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Bush Medicaid Plan Threatens Coverage for Millions of Elderly
- February 28th, 2003
The Bush administration''s proposal to overhaul Medicaid jeopardizes the health and safety of millions of elderly and disabled Americans who could suddenly find themselves ineligible for Medicaid coverage, elder law experts and patient advocates tell ElderLawAnswers.
Although it is unlikely that current nursing home residents would be evicted, millions of frail elderly and disabled individuals who would qualify for Medicaid coverage under the current system could fail to qualify under the Bush administration''s proposal. (For details of the proposal, see ElderLawAnswers article "Bush Proposes to Give States More Control Over Medicaid".)
Unable to pay for nursing home care on their own, these patients "would stay where they are now, with family caregivers or many times alone," predicts Priscilla Chapman, Counsel and Director of Government Relations and Policy for the National Committee to Preserve Social Security and Medicare. "Those persons would die much more quickly as well because they don''t have any type of care."
"The administration has decided these types of entitlements and social insurance programs really shouldn''t continue, that this is not in their view the most appropriate use of government money," Chapman told ElderLawAnswers.
To understand the administration''s plan and how it would affect the elderly and disabled, it is useful to know that there are two kinds of Medicaid beneficiaries: those whose incomes are so low that the states must cover them, and those with slightly higher incomes who are covered under optional state Medicaid programs. More than half of the more than 4 million elderly Medicaid recipients are eligible through such optional programs, according to the Kaiser Commission on Medicaid and the Uninsured. In 35 states, for example, the elderly and disabled can qualify for Medicaid coverage of nursing home care by deducting their medical costs from their income.
It is these optionally eligible individuals who would be affected by the administration''s proposal. Currently, the states must obtain permission from the federal government to set up such optional coverage and must adhere to strict federal rules aimed at protecting those who are covered. The administration''s plan would do away with all such guidelines and protections. States could create their own rules regarding who should be covered and what protections they would receive.
"The states could apparently make up whatever rules they wanted for spend-down, or not have spend-down at all," says Charles Sabatino, Assistant Director of the American Bar Association Commission on Legal Problems of the Elderly. "They could wholesale rewrite the Medicaid spousal impoverishment rules and the transfer of asset rules and pretty much have a free hand."
Patricia Nemore of the Center for Medicare Advocacy raises one dire possibility. Without federal protections, "possibly adult children could be asked to supplement nursing home rates and could be held financially responsible by states for their parents'' care," she warns.
Despite all this freedom, in the long run the states could end up with far less to spend on Medicaid recipients. The administration''s proposal, wich must be approved by Congress, would give states an extra $12.7 billion over seven years, but then would effectively ask for that money back later. In the meantime, the money would be in the form of inflexible "block grants". If a state''s Medicaid spending rose because of an economic downturn or higher medical costs, the state would have to make up the difference. Under the current program, the federal government shares the costs, even as they rise.
"If state spending went up beyond the cap, states wouldn''t get any federal financial participation, they''d be on their own," Sabatino told ElderLawAnswers. "And costs are going to go up, so this fiscal relief, the block grant, is pretty much a wolf in sheep''s clothing. It''s labeled as fiscal relief but it''s a real straightjacket fiscally and could result in a reduction in benefits, a reduction in populations covered, and a reduction in the rights of beneficiaries."
Chapman points out that Medicaid is the only source of public funding for long-term care. "Although Medicaid may not be the best way to do it, the solution is certainly not to do away with the Medicaid program," she says. "The solution is perhaps to put in place a long-term care financing system that would include self-pay, long-term care insurance for those who can afford it, but retain a social insurance program for the most vulnerable among us."
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