Protect Medicaid: Unconscionable Cuts Will Set Back the U.S. Economy–and Endanger Millions
PHI stands in strong opposition to the unconscionable cuts to Medicaid and other health programs proposed in the budget reconciliation bill under consideration this week by the House Committee on Energy and Commerce. A full Committee markup is scheduled for today, Tuesday, March 13th at 2 p.m. We call on all Congressional representatives to stop these cuts from moving forward. History—and voters in your districts—will remember the stand you took on this critical issue.
Through an initial analysis, the nonpartisan Congressional Budget Office (CBO) has determined that the budget reconciliation bill seeks to make $715 billion in cuts to healthcare investments, with Medicaid as the primary target. The CBO estimates that at least 13.7 million Americans will lose their health insurance coverage through this proposed legislation.
The bill, which Senator Josh Hawley (R-Missouri) referred to Monday as “morally wrong,” will impact access to care and health outcomes in a wide range of settings and endanger the lives and livelihoods of countless Americans. Notably, Medicaid is fundamental to the quality of long-term services and supports (LTSS), and to the quality of the jobs held by direct care workers. Drastic cuts will challenge care for millions of older adults and people with disabilities and worsen workforce recruitment and retention challenges in every state.
Numerous aspects of this bill are deeply concerning:
Access to Medicaid: Provisions of the bill will make it more difficult for individuals to apply for Medicaid, get covered, and stay covered through the program. Onerous and more frequent verification requirements for continued eligibility will pose significant administrative burdens on both states and on individuals.
Direct Care Workers’ Own Coverage: Low wages mean that nearly a third of direct care workers rely on Medicaid themselves, and 28 percent rely on food and nutrition benefits, including SNAP (the Supplemental Nutrition Assistance Program). New eligibility and verification requirements for Medicaid will threaten coverage for these workers, many of whom have obtained coverage through Medicaid expansion. In addition, concurrently proposed language in the House Agriculture Committee seeks to cut $290 million from SNAP by shifting costs to the states for the first time, a shift that will seriously undermine access to this essential benefit for direct care workers and families across the country.
Cost Sharing: For Medicaid beneficiaries living above 100 percent of the poverty line, the bill will require cost-sharing. While a significant percentage of workers live in poverty, those who live just above the poverty line will in turn be forced to pay more for Medicaid coverage. Such changes will further undermine the economic security of direct care workers, worsening recruitment and retention challenges, exacerbating the workforce shortage, and reducing the quality and continuity of care.
Community Engagement Requirements: The bill will require many Medicaid recipients to prove that they work, volunteer, or are enrolled in an educational program for at least 80 hours per month—which will push many currently eligible individuals out of coverage for administrative reasons, as evidenced by state-level examples, and disrupt vital caregiving connections between direct care workers, older adults, and people with disabilities.
Provider Tax: The bill will freeze existing provider taxes—state taxes on health care providers that help to support the state’s share of Medicaid—while also halting the establishment of new ones. Reductions to provider taxes will increase state taxes in general, reduce Medicaid eligibility, and reduce provider payment rates. Crucially, this can limit the availability of funding for workforce wages
Harsh Penalties for Supporting Immigrants: The bill penalizes states that provide health care coverage to undocumented immigrants by reducing their Federal Medical Assistance Percentage (FMAP)—the degree to which the federal government supports states’ Medicaid spending—by 10 percent. This will force some states into difficult financial tradeoffs and likely result in further reductions to Medicaid coverage and services.
Staffing Standards: The bill includes a moratorium on implementation of the Center for Medicare and Medicaid Services (CMS) Staffing Standards rule until January 1, 2035. Nursing home residents and direct care workers deserve adequate staffing, safe working conditions, and safe living conditions. Delay in addressing nursing home staffing issues will only worsen workforce recruitment challenges and limit the quality and continuity of care.
A Direct and Devastating Impact on Long-Term Care and the Direct Care Workforce
“The proposed budget reconciliation bill will have a devastating impact on long-term care and the direct care workforce,“ PHI’s President and CEO, Jodi M. Sturgeon said. “The cuts will put significant pressure on state budgets, leading to difficult tradeoffs, limiting innovation, and placing the burden on millions of American families.”
Historically, Medicaid policy shifts that increase state costs have resulted in reduced support for older adults and people with disabilities, with home and community-based services (HCBS) the hardest hit, since HCBS are optional for states to provide.
Medicaid cuts will bring cascading operating challenges to long-term care providers, among other health care operators. Some providers—particularly in rural areas—will likely close down altogether. Direct care workforce job quality will worsen—as investment in this workforce stalls, and individual workers lose hours and benefits—which will exacerbate the existing recruitment and retention crisis.
Facing a shortage of direct care workers, family members—disproportionately women—will be forced to cut their hours or leave their jobs entirely to care for loved ones. Individuals who might otherwise have received HCBS may be admitted to nursing homes, against their preference and at a higher public cost—and many more will go without care. As more Americans lose access to essential services and supports, the result will be higher costs for other health care service providers, including hospitals and emergency departments.
The bill under consideration will leave millions without long-term care, worsen direct care workforce recruiting challenges, and significantly damage the U.S. economy. PHI urges all members of Congress to vote against this damaging bill. Please share this post within your networks and contact your Congressional representatives to let them know where you stand.
