Block Grants and Medicaid Funding

Written by Kenny Maestas

MEDICAID MYTHS

• Myth: Seniors, PWD, pregnant women, and children forced on Medicaid waiting lists under expansion.
  • Truth: No waiting lists to enroll in Medicaid. States must enroll all eligible beneficiaries (i.e., children, seniors, PWD)
• Myth: Medicaid expansion led to longer waitlists for people requesting home and community-based services (HCBS)
  • Truth: Medicaid expansion has improved access to HCBS (9 of 11 states with no waiting lists are expansion states).
• Myth: Medicaid Expansion has been an economic drain.
  • Truth: PWD, caretakers, and home care workers have all benefited directly from Medicaid expansion. Colorado added many jobs, and Medicaid helps the economy, especially in rural areas.
• Myth: GOP Healthcare bill won’t harm seniors and PWD currently receiving HCBS.
  • Truth: Its per capita cap would make it hard for states to meet the need for HCBS, and cuts will increase yearly.
• Myth: States will be able to manage better Medicaid funds keeping coverage for current recipients.
  • Truth: States must cover nursing home care under Medicaid. So, cuts to Medicaid will be to PWD living in the community. HCBS waiting lists will grow. Some states might end programs.
• Myth: Medicaid expansion members are just lazy, able-bodied people.
  • Truth: There’s a minimal number of able-bodied adults not working, but they’re a distinct minority. Expansion members include many PWD, and others are low-wage workers whose employers do not provide insurance.
• Myth: Giving expansion higher match somehow hurts those on traditional Medicaid
  • Truth: The higher expansion gave states infrastructure to improve the program. People with disabilities, elders, and children benefited from these improvements. The match for traditional populations remained uncut.
• Myth: Medicaid patients cannot get doctors.
  • Truth: Federal statistics gathered over recent years show that the % of physicians accepting new Medicaid patients has remained around 70 percent. No support for the idea that the participation rate has declined under the ACA.

MEDICAID FACTS & BLOCK FUNDING

• States have had the flexibility to use Medicaid funds for HCBS and can target services to particular groups since 1981
• If per-enrollee caps like those the AHCA had been imposed in the mid-2000s, they would’ve caused many states to restrict HCBS spending to amounts far lower than spending under existing Medicaid reimbursement rules.
• States who initially spend the lowest amounts would have been the hardest hit, either in terms of reduced Federal reimbursements or having to abandon plans for building a more robust HCBS system.
• Capped reimbursement discourages states from delivering innovative types and amounts of services to meet needs.

Consequences:

• Without long-term services & supports needs met, more people would be institutionalized.
• Those remaining in their homes would have been more isolated, experienced worse health, and prevented from participating in their communities.

The great success of HCBS program expansion:

• Enabling people to continue living at home and promoting successful community integration – would have been seriously jeopardized.
• Centers for Medicare & Medicaid Services estimate more than 1 million people now receive HCBS.
• If AHCA is enacted, block grants mean most states would limit HCBS spending to the per-enrollee cap amount.
• Strong support for HCBS is key to dramatic progress in shifting care from institutions to the community in recent years.
• 53% of Medicaid spending on long-term services and supports went to HCBS in 2014, up from 18 percent in 1995.
• Due to such a high demand for HCBS, most states have waiting lists for these services.
• Two states with the most significant waiting lists – Texas and Florida – are non-expansion states.
• Federal funding for Health First Colorado (Medicaid) gives Colorado flexibility to invest in improved health outcomes
• Federal funding for HFC gives Colorado flexibility to reform our health system to improve the value of care.
• Federal funding for HFC contributes to the financial sustainability of Colorado hospitals.
• Colorado Medicaid expansion reduced unreimbursed hospital care by $328 million.
• Health First Colorado stabilizes and reduces costs in the private insurance market.
• High uncompensated care costs pressure hospitals/other providers to shift costs to private payers, which then pass the costs to consumers through higher premiums.

Medicaid is, therefore, critical to controlling private insurance costs.

Block Grants would underfund and destabilize the system’s ability to meet the demands of those who currently rely on HCBS for their needs.