Cuts to Medicaid could be devastating for a huge portion of low-income people over 65. This joint federal-state program is under a microscope as Congress debates the Fiscal Year 2025 budget and how to offset tax cuts. If the budget passes, it needs to be offset by $880 billion in cuts, making Medicaid a prime target.
Many of the proposed budget cuts could reduce or eliminate funding for services like home care, transportation to medical appointments, medication assistance and significantly impact the ability of many seniors to age at home. Journalists should follow this story closely so they can be prepared to cover the local and national impact of these cuts on specific beneficiaries, programs, and services
Here are some fast facts about Medicaid, specific to older adults, to help inform your reporting on this topic.
- Nearly 13 million people are eligible for Medicare and Medicaid (dual eligibles) including people under 65 who qualify based on adisability or medical condition. About 7 million dual eligibles are 65 or older; the remainder receive full or partial Medicare and Medicaid coverage due to disability and income levels.
- Medicaid is based on income and need. Programs and services vary by state but all must include certain mandatory benefits:
- Inpatient and outpatient hospital services.
- Physician services.
- X-rays and diagnostic tests.
- Home health care (skilled care).
- Nursing home care.
- Transportation to medical appointments.
What Medicaid covers
The program provides a range of other vital services for older people, including:
- Medicare premium assistance.
- Paying Medicare out-of-pocket costs and deductibles.
- Home and community-based care, including home care aides and personal care assistants.
- Optional benefits not covered by Medicare including:
- Dental, vision and hearing services.
- Prescription drugs.
- Physical, occupational and speech therapy.
- Podiatry services.
- Case management.
- Respiratory care services.
- Other diagnostic, screening, preventative and rehabilitative services.
- Mental health care.
Long-term services and supports
- Medicaid pays for more than five or eight older people in nursing homes.
- Medicaid funds programs and services to help older people age at home instead of in an institution. Medicare does not pay for long-term care, regardless of location.
- Medicaid paid for more than half of the $415 billion that the U.S. spent on long- term services and supports in 2022, a category that includes nursing home services and home and community-based services.
- Family caregivers often rely on Medicaid for their health coverage since many have had to give up jobs or cut back on hours to care for a loved one, and are ineligible for employer-sponsored health care.
- The share of total LTSS users receiving home and community-based services and the share of total Medicaid long-term services and supports spending devoted to HCBS reached all-time highs in 2021, as states continued to focus on serving more people in-home and community-based settings and reducing use of institutional services, according to the MAC Scorecard, a CMS dashboard that draws from over 30 datasets derived from state and federal reporting efforts.
“If states do not offset federal Medicaid cuts by picking up the new costs, they could reduce Medicaid spending by covering fewer people, offering fewer benefits, or paying providers less” a new KFF analysis found.
Options for enacting cuts to Medicaid include:
- Block grants or per capita caps — states would receive a fixed sum for Medicaid per enrollee, regardless of costs or inflation. States would have to pick up the difference, resulting in cuts to services and/or programs.
- Reducing the federal match (Federal Medical Assistance Percentage or FMAP). All states currently receive a minimum of 50% in federal matching funds. Many states receive 90% in FMAP under Medicaid expansion, allowing them to bring more programs and services to older adults and provide coverage for unpaid family caregivers. Lifting the minimum 50% cap shifts more costs to states, forcing an overall cut in Medicaid spending. Ending the enhanced 90% FMAP for Medicaid Expansion, would automatically end expansion in several states and force other states to scale back Medicaid programs and services that older adults rely on.
- Restricting allowable provider and insurer taxes, which every state uses to help fund all of their Medicaid programs, would reduce state budgets and force Medicaid cuts.
- Cutting provider payment rates would result in fewer providers accepting Medicaid, reducing access to care for seniors, worsening direct care workforce shortages and potentially resulting in some nursing home closures.
