The ongoing budget wrangling on Capitol Hill has centered largely around potential cuts and changes to Medicaid, prompting pushback and concern about potential effects on home-based care. “Our members will not support any policies that reduce access to essential home and community-based services for eligible individuals,” the National Alliance for Care at Home (the Alliance) […] The post Menu Of Medicaid Cuts Draws Pushback From Home-Based Care Defenders appeared first on Home Health Care News.
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The ongoing budget wrangling on Capitol Hill has centered largely around potential cuts and changes to Medicaid, prompting pushback and concern about potential effects on home-based care.
“Our members will not support any policies that reduce access to essential home and community-based services for eligible individuals,” the National Alliance for Care at Home (the Alliance) stated Wednesday, in a comment on recent Congressional budget and reconciliation activity. “As Congress continues to assess options to reduce federal spending, we encourage leaders to continue to look favorably on high-value services that reduce costs and improve participant satisfaction.”
Medicaid is a primary source for access to home-based care. In fact, Medicaid covered two-thirds of all home care spending in the U.S. in 2022, according to the KFF data.
Roughly 4.5 million individuals receive home-based care services through Medicaid annually, according to KFF.
In general, Medicaid home care services are provided through the Medicaid state plan or as part of a specialized waiver.
Last week, the U.S. House of Representatives approved a budget resolution. Without naming Medicaid changes, explicitly, the proposal would almost certainly reduce federal Medicaid spending.
Specifically, the budget requires the House Energy and Commerce Committee, which has jurisdiction over Medicaid, to cut $880 billion in spending over the next 10 years.
However, cuts could skyrocket to trillions of dollars, according to Mollie Gurian, vice president of policy and government affairs at LeadingAge.
“According to this resolution, [Congress could aim to] save more, so it could get up to trillions of dollars very easily, depending on what cuts they decide to go for,” she told Home Health Care News. “The $880 billion floor in the Energy and Commerce Committee is the number we’ve been looking to, in terms of the most directly correlated with Medicaid. Energy and Commerce could cut from other parts of their jurisdiction, but they could not reach that $880 billion number without cutting Medicaid.”
A menu of cuts, changes
There are a variety of options that have been circulated around what Medicaid cuts could look like, according to Damon Terzaghi, senior director of Medicaid and home community based services at the Alliance.
“Whether they actually get enacted or not is still up in the air,” he told HHCN. “We like to refer to them more as a menu, as opposed to an actual list of things that are going to be included, and there’s a variety of potential impacts to home care based upon which items from that menu ultimately are enacted.”
Indeed, efforts to control costs could lead to policy changes that health care industry leaders have been widely advocating.
For instance, Terzaghi pointed to the potential repeal of the Biden era regulations on nursing home staffing as something that likely wouldn’t impact home care negatively. He noted that it may even have slightly positive effects, such as reducing competition for the workforce.
The repeal of the Medicaid Access Rule — which featured the controversial 80-20 provision — could also be a positive for home-based care providers. However, Terzaghi acknowledged that there are upsides to the rule.
Still, Medicaid cuts would lead to some negative impacts on home-based care.
“We know from experience in certain states that work requirements, though they’re not intended to target individuals with disabilities and older adults, do create some administrative challenges that can reduce enrollment and place some pressure on client case loads,” Terzaghi said.
Ultimately, if states are receiving less funds from the federal government it could lead to fewer waiver services enabling at-home care, increase the waiting lists for those programs, or result in cuts to rates that would harm providers’ ability to deliver services.
“All of those would mean less access to care for home based care beneficiaries,” Gurian said.
For context, there have been about 700,000 people on waiting lists for home- and community-based services in most years since 2016, and total enrollment in waiting lists increased by 2.6% between 2023 and 2024.
Broadly, some experts have been critical of the cuts, pointing out that the $880 billion on table goes past the stated goal of eliminating fraud and abuse. Gurian, mostly, agrees with the pushback.
“You can’t get to $880 billion just by cutting fraud,” she said. “Medicaid is actually a pretty efficient system. There is some fraud, and that could be dealt with, but it’s not $880 billion worth. Some of the proposals on the table are fundamentally restructuring the way that the federal government finances Medicaid, such as implementing a per capita cap system.”
Another example of what Gurian called the fundamental restructuring of financing is the move to change the Federal Medical Assistance percentage (FMAP).
“This is the way [the] federal government matches state monies, so lowering that percentage for different populations, there are a couple of different ways that they’re thinking about that,” she said. “Once again, that’s like a fundamental restructuring of the federal contribution to the Medicaid program. It’s not dealing with fraud, waste and abuse.”
Next steps
The budget process involves several moving pieces, and another major element – the Senate budget resolution – does not include the same major spending reductions called for in the House resolution. And as the House continues its budget-related work, Speaker of the House Mike Johnson has pledged that caps on federal funding and changes to state matching formulas are off the table.
“The Alliance is reassured by affirmations that the congressional majority will not pursue some of the most drastic proposals previously discussed as options for reducing federal expenditures,” the organization stated in its comment released Wednesday.
As the reconciliation process proceeds, The Alliance and LeadingAge are telling their members to stay vocal.
“We’re telling our members that it’s really important for them to raise their voices and talk to their members of Congress about the importance of Medicaid in their community, the importance of Medicaid for those that they serve and how it affects their own budgets if funding is cut,” Gurian said. “I don’t know that we have any members that would say the Medicaid rates they get now are fully sufficient.”
And the Alliance is pushing for the expansion of programs that meet the goal of reducing spending, such as Money Follows the Person. By supporting the transition of older adults from institutional to community-based care, that program decreased spending related to that group by 20% in the program’s first year and 27% in the program’s second year, the Alliance pointed out in its comment.
Furthermore, the Alliance is advocating for caution regarding any changes that would affect Medicaid, stating:
“Medicaid is a complex program and changes to one part of the statute may have unanticipated negative outcomes on other aspects of services, financing, or reimbursements. We encourage Congress to be extremely careful to avoid making changes that could lead to unintended outcomes.”
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