Medicaid is at risk of being dismantled in Washington, and people with intellectual and developmental disabilities (I/DD) in Iowa stand to lose access to services and supports that are vital to their lives in the community.
Medicaid is the nation’s primary health insurance program for people with disabilities and low-income populations. The program currently covers over 10 million non-elderly people with disabilities. Medicaid is a lifeline for people with significant disabilities who do not have access to employer-based or private coverage, have greater medical needs, and require assistance with activities of daily living throughout their lifetimes. For many people with I/DD, Medicaid is the only source of funds for them to live and work in the community with friends and families and avoid more costly and segregated nursing homes or institutions. Nationwide, state and federal Medicaid together provide over 75 percent of the funding for services for people with I/DD.
Medicaid is a jointly funded program with matching state and federal funds. The federal government pays for nearly 60 percent of the cost, though the match rate varies from state to state. Currently the federal government has a commitment to help states cover costs, and in turn states are required to provide benefits to individuals with disabilities.
The federal match varies by state and the rate is based in part on the poverty or economic status of the state’s population. The rate ranges from a federal match of 50 percent to a high of up to 74 percent. When a state spends funds on providing eligible beneficiaries with services, the state is guaranteed reimbursement from the federal Medicaid program at the state match rate. If a state increases its Medicaid spending, the Federal funding also will increase. Within the basic requirements of the program, states have substantial flexibility to administer the program and to add services and additional beneficiary categories.
Congress is talking about two approaches that will change and cut Medicaid — a block grant to states or enacting per capita caps. With these proposals states will receive less federal support to administer Medicaid. States will likely have to consider reducing eligibility, limiting services and supports, and/or cutting reimbursement to providers to save money when the federal financial share is cut back.
Medicaid block grant is a funding structure that provides states with a set amount of federal money to fund its Medicaid program. A block grant would end the flexible state and federal partnership. States would be responsible for covering the costs beyond the federal allotment. Deep cuts in federal spending on Medicaid and block grants would be a cost shift to already cash strapped states. Many states have waiting lists for services, in some states numbering in the tens of thousands. These lists would grow, and those receiving supports would be at risk of a cut in benefits. Federal policy makers would need to make choices that will determine levels of federal financing as well as federal and state requirements around eligibility, benefits, state matching requirements, and beneficiary protections. A block grant would not adjust to increased coverage needs as the result of an aging population or during bad economic times and would not adjust to changes in health care, drug costs, or emergencies.
Under a Medicaid per capita cap, the federal government would set a limit on how much to reimburse states per enrollee. A per capita cap model would not account for changes in the costs per enrollee beyond the cost growth limit. To achieve federal savings, the per capita growth amounts would be set below the projected rates of growth.
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There’s a lot at stake for people with I/DD. States will receive less federal support to administer Medicaid if either of these approaches are enacted into law. While there is no way to be certain about what states would do if faced with reduced federal funds, we know there will be real life consequences for people with I/DD.
• David Thielen is the president and CEO of The Arc of East Central Iowa, a nonprofit agency located downtown Cedar Rapids. The Arc of East Central Iowa, a United Way agency established in 1953, serves over 800 individuals with intellectual and developmental disabilities in the immediate seven surrounding counties. The Arc’s mission is to empower individuals with disabilities to engage in lifelong opportunities to live, learn, work and play with dignity, freedom and full inclusion in their communities.