Part of the Transforming Life as We Age Special Report
In 2012, Ti Randall of New York City, who has Alzheimer’s disease, had run out of savings. His Social Security and a veteran’s pension helped cover his basic living expenses. But it took Medicaid to provide Randall with other services he needed in order to remain at home.
“He needed companionship and assistance,” says Ann Burgunder, 69, his long-time partner and caregiver. Burgunder, meanwhile, wanted and needed to continue working.
Randall’s needs have since grown. Now, at 93, he must have help bathing, dressing, cooking and toileting. At this point, “he couldn’t be left alone at all,” says Burgunder, who works as a coordinator for New York University’s Alzheimer’s Disease and Related Dementias Family Support Program. Through Medicaid, Randall has the services of home-care aides 12 hours a day Monday through Friday and half the day on Saturday. Medicaid also pays for his incontinence supplies, which cost more than $300 a month.
Proposed cuts to Medicaid under the American Health Care Act passed by the House recently could change life for Randall and many others. Medicaid is not only an insurance program for low-income people. It’s a lifeline for older adults like Randall who need supportive services to stay at home. At-home services are a lifeline for Medicaid as well, which would otherwise be paying for more expensive care in an institutional setting.
The vast majority of people in nursing homes do not need to be there, they just need some home supports.
— Leonardo Cuello, National Health Law Program
Many Never Expected to Need Medicaid
“A lot of formerly middle-income people have the misfortune of getting the wrong disease and they use up all their money on long-term care,” says Howard Gleckman, resident fellow of the Urban Institute and author of Caring for Our Parents. “They find themselves in old age doing something they never expected, which is ending up on Medicaid.”
Unlike Medicare, Medicaid covers long-term care for at least 2 million older adults. It has long been the payer of last resort for those who live in nursing homes. But increasingly, Medicaid’s focus has shifted to giving people want they want — help to keep living at home.
A tipping point came in 2014, when for the first time in the program’s history, more than half of Medicaid funding for long-term care, 53 percent, was spent on home- and community-based services aimed at keeping people of all ages out of institutions.
The cost of care at home is usually significantly lower than in an institution. In 2016, the national median cost of a shared nursing home room was $82,125 annually. The median cost of a home health aide was $46,332 annually for 44 hours of support each week.
“The vast majority of people in nursing homes do not need to be there, they just need some home supports,” says Leonardo Cuello, director of health policy for the nonprofit National Health Law Program, a nearly 50-year-old organization that advocates for access to health care for low-income people. “Across the country, state Medicaid programs are figuring out creative ways to get people those services in their home.”
Many of the innovative programs Medicaid has developed to cover home- and community-based services grew out of grants through the Affordable Care Act and their future is now uncertain. Unlike nursing home costs, which the federal government requires states to cover, these services are considered optional. This makes them particularly vulnerable to the billions of dollars of cuts to Medicaid included in the American Health Care Act.
High Risk of Nursing Home Admission
The eligibility criteria for receiving Medicaid-covered home- and community-based services vary by state. Generally they are based on people’s income, assets and need for help with activities of daily living — in other words, their risk of needing nursing home care.
Many who qualify for such services are among the 11 million older adults who are “dual eligible,” covered by both Medicare and Medicaid. Most of them do not yet need age-related long-term care, but dual-eligibles tend to have significantly more chronic conditions than those on Medicare alone. According to a report by the Kaiser Family Foundation, 61 percent of dual-eligibles need at least limited help with activities of daily living compared to just one-third of people who are only on Medicare.
In addition to home care, Medicaid — depending on the state — may cover in-home physical and occupational therapy, telehealth consults, adult day care and day health-care services, medical and nonmedical transportation, emergency call systems (e.g. Lifeline pendants) and respite for family caregivers, as well as incontinence products, shower benches, wheelchairs and other equipment including the cost of home adaptations for people with mobility challenges.
Some states have long waiting lists of eligible people wanting to receive home- and community-based services.
“All of those services make the difference between living at home — having an independent life with dignity and maximizing quality of life — and living in an institution,” says Cuello.
Medicaid helps low-income people stay independent in another way. For those living at the federal poverty level, it often pays for the Part B individual share of Medicare, now $134 a month.
“That goes a long way toward being able to afford rent and groceries,” says Stacy Sanders, federal policy director of the Medicare Rights Center, which runs a free help line and an interactive website for consumers.
For Caregivers, Costs Add Up Quickly
John Schall, CEO of the nonprofit Caregiver Action Network, says for the nation’s 90 million family caregivers like Burgunder, “Medicaid and home- and community-based services can make all the difference.” Out-of-pocket expenses can quickly add up, often reaching $10,000 a year for caregivers, he says.
Medicaid is funded half by the federal government and half by the states. If the American Health Care Act becomes law, it will slash the federal contribution to Medicaid by $839 billion over the next decade and cap the support to each state. Under such cuts, according to a March analysis by the Congressional Budget Office (CBO), Medicaid spending by 2026 will be 25 percent less than it would have been under current law. Under the House bill, the CBO estimates, 5 million fewer people annually would be covered by Medicaid than under Obamacare. The CBO will soon update its analysis to reflect the version of the bill the House passed in May.
Proponents of that bill have said their aim is to give states more flexibility in shaping their Medicaid programs. “But flexibility in the absence of dollars doesn’t mean more benefits for people,” Sanders says. “The funding has to be there to support the flexibility.”
Sharp cuts would force states to make tough choices, Sanders and other experts say. They could result in tightening eligibility for Medicaid, removing people who have coverage, cutting services or reducing Medicaid’s payments to service providers, including home care agencies, many of which already pay aides minimum wage. The proposed cuts to Medicaid would accelerate over time, with most going into effect beginning in 2020, just as many boomers will likely begin to need home- and community-based services.
“What does this mean for the 70 to 80 million people over 65 who will be relying on these programs in 2030?” Sanders asks. “This is absolutely the wrong time to be pulling back on some of these investments.”
Keeping Support Is Already a Battle
Burgunder says she’s worried what the proposed Medicaid cuts would mean for her and Randall. “I got a taste of the coming reductions in Medicaid if current thinking continues,” she says. In April, the Medicaid Managed Long-Term Care program that administers Randall’s coverage told her that based on their most recent assessment of his needs, his covered care hours would be decreased by more than half, to 22 hours a week.
“I can only tell you I was apoplectic,” Burgunder says. She contacted Randall’s doctors and social worker, the Medicaid nurse, the Medicare Rights Center — everyone she could think of. With their help, she was able to get the decision reversed.
“If they had reduced those hours, I could no longer work. He can’t be alone,” she says. “I’m working partly because I enjoy it and partly for my own financial well being.”
She doubts she could care for Randall full-time. He would likely end up in a nursing home, with Medicaid covering the cost.
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