While the largest number of Medicaid recipients are low-income children and adults, who tend to be far less politically potent voices in battles over entitlement programs than older voters, the changes to Medicaid proposed by Representative Paul D. Ryan of Wisconsin, the House budget chairman, could actually have a more direct impact on older Americans than the Medicare part of his plan.
The House plan would turn Medicaid, which provides health coverage for the poor through a combination of federal and state money, into a block grant program for states. The federal government would give lump sums to states, which in turn would be given more flexibility and independence over use of the money, though the plan does not spell out what the federal requirements would be.
Beginning in 2013, these grants would increase annually at the rate of inflation, with adjustments for population growth, a rate far below that of inflation for health care costs. As a result, states, which have said that they cannot afford to keep up with the program’s costs, are likely to scale back coverage. Such a reduction, critics fear, could have a disproportionate effect on Medicaid spending for nursing home care for the elderly or disabled.
By contrast, under the Medicare proposal approved by the House, no one currently 55 or older would see a change in benefits, which the House proposed to turn into a voucher-type program.
“This is a huge deal for the nation’s seniors, and it’s been largely unrecognized,” said Jocelyn Guyer, the co-executive director of the Center for Children and Families at the Georgetown University Health Policy Institute. “Obviously Medicaid is a program designed for low- and modest-income people. But when it comes to nursing homes, a lot of seniors start off middle class and pay for their care with private funds but end up using the Medicaid program.”
According to the Congressional Budget Office, in the 2010 fiscal year, 77 percent of people enrolled in Medicaid were children and families, while 23 percent were elderly or disabled. But 64 percent of Medicaid spending was for older Americans and people with disabilities, while 36 percent went to children and families.
According to the Kaiser Family Foundation, which analyzes health care issues, 7 of 10 nursing home residents are on Medicaid, in large part because even middle-class patients often run through their savings while in a nursing home and turn to the entitlement program.
The foundation recently estimated that a Medicaid block grant similar to the one proposed by Mr. Ryan could save $750 billion over 10 years. House Republicans also want to eliminate the expansion in Medicaid eligibility scheduled to take place in 2014 under the new health care law, which could result in savings of $610 billion.
According to a report released Tuesday by the foundation with the Urban Institute, by 2012, under the Ryan plan, Medicaid enrollment nationally could be 44 million people fewer than what it is projected to be under current law, which includes new additions to the program under the health care overhaul.
It is still possible that there will be some changes to the Medicare program this year, but Medicaid is quite likely a more politically viable area of change. Representative Eric Cantor of Virginia, the House majority leader, said Tuesday, “Medicaid is a very important part of our plan.”
While the House passed the Ryan 2012 budget that includes changes to Medicare and Medicaid, it is dead on arrival in the Senate.
Another budget proposal offered Tuesday by Senator Patrick J. Toomey, Republican of Pennsylvania, increases Medicare spending, while using block grants for Medicaid in an effort to reduce Medicaid spending by 2019 to a level only $14 billion above what it was in the 2008 fiscal year.
It is likely that Democrats will strongly oppose block grants, arguing that such a plan would shift too many Medicaid costs to states that are already slashing their budgets. At a news conference last week, Senator John D. Rockefeller IV of West Virginia sharply criticized several of the ideas for reshaping Medicaid, calling broad-based cuts “almost beyond my moral understanding.”
