Online NewsHour: Changing Medicaid -- November 27, 1995

CHANGING MEDICAID

NOVEMBER 27, 1995

TRANSCRIPT

The potential effects of controversial new Republican proposals to trim the growth of Medicaid over the next seven years, are reported by Betty Ann Bowser in California.

BETTY ANN BOWSER: There was a time when Lou Jesus could care for his wife, Pat, at home. Here body had been racked by multiple sclerosis for years. Then he too developed a crippling illness. He could no longer work or take care of her. So today, Pat Jesus is in a nursing home in San Mateo, California, where her medical care is paid for by Medicaid. It's the nation's largest free medical program for the poor. Every week, the state processing center near Sacramento goes through 3 million claims for Medicaid or Medical, as it's known here. The state gets half the money to pay these bills from the federal government, and it pays the other half itself. Seven years ago, $100 million a year passed through these computers. Now it's twice that and growing, mainly because the number of poor elderly people needing nursing home care is going through the roof. Right now, they take up one quarter of the entire Medicaid budget. Some say those two priorities, the growing need for care and the growing costs, are on a collision course, among them, Gov. Mike Leavitt of Utah.
GOV. MIKE LEAVITT, Utah: In 25 years, if something isn't done to change the nature of this program, every dollar in the national budget will be devoted to Medicaid. It's growing that rapidly. This is--the program is out of control. It isn't working.
LOU JESUS: It's scaring me because the lawyer that helped my wife and I get on the Medical, when she got on it, called me a few months ago and said, I wanted to tell you something, that it might affect you. I got kind of upset when she told me about it, you know, that I make just enough to live on and if they were to, to cut that, I would be struggling even more.
BETTY ANN BOWSER: What's worrying Jesus and spawning demonstrations are controversial new Republican proposals to transform Medicaid. The plan would trim the growth of the program over the next seven years. Although funds for poor pregnant women, children, and the elderly would still increase each year, they would increase more slowly. Republican leaders say the slower growth would save the federal government $163 billion over that seven-year period. They say they would achieve that savings from a major shift in how the money is spent. The federal government would virtually turn over the 30-year-old program to the states, which would get big chunks of money called block grants with few strings attached. California health services director, Kim Belshe, runs the largest Medicaid program in the country. Like most Republican reformers, she believes states can do a better job of running Medicaid with less money.
KIM BELSHE, California Department of Health Services: Today's Medicaid program really represents a federal one-size-fits-all mentality. A block grant is properly and equitably structured. It offers states a couple of very important opportunities. One opportunity is for states to be far more creative, far more innovative in serving low-income populations in terms of meeting their health care needs by giving states more authority and flexibility and structuring these important programs in a way that reflects the priorities, the circumstances, the needs of the particulate state, as opposed to what Washington, D.C., has.
BETTY ANN BOWSER: Under the Republican plan, it would be up to the states, not the federal government, to determine who does and does not qualify for free medical care. People like Pat Jesus might have to be certified all over again, a thought her husband finds frightening.
LOU JESUS: I would hold off as long as I could and would end up in the state of poverty. When you work many, many years, and some people longer than me even, work into their seventies and eighties, you feel that, you know, paying taxes and doing what you need, if you need some help, you don't feel bad about maybe taking it for an illness or something.
BETTY ANN BOWSER: And if the states take over Medicaid, it will be up to them to decide how much coverage recipients get. Diane Rowland is author of a Kaiser Foundation study on Medicaid.
DIANE ROWLAND, Kaiser Medicaid Commission: There is no longer a guarantee for anyone that they will be able to avail themselves of Medicaid as a safety net program. It's totally going to be determined by the states. So it could result in someone being eligible for Medicaid and getting one aspirin a year, one immunization a year as a benefit.
BETTY ANN BOWSER: But Utah's Gov. Leavitt says the Republican governors who support the plan have no intention of cutting back services to truly needy people.
GOV. MIKE LEAVITT: These people are our neighbors. These young children live around us. They're our elderly, live in the states. We want to care for these people. Our desire is simply to have a program that will allow us the flexibility to deliver services to them and not spend most of our time figuring out how you put 'em into a slot in a federal program.
BETTY ANN BOWSER: Families of nursing home residents became even more nervous when the congressional discussion focused on regulation. In 1987, after a series of exposes on abuses in nursing homes, regulations were passed that required yearly inspection and forbid the excessive use of mood altering drugs and physical restraints. Many Republicans viewed those regulations as costly and overly-restrictive. They also insist the states can be trusted to keep standards high, but nursing home advocates like Elma Holder disagree.
ELMA HOLDER, Nursing Home Reform Advocate: We fought for 20 years solidly to get this law enacted. It was--it's actually a model law. It was put together by consumers, industry, government people, people from all over the country worked on it, and it was based on good, fair practices all over the country. I think that over time--and I don't think it will take much time--maybe six months to a year, we'll see a decreasing quality of care in nursing homes.
SPOKESMAN: During the first hundred days of this Congress we heard a lot of talk about the Contract With America. But I don't remember the words in the contract "get grandma--"
BETTY ANN BOWSER: Under pressure from groups like Holders, Congress kept the federal regulations but gave enforcement over to the states. But it's the declining scale of federal dollars going to the elderly poor that concerns nursing home advocates the most. The Kaiser Foundation's Diane Rowland sees a dismal future for the elderly poor.
DIANE ROWLAND: The changes that Congress is enacting in federal funds to the states really trigger the most extensive reduction in federal funding in the last two years of the program, over 50 percent of the cut occurs after the year 2000. So just as we move to have more and more elderly people, the states will be faced with the greatest reduction in federal spending. So I would not want to be a low income elderly person in the year 2010. I would hope to have enough income to be able to continue to purchase private insurance to supplement whatever my government benefits are. And I think that's a pretty dire prediction for the future.
BETTY ANN BOWSER: The critics in this debate have characterized this in very heartrending terms, painting pictures of mom and dad having no place to go in their old age. Is it fair, the picture that the critics are painting?
KIM BELSHE: Well, as a health director for the state of California, I certainly take very seriously my responsibility to protect and promote the health care for all Californians, and that's a central charge of this department, and my responsibility as director. But I have been--and I have been struck by the allegations by critics of block grants that states can't be trusted.
BETTY ANN BOWSER: Nursing home advocates have a strong ally in the White House. President Clinton says he will veto any legislation that severely cuts back aid to the elderly poor.


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