March 27, 2017

Double, Double, They're In Trouble

The headlines on Tuesday, March 14 focused on two items: the blizzard that was belting the Northeast and the CBO report which predicted that 24 million Americans would lose health insurance coverage over the next 10 years if Trump Care became law. Far less prominently featured was the Senate confirmation of Seema Verma as head of the Centers for Medicare and Medicaid Services (CMS). Approved by a 55-33 vote, Verma could potentially have a major effect on the shape of health care for older Americans. So what do we know about Ms Verma?

We know she’s a first generation American and that she has a BA from the University of Maryland and an MPH from Johns Hopkins. She was the president and founder of SVC (which presumably stands for Seema Verma Consulting rather than superior vena cava, though I can’t find any reference on the website to what the letters stand for), an Indianapolis-based company that says it provides “strategic health policy solutions.” Her main claim to fame is that she (or SCV, Inc) came up with a strategy that enabled the Indiana Medicaid program to charge residents for premiums. She is widely expected to promote a similar strategy at the federal level as head of CMS. Medicaid is generally thought of as a program for the poor; how would Medicaid reform affect older individuals?

As of 2011, there are 10 million people who receive both Medicare and Medicaid, of whom 61 percent, or 6.1 million, are 65 or older. The remainder are younger people with disabilities. Just who are these people? The short answer is that they are the sickest, most impaired, and most vulnerable members of society. Nearly 3 in 4 have at least 3 chronic conditions. Over 60 percent need help with basic self-care activities such as eating, bathing, or dressing. And nearly 60 percent have a cognitive or mental impairment such as dementia.

And what does Medicaid provide for these “dually eligible” patients? Medicaid pays for nursing home care. It pays for long term care in the community. And it makes Medicare more affordable by helping cover Medicare premiums. The biggest chunk goes to long term care, with Medicaid allocating 62 percent of the $147 billion it spent in 2011 to long term care.

The amount that Medicaid pays for these services is considerable. Medicare beneficiaries account for 15 percent of Medicaid enrollment but 36 percent of Medicaid spending. Many states devote a considerable amount of their Medicaid spending to dually eligible, and 6 states spend over 45 percent of their Medicaid budget on the dually eligible.

What all this means is that Seema Verma could introduce policies that have widespread repercussions for 10 million people, over 6 million of them seniors. Within hours after being sworn in, she and DHHS Secretary Tom Price sent a letter to state governors urging them to impose premiums for the poor, charge Medicaid recipients for use of emergency rooms, and require many of those on Medicaid to get jobs. 

Reforming Medicaid, Republican style, would take the form of block grants. This means that the federal government would dole out a fixed amount of money to the states and allow them to set their own eligibility criteria. But it also means that there would be a cap on what each state gets, regardless of growth in the vulnerable population or their needs. 
States then have a choice: they can raise the eligibility standards, they can cut back on benefits, or they can reduce payments to providers. For people living in nursing homes, the single largest group of older individuals receiving Medicaid, how would that translate into practice? Well, the state could decide that only people with deficiencies in 5 activities of daily living (rather than 3 or 4) will be admitted to nursing homes under their Medicaid benefit, keeping more people at home longer without providing the necessary support to make this safe. Or it could limit the number of months it will cover nursing home care, forcing the burden of care onto families that in many cases have already concluded they cannot bear that burden. Or it could cut back the already bare bones payments to nursing home facilities, jeopardizing the quality of care in those institutions.

Medicaid matters. Write to Ms. Verma. Let her know.

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