All Roads in Congress May Lead to Block Granting Medicaid
Congress is considering a number of different mechanisms that may result in cuts so large that the only option would be to block grant Medicaid. Under a block grant, Congress would give states a reduced, fixed amount of money and eliminate many of the requirements (such as who to cover and what services to provide). Block granting is the worst option for people with intellectual and developmental disabilities (I/DD) as it would fundamentally change the structure of the program, not just cut funding for it. The individual entitlement to health care and long term services and supports would be lost and the states’ entitlement to reimbursement for actual costs would be lost. This is why it is so important to hold Members of Congress accountable for their positions on each of the mechanisms described below.
What are Spending Caps?
One approach to deficit reduction that is being seriously considered is to impose spending caps or limits. These caps limit government spending, usually limiting it to a certain percentage of Gross Domestic Product (GDP). There is one proposal that would limit federal spending to 20.6% of GDP (spending is currently 24% of GDP). This figure is the average amount of federal spending compared to all goods and services produced by the country (or GDP) in the last 40 years (before spending on aging baby boomers, national security, and interest on the debt was significant). Congress is currently considering three types of caps:
- A global spending cap (for all federal spending);
- An entitlement spending cap (for Medicare, Medicaid, and Social Security spending); and
- A global health spending cap (for Medicaid, Medicare, and Affordable Care Act spending).
What happens if federal spending exceeds the spending caps?
There would be an enforcement mechanism of automatic, across‐the‐board spending cuts (called “sequestration”) if the spending limits or targets were expected to be missed. Low income programs, such as Medicaid and Social Security, would not be exempted. To bring federal spending back in line with the proposed spending caps or targets, Congress would be forced to make drastic cuts in entitlement programs. Those cuts would most likely have to include block grants for the Medicaid program.
What Legislation is Congress considering that might include spending caps?
There a currently two main efforts in Congress that are expected to involve spending caps. The first, a measure to increase the debt ceiling, is by far the most serious threat, as the U.S. is close to reaching a point of default on its financial obligations. The second, a balanced budget amendment, may or may not advance.
- Raising the Debt Ceiling. The U.S. debt reached the limit of $14.3 trillion allowed by law in mid‐May. However, the Treasury Secretary is able to manage accounts without defaulting until about August 2. If federal borrowing authority is not increased by August 2, the U.S. will begin defaulting on its debt, triggering a catastrophic global financial crisis. Some Members of Congress have stated that they will vote to raise the debt ceiling ONLY IF major cuts in federal spending are included. While no specific programs and amounts have yet been made public, Medicaid is widely expected to be a major target.
- Balanced Budget Amendment. Unlike the constitutions of most states, the U.S. Constitution does not actually require the Congress to pass a balanced budget. Some Members of Congress are looking to add a balanced budget amendment to ensure that the federal government does not spend more than it takes in, including no borrowing authority. If this were to happen, most federal spending would be radically reduced, including Medicaid.
Q. What is happening in Washington?
A. There are many proposals being discussed in Washington to balance the budget. What these proposals have in common is that Medicaid spending would be dramatically cut in a short period of time. These proposals are:
- Block Granting Medicaid, which would give states a fixed amount of money for health care and long term services and would likely remove requirements (such as eligibility and service minimums and quality measures) for how the states spend the money.
- Spending Caps, with automatic enforcement, would set a limit on federal spending that is well below current spending and would likely result in a Medicaid block grant. Automatic enforcement mechanisms mean that, if a spending target is not met, cuts are made automatically without the need for further Congressional action.
In addition, Vice President Biden is leading a small group of six Members of Congress who are trying to find a way to cut the deficit. This group is working behind the scenes, and very little information about their negotiations is being made public. They are expected to reach an agreement allowing Congress to raise the debt ceiling by August 2.
What we do know is that cuts to Medicaid are on the table in all of these proposals, and that harsh fact alone requires us to act! Time is short.
Q. What happens if any of these proposals become law?
A. The cuts under any of the proposals for spending caps and automatic enforcement would be so drastic that a block grant would be the result for the Medicaid program (even if Congress does not immediately consider a straightforward proposal to block grant the program itself).
Q. What is the problem with block granting Medicaid?
A. One major problem is that the costs do not go away, but would be shifted to already cash-strapped states. If states do not make up for the federal cuts (the federal government pays 50 percent or more of the costs of every state’s Medicaid program), the costs would shift again, to individuals and their families, to health care providers, to other federal programs or to local governments.
- There would be no more guarantees of health care services and waiting lists would grow even longer.
- The block grant would likely have few rules and states would be free to change eligibility, cut services, and manage their programs with very little federal oversight.
- We believe that block grants would force bad choices and cause real conflict as groups with diverse needs compete for scarce dollars.
Q. What “bad choices” might states make?
A. Since the services to people with disabilities and the elderly are significantly more costly than health care coverage for children, states could decide to serve fewer seniors and people with disabilities and focus scarce health care dollars on children. Here are some possible choices states might be forced to make:
- Loss of home and community-based services (HCBS) and supports. Nearly 600,000 people with intellectual and/or developmental disabilities (I/DD) receive long term services paid for by Medicaid, and most receive them at home. States could decide to stop providing these services or limit the number of people who could get them, increasing waiting lists.
- Move people back to institutions. With fewer requirements, people with I/DD may be forced back into institutions rather than community living. Under a block grant, rules for providing quality care could be more flexible and conditions in institutions could return to the way they were in the past.
- Tightening of eligibility for services. To be eligible for Medicaid, people have to fall under certain income levels. States could restrict health care services to only the very, very poor.
- More out of pocket costs for individuals and families. In order to get health care, people might have to pay more out of their own pockets. Since people using Medicaid have limited income resources to start with, requiring them to pay for their medical care or long term services and supports could be a significant barrier to care.
- Reduction or elimination of critical services. If funds become scarcer, states may decide to reduce or stop providing basic services, such as personal care, prescription drugs, rehabilitative services, or home and community based waiver programs.
- Less availability of doctors and providers for care. It is already very difficult for people using Medicaid to find doctors and other health care providers willing to accept the low payment rates, particularly specialists. If states cut the amount they pay doctors and other providers, those professionals may quit serving people under Medicaid, making access to care even more difficult to secure.
Late yesterday, the U.S. Senate voted down a federal spending plan that could have disastrous consequences for people with intellectual and developmental disabilities. The bill aims to make drastic cuts and changes to important programs liked Medicaid, Medicare, the new health care law, and a host of other programs that help people with I/DD achieve. Learn more about the bill.
Here at The Arc, we want to give a big thanks to the hundreds of members who acted on our call to contact their Senator and ask that they vote against this bill! You do make a difference!
For those of you want to get more involved, sign up to get our Action Alerts and become a member of The Arc!
You may have read our CEO Peter V. Berns’ reaction to President Obama’s speech on Wednesday about the budget battle being waged at the Federal level. You know that we at The Arc are unwavering in our conviction that we must preserve the social safety net for the most vulnerable Americans, including people with intellectual and developmental disabilities. We simply can’t balance the budget on the backs of individuals and families who need our support to meet the most basic needs of medical care, housing, employment and education opportunities, much less to meet their expectations that they be fully included and able to participate in their communities and in society. Now, you might want to read the full text of the President’s speech on the matter and judge for yourself where he falls on the subject. Tell us what you think. Is the President pursing the right path? Will he succeed against the opposition he faces in Congress?
Late last week, The Arc submitted a formal statement to the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) to be recorded as testimony in the record of the hearings held to draw attention to the critical issues of employment of people with intellectual and developmental disabilities (I/DD).
We took this opportunity to go on record with The Arc’s position that people with I/DD have a fundamental moral, civil and Constitutional right to be fully included and actively participate in all aspects of society, including having the opportunity to be competitively employed. We pointed out the dismal statistics concerning the state of employment of working age adults with I/DD and urged specific reform in several key areas of public policy. We highlighted the work The Arc is doing to identify and promote best practices in helping people with I/DD become successfully employed through programs such as School-to-Community Transition funded by a grant from the Walmart Foundation. And we advocated for forceful, coordinated efforts to build up opportunities for integrated community employment.
We were grateful for this opportunity to be heard by our Congressional leaders and we urge them to take our advice. But our voice becomes louder and stronger when joined by our supporters on the grassroots level, so we encourage you to read the full statement, find out more about the issues at hand and take every opportunity to let your elected officials and community leaders know you support full inclusion for people with I/DD, including but not limited to opportunities for competitive employment. Visit www.thearc.org for more information.
The health care reform law provides categories of care that must be provided for customers of the health-insurance exchanges that are launching in 2014. An article in today’s Wall Street Journal, “Defining Essential Care,” points out that “The next big issue for the federal health law as it moves toward implementation is how regulators will define so-called essential benefits—the basic medical services that health plans must cover under the law.” So the details are left up to regulators who are now starting to develop the rules on what is an “essential” health care service and what is not.
Habilitative services, used by such children with Autism and other developmental disabilities, have become a particularly contentious point in the debate. The Arc’s Marty Ford provides an example of the difference between rehabilitative and habilitative services. (Visit our website to read Marty’s prior testimony on the importance of defining habilitation as an essential service.)
In the current political climate, it’s easy to become frustrated and start thinking that your voice doesn’t count. But we’re here to tell you that when you advocate for people with intellectual and developmental disabilities, your voice is heard. It does count. And, we have proof.
Every year hundreds of advocates like you come together on Capitol Hill for the annual Disability Policy Seminar for three days. For the first two days of the seminar, you hear from disability policy experts and other advocates about the most pressing issues facing the I/DD community this year. Then, on the third day, you take the Hill by storm with your fellow advocates and personally meet with your Senators and Representatives, including members of key committees that control the legislation you want to see passed or defeated. We have done some research and discovered that at least for the past few years, Congressional sponsorship of crucial bills important to the I/DD community increased in the months immediately following the annual seminar.
So, what issues were discussed during those meetings? What bills were pushed? That was up to you. All we know is, after your visits, many of those Senators and Representatives seemed to suddenly decide to co-sponsor bills to positively impact the lives of people with I/DD. And, many of those bills were subsequently passed into law. Maybe it was coincidence. We think it was because of you.
The 2011 Disability Policy Seminar is February 14-16 and early registration ends January 11. Are you registered yet?
Vigorous advocacy by The Arc and a coalition of disability rights and other champions was crucial to the enactment of the historic health care reform legislation nine months ago. The Patient Protection and Affordable Health Care Act and the Health Care and Education Reconciliation Act of 2010 (together known as the Affordable Care Act) contain numerous provisions of importance to people with intellectual and developmental disabilities (I/DD).
Now, the constitutionality of the Affordable Care Act is being tested. A narrow ruling yesterday in Virginia on the constitutionality of a provision of the Affordable Care Act is one of many recent rulings on similar cases in the past few months.
Opponents of reform have filed more than 20 different legal challenges since the law passed. The Administration’s motion to dismiss 12 of these cases has already been granted by judges. Moreover, in two cases, federal judges looked at the merits of the opponents’ arguments and determined that the Affordable Care Act is constitutional and upheld the law.
Since the health reform law was passed there’s been tremendous progress to strengthen the nation’s health care system. A new patient’s bill of rights has been implemented to end some of the worst insurance company abuses and we are on a path to eliminate discrimination against people with disabilities in health insurance.
It’s vital to our constituency that the courts find the Affordable Care Act constitutional, so that people with I/DD can have access to the following provisions and more:
- Prohibiting private health insurance exclusions for pre-existing conditions.
- Expanding Medicaid to cover individuals with incomes up to 133 percent of the federal poverty line (approximately $29,000 per year for a family of four).
- Ensuring that minimum covered benefits include products and services that enable people with disabilities to maintain and improve function, such as rehabilitation and habilitation services and devices.
- Improving training of physicians, dentists and allied health professionals on how to treat persons with disabilities.
- Medicaid Community First Choice Option long term services and supportswith a 6 percent increase in the Federal Medical Assistance Percentage (or FMAP).
A member of The Arc who is a parent and a sibling in Minnesota said, “People with disabilities — especially young people — can look to a future free from the discrimination of being denied coverage due to preexisting conditions. This legislation is a relief for families and represents the hope we have that our needs will be met.”
Read more on Health Care Court Ruling on The White House Blog.
The Arc and United Cerebral Palsy (UCP) are happy to announce that Marty Ford is now Acting Staff Director of the Disability Policy Collaboration (DPC). She’ll ensure a seamless transition of leadership in the organizations’ shared public policy office as Paul Marchand prepares to retire in January. During the two-month transition, Paul will retain his public policy portfolio.
“We are very pleased that Marty will assume this critical post. She is one of the nation’s leading advocates on issues that impact our constituency and has ensured that our voices are heard,” said Peter V. Berns, CEO of The Arc.
Marty has an extensive history in federal public policy issues affecting people with disabilities. She began her career in 1979 working for The Arc of DC joining the national office in 1984. Since 2003, she has represented both The Arc and UCP on Capitol Hill and in the federal agencies on numerous issues, including long-term services and supports (including Medicaid), the Supplemental Security Income program, and Social Security disability issues.
Marty recently served for three years as Chairperson of the Consortium for Citizens with Disabilities (CCD), a coalition of more than 100 national disability organizations. She is currently the Vice-Chair of Advance CLASS, the newly created organization dedicated to the proper implementation of the private, employer-based Community Living Assistance Services and Supports (CLASS) insurance program created by the health care reform law. She is a member of the bars of the District of Columbia Court of Appeals and the U.S. Supreme Court.
Also, Marty was recently honored with the 2010 President’s Award at The Arc’s National Convention in Orlando, FL for the significant impact her work over the past year will have on the success of the intellectual and developmental disability movement and the mission of The Arc.
President Barack Obama speaks at the official ceremony of the signing of Rosa's Law Friday, October 8.
There has been some confusion among intellectual and developmental disability advocates over varied interpretations of the language in Rosa’s Law and how it will be implemented at local, state and federal levels. The Disability Policy Collaboration has offered some clarification on key points in the legislation to help chapters of The Arc respond to questions by their constituents.
Quick Facts about Rosa’s Law
- The term “mental retardation” will be replaced with the term “intellectual disability” in federal health, education and labor statutes. Rosa’s Law applies only to programs under the jurisdiction of the Health, Education, Labor and Pensions (HELP) Committee, such as IDEA, vocational rehabilitation, ADA, health care and a few others.
- The law does not require any terminology change in state law. However, since many of the affected federal laws relate to state programs, the states will likely begin using the new term for these programs. More importantly, when a program covered by Rosa’s Law such as IDEA is reauthorized, any rules to implement the changes will then use ID instead of mental retardation.
- While most states have changed some terminology voluntarily and by statute, the changes vary in scope. For example, the vast majority of states have changed the names of their respective state agencies, using the term “Developmental Disabilities” in the agency name. But many of the programs overseen by these agencies still use the term mentally retarded (for example: Intermediate Care Facilities for Persons with Mental Retardation (ICF/MR).
A goal of The Arc is to get a similar bill introduced in the 2011-2012 Congress that will apply to other programs that are just as important to people with intellectual and developmental disabilities, namely Medicaid.
You can also download (you must be logged into The Arc’s website) these quick facts as a PDF.