Seniors, disabled could find services impacted by per capita caps

The implementation of per capita caps on Medicaid funding would not account for the disproportionate amount of program spending on certain groups of Medicaid enrollees. The Kaiser Family Foundation’s (KFF) issue brief on state variation in spending, issued in light of the American Health Care Act’s (AHCA) (H.R. 1628) proposed spending limits, notes that although seniors and the disabled make up 23 percent of Medicaid enrollment, 64 percent of program funds are spent on these groups.


Children and nonelderly adults with disabilities account for spending three times greater than their enrollment share, and spending on seniors is slightly more than double their enrollment share. These groups have greater health needs and use more acute care and long-term care services as opposed to those who are enrolled based only on income. Children without disabilities cost an average of $2,463 in 2011, while disabled children cost $16,802. Per enrollee spending on nonelderly adults with disabilities was $3,247, while spending for nonelderly disabled adults was $16,613 and spending for seniors was $13,249.

State programs

Spending also varied widely by state: Tennessee spent $6,945 per disabled child while New Hampshire spent $53,557. Some states spend less than $15,000 on disabled adults and seniors, while others pay $25,000 or more. This disparity stems from various coverage pathways offered to seniors and the disabled either at higher income levels or for some significantly disabled children regardless of parental income, provided at a state’s discretion. Variation in spending levels also depends on how many receive community care versus institutional care, with some states targeting home- and community-based services to those who are at risk of needing institutional care in the future. Other states offer personal care or attendant care services.

The brief pointed out that changing the federal Medicaid payment structure from guaranteed payments to states to a per capita cap could bind states to their current coverage provision, locking in these differences between states. In addition, these caps would not account for spending on newly discovered drugs or treatments, and could hamper state responses to emergency situations such as natural disasters like Hurricane Katrina or issues like the opioid epidemic and the Flint water crisis. States may be forced to cut some services they have chosen to provide under their Medicaid programs due to limit federal funding, such as long-term care services, which could especially impact seniors and the disabled.

Medicaid long-term services and supports benefit vital to many seniors

Medicaid provides vital services to seniors in need of expensive long-term services and supports (LTSS). Seniors must have low income and few assets to qualify, and states have some control over benefit package design. Still, Medicaid programs spend considerable billions of dollars on LTSS care for seniors each year.

Coverage and spending

Medicaid programs must provide nursing facility and home health services, but other LTSS are optional. This includes home- and community-based services (HCBS), such as homemakers, home health aides, personal care, case management, and home delivered meals. States have shifted to providing services in home and community settings as much as possible, as opposed to institutional care.

The Kaiser Family Foundation (KFF) noted that in fiscal year (FY) 2011, Medicaid programs spent over $80 billion on full-benefit seniors, and $55.8 billion of this amount went to LTSS. The percentage of LTSS spending varied by state, based on factors such as the amount of services provided and the share of elderly beneficiaries in that location. The services are not cheap: the median annual cost for nursing facility care is $90,000, with adult day health care costing nearly $20,000 a year.

Policy concerns

The amount of people needing LTSS in the next two decades is estimated to grow significantly, and 70 percent of the population turning 65 right now is likely to use LTSS at some point. Many Americans erroneously believe that Medicare will cover this benefit for them, and are unprepared to pay for LTSS themselves. The KFF report indicated that there is interest in streamlining the HCBS benefit to make it easier on both state programs and senior enrollees as the baby boomer generation continues to age.