While the federal government may cover 50% of its costs, it would be a mistake to believe that Medicaid always pays for nursing homes or home care for the elderly who can’t afford care.
If federal funding for Medicaid is cut, the pressures will be even more severe. States will be likely to tighten asset and income restrictions for Medicaid.
More than 65% of Medicaid spending is optional under federal law, and if the government establishes per capita caps, optional services will be the first to go. As part of proposed legislation to replace Obamacare, Republicans in Congress want to cap annual growth in federal payments to states at the medical portion of the CPI for most, and at M-CPI plus one for the elderly and disabled.
Nursing home coverage is mandated in Medicaid, but reimbursement rates are low and many home refuse Medicaid patients or offer only a limited number of beds. Some ask patients to leave after their assets are depleted.
Home care is another option, but waiting lists may be very long. Leading Age, an organization, which represents nearly 6000 non-profit organizations that run nursing homes and other senior care facilities, has been fighting against Medicaid cuts.
One representative from Leading Age notes that half of senior citizens have assets below $100,000. According to long-term care insurance provider Genworth, nursing home care averages $82,000 annually, while 44 hours a week of home health care costs $46,000 annually.
Republicans want to cut funding for Medicaid since its one of the government’s largest expenses. The current proposal would cut spending on Medicaid by $834 billion, or 25%, over a ten-year period.
The pending Senate bill puts the biggest cuts in 2025, just as the first baby boomers will be turning 80.
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Patient advocates say Medicaid per capita caps would demolish long-term care for elderly | Modern Healthcare