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What the Upcoming Budget Deal Could Mean for Family Caregivers

PolicyDigest last week discussed the “Super-Committee” and the upcoming budget negotiations that will ensue as 12 senators and representatives attempt to trim roughly $1.2 trillion from the federal budget deficit over the next ten years. If the committee can’t agree on solutions, or if the rest of Congress won’t vote to approve them, then automatic agency cuts will be triggered, with 50% coming from the defense budget, and 50% coming from other programs, excluding Medicaid, Social Security, and most of Medicare, starting in 2013. Warren Buffet, the CEO of Berkshire Hathaway, suggested recently in an Op-Ed that Congress should consider raising taxes, especially on upper-income Americans, and it’s possible that this committee may also consider raising taxes instead of only using budget cuts.

So, how could these negotiations affect family caregivers? Three possibilities are addressed below:

1) Medicaid: Many Americans assume that Medicare will pay for long-term care, but it’s actually Medicaid that picks up the bill after a person has extinguished most of their assets (though if you’re married, there are “spousal impoverishment rules” that will allow the spouse who isn’t using Medicaid to keep some income and assets). When the economy declined, more people became eligible for Medicaid, which put increasing pressure on state budgets. While additional federal funding helped states for a little while, that funding stopped on June 30th this year. Most states have responded by trimming anything that is “optional” in their Medicaid programs.

In Iowa, the state had proposed not allowing family caregivers to “bank” their respite benefits from one month to the next. After an outcry, the state then decided to set an annual cap of 576 hours per year- which would have been especially harmful for families who need respite the most. The governor ultimately reversed course, and Radio Iowa suggests this may be due to the hundreds of complaints that family caregivers made to the governor’s office.

In California, Medi-Cal currently covers Adult Day Health Care for about 37,000 people. This benefit is considered “optional” under federal law, and is now slated to end on December 1st of this year, which will have harmful effects on the families who rely on these centers to help with the medical care of their frail elderly family members, many who suffer from chronic health conditions. At a hearing last week, Lydia Missaelides, the executive director of the California Association for Adult Day Services, explained “a human disaster is about to unfold in your communities.” Marty Omoto from California Disability Community Action Network pointed out to the elected officials that “it’s not hindsight if we’re telling you about the problems now.”

Potential changes at the federal level could include converting Medicaid into a block-grant program, which would give states more flexibility to run their programs but could also have harmful effects on caregivers. AARP suggested in a report that block granting Medicaid would lead to states shouldering a greater share of the cost of Medicaid. To address this increased share, states may consider additional cuts to service during economic downturns or using waiting lists, freezing enrollments, cutting provider rates, or increasing cost-sharing so that beneficiaries (and/or their caregivers) pay more of the bill. Most states already use waiting lists for home and community-based services offered through Medicaid- a Kaiser Commission on Medicaid and the Uninsured report noted that there were 107,563 people on waiting lists in 39 states for Medicaid Aged and Aged/Disabled Waivers in 2009, with an average wait time of six months.

2) Community Living Assistance Services & Supports (CLASS)
The CLASS program, the nation’s first voluntary social-insurance program, was included as part of the Affordable Care Act, and is intended to help people plan and pay for their long-term care. It was targeted for elimination in one budget proposal earlier this year, and it may emerge as a target again. This is especially concerning in light of results from a recent survey in California, in which 66% of respondents reported that they could not afford more than three months of nursing home care if they had to pay for it themselves. The uptake for private long-term care insurance has also been fairly low, partly due to the fact that long-term care insurance companies haven’t been able to correctly “price” this insurance and have resorted to either increasing enrollee’s monthly premiums or exiting the market altogether.

3) Medicare
Several proposals have been considered with Medicare, including converting the program to a voucher-esque system that would give enrollees a set amount of money that they could use to buy health care, though the non-partisan Congressional Budget Office found this would lead to beneficiaries picking up a larger part of their health care bills. A recent Kaiser Foundation profile of 16 Medicare beneficiaries suggests that increased cost-sharing may not work for the roughly 50% of Medicare beneficiaries who have incomes below twice the poverty level ($22,000 for an individual) and are already struggling to make ends meet.

The Iowa example mentioned at the beginning of this posting may provide some jumping off grounds for other family caregivers who are interested in playing an advocate role during this process. If there are programs that you rely on, for example, a Medicaid Waiver that pays for in-home care, then it’s important for your elected officials (especially at the federal levels during this negotiation) to know about your experiences with that program. If you’re loved one has been on a waiting list for eight months, then policymakers need to know about it. Businessweek noted that lobbying firms in DC had lower revenues during the first half of 2011 as compared to 2010, but that this upcoming budget battle will lead to increased revenues.

Family caregivers may not be able to hire lobbyists or make large campaign donations, but they can communicate their experiences as caregivers and they can also vote. Iowa’s recent reversal on reducing the respite benefit is a strong reminder that caregivers can play a role in the policymaking process.

A few resources to get you started:

Family USA: “Medicaid, the Budget, and Deficit Reduction: The Threat Continues”

Kaiser Health News: FAQ: “’Super Committee’ Could Have Big Impact On Medicare, Medicaid Spending”

PolicyDigest: “Medicaid Cuts In TX, CA, MA, SC, WA May Place More Strain On Caregivers