policy Briefing: DANGERS TO LONG-TERM CARE CONSUMERS What You Need to Know & What You Can Do About It March 8, 2017

Agenda Welcome & Introductions Robyn Grant, Consumer Voice Medicaid Funding Cuts Would Harm Older Americans Eric Carlson, Justice in Aging Malpractice Restrictions Sarah Rooney, American Association for Justice Advocacy Action Robyn Grant, Consumer Voice Q & A Closing

Medicaid Funding Cuts Would Harm Older Americans Eric Carlson, Directing Attorney March 8, 2017

Much Progress in 50 Years When Medicaid and Medicare were enacted, 1 in 3 seniors lived in poverty Only about half of seniors had health insurance coverage. Now, the number of seniors in poverty is less than 1 in 10 When Medicaid and Medicare were enacted in 1965, 1 in 3 seniors lived in poverty. Medical bills were a huge contributor, as only half of older adults had health insurance coverage. Since then, older adults have seen tremendous gains in economic security – and now the number of seniors at the official poverty level is less than 1 in 10. However, these gains are threatened if Medicaid as we know it is taken away through Medicaid funding caps.

How Medicaid Works Federal-state partnership Federal government pays 50-74% of costs (FMAP) Depends on state and type of service Mandatory entitlement If state spends the money, they get the federal match Medicaid works as a state and federal partnership. Medicaid provides health insurance to the lowest income Americans – including over 6 million older adults. Now, for each dollar that a state spends on Medicaid, the federal government puts in at least a dollar too. In fact, state money spent on Medicaid is matched – with the federal government paying between 50 – 74% of the costs- more for poorer states and less for the more wealthy states. The matching rate (also called the FMAP) also varies according to the service or program. Medicaid is a mandatory entitlement – which means that if someone is eligible, they are entitled to Medicaid services. How much services someone gets is based on medical necessity. If states spend the money – then the federal government provides the match.

Federal standards and state options Federal gov’t sets standards for Medicaid Mandatory services and categories Due process protections Consumer protections States can tailor program for their needs Optional services and categories Waivers and demonstration programs Medicaid is based on a set of federal standards - including mandatory services, such as hospital, doctors and nursing home services, and mandatory categories, such as people who are eligible for SSI benefits. Medicaid also includes significant consumer protections, such as the protections of the Nursing Home Reform Act against abuse and neglect of nursing home residents. States can tailor their Medicaid programs now to fit their particular state needs through selecting optional services, such as home and community-based services, and optional categories, such as coverage for people with high medical bills, and waivers and demonstration programs, which encourage state innovation.

Proposals to Cap Medicaid Funding Block grants Fixed amount for each state Per capita caps Fixed amount per beneficiary Both set fixed cap on Medicaid funding to cut federal spending States responsible for costs above caps Shifts costs to states as population ages Forces states to make deeper cuts in future Over the past several years, Congress has proposed capping Medicaid funding – setting a fixed amount for states either through block grants or per capita allotments. Both of these options are designed to cut federal support for the Medicaid program, and cut the amount that states receive from the federal government. Block grants provide a fixed amount for the whole program, and per capita caps provide a fixed amount per beneficiary. Both types of proposals shift Medicaid costs to the states – making states responsible for costs above the caps. Looking specifically at older adults – this cost shift to the states is particularly harmful as the population ages – and will force states to make deeper cuts as time goes on, and ration care for its residents

House Energy and Commerce bill imposes per capita caps Fixed amount per beneficiary for five groups: Elderly Blind and disabled Children Expansion adults Non-expansion adults The new House Energy and Commerce bill released last night, the American Health Care Act, imposes per capita caps on the Medicaid program. The bill creates separate caps for each of five groups: Elderly Blind and disabled Children Expansion adults Non expansion adults This means that all the health care and long-term services and supports that a state provides to its older residents needs to fit into an arbitrary fixed sum of money, not based on actual medical needs of the state residents. Note that partial benefit dual eligibles (those who receive help with Medicare cost sharing only, but no other Medicaid services) are not included in the per capita caps. Full benefit dual eligibles, those who fully qualify for Medicaid, are included.

Dramatic cuts to Medicaid Starts in FY 2020 Caps set based on FY 2016 costs, and rise according to formula based on medical CPI No CBO score Past proposals – cuts increase dramatically over time, amounting to hundreds of billions of dollars The caps start off being set according to FY 2016 costs- and rise according to a formula based on the medical CPI. However these amounts will certainly fall well below current levels, resulting in dramatic cuts to the Medicaid program. We don’t know exactly how much these cuts will be, because Congressional leaders are pushing this through without any score from the Congressional Budget Office – we don’t know the amount of the cuts, or how many people will lose coverage. In past proposals, the cuts increased drastically over time, amounting to hundreds of billions of dollars over a ten year period.

What Is the Impact on Older Americans? Dramatically reduced federal funding will likely lead to significant cutbacks in services and eligibility. Thank you, Jennifer. Let’s look now at the legislation’s likely impact. The main feature is a dramatic decrease in federal funding. Not surprisingly, that creates a risk of cutbacks in services and eligibility.

Mrs. Elliott 82 years old, with multiple chronic conditions. Only income is small Social Security benefit. Lives alone. In-home caregiver assistance with bathing and transferring in and out of wheelchair. Hospitalized twice in last year. Let’s look at this from the perspective of a hypothetical older woman. Mrs. Elliott is 82 years old, has multiple chronic conditions, and relies on a small Social Security benefit. She lives alone, but receives some in-home assistance from a Medicaid-funded caregiver.

Impact of Specified Cutbacks on Mrs. Elliott Retroactive coverage limited to month of application. Home equity limited to $560,000, without state option to increase to up to $840,000. Elimination of 6% enhanced federal match for Community First Choice attendant services (eff. in 2020). The congressional proposal contains several specific provisions that have some particular relevance to an older person like Mrs. Elliott. Medicaid law allows for coverage to start up to three months prior to the month of application, if the person met eligibility standards during the relevant times. Due to unfamiliarity or confusion, some low-income persons do not apply for Medicaid in a timely fashion. The current law helps protect them from being stuck with unaffordable bills, by allowing some coverage even prior to the application month. The legislation proposes to eliminate this protection, and allow coverage to go back only to the first day of the application month. Secondly, current law limits coverage of nursing home care or home and community-based services to persons with homes with equity of no more than $560,000 or, at a state’s option, up to $840,000. This provision reflects the very high cost of housing in some states. The legislation would eliminate the state option to increase the limit beyond $560,000. The third provision involves the Community First Choice Option, which was created by the Affordable Care Act to increase access to personal care in the home. Eight states currently participate, serving over 300,000 persons. A primary motivation for states is a six percent increase in the federal financial participation rate, but the legislation would end this enhancement at the beginning of 2020.

Funding Cutbacks Likely to Result in Reduced Services to Mrs. Elliott Home and Community-Based Services Generally optional E.g., HCBS Waivers Community First Choice Option HCBS State Plan Option Let’s move now to the impact of the funding cuts. The biggest hit is likely to come on optional services, and this includes all home and community-based services. As Jennifer mentioned, the proposed cuts are drastic. When the federal government contributes a certain financial percentage for all qualifying expenses, the state is able to provide additional necessary services. But if reimbursement is made on a reduced, per-person basis, the state faces an obvious incentive to cut back on services.

Mrs. Elliott May Lose Other Optional Services Dental Optometry Case management Hospice care Physical therapy Respiratory services for ventilator-dependent persons For similar reasons, other optional services are also at risk. All of these services – including dental services, optometry, and case management – are provided at a state’s option, and could likely be eliminated by a state facing increased financial pressure.

Potential Loss of Coverage for “Medically Needy” and Others Even if Mrs. Elliott had somewhat higher income, she under current law could be eligible to enable her to pay for higher health care costs. This “medically needy” eligibility is optional. Financial pressure could lead states to cut back on “medically needy” and other optional eligibility. The same problem is encountered with “optional” eligibility groups. “Medically needy” eligibility is available in most states when a person has somewhat too much income for the mandatory eligibility group, but also has significant health care expenses. Financial pressures on a state Medicaid program could well lead that state to drop the medically needy coverage.

Potential Loss of Services Due to Restricted Eligibility Standards Many states have numerical scores to determine when person is eligible for nursing home care or HCBS. E.g., need for assistance with certain # of ADLs States likely will cut enrollment by requiring higher scores. The most likely cutback would be done by manipulating clinical eligibility standards for nursing home services and home and community-based services. Eligibility often is based on a numerical score derived from the person’s need for assistance. To reduce the number of qualifying persons, a state Medicaid program can increase the minimum score require to qualify for services. Mrs. Elliott might be eligible under the initial system, but then ineligible after the change is made.

Mrs. Elliott Loses Access As Providers Leave Program States often respond to financial pressures by cutting provider rates. Rate cuts can limit access, as providers quit Medicaid program. Finally, Mrs. Elliott may lose access to services as the state reduces reimbursement rates and providers leave the system. This is a frequent problem in state Medicaid programs, and would only be exacerbated by the legislation’s proposed funding caps.

Rationing Healthcare Medicaid historically has been based on providing medically necessary care. Congressional proposals would base care on amount of federal allocation, rather than on health care needs. As Jennifer discussed, this is all about spending less money, with inadequate regard for the consequences. Healthcare is to be rationed – with overall coverage based not on persons’ needs, but instead on the amount of money allocated by the federal government.

Action Steps Messages: Legislation includes proposals to decrease and cap federal Medicaid funding. Medicaid is vital for older Americans. Medicaid is important to you and your family. (Explain why) Here are some useful talking points. The legislation CUTS federal Medicaid spending drastically. Medicaid is vital for older Americans. And Medicaid is important to you and your family.

Malpractice Restrictions Sarah Rooney, Regulatory Counsel American Association for Justice March 8, 2017

Advocacy Action Robyn Grant, Director of Public Policy & Advocacy Consumer Voice March 8, 2017

Action #1 Contact your Members of Congress Meet with them (can do this by phone) Send a personal letter (can email it) Call (202) 224-3121 Use CV action alert

Action #2 Call (202) 224-3121 Contact: US House of Representatives Speaker Paul Ryan, Minority Leader Nancy Pelosi US Senate Majority Leader Mitch McConnell Minority Leader Chuck Shumer Your Governor www.usa.gov/state-governor Call (202) 224-3121

Get others to contact Congress and their Governors too! Action # 3 Get others to contact Congress and their Governors too!

Action #4 Medicaid Stories!

Instructions are coming! Stories Why Medicaid is important to the individual; What would happen without it Any format Written Audio Video Instructions are coming!

Goal: One State, One Story (at least Goal: One State, One Story (at least!) Don't let your state be story-less!

Contact Information Eric Carlson ecarlson@justiceinaging.org www.justiceinaging.org Sarah Rooney Sarah.Rooney@justice.org www.justice.org Robyn Grant rgrant@theconsumervoice.org www.theconsumervoice.org