Major cuts to Medicaid under the American Health Care Act could reduce access to in-home care and other health care services over the coming decades, especially as the proportion of Medicaid recipients aged 85 and older increases, a new report from AARP alleges.
The Washington, D.C.-based advocacy group’s concern stems from the AHCA’s mandate to shift Medicaid spending decisions to the states and base future payments on historical rates—moves that the bill’s Republican crafters claim will bring $800 billion in savings.
Under the AHCA blueprint, the federal government would require states to choose from one of two options: Take a fixed “block grant” each year, or institute a per-capita cap system, in which the state receives a set amount of Medicaid funding for each beneficiary. The exact dollar figure would vary among five groups of people, one of which is Medicaid recipients aged 65 and older.
The problem, AARP claims, arises from the fact that the cap values would increase at a fixed rate based on average costs in fiscal 2016—despite significant projected demographic shifts within the “older Americans” group over the coming decades. Adults aged 85 and older generally rack up far higher bills than their 65- or 75-year-old counterparts, and as the baby boom generation ages, 85-and-overs are set to represent an increasingly large part of the “older Americans” pie.
For instance, in 2015, the 85-and-older set accounted for 22.4% of all “older Americans” enrolled in Medicaid; by 2050, that number will reach 33.7%, according to U.S. Census projections.
“Despite this coming shift, however, the AHCA considers only Medicaid enrollment and spending that took place in FY 2016, which included a younger and less-expensive population mix than is likely to need Medicaid in the future,” AARP Public Policy Institute researchers Brendan Flinn and Ari Houser wrote.
Because the average 85+ beneficiary cost Medicaid $28,681 in 2011—compared to just $11,949 for those aged 65 to 74—such a stark demographic swing could have disastrous effects for Medicaid recipients, according to AARP.
“Given these data, it is very unlikely that the per capita cap allotment set under the AHCA will be able to keep pace with the needs of low-income adults as they age into their eighties and beyond,” Flinn and Houser wrote. “Over time, states will not have adequate funding to serve an increase in—and an aging of—the 65+ population.”
The House of Representatives in May passed the AHCA by a thin 217-213 margin, but the legislation must still receive the approval of a skeptical Senate before reaching President Trump’s desk.
The Trump administration based its fiscal year 2018 budget proposal on the assumption that the AHCA would become law, and promised an additional $616 billion in Medicaid cuts on top of the $800 billion from the new health law. That budget proposal, however, remains merely the spending wish list of Trump and budget director Mick Mulvaney; the House and Senate are expected to weigh in with competing budget plans in the coming months.
Written by Alex Spanko