Medicaid block grants and high risk pools threaten Oregonians with disabilities

A recent article in Kaiser Health News explains how GOP plans to block grant Medicaid will affect those who rely upon it for themselves and their children. It isn’t pretty. While Oregon has been a leader in health care reform, block grants threaten our progress and target people with disabilities for neglect. Proposals to return to “high risk pools” promise similar results.

Medicaid is a federal program that now covers almost 75 million adults and children. Those who are eligible due to poverty, disability or other qualification have an entitlement to receive the program’s benefits. In Oregon, Medicaid pays for most of the Oregon Health Plan as well as home and community-based services for seniors and people with disabilities, including I/DD and behavioral health housing.

GOP leaders say they want to turn Medicaid over to the states and cap how much the federal government pays in the future. Depending on the proposal, states would be allowed to cut back the number of people covered, the services covered and put additional requirements on recipients such as cost-sharing, working, drug testing and the like. The federal contribution would not keep pace with medical inflation, leaving states to make more cuts, find more revenue or develop great “efficiencies”.

The non-partisan Congressional Budget Office estimates recent Republican block grant proposals could cut Medicaid spending by as much as a third over the next decade. The cuts would start small, growing larger over the years.

Many Republicans say that, because states will have greater flexibility, they can innovate with their Medicaid programs. Oregon, in fact, has been a leading innovator under its Medicaid waiver that promises to “bend the cost curve” of medical inflation while improving health outcomes for Oregonians. But experimentation alone won’t make up for smaller federal budgets. Note Oregon’s present $1 billion shortfall to continue Oregon Health Plan services for two more years.

In 2015, Medicaid nationally accounted for 17 percent of the nation’s health care expenditures. The 75 million people covered make up almost a quarter of the U.S. population. Two thirds of people in nursing homes pay for their care using Medicaid. Indeed, most of the program’s spending is on seniors and people with disabilities.

Medicaid is also critical to the economic viability of hospitals. Hospitals and clinics that treat large numbers of Medicaid beneficiaries may have to rethink their budgets, what services they can provide and how many people they can employ. Cutting back their capacity will affect their availability to all.

Republican strategists see Medicaid cuts as the first step toward limiting other so-called “entitlement programs,” such as Medicare and Social Security. Again, it will be seniors and people with disabilities who will be first on the chopping block.

At a recent legislative forum where Oregon elected officials discussed health care reform, two legislators said they were interested in exploring a return to the use of a “high risk pool” in Oregon. They noted that 5% of patients use 50% of health care funds. If those “high utilizers” could be cut out, health insurance would be cheaper for everyone else.

What this means, in practice and effect, is that people with disabilities would be excluded from regular insurance and put in a pool with higher costs to them and fewer services. It makes regular insurance (and risk-sharing) only for those with few health needs. For those with high needs and limited resources, getting help would depend upon scarce state funding which fluctuates depending upon tax revenue and competing state needs such as schools and public safety. It is, in a very real sense, a race to the bottom for seniors and people with disabilities.

Oregon has worked diligently to create fiscal incentives for providers to achieve better health outcomes for people with chronic conditions. These efforts have greatly reduced the use of expensive emergency departments and helped to keep people at home and out of long-term care facilities. These promising efforts may be undercut by block granting and high risk pools.

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