Cut Medicaid? You May Have to Kick Grandma Out of the Nursing Home

We have been hearing a lot from the Republicans about cutting Medicaid and Medicare. How much do you know about these programs? Take this little quiz:

1) Who qualifies for Medicare?
A) People over 65; B) People over 65 and some people with disabilities; C) People over 55; D) All of the above

2) Who qualifies for Medicaid?
A) People who are poor; B) Only certain categories of people who are poor like children and single women with children; C) Some people in nursing homes; D) B and C; E) None of the above

You may have guessed (B) that Medicare is a health insurance program run by the federal government for people over 65 and some people with disabilities (a single payer program actually!). What about Medicaid? Did you think it was a health insurance program for anyone who is poor? If you did, you would be only partly correct. To be eligible for Medicaid you do have to be poor, but it is not a program for everyone who is poor -- only certain "categories" of the poor like children, pregnant women, single women with children, people with disabilities and the elderly. If you are a poor adult male who is not disabled, Medicaid does not cover you. The dirty little secret about Medicaid is that about a third of the budget goes for people in nursing homes, so cut Medicaid and you are likely to cut grandma as well. (The best answer would be B and C.)

Who relies on Medicaid? Children account for about half of all Medicaid enrollees but only 1/5 of the spending. One quarter of the enrollees are people with disabilities and the elderly but they account for two-thirds of the spending. An even lesser known fact is that between a third and half of a state's Medicaid budget can go to pay for nursing home care for elderly and disabled people who cannot live at home. A year in a nursing home now averages $72,000, and it doesn't take a math genius to figure out that an ordinary middle class person who has saved for his or her retirement can now "spend down" all that money fairly quickly, ending up on the Medicaid rolls.

Did you think Medicare paid for nursing home services? Medicare pays VERY LITTLE. At best, maybe a month in a nursing home after a hospitalization. But what if you are seriously disabled and simply can no longer live at home, have no family, no other resources? You would be dependent on Medicaid -- that is, if it still covered for people like you in your state.

Why so much fuss about cutting these programs and why do the Republicans want to replace the programs with blocks of money given to the states to administer (called "block grants")?

As we have already seen with Arizona, a Republican Governor and legislature can decide that Medicaid will no longer pay for organ transplants or can cut 250,000 current recipients from the Medicaid rolls; or as in Minnesota, funding cuts can be proposed for services to the elderly in nursing homes; or Texas where the program now faces up to $7b in cuts, endangering the care of disabled children. If this program were turned over to the states, it would greatly depend on what state you live in as to whether or not you would get the services you need. If you were lucky enough to live in New York or California, you might be ok. If you lived in Texas or Florida or Arizona, move!

Republicans and Tea Party types are quick to talk about cutting Medicaid costs, and they propose to cut $1 TRILLION from Medicaid over the next ten years. But there are very few good solutions to the increasing costs of health care for these populations without seriously damaging the program. About 60% of Medicaid spending goes for hospitals, doctors, drugs, and 30% for nursing homes. Doctors and hospitals who treat Medicaid patients get much less reimbursement than what private insurance or even Medicare pays, so it would be difficult to cut their reimbursement much more without driving them out of the program entirely.

Some states have tried different managed care models for Medicaid, with mixed success. California has done better than most, and Florida much worse.

If Republicans were to succeed in defunding health reform and returning the management of not only Medicaid but Medicare and all health programs to the states, as they have proposed in a rather radical proposal called a "health care compact", states would lose the federal matching money they currently receive (which is substantial), and we would be at the mercy of state ideologues who apparently know very little about the programs they claim to cut. Rolling back Medicaid expansion under the Affordable Care Act would deprive 15 million currently uninsured people of coverage, according to Jonathan Cohn of The New Republic.

The Tea Party will soon become this century's version of the Know Nothing party, They talk a good game about deficit reduction and small government, but they don't seem to know what these types of cuts mean to real people in their own neighborhoods. It could well be their own grandma who is kicked out of the nursing home and back into their own home, where, god bless 'em, I hope they have a lot of time and money to take care of her!

Thankfully, the Democratic Party has vowed to fight these cuts to the Medicaid program.
Democrat Chris Van Hollen (D Md) has said:

"Block granting Medicaid is simply code for slashing health care support for seniors, people with disabilities, and others," he said. "It is not reform. It does nothing to reduce health care costs. It simply gives governors a blank check and a license to deny critical care to millions of seniors and to people with disabilities."

Update: It was just announced that the GOP House 2012 Budget proposal will be released next week. It will contain proposals to put Medicare into a voucher program (you would get a fixed amount of money and would have to find coverage on your own), shift all federal money for Medicaid to the states in the form of the block grants I mentioned above, and make permanent the tax cuts for the rich. That is your Republican party, folks! Like it or leave it!