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Medicaid - Future Challenges In Medicaid Coverage Of Elderly Persons

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Medicaid has made great strides in assuring access to care and alleviating financial burdens for elderly Americans. The program is a critical source of assistance to four million low-income elderly people. However, despite its importance as a complement to Medicare, Medicaid still faces many challenges in serving current and future beneficiaries.

One of the biggest challenges facing Medicaid is the aging of the general population, which will increase demand for Medicaid services in the future and place a larger financial burden on the program. The elderly population in the United States is expected to double to 70 million people by 2030, and the population over age eighty-five is expected to grow more than fourfold by 2050 to over 18 million people. These demographic changes are not only likely to lead to a greater number of people relying on Medicaid, but also are likely to greatly increase expenditures, as elderly Medicaid beneficiaries are high users of some of the most costly services in the program—long-term care and prescription drugs.

Medicaid's growing role in caring for the poorest elderly Americans and filling in Medicare's gaps occurs at a time when the federal and state governments, with limited resources, are likely to be addressing other, often competing, policy issues. For example, future changes to the Medicare program that add benefits (i.e., prescription drugs) or enact changes to the structure of the program could lead to increased costs for Medicaid and strain state financing. Many state governments operate under very tight budgets and do not have additional resources to cover these costs. Responsibility for financing the care of the growing elderly population remains a major policy challenge.

Future additional burdens on Medicaid coverage of elderly Americans are especially problematic in light of the fact that the existing program still needs several improvements. Currently, Medicaid's coverage of the low-income Medicare population is limited. In 1997, the program reached only half of all poor, and 13 percent of near-poor, Medicare beneficiaries. States have the option to extend full Medicaid benefits to Medicare beneficiaries at higher income levels or use more liberal methods for determining income and assets for eligibility, but levels and allowable assets generally remain low. In addition, many Medicare beneficiaries who are eligible for Medicare premium assistance through the buyin programs, particularly the SLMB and QI programs, are not enrolled. Lack of significant outreach efforts, complex and burdensome enrollment processes, and limited benefits all contribute to limited enrollment. Simplified or automatic eligibility determination and a meaningful benefit would help expand the scope of Medicaid coverage for low-income elderly persons.

Figure 5 SOURCE: American Association of Retired Persons, 1997. Lewin estimates based on 1993 Medicare Current Beneficiary Survey Cost and Use data projected to 1997. Kaiser Commission on Medicaid and the Uninsured

NOTE: *Noninstitutionalized beneficiaries age sixty-five and older. **Not enrolled in Medicaid. The 1997 federal poverty level of people over age sixty-five was $7,698 for individuals and $9.712 for couples.

The Medicaid program must also work to assure access to high quality health services for this vulnerable population. With rising prescription drug costs and utilization, states are looking into various methods to control spending in this area, including restricting access to expensive brand-name drugs or limiting the number of prescriptions a beneficiary can fill. Such efforts could lead Medicaid to restrain, rather than expand, its role in providing prescription drug coverage at a time when prescription drugs' importance to maintaining health is growing.

Medicaid can also improve the provision of long-term care to elderly persons. Despite improvements in nursing-home quality following comprehensive nursing-home reforms in the late 1980s, serious problems persist in many facilities. In addition, the supply of community-based services falls far short of demand. Increases in payment levels to levels that allow facilities to properly care for elderly persons and a greater commitment to providing community-based services can enhance the quality of care and the quality of life for elderly Medicaid beneficiaries.

Medicaid is critical to making Medicare work for over four million elderly people in the United States. Despite the importance of Medicare's universal coverage, millions of elderly Americans struggle to gain access to the health care they need. To assure Medicare's adequacy for coverage of elderly persons in future years, it is important to maintain and improve the assistance with financial obligations and additional benefits that Medicaid provides today.

RACHEL GARFIELD DIANE ROWLAND

BIBLIOGRAPHY

Health Care Financing Administration. "Medicare Savings Programs: Medicare/Medicaid Dual Eligible Home Page." World Wide Web document, 2001. http://www.hcfa.gov/medicaid/dualelig/default.htm.

HOFFMAN, E. D., JR.; KLEES, B. S.; and CURTIS, C. A. "Overview of the Medicare and Medicaid Programs." Health Care Financing Review 22 (2000): 175–193.

LAMPHERE, J. A., and ROSENBACH, M. L. "Promises Unfulfilled: Implementation of Expanded Coverage for the Elderly Poor." HSR: Health Services Research 35, no. 1, Part II (2000): 207–217.

MOON, M., and MULVEY, J. Entitlements and the Elderly. Washington, D.C.: Urban Institute Press, 1995.

MOON, M.; BRENNAN, N.; and SEGAL, M. "Options for Aiding Low-Income Medicare Beneficiaries." Inquiry 35 (1998): 346–356.

NEMORE, P. B. Variations in State Medicaid Buy-In Practices for Low-Income Medicare Beneficiaries, A 1999 Update. (Publication # 1566.) Washington, D.C.: The Kaiser Family Foundation, 1999.

NIEFIELD, M.; O'BRIEN, E.; and FEDER, J. Long-Term Care: Medicaid's Role and Challenges. (Publication #2172.) Washington, D.C.: The Kaiser Commission on Medicaid and the Uninsured, 1999.

United States General Accounting Office. Low-Income Medicare Beneficiaries: Further Outreach and Administrative Simplification Could Increase Enrollment. (Publication #GAO/HEHS-99-61.) Washington, D.C.: USGAO, 1999.

WEINER, J. M., and STEVENSON, D. G. "State Policy on Long-Term Care for the Elderly." Health Affairs 17, no. 3 (1998): 81–100.

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