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Aging Services and Deficit Reduction: A Fair and Responsible Approach

by Published On: Nov 18, 2011Updated On: Nov 21, 2011

On behalf of LeadingAge’s 6,000 not-for-profit aging services providers, I urge the the Joint Select Committee on Deficit Reduction to consider the needs of frail and low-income elders as you work to develop a plan for reducing the federal budget deficit. 

LeadingAge members and affiliates touch the lives of millions of individuals, families, employees and volunteers every day. 

We focus on leadership development, applied research and promotion of effective services, including home health, hospice, community services, senior housing, assisted living, continuing care communities, nursing homes, and the application of technological solutions. 

Our members serve seniors, children, and others with special needs.

There is no question of the seriousness of the federal budget deficit. We fully understand the need for shared sacrifice among all Americans to ensure our economic security. 

Our concerns about deficit reduction on aging services

We are concerned, however, about the potential impact of budget cuts on physically and mentally frail seniors and those with limited resources to meet essential costs of living.

Two-thirds of spending under the Medicaid program goes to cover care for nursing home residents. These are people with very low incomes, who need substantial help with activities of daily living. 

Medicaid also covers care at home that can be a cost-effective alternative to nursing home admission. Elders whose care is covered by Medicaid have little alternative means to pay for the services they need. 

Most states already have made substantial cuts in their Medicaid programs; please do not recommend cuts to the program that would make the situation even worse.

The Medicare program developed precisely because private insurance was unavailable to and unaffordable for the majority of elders. The program has enhanced the health of people aged 65 and over and has contributed to increased longevity among our older population. 

Please do not support changes in Medicare that would require beneficiaries to pay more for less than adequate coverage.

Also, please consider that the Patient Protection and Affordable Care Act (ACA) already will reduce the growth of Medicare spending by $500 billion over the next decade. These savings are to be achieved partly through reductions in reimbursement to long-term services and supports providers, which already are going into effect. 

In fact, the Centers for Medicare and Medicaid Services (CMS) cut Medicare reimbursement to skilled nursing facilities by 11% for this fiscal year. Quality long-term services and supports providers will have difficulty absorbing any additional Medicare payment cuts.

In addition, the ACA contains reforms in Medicare and the health care system generally which will better integrate services, reduce unnecessary hospitalizations and eliminate the current system’s inefficiencies. 

These initiatives will simultaneously improve quality and reduce costs through proven care transitions, management and coordination programs. These reforms are positive steps to reduce the growth of Medicare and health care spending and they should be given a chance to develop.  

Section 202 housing

Many elders with limited incomes, living in the community, depend on the Section 202 housing program for decent and affordable housing. For every unit of Section 202 housing that becomes available, there are ten elders on the waiting list. 

Without the Section 202 program, many of these elders would be homeless. Please preserve this vital program, including funding for the new construction that creates thousands of jobs in addition to meeting seniors’ housing needs.

Elders in the community often also depend on Older Americans Act nutrition and service programs for essential help in getting enough to eat and for transportation and other services that enable them to live independently. The need for the services these programs cover is growing with the aging of our population.

The Budget Control Act

The Budget Control Act already has capped total spending on domestic discretionary programs. Funding for Section 202 housing has fallen from $825 million in fiscal 2010 to $374.6 million for fiscal 2012, a 54 percent absolute spending cut. 

Funding for Older Americans Act programs has stagnated for several years. At a time when the population in need of affordable housing and supportive services is growing rapidly, these programs cannot absorb cuts beyond those already mandated in the Budget Control Act. 

Please do not recommend additional reductions in total spending on domestic discretionary programs.   

In America, compassion has its costs, which we all must share because we all are likely to benefit from it. It is hard to see balancing the budget without new revenue. Cuts alone are irresponsible. Just ask people who have needed these essential programs.

Programs like Medicare, Medicaid, senior housing and the Older Americans Act are not the problem. They are the solution to challenges that face American families every day. 

They also promise to be a solution to creating jobs for today’s economy.

We hope you will support a fair and balanced approach to deficit reduction, with protection for safety net programs serving the nation’s elders and without sequestration. Our most vulnerable elders must not be forced to bear the brunt of federal budget deficit reduction.  

 



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