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With Trump's return to White House, seniors risk losing long-term care
Federal funding cuts to Medicaid feared under Trump, resulting in loss of health coverage for millions of residents.
Donald Trump. / REUTERS/Brian Snyder/File Photo
As Trump 2.0 approaches, the Medicaid program, which covers medical care for people with low incomes, could face cuts. Cutting Medicaid would harm enrollees, including the millions of children, people with disabilities, and elderly people with low incomes who are covered by Medicaid.
The impact of budget cuts to these health safety nets was discussed by panelists at the Ethnic Media Services briefing.
Joan Alker, the Executive Director and Co-Founder of the Center for Children and Families (CCF), and a Research Professor at the Georgetown University McCourt School of Public Policy explained what Medicaid covered and why it was one of the most important programs for seniors.
Medicaid is the largest payer for long-term care
Medicaid serves low- and moderate-income people and also plugs some gaps in the Medicare program, which is the program that provides health insurance to primarily senior citizens. It is the largest payer for long-term care. “It’s a very costly piece of the program and it’s something that Medicare does not provide on a long-term basis so Medicaid has to wrap around Medicare to provide long-term care for seniors and people with severe disabilities,” said Alker. Medicaid is also paying the cost sharing for low-income seniors who are able to access their Medicare benefit only with the help of Medicaid.
Medicaid is also one of the largest payers for behavioral health and substance abuse, both areas where we have many challenges facing our country right now. Medicaid is also a critical payer in rural areas. In fact, Medicaid’s role is often even greater in rural areas than urban ones, she said.
Medicaid is a federal state program and the largest source of federal funds coming into state budgets. Medicaid accounts for about 56 percent of all federal money that is flowing to states.
“Congress will try to get it done quickly,” fears Alker. “Congress does not have to wait for the president to be inaugurated. They can move a budget resolution as quickly as they can manage, even in January and the committees will have to fill in all the details,” said Alker.
Majority of the funds go to the aging population
Cuts to Medicaid would create serious problems for state governments who would not be able to fill in the gaps. If Congress was to make any fundamental changes to Medicaid’s financing structure, where the federal contribution was capped or substantial cuts were made in the federal matching rate, it would be near impossible, even for a well-intentioned state to make up these cuts. We have an aging population and this is already where the majority of the funds go. Though children are the largest group they don’t cost as much, she said.
“These cuts will be back loaded so that the current folks in office don’t have to take so much of the blame. That will set up a very, very untenable situation for the state government,” Alker said.
Alker felt that in the event of cuts, states will be given new “flexibilities” to help them adjust to the cuts. “These ‘flexibilities’ could for instance cut back eligibility, add red tape thereby making it harder for families and people to enroll. The benefits could be limited. Providers who see a lot of low wage workers and providers in rural communities, could see cuts in their reimbursement that may be very hard for them to absorb. We know that from the unwinding that we’ve just been through,” she said.
Problems ahead
Cut in federal funding would trigger an automatic elimination of affordable health coverage with no action required from the state’s legislature.
Nine states included a “trigger” provision that automatically terminates their Medicaid expansion if the federal matching rate decreases below a certain level. “We would have 3 to 4 million people who would lose coverage immediately because of these state statutes.”
Most of the nine states’ triggers kick in if federal funding falls below the 90 percent threshold. Arizona’s trigger would eliminate its expansion if funding falls below 80 percent. Montana’s law rolls back expansion below 90 percent funding but allows it to continue if lawmakers identify additional funding. Under state law, Montana lawmakers must reauthorize its Medicaid expansion in 2025 or the expansion will end. Three other states — Iowa, Idaho, and New Mexico— have laws that require their governments to mitigate the financial impact of losing federal Medicaid expansion funding but would not automatically end expansions. With those three states included, about 4.3 million Medicaid expansion enrollees would be at risk of losing coverage, according to KFF, a health information nonprofit that includes KFF Health News, and the Georgetown University Center for Children and Families.
Additionally, there are three states where legislative language doesn’t trigger an automatic rescission of Medicaid expansion should federal funding drop below a set floor, but a federal funding drop does trigger a required review of the state’s Medicaid expansion and can result in a reduction in enrollment, benefits or full elimination of the state expansion.
“If Congress cuts federal funding, Medicaid expansion would be at risk in all states that have opted into it — even those without trigger laws — because state legislatures would be forced to make up the difference. A third of California’s entire budget is dependent on federal dollars,” said Akers.
“I would certainly anticipate that overtime even states that don’t have a trigger law would have to reconsider this expansion,” she said.
Nearly a quarter of the 81 million people enrolled in Medicaid nationally are in the program due to expansions.
“Changes in federal budget funding can often seem remote. However, a simple reduction in federal funding for the Medicaid expansion population will have a very quick and direct effect in multiple states with millions losing their health coverage.”
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