Attacking Medicaid - Myths and Some Realities.

Attacking Medicaid - Myths and Some Realities. Information Bulletin # 320 (4/2011)

There have been a lot of articles and speeches attacking Medicaid: “GOP Governors Seek Leeway to Cut Medicaid,” “Fiscal Health Hinges on Containing Costs of Care.”

Now comes Rep. Ron Paul plan to change Medicaid.....

From article to article to political speech, the drum beat is the same: “Block Grant” Medicaid so states can set their own rules and achieve, hear the drum roll, “flexibility.”

Block grants are allocate federal funds based on the total number of people or the number of low-income people, or some other criteria. Under block grants, States would decide who will be eligible and which “medically necessary” conditions to cover. States would receive a dollar grant to spend as they wish. If you think politicians, lobbyists, and pressure groups are active now, just wait if there are block grants and no federal standards or requirements.

There are a number of reasons for the current activity.

First and probably the most important reason, this is a backdoor attack against the 2010 Health Care Reform Act. Last year, Congress, for the first time in our history, enacted that all low-income people - below 133% of the poverty level - will be eligible for Medicaid in 2014. That’s an addition 16 million low-income Americans.

In the past, Medicaid eligibility was federally based primarily on categories, so that two people with the same income but different sources of income were treated differently. The Health Care Reform Act ensures that two people in the same or different states with the same income and same impairments will not be treated differently.

When you hear Medicaid Block Grants, think “eligibility.” As David Wessel wrote in the Wall Street Journal, “The argument is that with ‘flexibility,’ states can do more with less. But the biggest ‘flexibility’ that states now lack - given that many already rely heavily on managed care and low provider fees - is the authority to reduce the rolls. That leaves them to do less with less.”

What’s fascinating about this conservative attack is that they do not articulate who currently on Medicaid does not need or does not “deserve” to receive health care. What’s at stake is the answer to the question “If a low-income American needs health care, should they receive it?”

Second, States presently have a lot of authority to control their Medicaid costs. Medicaid costs can be contained under the present system, but it does take some political backbone. Despite the drum roll of “out of control” Medicaid costs, these costs can be and have been in some instances controlled. For example, between 2000 and 2005, Medicaid reimbursements for drugs increased by 95.9%. To counter that, States took control and by 2009, reduced Medicaid’s drugs expenditures by 44%.

Another example of States controlling Medicaid costs should focus on why 17.4% of all Medicaid nationally in FY 2009 went to keep people with disabilities institutionalized. States control this. Yes, States throughout the country spent more on nursing homes and institutions for persons with development disabilities than they spent on in-patient hospitalization and drugs! The federal government did not make States do this. Medicaid did not make the States do this! Moreover, many of these institutions provide at most custodial care; they’re the 21st century’s poorhouses and homeless shelters paid for by Medicaid.

Again, as David Wessel wrote in another column, regarding “often overlooked facts.... Medicaid pays 43% of America’s long-term care bill, including bills for about 60% of nursing-home residents.” He correctly points out that right now, without any changes in Medicaid, States could “keep the elderly and disabled out of nursing homes by helping them pay for home or community-based care... It’s cheaper and often preferred by the individual. That push has been under way for years. It’s now at risk as states scramble to save money, and eye cuts to home and community-based care.”

Cheaper, preferred? Why is it not happening? States control this and have decided to buckle under to the nursing home lobby! Ask your State’s nursing home lobby how much they contributed to your Governor’s campaign. It’s not the present Medicaid statute.

Third, presently States pay with State general revenue funds at most 50% of Medicaid costs, and the federal government matches States expenditures. About 36 states receive more than 50% from the federal government depending on the state’s per capita income. The poorer the State the more federal match. Don’t be fooled that the push for “Block Grants” is to help States financial situation. The feds pay an enormous share of Medicaid.

Right now, the Medicaid standard is that only “medically necessary” services and treatment are required. Let the Block Grant proponents identify and list which specific “medically necessary” services should not be paid for.

It’s critical that advocates for disabled older and younger Americans get into the fray. Our lives and the lives of brothers, sisters, neighbors, friends and all low-income people depend on it.

Steve Gold, The Disability Odyssey continues

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