Presently, Medicaid funding comes from the federal and state governments, with the federal government obligated to pay a pre-determined share of a state’s Medicaid costs. The federal government’s pre-determined share varies by state, however averages 57 percent. Under the current Medicaid matching structure, federal funding fluctuates in concert with the health care needs of the individual states. The current policy furthers Medicaid’s central goal by giving beneficiaries the security of a health care safety net.
Low-income seniors have greatly benefited from the Medicaid program. For example, since Medicaid states sometimes fills coverage gaps on dental, vision and hearing services Medicare does not cover, seniors are able to receive care they could not cover on their own. In addition, low-income seniors are aided in the cost sharing and out of pocket costs in their Medicare coverage. Many seniors depend on Medicaid to cover the cost-sharing in Medicare—without this coverage they would not be able to afford co-payments and would skip needed care.
In addition, Medicaid helps seniors with long-term services and supports (LTSS) by providing funding for such senior health care services like nursing facilities. In 2015, the median nursing facility annual cost was $91,250, which exceeds what most elderly people and their families can afford. Because Medicare financing for LTSS is limited, Medicaid has been a critical to rounding out funding so low-income seniors can receive the appropriate long-term health care services.
Recently, Congress had seriously considered the American Health Care Act (AHCA) as legislation to repeal and replace the ACA. While Congress was unable to pass the AHCA it is important to examine how this proposed legislation would have impacted Medicaid. Specifically, Congress was deliberating on whether to change Medicaid to a per capita cap financing structure between the federal government and the states. Under a per capita cap, federal spending on the Medicaid program would have been capped on a per-beneficiary basis. While the AHCA exempted Medicaid aid for low-income Medicare beneficiaries from the per capita cap proposal, changing any portion of the Medicaid funding to a per capita cap proposal would have added an additional layer of pressure to state budgets, and put the health care and financial security of millions of older adults at risk. For instance, a per capita cap proposal could have drastically decreased the amount of federal financing available for states to pay for nursing facilities.
From 2015 to 2035, the number of low-income older adults is expected to rise from 15 million to 27 million people. Proposals that cap the federal government’s financial responsibility will put an increasing amount of Medicaid beneficiaries at risk when they need more care as they age. State Medicaid programs operating under a fixed federal contribution could face the daunting choice of finding billions of additional dollars in their own budgets or being forced to offer even more limited health care access to their most vulnerable low-income seniors.
Evan Carmen, Esq. is the Assistant Director for Aging Policy at the B’nai B’rith International Center for Senior Services. He holds a B.A. from American University in political science and a J.D. from New York Law School. Prior to joining B’nai B’rith International he worked in the Office of Presidential Correspondence for the Obama White House, practiced as an attorney at Covington and Burling, LLP, worked as an aide for New York City Council Member Tony Avella and interned for Congressman Gary Ackerman’s office. Click here to read more from Evan Carmen.