The Future of Medicaid: A NAHC Perspective
August 11, 2017 09:36 AM
Following seven months of repeal and replace talks, the final three in the Senate, efforts to come up with an alternative to the Affordable Care Act failed in dramatic fashion when Senators Susan Collins (Maine), John McCain (Arizona), and Lisa Murkowski (Alaska) voted against the so called “skinny repeal.” This resulted in a 49-51 vote count as all Democrats voted against the measure as well. As has been reported, the National Association for Home Care and Hospice’s (NAHC) primary concerns with these bills was the significant cuts that would have been made to the Medicaid program. Ultimately, these proposed funding cuts would lead to the removal of home care and hospice as benefits under Medicaid.
As long as there is a United States Congress and a Medicaid program there will be contingent of lawmakers interested in reforming it – specifically, shifting the federal share to a defined contribution. The appeal here is for ease of budgeting, short-term savings, and potentially long-term savings as well. Opponents of this approach argue that enrollees will be harmed by inevitable funding cuts and benefit reductions. The two options discussed in this most recent round of Medicaid reform discussions were block grants and per capita caps. While similar in the intent of a defined federal contribution, these models operate differently. Block grants are a simple lump sum payment to each state individually for the state to determine how to spend on their Medicaid program with few stipulations.
In a per capita cap model, which is the model lawmakers included in the repeal-and-replace legislation, states would be allotted a specific amount per enrollee from the federal government, not the open ended amount that currently exists. Starting in 2020, the federal share would have been based on 2016 data, and then adjusted for inflation annually, according to the Consumer Price Index (CPI). Put into public policy, these adjustments would result in a funding gap widening with each passing year from what Medicaid is currently projected to spend, as its growth rate exceeds what the CPI calls for.
This decreased level of funding paired with home care and hospice’s status as optional benefits, and nursing homes status as a mandatory benefit puts state governments into an undesirable position. They will be pressured to come up with additional funding, cut home care and/or hospice as a benefit in favor of nursing homes, or hamper the eligibility criteria. All of these options would do great harm to patients and providers of home care and hospice.
In the future, we anticipate a continued desire to reform Medicaid from Congress in an effort to cut spending. However, as we just witnessed, there will be strong opposition to these proposals. As many know, there is a stereotype that exists that Medicaid only covers people looking for a “free ride” and those that refuse to work. Data simply does not validate those assertions. Studies have shown the vast majority of Medicaid beneficiaries are either working, seeking work, students, disabled, or providing care to a loved one. Further, Medicaid ensures care for the most vulnerable among us. People living with disabilities, seniors who have exhausted their savings and retirement funds, and those that have experienced financial catastrophe from unforeseen medical emergencies, are all Medicaid beneficiaries. Protecting these people is vital to NAHC’s mission.
In future debate, NAHC urges lawmakers to strengthen eligibility protections for vulnerable populations. We recommend that home care and hospice be made mandatory benefits under Medicaid. We also urge lawmakers to ensure proper funding is protected so that no enrollee is denied home care or hospice. If a system such as per capita caps or block grants were put in place, an inflation adjustment factor that keeps pace with states Medicaid expenses is essential to the achievement of optimal outcomes and patient satisfaction. A more recent payment baseline, rather than four years prior, would also be paramount to a strong foundation for block grants and per capita caps.
It is no secret that President Trump and Secretary of Health and Human Services Tom Price hold the ACA in low regard. With repeal and replace talks on ice, these two are now looking at other avenues to reform the American health care system. One notable way is through state Medicaid waivers. While these waivers were created with good intent, expanding coverage, they do not include additional funding. This scenario creates an undesirable catch-22, covering new enrollees while hurting current enrollees. State governments are able to expand coverage through reducing benefits offered and implementing cost sharing requirements such as deductibles and copays. It is difficult to make specific recommendations on waivers as there are countless ways in which they may be planned and implemented. As such, NAHC urges careful deliberation and open dialogue with stakeholder groups when leaders consider these proposals. Further, Congress should closely monitor these proposals develop to ensure no harm is done. Some states have already applied for, and been granted these waivers, with Maine becoming the most recent to apply. Expect more states to follow.
For over 30 years, NAHC has worked and advocated for the rebalancing of post-acute care spending in favor of the home, away from institutional settings. Every president, dating back to Ronald Reagan, has agreed and supported care in the home. Numerous pieces of legislation passed by Congress have shown their support for rebalancing. In 2015 these efforts were realized with the majority of post acute care spending going towards home and community based care. Most recently, both Republican and Democratic policy platforms from the 2016 election cycle specifically prioritized home care. NAHC applauds these inclusions and looks forward to further progress in favoring home and community-based services.