A greater burden for nursing home care? Cuts could force relatives to pay more for those on Medicaid

November 13, 1995|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON -- The Republican drive to shrink Medicaid threatens major changes in a program that serves as the primary nursing home insurance policy for the middle class.

As part of their effort to balance the budget, the Republicans propose to cut the growth of Medicaid spending for the poor, elderly and disabled by half and end the long-time federal guarantee of benefits for anyone who qualifies.

Thus, families of nursing home patients, nearly two-thirds of whom now have their bills paid by Medicaid, could find spouses and adult children forced -- either by the state or their own sense of obligation -- to shoulder much or all of that burden, which can cost more than $30,000 a year.

"If those budget numbers aren't changed, I think Congress is going to have to face up to serious policy questions that have real implications for children of the middle class," said Gail Wilensky, who ran the Medicaid programs for President George Bush and is an adviser to the Republican Congress. "I think those numbers are just too low to work."

Just to keep pace with the anticipated increase in the Medicaid population plus inflation would require a 6.5 percent annual increase, she said. The Republicans are slowing the growth rate from 10 percent a year to 4 percent.

Republican leaders argue that it is essential to slow Medicaid spending to help meet their goal of balancing the federal budget in seven years. The program is one of the largest and fastest-growing categories of federal spending.

The lawmakers believe that much of the savings would come from eliminating federal red tape, which they say would allow states to provide health care more efficiently, such as through managed-care programs.

Thus, they say, Medicaid beneficiaries would not be hurt by slowing the rate of increase in federal aid.

"We're not expecting the program to cost as much," said Sen. Pete V. Domenici, a New Mexico Republican who chairs the Budget Committee. "I'm sure there will be a huge amount of savings."

But it is particularly hard to find savings in providing medical care to a growing population of elderly who are living longer with chronic diseases, said Sen. Barbara A. Mikulski, a Maryland Democrat.

"Middle-class families will have to pay more of these costs, and the frail elderly will have fewer choices," Ms. Mikulski said.

Particularly at risk, she said, is the "sandwich generation," already "financially squeezed between caring for parents and providing a better life for their children."

Even as the Republican-led Congress is ironing out the details of the balanced budget plan it will send to President Clinton, Maryland officials are considering options for coping with an anticipated loss of $2.9 billion in Medicaid funding -- about 25 percent of the the federal share -- over the next seven years. Those options, all of which portend greater family responsibility, include:

* Changing eligibility rules for nursing home coverage so that Medicaid would be available only to people with incomes below a fixed limit, even if their income is too low to pay the bills.

* Extending the "look back" period to seven years, from the current three years, for reclaiming assets elderly parents may have transferred to their children to avoid having to spend them on their own medical care.

* Exploring ways that adult children can be encouraged -- if not required -- to pay a portion of their parents' nursing home costs.

"It's going to be a whole new ballgame," Martin P. Wasserman, the Maryland health secretary, said of the likely changes in Medicaid. "And it's not just going to affect pregnant women and children like a lot of people think."

The chief function of the 30-year-old Medicaid program, financed jointly by the federal and state governments, is to provide basic health care for more than 25 million poor adults and children. Medicaid helps support 5 million blind and disabled Americans.

But more than one-third of the Medicaid budget is devoted to paying nursing home bills for the elderly, many of whom are formerly middle-income Americans who outlived their money or gave it to their children.

Under current federal law, nursing home patients have to "spend down" assets before they can qualify for Medicaid. Their spouses are allowed to keep the family home, a car, $1,200 a month income and $15,000 in other assets. Some states, including Maryland, allow spouses to keep more. Federal law prohibits states or nursing homes from requiring adult children of Medicaid patients to contribute to the cost of their care.

RTC In the negotiations, Republican moderates are trying to retain some of these protections, but are meeting with mixed success.

"I think we're going to be OK on retaining protections against spousal impoverishment," said Sen. Olympia Snowe, a Maine Republican.

Whatever protections remain might not mean much if the Medicaid program is so sharply curtailed that many elderly Americans are no longer eligible.

"As long as they stick with those numbers and drop the guarantee of eligibility, it seems to me any promises of protection are more illusory than real," said Trish Nemore of the National Senior Citizens Law Center.

Mr. Clinton is expected to veto the first version of the Republican budget proposal, partly because of the Medicaid changes. But the problem of financing health care costs for the aging cannot easily be bargained away in a political deal, policy analysts say. Even Mr. Clinton has proposed to limit the growth of Medicaid funds, though not as dramatically as the Republicans want.

"The good news about this issue is that there's no way out," said Robert Moffit, a health policy analyst for the conservative Heritage Foundation. "Either we start limiting these entitlements or the American people are going to face a huge tax increase. No one wants that."

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