“Don’t touch my Medicare” has been a rallying cry in recent years, first as Congress considered health reform and now as it debates the fate of the Affordable Care Act (ACA). While the bill that would repeal and replace the ACA—the American Health Care Act (AHCA)—does not include explicit changes to Medicare, the legislation could have a profound impact on the 11 million Medicare beneficiaries who also rely on Medicaid for key components of their care. Here’s a look at how the ACHA’s major changes in federal funding for Medicaid would affect low-income older adults and the Medicare program.
One-Third of All Medicaid Spending Is for People Covered by Medicare
Low-income Medicare beneficiaries who also are enrolled in Medicaid—often referred to as “dual eligibles”—could be disproportionately affected by congressional efforts to cut and cap federal Medicaid financing. Not only do these older adults account for one-third of all Medicaid spending, much of the Medicaid spending for low-income Medicare beneficiaries is “optional” for states.1
The nearly three-quarters (72%) of dual eligibles who receive full Medicaid benefits are most at risk under the AHCA’s funding caps.2 They tend to be in poorer health than other Medicare (and Medicaid) beneficiaries, and rely on Medicaid for high-cost services.3 While Medicare covers physician, hospital, and most other acute care, Medicaid covers some of dual eligibles’ behavioral health services as well as most of their long-term services and supports, such as nursing home and home and community-based services. Under federal law, many of these services are optional. Similarly, many low-income Medicare beneficiaries who qualify for Medicaid are “optional” beneficiaries who qualify only when they incur health and long-term care costs that are well in excess of their incomes. States can drop optional services and optional enrollees even without any new federal flexibility.