How Medicaid Block Grants Could Impact People with Intellectual/Developmental Disabilities and their Families

The new Administration has called for drastic cuts to Medicaid, through Medicaid block grants, that would fundamentally compromise the program—making it less reliable for the people who depend on it and shifting costs to states and even to consumers.

Medicaid covers six million New Yorkers.  For many of the 130,000 New Yorkers with intellectual and developmental disabilities (I/DD) known to OPWDD, Medicaid is a life line.  Medicaid funds over 90% of services for people with I/DD, who typically require more complex and costly services than Medicaid recipients without disabilities, and they typically need such services throughout their lifetimes.

A Medicaid block grant would be a fixed amount of money from the federal government to the states to spend on health care for people who are poor, elderly, or have disabilities.

The most critical Medicaid services for people with I/DD are:

  • Acute care – including hospital care, physician services, behavioral health, dental, laboratory, and x-ray services.  These acute care services are mandatory which means they must be provided to everyone who is eligible.
  • Long term services and supports – including help getting dressed, taking medication, preparing meals, managing money, getting in and out of bed.       These are optional services: the states choose whether to cover them.
  • HCBS Waiver Services — including residences, day programs, community habilitation, self-direction options, recreation, and respite. These, too, are optional.

Medicaid is a shared program between states and the federal government and each state pays for part of it.  The federal share of Medicaid for New York is 50% of costs generally, and a slightly higher share for specific services.

Based on previous federal block grants and the statements that key Administration officials have made about their plans, we can expect that a Medicaid block grant would:

  • Cap the amount the federal government spends on Medicaid
  • NOT increase this amount to keep up with health care inflation
  • Radically cut the federal share of Medicaid

Block grants could force bad choices and cause substantial conflict as groups with diverse needs compete for scarce dollars.  While there is no certain way to know what New York State will do, here are some of the possible scenarios:

  • Cut benefits, eliminate entire categories of services, or limit the number of people who could get such services as Home and Community Based Waiver Services, personal care, prescription drugs, or rehabilitative services.
We urge Congress to fiercely oppose Medicaid block grants. And in the event such grants are enacted, we urge New York’s legislators to fight to preserve critical services for people with I/DD.
  • Move people into institutions or other large congregate care settings when it is cheaper to do so.
  • Reduce the number of people served by making it more difficult to meet financial or other eligibility criteria.
  • Increase the cost burden on the individuals or family members.
  • Slash the amounts Medicaid pays to doctors and other providers.

Services to people with disabilities would likely be reduced by New York State if Medicaid is turned into a block grant because people with disabilities and the elderly account for most of the Medicaid spending.  While children and adults make up about 75 percent of Medicaid enrollees, they account for less than a third of the spending.  In contrast, the elderly and individuals with disabilities make up about 25 percent of enrollees but about 66 percent of spending. The elderly and people with disabilities use health care services more often, use more health services, and are more likely to use long-term services and supports. We are very concerned that states may slash the supports that help people with I/DD live safe, independent, productive lives.

In fact, block grants aren’t actually effective because they don’t control the cost of health care, which continues to rise as people get older and use more health care services, and as the general cost of all health care increases.  Although block grants shift more of the cost to the states and likely the individuals, costs may actually rise significantly because people who lose their health care or can’t afford it will stop seeing their doctors or taking their medication.  When that happens, existing health conditions worsen, leading to more doctor or hospital visits and more costs down the road, as the individual faces more illness and hardship. Moreover, this reduces the amount of money left for other populations, such as people with I/DD.

If home and community based services are reduced, it will likely lead to greater levels of costly and unnecessary institutionalization or homelessness.  If people are not provided needed services they may not be able to work, learn, or function in the community. This creates lost productivity from the individual and family members if they are called upon to provide care when there are no other options.

We must make clear to our members of Congress that block granting Medicaid is not the answer to our nation’s deficit, especially at a time when large-scale transformation efforts are in place to enhance the value of services provided under Medicaid.  We must tell our Congress members what exactly is at stake, The health and well-being of people with I/DD will be at risk if it becomes more difficult or costly to access needed services.

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