Washington, DC – The American Health Care Association / National Center for Assisted Living (AHCA/NCAL) today announced support for the Economic Recovery in Health Care Act, S. 2819, which was introduced by U.S. Senators Jay Rockefeller (D-WV), Olympia Snowe (R-ME), and Edward Kennedy (D-MA), and which would preserve access to Medicaid-financed long term care and services for seniors and persons with disabilities during the ongoing economic downturn.
“During the 2003 economic downturn, vulnerable citizens’ access to key Medicaid-financed health coverage threatened to become a major problem—and Congress passed legislation to ease the loss of critical funds. Today, we applaud Senators Rockefeller, Snowe, and Kennedy for introducing the Economic Recovery in Health Care Act, which seeks to preempt what will most likely again be a major problem for our nation’s seniors and persons with disabilities,” remarked AHCA/NCAL President and CEO Bruce Yarwood. “Medicaid is consistently one of the first programs targeted for cuts at the onset of state budget shortfalls, and Congress should move swiftly to support this initiative before there are problems – not after they become evident.”
Yarwood noted that the Kaiser Commission on Medicaid and the Uninsured reported that the loss of revenue between fiscal years 2002 and 2005 led all 50 states to reduce Medicaid provider payment rates and implement prescription drug cost controls; 38 states to reduce Medicaid eligibility; and 34 states to reduce benefits. According to the National Governors Association (NGA), the recent economic downturn has left 18 states with budget shortfalls totaling $14 billion in 2008 while 21 states project shortfalls totaling more than $32 billion in 2009. If the current downturn follows the path of most recessions, the NGA expects that 35 and 40 states will face severe budget shortfalls in 2009.
The AHCA/NCAL President and CEO said, “The Economic Recovery in Health Care Act provides the timely, targeted, and temporary federal response necessary under the circumstances our nation now faces.”
First, the bill responds to Bush Administration-proposed changes to several Medicaid regulations, which, if allowed to move forward unchecked, would further aggravate the impact of the economic downturn on states and working families. The Congressional Budget Office (CBO) estimates that these regulations would reduce Federal Medicaid matching payments by approximately $18 billion over 5 years and $42 billion over 10 years; yet, a recent U.S. House of Representatives’ Committee on Oversight & Government Reform report offers documented proof that the cost shift to states could be far greater.
The first major component of the bill also would extend the yearlong moratoria to include the Centers for Medicare & Medicaid Services (CMS) August 17th directive regarding the Children’s Health Insurance Program (CHIP), and the Departmental Appeals Board (DAB) rule. Yarwood noted that AHCA submitted comments on the DAB rule expressing concern with several of its key aspects, and “AHCA is very pleased this has been added to the Senate package.”
The second major component of the Rockefeller-Snowe-Kennedy legislation would provide targeted state fiscal relief of approximately $12 billion, equally divided between an increase in Federal Medicaid matching payments and targeted grants to states. AHCA/NCAL believes that the three-year decline in the number of assisted living residents who rely on Medicaid reported by a Department of Health & Human Services’ Assistant Secretary for Planning and Evaluation report serves as warning sign that the safety net for our low income elderly is in trouble. The AHCA/NCAL President concluded that, “Further constraining states’ ability to fund Medicaid is the last thing that disabled citizens and vulnerable seniors need given today’s uncertain economy.”
The American Health Care Association and National Center for Assisted Living (NCAL) represent nearly 11,000 non-profit and proprietary facilities dedicated to continuous improvement in the delivery of professional and compassionate care provided daily by millions of caring employees to 1.5 million of our nation's frail, elderly and disabled citizens who live in nursing facilities, assisted living residences, subacute centers and homes for persons with mental retardation and developmental disabilities. For more information, please visit www.ahca.org or www.ncal.org.