On January 31, 2003  HHS Secretary Tommy Thompson announced that the Bush Administration would propose “innovative improvements in states’ health coverage for low-income Americans” – in short, “Medicaid reform.” Based on available information, advocates are extremely concerned that the Administration’s plan would return the program to the pre-reform era before Congress passed many of today's financial and quality of care protections for nursing home residents. If preliminary analyses are accurate, the proposal could  vastly diminish services, access and regulatory protections now available to elderly and disabled Americans in states that elected to participate.

What the Proposal Would Do 
Under the proposal: 

• States could continue their Medicaid programs as they are and receive no new fiscal relief from Congress, or 
• States could opt for a “block grant” with separate allotments for acute care (Medicaid and State Children's Health Insurance Program, or SCHIP) and long term care.

The proposal has another provision that may make it attractive to states:
It would give them “flexibility” in deciding how they serve “optional” beneficiaries – such as the medically needy in nursing homes whose incomes are too high for public assistance but who qualify for Medicaid because their nursing home costs exceed their income and assets.
 
Approximately 85 to 90 percent of nursing home residents would fit into this optional category in which, according to Administration statements, existing regulations regarding eligibility, services and quality would no longer apply.

It appears the only residents entitled to current protections would be a relative few who are eligible for Supplemental Security Income (SSI). Moreover, advocates who have studied the proposal say it is not clear that even mandatory benefits would remain the same.

Since the plan encourages home and community-based care as an alternative to institutional care, it may also appeal to some advocates for the elderly and disabled who want more public funding for home and community-based services. Advocates should be cautious since such plans could divert people to settings that do not meet their medical or social needs.

Nursing home consumer advocates have been calling for more accountability for how Medicaid funds are spent. This proposal would virtually eliminate what we already have.

The current Medicaid law provides a financial safety net for America’s frail elderly and disabled residents and their families, as well as public oversight of the quality of care they receive.

• Medicaid pays approximately half of the nation’s nursing home costs and supports the care of about 70 percent of nursing home residents. About half of those residents “spent down” their life savings on nursing home care before they became eligible for Medicaid.
• Federal Medicaid law provides basic financial protections for residents and also their families.
• Medicaid provides the foundation (through the Nursing Home Reform Act amendments of 1987) for the regulation of nursing homes. This foundation includes health and safety standards, resident assessment and data collection, residents’ rights, annual inspections, and enforcement procedures. (These regulations benefit all residents, not just Medicaid beneficiaries.) At a hearing on February 12, Secretary Thompson said nursing home standards would continue for “mandatory” beneficiaries – the 10 to 15 percent of residents who are SSI beneficiaries and therefore categorically eligible for Medicaid.

Block grants threaten protections for American families against devastating nursing home costs. 

• “Spousal impoverishment” provisions enacted by Congress in 1988 ensure that spouses of nursing home residents can retain enough of the couple’s resources, including the family home, to meet their own needs. Before Congress changed the law, elderly women, especially, often faced dire poverty when they could no longer care for their husbands at home; some aging couples divorced so that the wife would have enough to live on. 
• Current law also protects the adult children of nursing home residents – who may be caring for their own children, paying for their children’s college education, or even be retired themselves – from being forced to contribute to their parents’ nursing home care.

• In the name of “flexibility,” states could be exempted from ensuring that their nursing homes comply with comprehensive federal quality of care standards, residents’ rights protections, and inspection and enforcement procedures.
• Residents in understaffed nursing homes could be left without legal protections from neglect and abuse of their rights that we now take for granted. 

• Under current law, when states provide an optional service, all beneficiaries must receive the same benefits. 
• Under current law, benefits must also be sufficient in “amount, duration and scope” to meet their purpose. 

• People who qualify for Medicaid long term care services have multiple medical problems, often including dementia. Nursing homes are regulated and inspected at least annually to ensure standards are met. Assisted living and personal care homes, on the other hand, are poorly regulated in most states and may not provide the care elderly and disabled residents need.
• Congress should not encourage redirection of Medicaid funds to home and community-based care unless it enacts federal standards and enforcement procedures to ensure that beneficiaries do not lose access to services and protections they need.

• States that elected the plan would experience declining federal payments over time, forcing them to reduce the number of people they covered unless they increased state funding to compensate.
• The plan would allow states to transfer funds between the two allotments, setting the stage for competition for resources between our two most vulnerable populations, the old and the young. 

 The House has held one hearing on the Administration proposal and is expected to hold another while state governors are in town February 22-25 for the National Governors Association conference. Since the plan will not go anywhere without support from the governors, the Administration will be using this opportunity to woo their support. 

If you  are not in agreement with  this proposa, please  contact the Governor  and  urge him  to oppose it.