Decreasing Medicaid eligibility: reducing or shifting costs?

North Carolina House and Senate Republicans are grinding toward a resolution of their differences in how to proceed with Medicaid reform. The latest from the Senate sounds mostly similar to their past offer (reduce Medicaid eligibility for some aged, blind and disabled beneficiairies, and move to bid out the full Medicaid program to private insurance companies, but allowing provider networks to bid). Hereis is a brief review until today of the many twists and turns since complete Republican control of state government commenced in January 2013.

I will get to the ins and the outs of the emerging plan when it emerges some more, and we hear from the House.

A quick point on the continued insistence of Senate Republicans to reduce eligibility for some aged, blind and disabled recipients–Rose Hoban quotes Senator Harry Brown (R-Jacksonville) in a committee meeting yesterday as follows:

“That is a major concession for us. We think that you eventually have to address eligibility requirements in Medicaid if you want to control costs,” Brown told the committee.


The aged, blind and disabled beneficiaries who seem likely to lose eligibility (~5,000 but i’ve seen other figures) are typically receiving a great deal of Long Term Care services becaus they are living in assisted living facilities and qualify for other benefits based on their disability. What will be lost by them under the Senate proposal includes payments paid to the institutions where they now live. I don’t believe that Senate Republicans have invoked again the false claim that anyone who loses Medicaid could simply get their care needs met by signing up for an Obamacare plan (so that is progress!), but Senator Brown’s comments confuse cost savings with cost reduction.

An example with many inter-woven parts. My mother in law (who has dementia) lived with my family for a little less than a year, when her ability to live alone (she is a widow) was in question. When her care needs became too great for her to live with us she moved to an assisted living facility (she had three hospitalizations the last 40 days or so she lived with us, due to falls when she wandered from our home during the night; this showed she needed more care; BTW, all 3 hospitalizations were paid for by Medicare).

My mother in law’s stay in assisted living is not covered by Medicaid, but by private long term care insuarnce. She is very fortunate, as are we that she has this. However, she could be covered by Medicaid if she had low income and assets.

My point. Imagine if her LTC insurance company decided not to pay for her care, for example, if they said her contract was invalid. Taking the companies bottom line perspective, you could say this is a reduction in cost, or at least the liabilities for which they are responsible. However, her needs wouldn’t go away, and she would either have to move back in with us, my wife’s brother, or we would have to pay the cost of assisted living out of pocket (~$6,500/month where she lives now). So, the cost of her care would simply be shifted. It doesn’t go away.

In the same way, reducing eligility for some in Medicaid would reduce the program outlays, but will simply shift the costs to families in our State, or perhaps will result in vulnerable persons living in dangerous situations (remember, my mother in law was hospitalized 3 times in close order when she lived with us; this was the trigger that the situation was no longer safe). To make things even more complex, her 3 hospitalizations were paid for by Medicare which points out that the two programs are inextricably linked in the care of the most vulnerable groups (this blog tag has much about duals & reform ideas; it is true that the duals are the most expensive persons in the system).

Reducing eligibility for some aged, bling and disabled Medicaid beneficiaires is at best, short sighted; at worse it is a callous turning away from some of the ‘least of these’  and is in my view, a particularly bad idea.

About Don Taylor
Professor of Public Policy (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute), and Chair of the Academic Council at Duke University . I am one of the founding faculty of the Margolis Center for Health Policy. My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

2 Responses to Decreasing Medicaid eligibility: reducing or shifting costs?

  1. Bob Hertz says:

    Wow. In most states, the drive to cut Medicaid costs starts with young persons of low income.
    Of course in many parts of the South, the income limits on Medicaid are already very low.
    So this avenue of cutting costs has a limited affect.

    This is the first I have heard about cutting old people off Medicaid. Some of these people are even white. Most states do not go this far.

    Nor would Paul Ryan even come close to this. Thanks for the heads up.

  2. Pingback: Harry and the hypocrites | PoliticsNC

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