, which keeps insurance companies in the individual (non-group) market from considering health status when making coverage decisions, could hurt millions—especially older adults who tend to develop more health conditions as they age.

But the preexisting condition protection is not the only serious concern. The proposed legislation would also make huge cuts to Medicaid by taking almost $1 trillion (or 25 percent of all Medicaid dollars in 2016) out of the program by 2026. How?  By fundamentally changing the way the program is funded. Under the AHCA, Medicaid funding would move from a federal guarantee to match all legitimate state expenditures on health care and long-term services and supports (LTSS) for eligible beneficiaries, to a capped payment system that would give states a fixed dollar amount per enrolled beneficiary [i]. Although per enrollee caps respond to changes in enrollment, they do not respond to increases in health care costs attributable to medical or pharmaceutical innovation, nor do they respond to other changes in the health care environment that could affect per enrollee spending. Health care costs, we all know, are notorious for their rapid rise. The result: an ever-widening gap between cost and funding.

The impact of such a huge loss of federal Medicaid funds on people with disabilities and poor seniors will be devastating—especially for 11 million Medicare beneficiaries who are also eligible for Medicaid. These individuals—called dual eligibles, or duals—are the poorest and sickest of all Medicare beneficiaries and rely on Medicaid for critical LTSS services, like help with toileting, bathing, and eating.

Faced with major losses of federal funding for their Medicaid programs,  states would have limited options. They could plug the funding hole with state revenues, which is unlikely given competing demands on state budgets. States could also cut provider rates, which could lead to significant access problems for beneficiaires because many providers may choose not to serve the Medicaid population. States could also eliminate optional eligibility categories, including some that provide access to LTSS. Finally, states could reduce or eliminate access to optional services, including home and community-based LTSS. Limiting access to needed LTSS for dual eligibles will most surely result in increased use of emergency room and hospital services, ultimately shifting costs to the Medicare program—creating a “pay me now or pay me later” situation for the federal government.

Rather than take millions  of dollars out of Medicaid and shift significant costs to Medicare, it is time to have a reasoned conversation about how to improve the program in ways that don’t leave gaping holes in the health care safety net that millions of people  and their family caregivers rely on.

 

[i] States have the option of receiving block grant funding for children and non-elderly, non-disabled adults. Block grants are fixed amounts of money that do not respond to changes in enrollment or program costs.

 

 

Lynda Flowers is a Senior Strategic Policy Adviser with the AARP Public Policy Institute, specializing in Medicaid issues, health disparities and public health.

 

 



Source link

The Fierce Urgency of Now: How $880 Billion in Cuts to Medicaid Could Hurt Us All

The Fierce Urgency of Now: How $880 Billion in Cuts to Medicaid Could Hurt Us All


If you have protection against future catastrophic out-of-pocket costs for basic life functions, consider yourself lucky. The vast majority of people in the United States don’t.

Yet the reality is that there’s a 52 percent chance that someone turning 65 today might develop a severe disability requiring long-term services and supports (LTSS)—that is, help with such functions as eating, bathing, dressing, and toileting.

For more extensive care, the cost can surpass $250,000 for those over the age of 65—a figure that could easily decimate even some middle-class families, never mind lower-income earners. As a result, many people deplete their resources, become impoverished, and wind up needing relief from Medicaid as a last resort. Thus, millions of Americans, many of whom you might never have guessed would need Medicaid, find themselves having to turn to the half century-old program for this vital support. But at least that safety net is there.

However, if some in Congress get their way, that safety net may disappear, a position AARP firmly opposes. Provisions in the most recent House health reform proposal threaten to roll back the federal promise of coverage and services for millions of Americans, including at least 17 million children and adults with disabilities and low-income older adults who rely on Medicaid. Meanwhile, the proposal would instead shift more costs to states and their taxpayers. In short, hanging in the balance of a debate raging in Washington is $880 billion in federal funding for crucial health care and LTSS.

Responsive Medicaid Would Turn Rigid

For more than 50 years, Medicaid has served as a critical safety net for millions of people with limited income and resources. Current law guarantees access to health care and LTSS to all eligible individuals. States and the federal government share the risk, responsibility, and cost of financing Medicaid. The federal government guarantees states financial support, based on the relative wealth of the state, of between 50 and 75 percent of the program’s cost, even if cost goes up.

The program responds to changes in the economy, public health outbreaks, natural disasters, and medical cost growth. During the Great Recession when millions lost their jobs—and their employer-based health insurance—Medicaid served as a critical safety net. And as the Zika virus spread throughout the U.S. recently, Medicaid responded with the necessary funding.

In its current form, the House health legislation would fundamentally alter the program by changing the financing structure to a per capita cap. Under such a system, the federal government would set a maximum limit on how much to reimburse states on a per-enrollee basis for children, adults, individuals with disabilities, and seniors. While payments to states would reflect changes in enrollment, the cap would shift the risk to states for higher-than-expected cost growth due to epidemics, blockbuster drugs, and natural disasters. In addition, the cap would not account for the changing mix of an aging population. As we get older the needs for LTSS will go up, but budgets will not. Setting the caps at a time when per-beneficiary spending for low-income seniors is much lower would result in an underfunded safety net for this population.

Just in the event this was not drastic enough, House leaders are now willing to modify the health legislation and provide states with the option to accept Medicaid block grants—which is a fixed amount of Medicaid funding annually, regardless of actual need or program costs. Under a block grant, people are not guaranteed coverage for services, and funding would not necessarily keep up with health care costs, nor would it be adjusted based on the number of persons served.

The Real Face of Any Savings: State Taxpayers and America’s Most Vulnerable

While block grants and per capita caps on the surface appear to be a mere change in how funds are allocated for Medicaid, thereby saving federal dollars, and allowing greater state flexibility in program implementation, such a shift would result in a program that would be in many ways unrecognizable, both philosophically as well as “on the ground,” where Americans rely on the program every day.

Analyses from the Congressional Budget Office estimates federal spending in Medicaid would decrease by $880 billion by 2026. These cuts could have major implications for state budgets and the ability of states to provide adequate health care and LTSS for low-income seniors and people with disabilities. States and their taxpayers will either have to fill this gap themselves, or fewer people will receive less support for services like LTSS.

Faced with some difficult choices, states may limit optional benefits like home- and community-based services (HCBS), which is generally more cost-effective than long-term care facilities.

The bottom line: Members of Congress will vote on the health legislation later this week.

The Medicaid piece of the new health legislation means that access to services for some of the most vulnerable populations in our society, guaranteed for over a half-century, would be in jeopardy. It would also shift costs to taxpayers at the state level, which is one reason some governors feel the need to oppose it, regardless of their political affiliation. Now is the time to act and voice your concerns. There is just too much at stake.

Debra Whitman is AARP’s chief public policy officer and leads policy development, analysis and research, as well as global thought leadership that supports and advances the interests of individuals age 50-plus and their families. Follow Deb on Twitter: @policydeb

Jean Accius is a nationally recognized expert on aging policy, livable communities and long-term services and supports (LTSS).  He currently serves as the vice president of the long-term services & supports and livable communities group within the AARP Public Policy Institute. Follow Jean on Twitter: @JeanAccius 

 



Source link

Preserving Access to Home and Community-Based Services through Community First Choice

Preserving Access to Home and Community-Based Services through Community First Choice


Courtesy of Greg Kahn

An important AARP study shows that an overwhelming majority of people would like to remain in their homes and communities for as long as possible. Personal care services, such as assistance with bathing, eating, and dressing, are critically important to helping older adults and people with disabilities of all ages live independently and avoid costly nursing facility placements.

Medicaid plays a critical role in providing this support. It is the largest payer of long-term services and supports (LTSS), including home and community-based services (HCBS) like personal care. While there has been an increase in funding for HCBS over the years, institutional care still accounts for 59 percent of Medicaid LTSS spending for older adults and people with physical disabilities. Nevertheless, through such programs as Community First Choice (CFC), the trend has continued toward greater availability of HCBS across all populations. And with HCBS being both cost effective and a means of enabling greater independence, it’s a trend that needs to continue.

Yet the recently released American Health Care Act (AHCA), the proposed legislation to replace the Affordable Care Act (ACA), puts the future of CFC in jeopardy. With a provision that repeals the program, if enacted the AHCA could disrupt services for older adults and people with disabilities covered through CFC.

How Does Community First Choice Work?

Community First Choice is a provision of the ACA that offers additional federal funding to states to provide personal care and assist individuals with activities of daily living (ADLs), instrumental activities of daily living (IADLs), and health-related tasks. States may also leverage CFC funds to cover transition services to help people leave nursing facilities and return to their homes and communities.

The CFC option empowers older adults and people with disabilities through its emphasis on self-direction. Unlike some other types of Medicaid programs, individuals enrolled in CFC and their families are guaranteed the right to self-direct their services and oversee the people that provide their personal care.

Community First Choice and the States

As of 2016, eight states offer this option in their respective Medicaid programs. An analysis of just four of the states (California, Oregon, Washington, and Montana) showed that the program has served more than 500,000 people since its inception. States that offer CFC must offer the program to all populations, and the analysis found that 40 percent of CFC enrollees were adults 65+ and 55 percent were people with disabilities under age 65.

While a more recent enrollment count is not available, the current total is likely much higher today due to the increased number of states offering this option.

The Financial Impact of Personal Care and Community First Choice

Numerous studies and analyses reveal that providing people LTSS in their homes and communities is generally less expensive than doing so in a nursing facility. A 2016 analysis from Genworth, for example, shows the median annual cost for a private room in a nursing facility exceeds $92,000, while the cost for 30 hours of personal care is $32,000. AARP research on Medicaid-funded HCBS also found that Medicaid pays nearly three times as much for each person served in institutional settings as it does for each person served in the community. Additional studies found annual cost savings of $11,912 per older adult who transitioned from a nursing facility back to the community through Medicaid’s Money Follows the Person Rebalancing Demonstration. In short, redirecting more resources to provide Medicaid HCBS is cost-effective compared with nursing facilities.

Given the lower expenses associated with personal care and the full spectrum of home and community-based services, increasing the portion of Medicaid LTSS dollars spent on these services could yield significant long-term cost-savings to states and the federal government. We are already moving in that direction. The most recent data on Medicaid LTSS expenditures shows that 53.1% of all Medicaid LTSS dollars go towards HCBS for all populations, up from 51.3% the previous year. Since its inception, Community First Choice has become an important tool to help states continue balancing Medicaid LTSS toward HCBS.

The Future of Community First Choice

The CFC option is an important piece of the puzzle for helping states provide services that enable people to live independently in their homes and communities. It also has the potential to help states and the federal government improve and expand access to LTSS while containing costs.

Including a repeal of Community First Choice through the AHCA, therefore, could hinder the progress made toward balancing long-term services and supports and limit access to home and community-based services for the growing number of states that have embraced the program. Given CFC’s current role in expanding HCBS, and the potential for cost savings to Medicaid through increasing access to HCBS more broadly, it would be wise for policymakers to preserve CFC and allowing state governments to continue offering HCBS through this mechanism.

 

Brendan Flinn is a policy research senior analyst for the AARP Public Policy Institute. He works on Medicaid, long-term services and supports, and family caregiving issues.



Source link

Pin It on Pinterest