By Lynn Kellogg
Last month I wrote about key efficiencies in three pieces of national legislation critical to the health and livelihood of our elder population: the Older Americans Act, Medicare and Medicaid.
Now it’s important to drill down further on Medicaid. Why? Because when something is called a “waiver” and it’s “discretionary” by state, it becomes a target for cuts. This would be a fool’s error.
Medicaid provides critical funding for nursing home care. It’s a requirement of the act. While we need nursing homes, it became apparent many years ago with the population living into advanced years, that lower-cost options needed to be developed for those needing daily care. Most people have family caregivers who can assist, but they can’t do it all.
The solution? States were allowed at their discretion to apply for a “waiver” of Medicaid rules to allow payment for care in the home for persons with conditions eligible for nursing home care.
The result? Eventually all 50 states applied for a waiver. It’s a win-win for cost savings and quality of life. Each state could set slightly different rules, but the purpose was the same: lower costs and serve more people in the setting of their choice – their home.
Michigan’s waiver, called MI Choice, provides in-home care for adults 18 and older with nursing home level of care needs. Eighty eight percent of older adults want to live in their home as they age. MI Choice makes this happen for over 16,000 Michigan residents who otherwise would be seeking institutional care.
In FY2024, the average cost per MI Choice participant was $114.58 per day while nursing facility costs were over double at $268.41 per day. MI Choice saved the state $916,559,952 in FY2024 alone – nearly a billion dollars.
A nationwide success story, Medicaid is funded by a combination of federal and state dollars. Before the waivers were allowed, states spent 100 percent of their long-term care Medicaid dollars on institutional care. With waivers, the national average is now 53 percent home-based care, 47 percent institutional care.
Some states have shifted as high as 80 percent of their dollars to home-based care. Michigan lags poorly in comparison. In FY2023 only 29 percent of long-term care dollars were allocated for home-based care, 71 percent for institutional care.
Medicaid is a lean program. Per members of the Congressional Energy and Commerce Committee responsible for setting the Medicaid budget, it has lower per capita cost than all other major health programs, including Medicare and private insurance. Their charge to cut $880 billion in programs leaves Medicaid vulnerable to serious cuts.
We do not have universal health care in this country. Medicaid is a lifeline keeping children healthy, parents working and helping caregivers provide support to elders and persons with disability.
If serious cuts result, people will die and costs will spike with deteriorating health conditions, trips to emergency rooms and avoidable hospitalizations.
Medicaid is a model partnership between caregivers and our health system. Caregivers provide care out of love and devotion. Those who can afford to bring help into the home do so in order to balance what they can do themselves at a sustainable level. Those who can’t afford help often find their own health failing. Caregiver studies show that over half of family caregivers without help die before the person they’re caring for.
Medicaid was a key topic at a recent Legislative Forum sponsored by the Area Agency on Aging (AAA). It was well attended by state and federal senators, representatives and staff from both sides of the aisle.
Unanimous support for supporting Medicaid and strengthening MIChoice was voiced. Disclaimers were also voiced that other elected colleagues didn’t understand.
The call to action is for those who do understand to be champions, sharing their knowledge and support with colleagues, calling on folks at AAA or others to help inform, using information in this column to educate. Whatever it takes.
In Michigan, legislative action needs only to shift investment a few percentage points from institutional care to home-based care, closer to the national average of dollars spent in the home. This would relieve financial pressures and solidify options for MIChoice in Michigan. It’s critically important.
Lynn Kellogg is former CEO of Region IV Area Agency on Aging in Southwest Michigan. Questions on age or independence services? Call the Info-Line for Aging & Disability at 800-654-2810 or visit areaagencyonaging.org. The Generations column appears each weekend in The Herald-Palladium.