Ask the Advisor: August 2017

Ask the Advisor: August 2017

How Would My Son’s Caregiver Be Affected By Medicaid Cuts?

Q:  How would the healthcare replacement legislation in Congress affect homecare and long-term care services covered by Medicaid?  My 44-year old son was born with cerebral palsy and is homebound.  He receives both Medicare and Medicaid.  My mom, age 93, also lives with me.  My husband and I still work.  We are in our 60s. 

A family relative helps care for my son and keeps my Mom company during the day.  She is paid minimum wage through a state Medicaid family caregiver program for which my son is eligible.  This program is keeping both my son, and Mom out of the nursing home, and allowing me to earn a modest income just to put toward our bills.  

A:  The Congressional Budget Office estimates the House GOP’s American Health Care Act that passed in the House cuts federal spending on Medicaid by $834 billion over ten years, a funding cut of 25%. The Senate’s health care bill would cut Medicaid even more deeply, by using a more slowly-growing inflation index to adjust reimbursements to states.

Under current law, the federal government matches state Medicaid spending for everyone whose income is low enough to qualify, which is tied to the federal poverty level of $12,060 (individual) or $16,240 (couples).  Under current law, as Medicaid spending increases due to rising program costs there are no caps on what the federal government contributes.  Under the House and Senate health care bills, the federal government would switch to reimbursing states using a capped amount, regardless of the actual growth in costs in a state.  If costs grow faster states would have to make up the difference.

About one-in-five persons have incomes so low they receive both Medicare and Medicaid.  Medicaid benefits can include payment of Medicare Part B premiums and cost sharing.  In addition, Medicaid covers benefits that are not covered by Medicare, including nursing home care, and the family caregiving program that is enabling your disabled son and your mom to live with you instead of in a nursing home.

The big concern is that per capita caps and block grants won’t keep pace with the real growth in costs in state Medicaid programs — especially since the reimbursements formulas would be tied to the rise in inflation.  Actual medical costs are expected to grow several times faster than reimbursements.  States could be forced to reduce spending on older people and younger disabled adults, who account for a disproportionately large share of Medicaid spending.  States could tighten eligibility, reduce non-mandatory benefits like your home caregiving program, and nursing home reimbursements, or otherwise ration care.

As of June 30th, the fate of the Senate’s repeal and replace healthcare bill  remains uncertain.  The legislative in the Senate has avoided full bipartisan committee consideration and open hearings.  We urge you to contact your Members of Congress and tell them NO to Medicaid cuts.