The Home Care Industry Addresses the Issues of Per Capita Caps

Posted on Thursday, April 27, 2017 11:11 AM

According to analysts at a National Coalition on Health Care event earlier this month, Medicaid per-capita caps would raise Medicare costs for the 11 million people covered by both programs and halt progress made in moving long-term care out of nursing homes and into homes and communities.

The Trump administration and some Republicans in Congress have discussed reviving an Obamacare repeal-and-replace effort to include per capita caps in some form.

The main issue is the aging baby boomer generation, which will involve a lot of care and require the country to either invest more in health care for the elderly or force these costs on providers and beneficiaries. Analysts argued at the National Coalition on Health Care, explaining that the creation of per capita caps would simply shift costs from Medicaid on to Medicare, potentially endangering the program for tens of millions more.

Although the cost to care for the elderly and disabled is on the rise, per capita caps calculations do not take this into consideration, which creates a funding problem and a potential humanitarian disaster if funding care disappears.
According to the Kaiser Family Foundation, the average Medicaid beneficiary between the ages of 65 and 74 cost $11,949 in fiscal 2011.

That average cost rises to the following:
• $18,000 for Medicaid recipients between the ages of 75 and 84
• $29,000 for people 85 and older

According to panelist Melanie Bella, the former Director of the Medicare-Medicaid Coordination Office, “Per capita caps would force states to reduce benefits and stop the progress made in de-institutionalizing long-term care by moving people out of nursing homes and back into their homes, where they want to be.”

Cindi Jones, Director of the Virginia Department of Medical Assistance Services (Medicaid), says “a per capita cap doesn’t work.” She added: “I can’t imagine it works in any state when you serve the elderly and disabled. The elderly population is growing every day as baby boomers get older.”

By 2026, Jones estimated that Virginia would lose the following:
• $689.5 million in Medicaid funding for the elderly and disabled
• $709 million overall
• $22 million in federal funds in the first year of per capita caps

NAHC opposed per capita caps in its 2016 Legislative Blueprint for Action. “Congress should reject any consideration of placing caps on Medicaid spending and increase the federal match for state Medicaid programs, thereby bolstering efforts to bring states into compliance with the Olmstead decision. Proposals for per beneficiary caps or full program federal spending caps such as block grants should be rejected by Congress.”

A recent analysis by the Center on Budget and Policy Priorities quoted that “a per capita cap would shift large costs to states and almost certainly lead over time to substantial cuts affecting low-income beneficiaries and health care providers. It also would likely discourage states from taking up health reform’s Medicaid expansion and could cause some states to abandon the expansion.”

NAHC repeated its disapproval to per capita caps on December 22, 2016 by stating the following:

     NAHC has long rejected pushes to implement… allotment caps. These proposals have the potential to limit beneficiary access to            care. They also can lead to forcing beneficiaries to choose between paying regular monthly bills and medically necessary services          ordered by a physician. These models have long been favored by Republicans and will most assuredly be pursued in the 115th              Congress… NAHC will continue our fight to prevent their implementation so that our members and beneficiaries will continue to                provide and receive required care.

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