Legislative Update: As More Seniors Fall Below Poverty Level, the Safety Net Is Shrinking

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Legislative Update: As More Seniors Fall Below Poverty Level, the Safety Net Is Shrinking

Benefit cuts may be in store for low-income seniors. The Bush Administration recently proposed giving states vast new power to reduce or eliminate benefits for persons receiving Medicaid — including seniors in nursing homes and some receiving Medicaid prescription drug benefits. Currently, Medicare pays for only 2% of all nursing home stays, and no outpatient drugs. State Medicaid programs cover most nursing home costs and many have prescription drug programs for lower-income seniors.

Medicaid is the joint federal and state health insurance program for persons with low incomes. In recent years Medicaid rolls have been rapidly rising at the same time as states have been facing huge budget deficits. Last year, Medicaid surpassed Medicare as the nation’s largest insurance program. Unlike the federal government, most state governments are required to have a balanced budget and have been forced to make cuts. State governors recently asked the federal government for help.

The Bush Administration proposed to reduce Medicaid costs by giving states vast new powers to decide who would receive benefits. Currently, federal funding is determined by how many people are in the program and how much their care costs. The Administration proposal coincides with a major effort to overhaul Medicaid in the House.

In recent years TSCL has been concerned that growing numbers of seniors who have few assets other than Social Security benefits, especially Notch Babies, may be pushed below the poverty level by low Cost-of-Living Adjustments and record-high health care cost increases. Qualifying for Medicaid is no picnic. Seniors must impoverish themselves by “spending down” to the income limits.

A proposed Medicaid change can only be judged by whether it would likely bring better health coverage to the poorest and most vulnerable in our nation. TSCL urges you to contact your Members of Congress and ask them to protect Medicaid from severe cuts and to ensure that the nation’s safety net remains in place.

Sources: “Medicaid Plan Gives More Say to States,” Amy Goldstein, "The Washington Post," February 1, 2003. “Medicaid Proposal Would Give States More Say on Costs,” Robert Pear, February 1, 2003.

For a related story, see “COLA Cuts Do Not Affect Seniors Equally” at http://www.tscl.org/NewContent/101412.asp.

May 2003