Aging in America News

Maggie Clark

Medicaid is again in the crosshairs as the Republican-led Congress searches for ways to fund President Donald Trump’s policy agenda, including massive tax cuts and increased border patrol. A formal plan will likely come from the Senate before its next recess begins on April 11, and an earlier House budget resolution showed lawmakers looking to cut $880 billion in spending over the next 10 years, with a significant portion coming from Medicaid.

A Medicaid cut this deep will have immediate, painful consequences throughout the country, especially for seniors. Even though senior care is primarily associated with Medicare, the primary insurer for people age 65 and over does not cover long-term care, either in institutional nursing homes or at home. Medicaid does.

For seniors receiving in-home care and services that assist with daily living, such as cooking, medication management and personal care, cuts to Medicaid are especially troubling. Here’s some background to help explain why.

To find billions in Medicaid cuts, lawmakers have indicated that they will try to shrink the amount of federal money that flows to states for Medicaid-related expenses. As background, Medicaid operates as a federal- and state-funded program where states pay a portion and the federal government pays a portion of every dollar spent. In exchange for federal funding, states must cover a minimum of required benefits, and many states have elected optional benefits to offer more services and still receive federal matching funds.

However, if the federal government ratchets down its cost-sharing, states will have to increase their share of the spending just to maintain the minimum standards. States will then be forced to consider cutting back on optional Medicaid benefits that are very important, but not required by federal law.

Enter home-based care for seniors—an optional Medicaid benefit. For largely historical reasons, state Medicaid programs must cover long-term services and support services delivered in institutions and nursing homes. But, if those same services are delivered in someone’s home or in a community-based center, Medicaid coverage for those services is optional, based on the state’s preference.

Advocates fear that if states start cutting optional Medicaid benefits, in-home care will be on the chopping block. 

“When states have budget shortfalls, they start to tighten eligibility for the home-based programs,” said Natalie Kean, director for federal health advocacy with Justice in Aging, in an interview with Stateline News. “We’re certain those would be the first to go if federal funding is cut for Medicaid.”

She continues:

“There’s already a direct-care workforce crisis. Even if eligibility isn’t directly cut or programs aren’t cut, there wouldn’t be enough workers to provide that care. At home and in nursing facilities, the quality of care will go down.”

Cutting home-based care is counterproductive if the goal is to save money. Home and community-based care costs less than institutional nursing home care—about $38,000 vs. nearly $54,000 per year in 2021, according to a KFF analysis. People also tend to prefer in-home care over nursing homes: a recent survey found that 70 percent of seniors would prefer to age at home with support rather than move to a nursing home.

In the coming days, we’ll know the details of the ways Medicaid could be restructured. Expect to see more discussion of in-home and community-based care and the ripple effects that potential Medicaid cuts will have throughout the country.  It may fall to states, counties, cities and families to pick up more of the cost of in-home care.

Maggie Clark is an award-winning journalist and social policy expert. She has reported on health care for the Sarasota Herald-Tribune and previously covered criminal justice for Stateline News. Her work has appeared in local and national news outlets, including USA Today, The Los Angeles Times, The Washington Post and NPR News. She lives in Washington, D.C.