Provider groups and senior citizens advocates are trying to persuade Congress that proposals to cap the growth in federal Medicaid payments will reduce payments and endanger long-term care for millions of people. But they say their arguments are falling on deaf ears.
The groups say the Medicaid debate is taking place with little recognition that the joint federal-state program is the primary payer for two-thirds of the 1.5 million nursing home residents nationwide and represents about half of all nursing home expenditures, which reached $69.6 billion in 1993, the latest year for which figures are available.
Members of Congress, senior citizens and younger adults alike view Medicare as an entitlement. Medicaid, however, often is viewed through the lens of welfare reform. Many people believe expenditures can be reduced slowly if poor families are given the right incentives to become self-sufficient, advocates said.
"(The Medicaid debate) right now is really at an ideological level," said Stephen McConnell, senior vice president for public policy of the Alzheimer's Association and chairman of the Long Term Care Campaign.
"Many in Congress and many of the governors see Medicaid as largely a welfare program," said Paul Willging, executive vice president of the American Health Care Association, a long-term-care provider group.
The congressional Medicaid proposal "is not health policy," Willging said. "It is budget policy."
The congressional plan is simple: Turn Medicaid payments into state lump-sum payments called "block grants" that can increase only 4% a year and give states greater authority over their programs.
The House estimates its budget plan will pare $184 billion from projected federal Medicaid spending of more than $950 billion during the seven years Congress plans to take to balance the federal budget. Meanwhile, the Senate plan forecasts savings of $175 billion over seven years. Differences in the plans approved by lawmakers last month are being ironed out by House and Senate budget negotiators.
Federal and state Medicaid payments for nursing-home care were $36 billion in 1993, roughly 32% of the $112.8 billion in federal and state Medicaid expenditures that year, according to HCFA data. Home healthcare added another $3.2 billion in Medicaid cost in 1993.
The Congressional Budget Office projects federal Medicaid spending of $90 billion in fiscal 1995, which ends Sept. 30.
Republican leaders, however, contend that their block-grant proposal will save federal money because it will turn more management authority back to state governments while simultaneously releasing them from federal rules that govern eligibility, services and provider payments.
"The governors have decided that they can take care of welfare and Medicaid for a lot less money," Senate Majority Leader Bob Dole (R-Kan.) told the AHCA's congressional conference last week.
But Sen. John Chafee (R-R.I.) casts doubt on whether one of the governors' frequently cited solutions for controlling Medicaid costs-namely, enrolling beneficiaries in managed-care plans-can help limit Medicaid long-term-care expenditures.
"If you've got someone lying in a nursing home, all the managed care in the world isn't going to help," Chafee said. "These people are very sick."
That view is shared by Diane Rowland, executive director of the Kaiser Commission on the Future of Medicaid. "Historically, states have had a very hard time figuring out how to save much money on the long-term-care side," Rowland said.
Two interest groups have analyzed the potential effects of the congressional Medicaid proposals and predict dire consequences for providers and beneficiaries.
The AHCA, which represents 11,000 long-term-care providers, estimates the federal government would reduce the growth in its state long-term-care payments by $29.8 billion between 1996 and 2000 if federal Medicaid payments grow only 5% a year.
Under the same block-grant scenario, the American Association of Retired Persons estimates the total reduction in Medicaid long-term-care spending growth will be $37.4 billion over the same five years, causing 1.7 million elderly Americans to lose or be denied long-term-care services by 2000.
But Rowland said the effects of a Medicaid block grant could vary by state.
In some states, a strong seniors lobby and nursing home industry could band together to defend long-term-care benefits and payments, Rowland said. But in others, a strong lobby for children and pregnant women could result in more money being devoted to primary and acute care for those people.
"I think the hard thing about a block-grant approach vs. a prescribed cut is you don't know what will happen in each state," she said.