[Congressional Record Volume 141, Number 199 (Thursday, December 14, 1995)]
[House]
[Pages H14925-H14926]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       LONG-TERM CARE JEOPARDIZED

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Virginia [Mr. Moran] is recognized for 5 minutes.
  Mr. MORAN. Mr. Speaker, we all know that Americans are living longer, 
and they are living longer with chronic and often incapacitating 
illness. For many of them, nursing home care is the only option. It is 
a difficult and painful choice, not one that any individual or family 
would take lightly, particularly given the cost of nursing home care. 
Mr. Speaker, in northern Virginia, in the district I represent, the 
average cost of nursing home care is $45,000 per year.
  So the State of Virginia has been very stringent in determining 
Medicaid eligibility. That is why this is relevant to the discussion 
that just took place. Without the cuts to the Virginia Medicaid 
program, Virginia would be providing 54,000 individuals with access to 
home and community-based care, 24,300 nursing home recipients, and 
2,300 individuals in intermediate care facilities for the mentally 
retarded.
  But in the face of the Medigrant Program, which caps Medicaid long-
term care spending as soon as 1996, next year, $968 million, or 27 
percent of the budget for long-term care in the State of Virginia by 
the year 2002 would be cut. That translates into a reduction of 9,000 
people who would no longer be eligible for assistance next year, and 
37,000 nursing home residents who would no longer be eligible for care 
in 2002. We have to ask ourselves, where would these people end up?

  In 1987, President Ronald Reagan signed into law Federal standards 
for nursing homes. This was a direct consequence of the in ability of 
the States to establish standards and monitor and enforce them. The 
newspapers were filled with horrible accounts of abuse of our Nation's 
seniors. That is why President Reagan responded to the abuse that was 
taking place across the country.
  This Medigrant Program turns back the clock. It turns the 
responsibility of establishing, monitoring, and enforcing nursing home 
standards back to the States. Clearly President Reagan would not have 
usurped that responsibility if there were any alternative way of 
ensuring quality care for our Nation's seniors.
  All families with members needing long-term care have been paying for 
many years to care for their parent or child at home. In the end, their 
ability to care for that person, both physically, emotionally or 
financially, runs out.
  In my district, the eligibility requirements to receive Medicaid 
assistance for long-term care are already very stringent. Thirty-four 
percent of all Medicaid dollars are spent on long-term care assistance. 
This is considerably lower than the national average. But once an 
individual is determined to be eligible, the State does not come after 
the adult children to pay for nursing home care.
  This legislation included in the 7-year balanced budget plan, the 
Medigrant legislation, empowers States to require payments from adult 
children if the family income is above the State median, regardless of 
other financial obligations. Governor Bush said, and I want to quote 
him, ``I plan to go after all adult children of nursing home 
residents.''
  Many allude to middle-class seniors divesting their fortunes in order 
to qualify for Medicaid, but the anecdotes do not add up. The GAO found 
in a 1993 study that less than 10 percent of all Medicaid applicants 
had transferred their assets in order to qualify for assistance, but 
even that did not result in increased Medicaid spending. Furthermore, 
Congress changed the law in 1993, requiring that Medicaid eligibility 
could not be considered within 3 years of the asset transfer.

  In 1993, Congress required States to recover from the estate of 
deceased Medicaid beneficiaries. It did not require the seizure of 
homes or businesses, and it even prohibited such actions if the home 
was being lived in by a spouse. Current law also protects against liens 
and estate recovery while dependent children are living.
  But Medigrant repeals these protections. The Medigrant bill empowers 
States to pursue family homes to recover long-term care expenses, even 
if those homes are currently occupied by families members. All that 
protection is repealed.
  Mr. Speaker, I will not take any more time. There is so much more 
that I could say about this. It is all of a critical nature, because we 
are taking away the security that is currently available to families 
who desperately need it.

                              {time}  1730

  We are enabling States to go after homes, to seize assets, no matter 
how impoverished the spouse might be, to take away the standards that 
President Reagan put into place to protect our senior citizens. This 
goes far beyond the dollars and cents.
  I think this is a profound erosion of the kind of security that 
Americans have come to, and should be able to, expect.
  I thank the Chair for the opportunity to express this on the floor 
today, and I would hope we are going to turn this back.
  The Medigrant Program repeals protection for the spouses and children 
of nursing home residents. Medigrant gives States the flexibility to 
deny coverage. Income and resource set-asides for the spouse of a 
nursing home resident have been maintained in Medigrant, but these are 
only available after a resident has been found eligible for coverage.
  Under Medigrant, there is no assurance of coverage even if you meet 
income and resource standards; no required fair hearing to challenge a 
determination of noncoverage; no protection against having a lien 
placed on the home; no requirement for clarity about what is included 
in the Medigrant rate; no requirement that Medigrant cover a specific 
set of services; and no allowance for putting aside money for a 
disabled child.
  I have been told that Medigrant requires States to set-aside 
considerable resources for nursing care services. Although the amount 
Medigrant requires to be set aside for the elderly is based upon 
expenditures for current nursing home services, nothing in law requires 
such services to be offered. The funds set aside are considerably less 
than what Medicaid sets aside today. In fact, a number of studies have 
suggested that the first cuts will be made on community and home based 
long-term care, forcing disabled and frail elderly to apply for the 
much more costly nursing home care.
  Why? Because the nursing home industry is much stronger and 
financially able to lobby for dollars than the burgeoning community 
based care community.
  The block grants are capped, regardless of economic or demographic 
changes. The rate of growth will not keep pace with inflation or 
increased use due to an aging population. The bill, on average, 
increase spending at 5.2 percent a year, while long-term care spending 
will increase at about 9.5 percent a year. Virginia is particularly 
hard hit because of the aging of the population. Residents older than 
65 years will increase from 7.3 to 15.7 percent of the total 
population. In the next 15 years, there will be five times as many 
Virginians older than 75 and nine times as many Virginians older than 
85 years as there were in 1960.
  This Nation made a commitment 30 years ago to investing in medical 
technology and medical assistance to extend and improve the lives of 
senior citizens. Assistance for long-term care is the humane extension 
of medical intervention and assistance. Those who seek long-term care 
are seeking to complete their lives with dignity, as independently as 
possible and certainly, not as a financial burden on their children or 
grandchildren. The Medigrant bill takes away this dignity from those 
who need long-term care and from their families.

                 How the Medicaid Cuts Affect Virginia

       Issue: The current proposed block grant for the Medicaid 
     program relies on a formula which rests on the current 
     federal match now received by each state. This unfairly 
     penalizes Virginia, because it locks in current funding 
     patterns among the states, regardless of need or changing 
     demographic patterns, while high cost states that have not 
     been efficient or judicious with their Medicaid dollars will 
     continue to benefit at high levels of federal assistance.
       Congressional proposals do little to address vast 
     disparities in federal Medicaid grants to the states. Both 
     lock in generous payments to some states at the expense of 
     others. Under both plans, New Hampshire and Connecticut would 
     get twice as much per poor person as Virginia. Under both 
     proposals, Virginia will continue to have the seventh lowest 
     grant per poor person in 2002. (Poor is defined as those in 
     families earning 100% or less of the federal poverty level, 
     which is $11,817 for a family of three in 1995).
       History: Virginia has been very conservative in its 
     determination of program eligibility and benefits; management 
     of Medicaid dollars and beneficiaries; and in its claim on 
     federal resources.
     
[[Page H14926]]

       Viriginia has the seventh lowest federal grant per person 
     in poverty. Virginia is below the national average in state 
     Medicaid spending per beneficiary. 75% of its Medicaid 
     expenditures are on mandatory services and 25% are on 
     optional services . . . this is below the national average.
       (States must offer a minimum acute care benefit package to 
     their eligible populations. They can cover other acute 
     services at their discretion. States vary widely in their 
     coverage of optional acute services.)
       Virginia has established tight eligibility standards. Thus, 
     although Virginia has a higher poverty rate than Connecticut, 
     Massachusetts and Rhode Island (and closely trails New York), 
     Virginia covers less than half of its poor residents in 
     Medicaid, while these other states have enrolled 60-90% of 
     their poor.


             disproportationate share payments to hospitals

       In the early 1990's, some states aggressively pursued DSH 
     money in order to leverage more federal dollars. DSH payments 
     were intended to help hospitals serving high volumes of 
     uninsured and Medicaid patients. They did this by adding 
     money generated from hospital assessments and ``voluntary 
     payments'' from hospitals and adding that to state funds, in 
     order to leverage more federal matching funds, and then paid 
     back that money to those hospitals. Until these schemes were 
     controlled in 1993, many states received huge amounts of 
     federal Medicaid dollars, which they spent on general state 
     needs. Two-thirds of DSH spending is concentrated in 8 
     states. DSH payments to Northeast high cost states are 6-
     16 times higher than in Virginia.
       Virginia chose not to participate in aggressively capturing 
     DSH dollars, as they felt it was an inappropriate use of 
     federal funds.
       The proposed Medicaid block grants lock the DSH inequities 
     into place, leaving Virginia with only a small amount of DSH 
     funds. Those states like NH, LA, NY, CT, NJ, will continue to 
     receive significant DSH dollars under the block grant.


                              Demographics

       The block grant does not take into consideration the 
     changing demographic trends in Virginia. The population is 
     aging and the percentage of older Americans moving into 
     Virginia from other states is increasing.
       By 2020, the total population of VA. will number 8.4 
     million, up from 6.5 million in 1990. The elderly are the 
     fastest growing segment of the population. Residents older 
     than 65 will increase from 7.3% to 15.7% of the total 
     population. There will be five times as many Virginians older 
     than 75 and nine times as many Virginians older than 85 as 
     there were in 1960. The elderly are the heaviest users of 
     health care; it is reasonable to assume a growing percentage 
     of this population will become Medicaid-dependent for nursing 
     home care and other long term care services at an 
     increasingly high cost.


       what has the state done to maximize its medicaid dollars?

       Virginia has implemented a number of cost containment 
     techniques to improve ``efficiency'' of the Medicaid program. 
     The Va. Dept. of Medical Assistance estimated in 1994 that 
     since 1982, Virginia has realized about $217 million dollars 
     annually in savings and cost avoidance through cost 
     containment measures including:
        Medicaid managed care
       Moratorium on nursing home construction
       Limits on inpatient hospital admission before non-emergency 
     surgery
       Expanded use of generic drugs
       Utilization management for hospital and other services
       Preadmission screening for nursing home applicants
       Adult day care alternatives to nursing home placement
       24-hour obstetric discharge using a home health alternative
       As a result of improved efficiency, Virginia has not 
     required continued large increases in federal matching 
     dollars. Yet, the state will be penalized for prudent and 
     judicious use of Medicaid money. Those states with 
     inefficiently run programs that are high cost to the 
     federal government, including those states that illegally 
     garnered DSH dollars, will continue to receive the highest 
     contribution. The current Medicaid program is flexible 
     enough to allow Va. to receive more federal dollars as the 
     needs and available resources change. The proposed block 
     grant proposal bases consideration of future federal 
     funding on current levels, regardless of each state's 
     future needs.
       What should be incorporated into the Medicaid block grant 
     is an effort to move all states to an equitable level of 
     federal financial support per capita. That is not unlike the 
     policy in place for the Medicare program. When that program 
     moved from a cost-based reimbursement to reimbursement by 
     diagnosis-related group, formerly vastly different rates paid 
     to providers were moved to a national rate adjusted only by 
     the special labor costs within regions. This uniformly 
     provides the same incentives to all states to operate 
     efficient Medicaid programs.

                          ____________________