This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

By Stephanie O’Neil

Before Medicaid Caps Pitched By GOP Could Shrink Seniors’ Benefits
nursing home patient Carmencita Misa became bedridden, she was a veritable “dancing queen,” says her daughter, Charlotte Altieri.

“Even though she would work about 60 hours a week, she would make sure to go out dancing once a week — no matter what,” Altieri, 39, said. “She was the life-of-the-party kind of person, the central nervous system for all her friends.”

A massive stroke in March 2014 changed all that. It robbed Misa, 71, of her short-term memory, her eyesight and her mobility — and it left her dependent on a feeding tube for nourishment. Altieri, who has two small children, is unable to provide the 24-hour care her mother now gets at a Long Beach, Calif., nursing home three miles away — all of it paid by Medi-Cal, California’s version of the Medicaid program for low-income people.

But advocates for the elderly now worry that Misa and other low-income seniors who receive long-term care in facilities or at home could see their benefits shrink or disappear under Republican-proposed legislation to cap federal Medicaid contributions to states. The proposal is part of a broader GOP plan to repeal and replace former President Barack Obama’s Affordable Care Act.

“My mom is getting the basic of basic care,” Altieri said. “If they cut it, I don’t know what to do.”

Nationwide, Medicaid provides long-term care and support to more than 2 million low-income seniors. The program, funded jointly by the federal government and the states, pays more than half of all long-term care in the country — “more than Medicare, private long-term care insurance and out-of-pocket spending combined,” said Matt Salo, executive director of the National Association of Medicaid Directors.

And, he said, it’s the only public program that offers such care on an ongoing basis. The Medicare program — for people 65 and older — provides only limited long-term care to those who need it after being hospitalized.

The GOP bill, scheduled for a vote on the floor of the House on Thursday, would transform Medicaid from an open-ended system, in which the federal government matches state spending, to one in which it pays a fixed, per-capita amount to each state. In that scenario, the federal contribution would rise only if a state’s Medicaid enrollment grew, though it would be adjusted for medical inflation. There has also been talk among Republicans in recent days of allowing states to take lump-sum payments instead.

Critics say such caps on funding would not accommodate inevitable spending hikes from the introduction of expensive new treatments or other cost variables.

“The problem with the per-capita caps is that they are really set up to starve the Medicaid program,” said Eric Carlson, a directing attorney in the Los Angeles office of the nonprofit group Justice in Aging. “It’s really a form of rationing where you have the care based on the money that’s been budgeted rather than on the needs of the people, and that’s entirely backwards.”

Carlson is co-author of a paper released by Justice in Aging that says capping federal Medicaid spending, with either per-capita funding or lump-sum payments — known as block grants — would harm older Americans, in part by forcing states to cut services for them “to the bone.”

“Federal payment for Medicaid would drop sharply, resulting in fewer services for everyone who relies on Medicaid, including older adults who account for over 22 percent of all Medicaid spending,” the report predicted.

In 2015, Medicaid spending topped $552 billion nationwide, including more than $85 billion spent on Medi-Cal enrollees, according to the Kaiser Family Foundation. (California Healthline is produced by Kaiser Health News, which is an editorially independent service of the foundation.)

Under the GOP proposal, nursing care in a facility would remain a guaranteed Medicaid benefit, though states could reduce how much they spent on it if they were forced to economize. And Republicans might well attempt to loosen or undo federal program requirements with subsequent legislation that would give states more control.

Such a shift would “decimate Medicaid’s current guarantee of adequate and affordable care,” according to the Justice in Aging paper.

In the meantime, states could do away with benefits not guaranteed under federal law, which include at-home nursing, personal care — which Medi-Cal covers for qualified beneficiaries — and even inpatient and nursing care in mental health facilities for the elderly.

A report released last week by the nonpartisan Congressional Budget Office suggests states might cut provider payments or eliminate some of their optional services to fill the funding gap left by the restricted flow of federal money.

Oren Cass, a senior fellow with the Manhattan Institute who specializes in anti-poverty law, doesn’t believe that means the GOP plan would necessarily harm elderly Medicaid beneficiaries.

“A state that wants to continue the spending it does on the elderly can do that if it would rather make cuts elsewhere,” he said. “Or it can put up more of its own money.”

Cass said that having more flexibility might appeal to California legislators and health care leaders.

“If you ask California today whether it would rather have Donald Trump run its Medicaid program or run it itself, I think most people there, especially liberal people, would say they would rather have the state making the rules,” he said.

For now, however, the debate over the GOP bill is largely speculative, since there may be enough Republicans with serious concerns about the legislation to sink or significantly amend it.

The CBO report shows the bill would reduce federal budget deficits by a cumulative $337 billion over a decade. The CBO also projected that the bill, if passed, would leave 14 million more people uninsured next year than under current law and 24 million more by 2026.

The cost savings may not be enough to overcome the reluctance of many conservative Congress members who call the bill “Obamacare Lite” because it retains some of the most popular features of the Affordable Care Act.

As the debate heats up in Washington, Charlotte Altieri of Long Beach remains hopeful that her mother’s nursing home care will be spared any cuts.

“We’re not at some grandiose nursing home right now,” she says, “Where are we going to find one that costs less than this one?”