Cuts to Medicaid Benefits May Harm Millions of Older Adults

Takeaways

• Medicaid, a vital program providing health care for low-income individuals, is facing potential funding cuts that could significantly affect older adults and people with disabilities.

• Proposed reductions in Medicaid funding may lead to states cutting benefits, restricting eligibility, and reducing health care provider payments, impacting access to care, particularly in rural areas.

• Medicaid plays a crucial role in supporting Medicare recipients by covering co-pays, deductibles, and long-term care. Cuts to Medicaid would also negatively impact Medicare.

Since Medicaid was established nearly 60 years ago, it has become a popular nationwide program. Medicaid provides health insurance for both adults and children with limited income and resources.

Millions of Americans rely on Medicaid for a wide range of services and products, including hospital stays, doctor visits, and long-term care services, which are often essential for seniors facing chronic health conditions or disabilities. Notably, Medicaid covers services that Medicare does not, such as long-term nursing home care and personal care services, filling critical gaps for older Americans.

Threats to Medicaid

Recent proposals from the Trump administration and Republican members of Congress aim to implement substantial cuts to Medicaid funding. These proposed reductions have raised concerns about their potential effects on older adults who rely on Medicaid for essential services. For instance, Michigan health care officials have warned that such cuts could jeopardize coverage for 2.6 million residents, including nearly a million children, and strain local hospitals and clinics.

Congress may have to find ways to reduce government spending to accommodate the tax cuts the Trump administration wants. Since Medicaid accounts for a significant expenditure, about $880 billion in 2023, it is likely on the chopping block.

A recent House of Representatives’ resolution is calling for at least $880 billion in cuts to Medicaid over the next 10 years. The Senate’s version of the resolution is calling for at least $1 billion in cuts to Medicaid. With such a large discrepancy in figures, it remains unclear how much will be cut. What is certain is that the effects would be felt nationwide.

How Funding Cuts Would Harm Older Adults

If the federal government cuts Medicaid funding, the states will bear more of the costs of care for those who cannot afford it. This will force the states to fill the funding gaps by reducing benefits, restricting eligibility, or both. In short, it may be impossible to cut hundreds of billions of dollars without having an impact on people’s health care.

States facing budget shortfalls may be forced to cut optional benefits or eligibility categories such as:

• Home- and community-based services (HCBS)
• Dental, vision, and hearing benefits
• Spend down or share of cost eligibility, which is an option that allows individuals with income or assets exceeding traditional Medicaid limits to qualify for benefits by spending down their excess income on medical expenses so they can qualify for Medicaid

States may also have to cut enrollment for mandatory populations, such as seniors and disabled persons, by doing away with eligibility expansions for Medicare Savings Programs. Medicaid funding cuts would also reduce health care provider payment rates, worsening the direct-care workforce shortage.

Cuts to Medicaid would most acutely affect older adults and people with disabilities. Reduced funding or an end to funding could easily lead to hospital and medical clinic closures, mostly in rural areas.

Cuts to Medicaid Are Cuts to Medicare

Medicaid cuts could have serious consequences for millions of people on Medicare, particularly low-income seniors and people with disabilities who rely on both programs for health care. One in five people who rely on Medicare also have Medicaid. Thirty percent of Medicaid spending supports people with Medicare, and 60 percent of Medicaid spending on long-term care supports Medicare recipients.

Medicaid makes Medicare affordable by covering co-pays and deductibles, enabling 8 million people to afford to visit a doctor. Additionally, Medicaid puts $185 back into the pockets of 10 million Medicare enrollees every month. Medicaid strengthens Medicare for everyone by improving health outcomes and by helping people age in place.

What You Can Do

Concerned citizens can contribute to efforts aimed at preserving Medicaid funding and ensuring that older adults and individuals with disabilities will continue to receive the care they need. To oppose the proposed Medicaid cuts, the different actions you can take include:

• Contacting Legislators. Reach out to your congressional representatives to express opposition to Medicaid funding reductions. Personal stories about how Medicaid has benefited you or your loved ones can be particularly effective.
• Engaging in Advocacy. Participate in advocacy group efforts focused on protecting Medicaid. Organizations such as the Medicare Rights Center, Justice in Aging, and Caring Across Generations provide resources and action alerts to help individuals get involved.
• Staying Informed. Keep abreast of legislative developments related to Medicaid. Understanding the specifics of proposed changes enables more effective advocacy and informed discussions with lawmakers.

You can also contact an experienced elder law attorney near you if you have questions about your specific situation and to plan for long-term care.

For additional reading about Medicaid, Medicare, and long-term care, check out the following articles:

• Receiving an Inheritance? Beware of Medicaid Income Limits
• Spending Down Assets to Qualify for Medicaid
• Who Is Eligible for Both Medicare and Medicaid?
• Know Your Options Before Signing Up for Medicare
• What You Should Know About Long-Term Care