President Proposes Major Changes to Medicare and Medicaid

Written By: Attorney Jeffrey A. Marshall

  Recently, President Bush has recommended dramatic revisions to the operation and philosophy of the Medicare and Medicaid programs.  

Medicare:

The President's proposed plan for Medicare will require participants to give up their traditional Medicare coverage in exchange for private managed insurance administered by insurance companies that will include prescription drug coverage.  Drugs are the fastest-growing component of health care costs and are a main concern for many elderly and disabled people. 

Medicare recipients currently pay for most prescription drugs themselves, and the costs can be significant, so prescription coverage would be a real enticement for people to drop their traditional Medicare.  But many of the details of the President's plan are unclear, and the proposal has met with a lukewarm response from Congress. Key Legislators, including House Republicans, have advised the White House that any plan must include prescription drug coverage for all Medicare beneficiaries, whether or not they remain in the traditional fee-for-service program.

  Medicaid:

The proposed changes in Medicaid would alter the fundamental nature of the program.  If enacted, they would signal the end of Medicaid as we know it, particularly for those elderly who require long term nursing facility care. 

Under current law, there are certain categories of individuals that states must cover under Medicaid.  These individuals are commonly referred to as "categorically needy."  This categorical class of Medicaid beneficiaries includes seniors whose assets and income are low enough that they qualify for SSI. 

For other categories of individuals, states have the option to provide coverage or not.  If it decides to provide such optional coverage, a state will receive federal matching funds, but must follow federal regulations in providing that coverage.  If a state wants to deviate from the federal standards, it has to seek a waiver from the federal government. 

About ½ of elderly recipients of Medicaid receive their coverage through an optional "spend down" program where beneficiaries qualify by incurring high medical or long term care expenses.  This is referred to as "medically needy" eligibility.  Medically needy coverage is particularly important for nursing home residents because they have high medical expenses. 

The Bush Administration proposal would maintain the mandatory state coverage of the categorically needy.   But, it would take the federal government out of the business of regulating what states do in regard to the medically needy and other optional categories.  The federal government would merely provide each state with a block grant of funds, and the state would then decide how to spend those funds.  As described by Tommy G. Thompson, the secretary of health and human services, the states would have "carte blanche" to alter Medicaid coverage for these recipients. 

The result is that states, struggling with fiscal woes, would have vast new power to reduce or eliminate benefits for millions of low-income people, including many elderly.  The federal rules and protections would be gone.  States would no longer need to seek waivers for these optional groups.  They could do whatever they wanted with all but the categorically needy class of Medicaid recipients. 

The Administration's Medicaid proposal requires Congressional approval.  This may be difficult to get.  A similar "block grant" approach was approved by Congress in the mid-1990s, but was vetoed by President Clinton who said it would make "devastating cuts" and hurt millions of poor people. This time, the proposal comes from the President - so it may have a better chance of becoming law. 

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Medicaid Misconception #4.

The Quality of Care I Receive Will Decline if I go on Medicaid

  Here is the next instalment in our discussion of some of the most prevalent misconceptions about Medicaid and the rules for payment of nursing home costs.

Misconception # 4

 The quality of care I receive will decline if I go on Medicaid

The Truth:   Federal law requires that nursing homes treat all residents identically, regardless of the source of payment for the resident's care.  A resident who is receiving Medicaid benefits should receive the same treatment, the same respect, and the same level of care received by a resident who is paying privately.  

In practice, the quality of care generally does not vary upon the source of payment.  In most nursing homes, the nursing and aide staffs have no idea whether a resident is receiving Medicaid or is paying privately.  Most nursing home residents (over 2/3rds) are on Medicaid, anyway.   No matter what the source of payment, federal and state regulations require that "[e]ach resident must receive and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial well-being. . . ."

Other examples of Medicaid Misconceptions are posted on the Marshall, Parker & Associates' website at www.paelderlaw.com .

In future editions of the Elder Care Law Alert, we will discuss

additional Medicaid misconceptions.

Stay Tuned!

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  "Understanding the Rules: Medicaid  Payment for Long Term Care"

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Marshall, Parker & Associates'

 

-Saturday, February 22^nd, 10 AM, The Radisson, Williamsport

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-Wednesday, March 19^th, 6:30 PM , The Patriot Inn, Bloomsburg

-Thursday, March 20^th, 6:30 PM , The Radisson, Scranton

-Saturday, March 22^nd, 10 AM, Evangelical Hospital, Lewisburg

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-Wednesday, March 26^th at 6:30 PM , The Radisson, Williamsport

Reservations are suggested, but not required.  SIGN UP ONLINE or call 1-800-401-4552 for more information or to reserve your spot for one of these seminars!

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*Attorneys Marshall and Parker are certified as Elder Law Attorneys by the National Elder Law Foundation under authorization from the Pennsylvania Supreme Court.