The sweeping cuts to Medicaid, Medicare and other safety-net programs in the federal government’s new Budget Reconciliation Act — known as HR1 — will devastate core services that older adults rely on, from long-term care to dental and vision coverage.
HR1 eliminates nearly $1 trillion from Medicaid through direct reductions and eligibility changes. That loss of federal funding will trigger cuts to benefits that millions of older adults depend on, said Amber Christ, managing director of health advocacy at Justice in Aging.
“States are going to lose billions of dollars in federal funding to operate their Medicaid programs,” said Christ, at a Nov. 21 American Community Media news briefing. “There are really only so many ways to fill a hole of that size. You’re going to have to cut provider rates. You’re going to have to cut eligibility or cut benefits. And probably all three.”
Cuts to Community-Based Services
Much of what older adults rely on in Medicaid are optional for states to pay under federal law,” including dental, vision, hearing, adult day health programs and home-and-community-based services. These at-home supports make it possible for many older adults to avoid nursing facilities. “Home and community-based services account for 51% of optional spending in Medicaid,” said Christ. “If you’re a state, you’re going to turn to that.”
Medicaid also pays for long-term care, such as nursing homes or memory care facilities.
Funding for the Older Americans Act programs — which offer transportation, caregiver respite, and other supports — will also be reduced next year. “The federal government is stopping funding for hundreds and hundreds of types of programs. And they’re shifting those costs to the states and then ultimately to the people,” said Christ.
Seniors in Poverty
There is a stereotype of older adults being relatively economically comfortable, said Christ. However, most seniors live on a fixed income ranging from $30-$50,000 per year. The number of seniors living in poverty has dramatically risen from 2020: 15% of Americans over 65 now live below the federal poverty line of $16,250 for a single person.
HR1 fundamentally restructures federal healthcare by redistributing resources away from low-income Americans and older adults toward households with higher incomes, said Christ. Low-income households will lose about 3 percent, or $1,200 a year, while households with the highest incomes will see their household resources increase by almost 3% or $13,600 a year.
“HR1 really paid for tax cuts for the wealthiest people in this country by cutting public programs for the people with the lowest incomes,” she said.
Christ emphasized the deep interdependence of Medicare and Medicaid for seniors. “Medicare has huge gaps in coverage, and is really expensive,” she said. Medicaid fills those gaps by covering dental, vision, hearing, nursing care and the 20 percent coinsurance charged by doctors. “Without Medicaid’s financial assistance, older adults and people with disabilities could not afford Medicare,” she said. “Medicare would become an unusable benefit.”
Coverage Ends for Lawfully Present Immigrants
HR1 also imposes unprecedented restrictions on Medicare for older immigrants with lawful status. “HR1 is actually ending eligibility for Medicare for millions of lawfully present immigrants, including refugees, asylees, and the people with temporary protected status,” said Christ, noting that many have paid Medicare taxes for years. “This is unprecedented. At no time in history that we are aware of have people who have had eligibility for Medicare lost eligibility for Medicare.”
Those individuals, she said, will not be able to turn to marketplace plans because HR1 also eliminates their access to enhanced premium tax credits. “We’re leaving millions of people uninsured,” she said. “They won’t be able to afford marketplace coverage and they won’t be able to enroll in Medicaid.”
Medicaid expansion enrollees ages 50 to 64 — including caregivers and people with chronic conditions — will lose coverage under new work requirements. The Congressional Budget Office estimates 5 million people will lose insurance due to the administrative barriers of having to prove they are working.
Older adults age 50 to 64 represent 51% of those getting enhanced premium tax credits.
When asked what happens to older adults who lose coverage, Christ was blunt. “We’re going to see a lot more emergency room use. We’re going to see higher rates of mortality, because people aren’t going to get the care that they need when they need it.”
“You cannot cut $1 trillion out of the healthcare system and not have ramifications across the entire society,” she stated. “I don’t think anybody is immune from this.”
