Medicaid Cuts Could Have Dire Impact on the Disabled

Kim Krisberg

Nations Health. 2005;35(5) 

In This Article


Millions of Americans with disabilities view Medicaid as a lifeline, depending on the program for services that would likely be out-of-reach in the private sector. Because of its indispensable role in their lives, people with disabilities as well as advocates for the disabled are rallying to oppose proposed funding cuts that could curb services or even force people from the program.

Medicaid provides health care coverage for about 8 million Americans with disabilities, offering access to prescription drugs, long-term care, physical therapy, home health services, medical equipment, communication devices and much more. Although many people with disabilities receive services via private health insurance, many others are employed at jobs that don't offer health benefits and "individual insurance policies for persons with less-than-perfect health are usually unaffordable or unavailable," according to the Kaiser Family Foundation. Even for those who can get private coverage, plans likely do not cover all of the services a person with a disability needs. Medicaid is often the only avenue that allows a disabled person to remain independent.

"(Medicaid) is the mother of all federal programs," said Steve Eidelman, executive director of the Arc, a national organization of and for people with mental retardation and related developmental disabilities and their families. "Probably more than any other single federal program, it impacts people's lives."

Eidelman's organization is among many calling on Congress to oppose massive cuts to Medicaid. At press time, the fiscal year 2006 federal budget was still making its way through Capitol Hill, but Congress had passed a joint spending resolution that called for $10 billion in cuts over four years beginning in fiscal year 2007. Nevertheless, with state legislators warning of strained budgets, cuts to Medicaid funding could result in more uninsured people. For people with disabilities, who are more likely to have greater medical needs and lower incomes and are among the most costly Medicaid beneficiaries, such a possibility is life-threatening.

"Community-based care averages about $40,000 to $60,000 a year, and families just can't afford that -- it's beyond bankruptcy," Eidelman told The Nation's Health. "People want to stay in their own home, and Medicaid is the primary financing vehicle."

Eidelman said that issues of Medicaid reform often place at-risk populations up against wealthy and influential special interests, although he predicted that state legislators will -- "in a sobering moment" -- reject significant Medicaid cuts.

"You've got vulnerable people on the one hand and drug manufacturers, hospitals, durable medical equipment suppliers, doctors on the other...who can spend more money influencing policy-makers," Eidelman said. "It's pitting people who are not very powerful against some of the most powerful organizations in the state."

The majority of Medicaid beneficiaries living with disabilities qualify for coverage because they receive Supplemental Security Income, which assists older and blind Americans as well as people with disabilities who have little or no income. Such populations are considered "mandatory beneficiaries" and are living below the federal poverty level. Those with Medicaid coverage and resources above Supplemental Security Income levels are generally "optional beneficiaries." In addition to including optional beneficiaries in Medicaid, states also provide a variety of optional health services that are often offered to not only mandatory eligibles, but all those eligible for Medicaid. One suggestion for immediate Medicaid cost savings could be to scale back services for optional beneficiaries, but such an action could remove "access to vital health and long-term services and supports," according to the Arc.

"Since people with disabilities comprise such a significant proportion of Medicaid spending due to their needs for long-term services, any cut is going to affect them," said Liz Savage, director of health and housing policy for the Disability Policy Collaboration.

Medicaid is crucial because it often allows families to care for a disabled child at home and helps adults with disabilities receive the kind of care that lets them forgo living in a nursing home or institutional setting, Savage told The Nation's Health. Unfortunately, Medicaid can also act as a disincentive for some with disabilities or their family members to accept job promotions or better-paying jobs for fear of losing financial eligibility for Medicaid, she said. Cutting Medicaid funding could also exacerbate a direct care worker crisis in which "you can currently earn more at a fast-food chain than you can caring for a person with a developmental disability," Savage said.

"Capping Medicaid funding forces people with disabilities to fight with groups representing seniors, creates a very difficult situation because you're all fighting over a much smaller pie," she said.


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