MEDICAID: STATES SHIFTING LONG-TERM CARE EXPENSES
"Facing ever-increasing costs for long-term care of low-This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
income older Americans," state governments "are shifting some of
the burden to Medicare and other outside payers" and relying on
other cost-control strategies, according to a new Urban Institute
study. Researchers visited 13 states in 1996 and 1997 "that
account for half of all Medicaid spending ... to see how well the
states are doing" in their efforts to control long-term care
costs without sacrificing quality, LEGI-SLATE reports. Growing
costs are "particularly critical" for states, LEGI-SLATE notes,
"because a tidal wave of baby boomers will start turning 65 in
2011, greatly increasing costs and throwing new obligations on
Congress for care of the elderly."
The Urban Institute researchers noted that states are
"encouraging people to buy long-term care insurance, whose tax
treatment was improved in the 104th Congress." Urban Institute's
David Stevenson notes that California encourages the purchase of
such policies by guaranteeing Medicaid coverage for seniors who
buy them, "even if they have up to $100,000 in assets (the normal
limit is $2,000)." New York has a similar program, but LEGI-
SLATE notes that incentives haven't worked well in either of the
two states, where "only 12,000 people have purchased policies."
States are also pursuing "Medicare maximization." New York,
Wisconsin and Massachusetts emphasize this approach, under which
they try "to get some costs that [Medicare and Medicaid] pay for,
like home health care, billed solely to Medicare." The study
also found that states are "threatening to cut their Medicaid
payments to home health-care providers so low that the providers
will routinely start billing Medicare to get its higher rates."
Stevenson noted that these strategies "don't really provide more
money, they simply shift the cost from the states to somewhere
Joshua Wiener, a co-author of the study, said states are
turning to spending controls such as "trying to combine acute-
care services with long-term care in a single integrated [HMO]
package" for dual-eligible seniors. However, the researchers
said there are "fears ... that managed care groups, who have
little experience with large groups of disabled and who tend to
view everything from the point of view of acute care, not long-
term care needs, would short-shirt the latter." Another state
strategy, Wiener said, is reducing "payment rates to nursing
homes so much that there can be a deep threat to quality of
care." He noted that Alabama proposed a 20%-30% rate reduction
when the state's Medicaid budget experienced a cost overrun.
Other states, Wiener said, "have already barred creation of new
nursing home beds ... for fear they would all end up filled with
Medicaid patients." Weiner said the state strategies for
curtailing long-term care costs "might end up saving money, [but]
there is no obvious, big, bold change on the horizon that will
assure good care at a modest cost for all those who need it"