With nursing home care costing more than $90,000 a year in Minnesota and assisted-living facilities charging roughly half that, it’s easy even for those who diligently put away money to outlive their savings. When that happens, Medicaid is the program that steps in to assist elderly Americans who require long-term care and are unable to pay for it.
Medicaid’s critical role as a safety net for the elderly and other vulnerable groups is why care, caution and transparency are absolutely critical when any program changes are considered, much less the alarming reductions in federal funding newly revealed Thursday in a more detailed analysis of the Senate health care bill. There’s no painless way to replace missing dollars from the U.S. government, which works in partnership with the states to pay for the program. The drastically reduced support the Senate bill calls for would hobble Medicaid’s ability to serve the coming wave of baby boomers creating unprecedented demand for long-term care.
The Congressional Budget Office (CBO) performed an important public service Thursday by spotlighting the deeper, poorly understood future cuts the bill proposes. The first CBO report, released Monday, only went out to 2026. The agency concluded that federal support during this next decade would decrease 26 percent.
But the second report analyzed the funding changes for the 10 years after 2026. It concluded that federal Medicaid spending would be cut by 35 percent by 2036 — an unprecedented and unacceptable withdrawal of support.
At the least, Senate Republicans need to slow down and ensure that lawmakers fully grasp what a “yes” vote means. As part of that, senators need to hear from state policymakers, who would be left to deal with the gaping budget gaps the bill would create for a program that serves the elderly, the disabled and more than 30 million children.
Medicaid is jointly funded by the federal government and states. In 2016, the U.S. government provided $6.4 billion — 57.4 percent — of Minnesota’s $11.2 billion in Medicaid spending. A degree in health economics is not needed to see that the Senate bill reductions would be difficult for state taxpayers to fill. As the CBO noted Thursday, states would be left with unpalatable options beyond that, such as eliminating services, restricting Medicaid enrollment or reducing payments to medical providers.
State health leaders are understandably sounding the alarm. The Minnesota Hospital Association and LeadingAge Minnesota, a nursing home trade group, sent a forceful letter Friday to the state’s congressional delegation. Minnesota Department of Human Services (DHS) Commissioner Emily Johnson Piper weighed in this week, saying that the Senate bill, or the one passed in the U.S. House in June, could reduce federal funds to Minnesota by $2 billion in the first 18 months.
Gov. Mark Dayton also blasted the Senate bill in a Friday statement, calling it a “shameful ploy” that hurts the vulnerable while reducing taxes on the “very wealthiest” Americans. “The bill recently assembled in secret by a handful of Senate Republicans would severely harm many thousands of elderly, sick and lower- to middle-income Minnesotans,” Dayton said. “Like the bill passed by House Republicans, it would make the problems with our existing health care system much worse, not any better.’’
Dayton’s point about the congressional health reforms hurting middle-class Minnesotans is important. Many people mistakenly believe that the policy changes wouldn’t affect them. But the impact on long-term care especially could reach across many income levels. Even those with healthy incomes or savings would be challenged to pay for nursing home bills for long.
Roughly 70 percent of those 65 and older will need long-term care. Only 10 percent of elderly Americans have private long-term care insurance, according to the National Bureau of Economic Research. Medicaid has bridged that gap. Changes to it must be made transparently and with an honest discussion of the consequences for the 74 million elderly, disabled and poor Americans reliant on this vital program.