Craig Donatelli is one of seven young men, all with Down syndrome, who live together in a seven-bedroom house in Eggertsville.

The house offers a safe place where Craig and the others can live as independently as possible in the community, the goal of people with a developmental disability, as well as their parents. With the help of staff and other support, he shares in all the chores, attends day programs and works part time at a restaurant.

None of this would be possible without Medicaid, the state-federal health plan at the center of debate over a Republican plan to overhaul the Affordable Care Act, also known as Obamacare.

The latest Republican plan from the Senate proposes changing the financing of Medicaid and cutting it by $772 billion over 10 years, a fundamental restructuring of health care in the United States and a worrisome prospect for the 81 million Americans, including Donatelli, who rely on the program.

“For Craig’s quality of life, to be healthy, to be the best that he can be, Medicaid is essential,” said his father, Max Donatelli.

Medicaid was created in 1965 along with Medicare, the federal health plan for people 65 and older, to help states pay for medical care to the poor. Since its inception, the program has expanded to cover more services and people under both Republic and Democratic administrations.

More than health care to poor

Medicaid is best known for providing health care to the poor. But it’s a complicated program that touches lives in many ways, covering:

  • 39 percent of all children
  • 49 percent of all births
  • 35 percent of people with disabilities
  • 30 percent of individuals with an opioid addiction
  • 64 percent of nursing home residents, many of whom only become poor after spending their savings

Today, Medicaid insures 1 in 5 people, and provides a key source of funds for hospitals, health centers, nursing homes and agencies serving the poor, elderly, children and disabled. At Buffalo General Medical Center, for instance, Medicaid accounts for 31 percent of patient stays and visits, and at Women & Children’s Hospital, the program pays for more than 68 percent of patient stays, emergency department visits and outpatient services.

Aspects of Medicaid need reform, said Dr. Nancy H. Nielsen, senior associate dean for health policy at the University at Buffalo and a former president of the American Medical Association, but she said the Republican bill doesn’t do that.

“We need to address the cost of medical care in this country and bring it more in line with the results in other countries,” she said. “But you don’t address that by going after the neediest.”

The political fight in Congress is over the way Medicaid is funded, and families like the Donatellis find themselves on the frontline of the battle. People with disabilities account for 14 percent of the enrollees in Medicaid but 40 percent – the largest share – of the spending. They and their families see themselves as a big target for cuts.

“We’re worried about the implications of the plans in Congress,” said Max Donatelli. “People like Craig used to be hidden in institutions. We’re deathly afraid of going back to those days.”

“He and others can live in the community and contribute to society, but they need support,” he said. “And, there are others more incapacitated by their disabilities whose needs are great through no fault of their own. They use ventilators. They have tubes that need to be changed. They need help going to the bathroom.”

Medicaid operates as an entitlement in which people who qualify for coverage get it, depending on eligibility requirements and benefit levels in their state. The federal and state governments –and counties in New York – share in the cost.

Republican proposals in the House and Senate would replace the current system with per-capita caps on federal funding. The Senate bill calls for lowering the growth rate of spending starting in 2025.

Defenders of the bill contend that Medicaid spending will increase under the plan. But the lower inflation rate allowed under the proposal would be below typical inflation for medical costs and what would happen under current law. That means a large gap will grow between federal funding and actual costs – leading to 26 percent less spending by 2026 and a 35 percent gap in 2036, according to the nonpartisan Congressional Budget Office.

GOP health bill would bar N.Y. from charging upstate counties for Medicaid

Among other proposed changes to Medicaid, the Senate bill includes an “equity” adjustment that reduces federal funding even further for states that spend more than 25 percent of the national average on Medicaid. New York state faces the loss of billions of dollars in aid. The Senate bill would also end the Affordable Care Act’s expansion of Medicaid to millions of low-income Americans.

The Senate bill also gives tax cuts worth about $700 billion to wealthy individuals, and the drug and insurance industries.

“The approach is to put a percentage limit on the program and let states figure it out. It’s kicking the ball down to the states,” said Bill Hammond, a health care analyst at the Empire Center, an Albany think tank.

“Medicaid should not be immune to criticism. New York is making strides, but it remains a very expensive program,” he said, referring to a Medicaid redesign initiative in the state aimed at reducing unnecessary emergency room use and hospital stays, and encouraging more preventive care.

“But what’s being talked about is just taking an ax to the funding,” he said.

If the bills become law, states like New York will face uncomfortable choices to offset the huge cuts in Medicaid. They can raise taxes, drop optional services, reduce payments to hospitals and other facilities, or limit coverage. Nationwide, the Congressional Budget Office estimates that the reduced spending will result in 15 million fewer people receiving Medicaid by 2026.

Hospitals and nursing homes view the potential Medicaid cuts as major threats. The chief executive officers of every major medical institution in Buffalo have publicly warned against the current versions of the Republican bills. Dozens of organizations, from AARP to Vietnam Veterans of America, have voiced opposition to the idea of converting Medicaid’s financing.

The only insurance for many

For the Donatellis and others dependent on the program, reduced funding is a frightening prospect.

Max Donatelli and his wife, Joyce, spent years advocating for their son’s integration into the community, and 29-year-old Craig Donatelli is determined to live life as normally as possible. It took more than four years of work with the state and Aspire of Western New York to establish the home where Craig Donatelli lives, for instance.

“He knows he has a disability, but sees himself as a regular person, and takes a lot of pride in what he does,” Max Donatelli said. “But he would not have gotten there without the support of family and organizations and Medicaid.”

Medicaid paid for Craig Donatelli’s job coaching at People Inc., which employs more than 4,000 employees and is the largest agency in the region devoted to people with developmental disabilities. Medicaid helps support him in his house. Medicaid also pays for his day program at People Inc.

Heather Rust is equally as dependent on Medicaid.

Her 8-year-old daughter, Alannah Pionessa, spent 80 days in the neonatal intensive-care unit at Women & Children’s Hospital after being born with little chance of living because of congenital birth defects.

She estimates Alannah’s care has cost more than $1 million, and she continues to need medical treatment, including six medications, and regular therapy. Her other daughter, Gianna, was born with a type of cleft palate and underwent surgery. And, Rust, of Alden, suffers from several conditions, including an auto-immune disorder and herniated discs in her back.

She used to get health insurance through a full-time job. Now, she’s home caring for her children and can’t imagine how she would do it without Medicaid. For the disabled and elderly, it’s often the only insurance available.

“I wouldn’t have any quality of life,” Rust said. “More than that, without Medicaid, I can see people going into massive debt, losing their cars, their homes.”

Enrollment growth drives costs

Medicaid is expensive – more than $553 billion in 2016, according to the nonpartisan Kaiser Family Foundation. But growth in Medicaid spending per enrollee has been low compared to Medicare and private insurance, and the increases have been largely driven by more people being enrolled.

One reason is the expansion of eligibility under the Affordable Care Act to the near-poor that many states adopted. Other reasons include the aging of baby boomers who need long-term care and the growth of the disabled population.

“People are living longer into old age. Children born with developmental disabilities are surviving, often with the help of expensive medical technology,” said Rhonda Frederick, chief executive officer of People Inc.

There has also been a movement, Frederick said, to provide services in integrated settings in the community as much as possible after a 1999 Supreme Court ruling.

“All of this means the needs are growing,” Frederick said.

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What’s at risk if Medicaid is scaled back under health bill?