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The Joint Committee on Deficit Reduction — better known as the “Super Committee” — has only until November 23 to report out a deal to find $1.2 trillion in savings over the next ten years or face a “trigger” that would result in automatic cuts.

It is looking less and less likely that a deal can be struck, according to news reports.

If a deal can be reached, this would be the second installment of deficit reduction measures, following the cuts made by Congress earlier this year.

Areas that the committee is likely considering include:

• revenue increases, including raising taxes and reforming the tax code to eliminate tax breaks and loopholes;
• military spending cuts; and
• measures to reform and slow the growth of entitlement programs, including Medicare, Medicaid, and Social Security.

Divided Over Cuts to Safety-Net Programs or Raising Taxes for the Wealthy

The Committee, made up of six Democrats and six Republicans, is divided over the balance between cuts to core safety-net programs for low- and middle-income Americans and tax increases for the very wealthy.

On November 15, Representative Jeb Hensarling, the Republican committee co-chair, said he and his colleagues had “gone as far as we feel we can go” on taxes, and that “any penny of increased static revenue is a step in the wrong direction.”

If the super committee fails, Hensarling said that Republicans will look to undo the compromises they have already made.

Automatic Trigger Would Devastate Key Government Programs

Should the automatic “trigger” go into effect, half of these cuts are scheduled to come from domestic spending (excluding Social Security, Medicaid, and a few other programs that help the poor). The other half is scheduled to come from the Pentagon. Neither party wants to see defense budget cuts of that scale, which is intended to be an incentive to reach a deal.

Sen. Bernie Sanders (I-VT) speaks at rally to support jobs and to protect Medicare, Medicaid, and Social Security

Though discussed less often, the 7.8 percent across-the-board cuts to domestic spending would be devastating to key government programs, such as homeland security, law enforcement, environmental protection, food safety, and transportation infrastructure.

The committee is considering various proposals, from a $4 trillion “grand bargain” that would match significant tax increases on the wealthy with significant cuts to programs such as Medicare and Medicaid, to smaller packages that would not require new revenues. Given the looming deadline, more proposals are expected over the next few days.

Advocates Turn Up the Heat

Advocates are turning up the heat to push the super committee to not agree to any cuts in Medicare, Medicaid, and Social Security.

For example, the American Health Care Association and the Alliance for Quality Nursing Home Care have launched a Care Not Cuts effort to fight cuts in programs. A wide range of labor and consumer organizations, including Caring Across Generations, are holding rallies in Washington, DC and across the country on November 17 to support jobs, not cuts.

For more information on how Medicaid cuts would affect beneficiaries and threaten millions of health care jobs, read PHI’s Medicaid Matters…in Super Committee Deficit Reduction Deliberations (pdf).

– by Carol Regan, PHI Government Affairs Director

Tricia Neuman of the Kaiser Family Foundation

In a standing-room-only briefing on Capitol Hill on June 10, advocates made their case to congressional staff about the harmful impact of cuts to Medicare and Medicaid on older adults.

The briefing, “Medicare and Medicaid: Know the Difference, Know the Impact,” sponsored by the Leadership Council of Aging Organizations (of which PHI is a member), shared in-depth data on the two health insurance programs and gave concrete examples of what proposed cuts would mean for older adults.

Presenters included:

• Tricia Neuman, Vice President and Director, Medicare Policy Project, Kaiser Family Foundation;
• Howard Bedlin, Vice President, Public Policy & Advocacy, National Council on Aging; and
• La’Kasha Hines, CNA, Service Employees International Union (SEIU) Healthcare Pennsylvania.

The presenters also reminded the policymakers who attended of the human toll of budget cuts. Hines noted that the individuals and families she works with are “already at their breaking point,” and that cuts would directly affect staffing levels and the quality of care she and her co-workers are able to provide.

Senators Commit to Preserving Medicaid

Also last week, Senator Jay Rockefeller (D-WV) announced that 41 Senators have publicly stated their commitment to preventing drastic cuts to Medicaid — 37 signed onto a letter (pdf) he circulated, and four sent separate letters.

Together, these 41 Senators provide enough votes to block a GOP effort to drastically cut federal funding for the Medicaid program.

However, the absence of sign-ons from several Democratic leaders — including Majority Leader Harry Reid (NV), Finance Committee Chairman Max Baucus (MT), and Budget Committee Chairman Kent Conrad (ND) — suggests that Medicaid may still be vulnerable to significant cuts as part of negotiations between congressional leaders from both parties and the White House over raising the debt limit.

This week advocates kept up their push to protect Medicaid with calls and emails to members of Congress, urging them to oppose damaging cuts to the program.

– by Gail MacInnes, PHI National Policy Analyst

In a policy address on April 13, President Obama shared an outline of his proposals for cutting the federal deficit by $4 trillion, including reducing federal Medicare and Medicaid spending by $480 billion over 12 years.

Obama’s speech follows last week’s release of House Budget Committee Chairman Paul Ryan’s (R-WI) proposed FY2012 Budget Resolution, which incensed advocates for older adults and other vulnerable populations by proposing cuts of more than $6 trillion over 10 years, and converting the Medicare program into a voucher program and the Medicaid program into a block grant. (See a side-by-side comparison of the two plans from The New York Times.)

Obama’s proposals for reducing Medicare and Medicaid spending, though far less dramatic than those proposed by Ryan, could affect direct-care workers and consumers of long-term services and supports. In contrast with the Ryan proposal, Obama includes some tax increases for wealthy Americans in order to mitigate spending cuts for Medicare, Medicaid, and Social Security.

Strengthening the IPAB Board to Reduce Medicare Spending

First, Obama proposes to strengthen the power of the Independent Payment Advisory Board (pdf) that was created by the Affordable Care Act.

Under current law, the Independent Payment Advisory Board (IPAB) is tasked with making recommendations to Congress for reducing Medicare costs anytime cost growth exceeds GDP per capita plus 1 percent. Obama proposes lowering the trigger for IPAB recommendations to GDP per capita plus 0.5 percent. According to a Center for Budget and Policy Priorities statement (pdf), Medicare costs have historically risen at about GDP per capita plus 2 percent.

Because the IPAB is prohibited from recommending increased cost sharing for beneficiaries, it will likely — in either its current or a “strengthened” form — have to recommend some cuts in provider payments.

Since Medicare is a funder of both skilled nursing facility and home health care, cuts in provider payments could have an impact on direct-care worker compensation and on consumer access to care.

Changing Federal Medicaid Matching Formulas

Obama also proposed replacing the current mix of federal Medicaid matching formulas, which vary by program, with a single federal matching rate for all Medicaid spending. This rate would be structured to encourage efficiency; it would also increase if a recession caused enrollment and cost increases.

Obama has asked state governors to formulate a plan to cut Medicaid spending by $100 billion over the next 10 years. Details are lacking, but — though significantly less harmful than the $771 billion in Medicaid cuts in the Ryan budget resolution — the $100 billion in cuts proposed by Obama could have a negative impact on Medicaid programs that are classified as “optional,” including home- and community-based long-term services and supports.

– by Gail MacInnes, PHI National Policy Analyst

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.

Whether retired or employed, low-income direct-care workers who have Medicare (pdf) due to age or disability may be eligible for help to pay their out-of-pocket costs.

Medicare Savings Programs (MSPs) help pay Medicare premiums, deductibles, and co-insurance for people with Medicare whose income or assets are too high to qualify for Medicaid but are low enough to qualify for one of the three MSPs.

Much Needed Relief

“Medicare consumers who are not getting the health care they need because they cannot afford the out-of-pocket costs should know about Medicare Savings Programs,” said Joe Baker, president of the Medicare Rights Center (MRC), a national nonprofit consumer advocacy group.

“MSPs offer much-needed relief for people with limited incomes by helping them pay monthly premiums and other Medicare-related costs.”

According to MRC, each MSP has different income eligibility limits; one covers more out-of-pocket costs:

• Qualified Medicare Beneficiary (QMB): Pays Medicare Part A and Part B premiums, deductibles, and co-insurances or co-pays. Consumers with QMB have no co-insurance or co-payment for Medicare-covered services they get from doctors who participate in Medicare or Medicaid or are in their Medicare private health plan’s network.
• Specified Low-Income Medicare Beneficiary (SLMB): Pays for Medicare’s Part B premium.
• Qualifying Individual (QI) Program: Pays for Medicare’s Part B premium.

Consumers who enroll in an MSP automatically get help paying for Medicare Part D, the prescription drug benefit.

MSPs are programs run by state Medicaid offices. The financial eligibility guidelines vary from state to state.

“People who have paid into Medicare deserve good quality care, and MSPs can help them get it,” Baker said.

Valuable but Under-Enrolled Programs

Despite the value of MSPs, a “significant number” of consumers who are eligible do not participate in the programs, according to a Georgetown University Health Policy Institute report (pdf).

Over 22 percent of direct-care workers are age 55 and older, while about 44 percent of direct-care workers (pdf) live in households earning below 200 percent of the federal poverty levels, PHI analyses have shown.

Information on how to apply for MSPs and eligibility guidelines by state is available on Medicare Interactive, MRC’s user-friendly web-based tool to help people find answers to Medicare questions.

– by Deane Beebe

While the national health reform law won’t take full effect until 2014, there are several provisions that will go into effect on September 23, explains PHI’s just-released Health Reform Facts 4.

Early Coverage Options for Direct-Care Workers and Their Families (pdf) is the fourth fact sheet in PHI’s Health Care for Health Care Workers series on how the health reform law affects eldercare and disability employers and direct-care workers. The new fact sheet outlines eight health-reform provisions that have either taken effect already, or will do so in the coming weeks and months.

“These provisions will help direct-care workers like John in Indiana, who relies on health centers for his care; Helen from Maine, who won’t have to worry that an insurance company can deny her coverage because of a pre-existing condition; and Terry from Washington, D.C., who will now be covered by Medicaid,” said Carol Regan, PHI director of government affairs and the national Health Care for Health Care Workers campaign.

Some of the provisions of national health reform that will become effective on September 23 (or in some cases with a new plan beginning on January 1, 2011) are the:

• elimination of pre-existing condition exclusion for children on insurance plans;
• allowance of young adults to stay on their parents’ health plan up to age 26;
• elimination of cost-sharing for preventive care in Medicare and private plans; and
• prohibitions against lifetime benefit caps and rescissions.

Approximately one in four direct-care workers is uninsured (pdf).

The Health Reform Fact Sheet series is available on PHI’s Health Care for Health Care Workers website.

– by Deane Beebe