HCBS Workers Could Be Hard Hit by Health Care Proposals

CFAR | July 08, 2017 | by Steven W. Syre

A new report featuring research from the LeadingAge LTSS Center @UMass Boston assesses the impact on states if key proposals contained in the House version of the American Health Care Act are passed by the U.S. Senate.

As many as 713,000 workers in the home- and community-based services (HCBS) sector could lose their jobs if key proposals contained in the House version of the American Health Care Act (AHCA) are passed by the U.S. Senate, according to research by the LeadingAge LTSS Center @UMass Boston.

New York, Texas, California, Pennsylvania, and Minnesota would have the largest number of HCBS jobs at risk, according to research conducted by LTSS Center Co-Director Marc Cohen.

Cohen’s research is featured in CAPPING MEDICAID: How Per Capita Caps Would Affect Long-Term Services & Supports and Home Care Jobs. The report was released in June by LeadingAge and the Center for Consumer Engagement in Health Innovation at Community Catalyst.

The report estimates that a minimum of 305,000 HCBS workers could lose their jobs if pending health care proposals are adopted. Job loss estimates are based on projected reductions in the number of people receiving HCBS due to proposed cuts in Medicaid spending called for in both the AHCA and in the Senate’s Better Care Reconciliation Act of 2017.

The AHCA would reduce federal spending on Medicaid by $834 billion over time. The Senate proposal would cut Medicaid spending by $772 billion, according to the Congressional Budget Office.

HOW STATES WILL RESPOND TO MEDICAID CAPS

The CAPPING MEDICAID report focuses on Congressional proposals to change Medicaid’s financing structure to a per capita cap system. Under the AHCA, the federal government would provide states with an aggregate amount of funding based on the number of eligible beneficiaries in the state. Federal spending would be adjusted to account for overall population growth, but it would not account for changes in health care needs or costs.

The report found that the health care bills under consideration would create varying degrees of economic stress on individual states. In the event of reduced federal Medicaid spending, states would likely have to cut benefits, reduce payments to providers, change eligibility requirements, and/or add to program waiting lists.

Five factors would negatively affect the ability of individual states to provide long-term services and supports (LTSS) in a per capita cap system, according to the report:

  • The projected rate of growth in the population age 85 and older between the years 2015 and 2025. Because the need for LTSS grows significantly as the population ages, states would experience gaps between the proposed cap and the costs of addressing growing need.
  • The percentage of people over age 65 with at least 4 chronic conditions. As the percentage of the population with chronic conditions grows, LTSS need would also grow and the cap would not account for this.
  • An above-average federal medical assistance percentage. States that depend heavily on the federal government for Medicaid funding would experience more pressure to cut services or increase state spending.
  • Above-average HCBS expenditures. States with high HCBS expenditures would experience greater service disruptions because they would be forced to reallocate scarcer federal dollars from optional HCBS services to mandatory services like nursing home care.
  • Above-average expenditure growth for people aged 65 and older. States that have been spending at a faster rate than others to meet the needs of an aging population would be forced to cut back more drastically on their Medicaid spending, thus putting more pressure on LTSS provider networks.

DEGREE OF STATE EXPOSURE TO RISK

All states were found to have above-average exposure to at least 1 of the 5 factors. Florida was found to be at risk relative to all 5 measures.

Eight states were found to have above-average exposure to 4 of the 5 factors:

  • Delaware
  • Georgia
  • Maine
  • Missouri
  • Montana
  • New Mexico
  • South Carolina
  • Tennessee