by Carol Regan, PHI Director of Government Affairs and Health Care for Health Care Workers Initiative
This week, House Budget Committee Chairman Paul Ryan (R-WI) released the House Republicans’ 2012 budget proposal — an outright assault on America’s most vulnerable families. This budget cutting plan would fundamentally alter the Medicare and Medicaid programs and have an enormous and, in PHI’s view, devastating impact on direct-care workers and the people for whom they care.
What’s in the budget?
The proposal includes broad changes to the tax system and $6.2 trillion in federal spending cuts over the next ten years. The biggest winners are wealthy individuals and corporations who will see their taxes lowered. The losers are the 47 million Medicare and 50 million Medicaid beneficiaries whose health coverage will be privatized and cut.
The Republican budget proposes to dismantle the Medicare program, replacing it with a voucher contribution program. According to the Congressional Budget Office, this will result in beneficiaries paying about 68 percent of the cost of insurance by 2030. Currently nearly 7 out of 10 Medicare beneficiaries — elders and persons with disabilities on fixed budgets — already spend more than 10 percent of their income on premiums and other health expenses.
The budget plan also turns Medicaid — the program that provides health coverage and long-term services and supports to low-income Americans — into a block grant (pdf). States would receive a fixed amount of federal Medicaid funding, as opposed to the current system whereby states receive increases in their federal allocation when their own spending rises. This means a cut of almost $1.4 trillion over ten years: $771 billion from current spending and $600 billion from the expansion of Medicaid that is fundamental to the success of the Affordable Care Act. By 2021, Medicaid spending would be cut by one-third, regardless of the number of people in need.
Ryan says this will give states more “flexibility.” But states already have significant flexibility in administering their Medicaid programs, and Health and Human Services Secretary Kathleen Sebelius has offered state agencies assistance in figuring out ways to pursue effective cost containment. A block grant really means two things — cutting funds from a program that provides cost-effective health care to the lowest-income individuals and asking states and the individuals and families who rely on Medicaid to pay more.
What do Medicaid block grants mean for eldercare/disability services and the workers who provide these services?
As the largest payer, Medicaid is the “backbone” of long-term services and supports in America, paying for about two-thirds of the nation’s total long-term care bill (nursing home care and home- and community- based services). Approximately 3 million elders and people with disabilities rely on this program (pdf).
What may be less well understood is that, due to low wages and part-time work, many direct-care workers rely on Medicaid coverage for health care for themselves and their families. Currently, nearly 20 percent, or 600,000 direct-care workers nationwide (pdf), receive health coverage through Medicaid or other public insurance at some point during the year. Under the proposed expansion of Medicaid in the Affordable Care Act, an additional 375,000 direct-care workers could receive Medicaid coverage.
Both aspects of PHI’s core mission — quality care and quality jobs — will be severely affected if the current House budget proposal is enacted. Under a block grant, many states could be forced to eliminate “optional” coverage — that is, state-provided coverage that goes beyond what is required by the federal government. Today this is an enormous part of state Medicaid budgets: more than 83 percent of Medicaid spending for elders and over 66 percent for people with disabilities is for “optional” services (pdf).
An equally disturbing outcome of a Medicaid block grant program would be that hundreds of thousands of direct-care worker jobs could be eliminated. Medicaid funding is the primary source of funding for these jobs. Direct-care occupations — nursing assistants, home health aides, and personal care aides — are three of the top ten occupations projected to produce the most new jobs across the entire economy in the next seven years. If federal Medicaid funding is severely curtailed, the growth of direct care jobs — an enormous area of economic growth for our nation — will be stunted, with devastating consequences for the economy as well as the workers and their families who depend on these jobs for their livelihoods.
Why we need to oppose this budget
A block grant is not about creating cost savings; it is merely about cost shifting — to states, to individuals and families who cannot afford health care, and to providers. A block grant undermines the future viability of the program and will end our country’s commitment to our most vulnerable and fragile populations. According to a recent poll (pdf), Nearly 90 percent of Americans want to increase or preserve federal funding for Medicare, and 75 percent want to preserve or increase funding for Medicaid.
PHI joins many aging, disability, workforce and health care organizations opposing this budget, including making Medicaid a block grant and further privatizing Medicare.
To learn more about the impact of the proposed Medicaid block grant and its impact, download PHI’s new fact sheet, Why Medicaid Matters for Long-Term Services and Supports (pdf).
To see a state-by-state breakdown from the Democratic Party of the effects of the Ryan proposal on Medicaid, click here.
The PHI Health Care Reform Resource Center will continue to post additional resources and tips on how to talk with your elected officials about this important issue.
As President Obama and Congress continue to wrestle over a budget plan to reduce the federal deficit, a small group of bipartisan senators known as the “Gang of Six” put forth a proposal which, if enacted, would cut Medicare, Medicaid, and Social Security, and repeal the Community Living Assistance Services and Supports (CLASS) Act.
