In the river of retrograde effects certain to follow if the latest version of the Senate Republican health care bill passes largely intact, none is more surprising than the injury to elderly Medicaid recipients. To state this is not to prioritize poor elderly over other deserving beneficiaries. It is simply to say that nearly two-thirds of Americans in nursing homes are, well, on Medicaid. And while not every American has a loved one who is disabled, or a poor child, or struggling with opioids, or belongs to another beneficiary group, it does seem fair to say that at one time in their life every American had parents. If they live long enough, most will be on Medicaid.
That may explain the visceral and nearly universal desire to treat the elderly with dignity and compassion. And it probably helps explain why the Medicaid program for the elderly has been largely non-controversial since adoption of its forerunner in the late 1950s. Unfortunately this is no longer so. Senate subcommittee hearings on the state of America’s elderly poor in 1959 actually invited elderly views, in contrast to the draft-by-stealth approach of the Republican bills we are seeing now.
A witness at that 1959 hearing, a retired worker from Tampa, described to committee members how he and his wife survived on $1,500 a year. “Well, we are old people and we don’t require much,” he said, according to excerpts published last fall by Politico Magazine. “But I want to ask you, what do we do if we need medical care? I will have to seek some charity … and pronounce to the whole world that I am only a pauper, a beggar.”
The most damaging of the Medicaid changes in the Republican legislation is a per capita ceiling on the growth of funding. Initially for the elderly this will be the Medical Consumer Price Index plus 1 percentage point, but after eight years spending will risepegged to the general CPI, a basket of goods and services unrelated to medicine. Yet medical costs generally increase at a much faster rate than inflation overall, so states will have to pick up an increasing share of the federal tab. They will have limited options.
States could raise taxes or cut spending, but for many of them the financing would be difficult. Nevada Gov. Brian Sandoval sees the bill adding $480 million to annual budgets just to maintain current levels of coverage, a lot of money given that more than a third of residents are low income. More than a third in West Virginia and Louisiana are also low income and three of four nursing home residents in each state are on Medicaid. The program soaks up 12 percent of state funds in West Virginia and 19 percent in Louisiana.
In Ohio, 26 percent of state spending goes to Medicaid. The money supports three of every five nursing home residents and must also go for other pressing needs, such as fighting an opioid epidemic that has produced the country’s third highest rate of opioid deaths. Eight in 10 nursing home residents in Alaska are on Medicaid, and per person costs for the elderly are the country’s highest.
Tax or program cuts are not the only way for states to cope with shrinking federal contributions. Providers could be paid less, but lower Medicaid reimbursements would drive more doctors away. Nursing home staff could be cut, but care would suffer. Prescription drugs could be cut or priced to (unaffordable) market rates, harming patient health or further draining family resources. Improvements in care delivery might extract modest savings — usually with up-front investments.
But the surest way to save is to shrink or eliminate what Medicaid calls “optional coverage.” That’s where the big money is. Since most nursing home residents are in this category, removing eligibility removes the cost. Unfortunately, it also removes the residents. Where do they go? Wherever they went before Medicaid: family, neighbors, charities, who knows? Wherever they go, once forced from nursing homes seniors would likely find commensurate cuts on the outside too, since Medicaid’s home and community based services are also “optional.”
The reality is that Medicaid is a 52-year-old system straining to meet stresses not reflected in its 1960s design. People are living longer and their diseases — dementia, diabetes, congestive heart failure — require more care. The cost of health care meanwhile has skyrocketed. Spending in 2010 was up nearly 2,300 percent over 1970 even as median household incomes grew only 22 percent in that period. In 2013, the median net worth of an American over age 65 was $57,800 — enough for about nine months in a nursing home.
Amid these changes, Medicaid has become the end-of-life lifeboat for most Americans. And because we are a wealthy, resourceful and humane people, we are fully capable of building a better boat than the one on offer in the Senate.
Peter Fromuth, a former senior State Department official in the Clinton and George W. Bush administrations, is an attorney from Yarmouth, Maine. He has an elderly mother.