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.

The Price of Tom Price

The Senate confirmed Tom Price (R-Georgia) by a 52-47 vote as the new Chief of the Department of Health and Human Services this week. Much of the debate focused on Price’s ethically and legally dubious stock purchases. He bought stock in a medical device company--and then promptly authored a bill to increase Medicare reimbursements for that company’s products. Attention to Price’s many apparent conflicts of interest are important but should be taken up by the SEC as part of an investigation of insider trading. Unfortunately, with all the attention paid to financial shenanigans, there was correspondingly less attention paid to what Tom Price would try to do to Medicare and Medicaid.

In fact, there’s a great deal of speculation about what Tom Price believes or would do, and less reliable information about what he wants to do. What we do know is that he is an orthopedic surgeon (one of the medical device companies he invested in, and which stands to benefit from legislation he favors, is Zimmer, a leading manufacturer of artificial hips and knees) who strenuously dislikes the recently introduced “bundling” of payments for joint replacement surgery under Medicare. According to this plan, which so far seems to be lowering costs without adversely affecting quality, Medicare pays a single amount for all care involved in replacing a hip or knee: hospital care, the surgery itself, and post-surgical care for 90 days. Providers whose care costs less than the target amount stand to be paid a bonus and those whose care care exceeds the target amount are hit with a penalty. Programs such as this one are piloted by the Center for Medicare and Medicaid Improvement, an agency authorized by the Affordable Care Act--and Price has specifically tried to de-fund the CMMI.

What we know is that Price was one of the authors of “A Better Way,” the House Republican outline for replacing the ACA. This document strongly favors “premium support,”  a voucher program that would give patients a fixed amount of money with which to purchase a (private) health insurance plan. While this might simply be what Medicare already does with respect to Medicare Advantage programs, the current alternative to fee-for-service Medicare, it raises the question both of whether the vouchers could be used to buy a conventional Medicare plan and also how much control CMS would have over what must be included in eligible plans. 

We know that Price favors repeal of the ACA, which provides for free coverage of preventive services such as colon and breast cancer screening, and which has reined in Medicare costs by reducing payments to hospitals, skilled nursing facilities, and Medicare Advantage plans. Undoing the ACA has the potential to reverse all these trends. 

Finally, we know that Price is in favor of converting Medicaid to a block grant program—essentially turning it over to the states. Medicaid already demonstrates enormous state to state variation, with the contribution and standards of the federal government standing between a robust insurance plan and a total farce in states such as Alabama and Mississippi. Right now, 9 million of the 46 million Medicare enrollees are dually eligible—they receive both Medicaid and Medicare.

A far larger proportion of older, eligible voters go to the polls on election day than any other group. In 2016, voter turnout among the 65+ set was close to 60 percent; among those 18-29, it was under 20 percent. 

Older people count in the eyes of our elected officials, if for no other reason than that they vote. Maybe those enrolled in Medicare didn’t realize that a Trump administration would mean for them. But with the appointment of Tom Price, we know a little more. It's time for older people to speak up for Medicare.