Medicaid costs: The greatest risk to American familiesArticle added by Phyllis Shelton on August 24, 2010
Phyllis Shelton

Phyllis Shelton

Hendersonville, TN

Joined: September 17, 2006

My Company

LTC Consultants

In late July, while preparing for a speech to state regulators from 12 states, I integrated what is going on with health care reform and Medicaid with the critical need for long term care insurance policies. I was appalled as I put it all together and really came to understand what is happening in our nation: The greatest risk to American families and jobs is the rapidly escalating growth of Medicaid.

Look at these seven points and see what I mean:
    1. Not only is Medicaid under incredible pressure from an aging population, but now, also from younger adults from two sources:
    • High unemployment, which not only causes younger families to turn to Medicaid for health care, but also causes states to lose state income tax and sales tax revenue as people out of work aren’t paying tax and aren’t buying as many things

    • The new health care reform act that will put 16 million new adults with earnings below 138 percent of the federal poverty level on the program between 2014 and 2019.
    2. The Medicaid home care benefits are being expanded by the health care reform act, which will bring more claimants out of the woodwork.

    3. Forty-six states are facing budget shortfalls for FY 2011, as additional Federal funds provided by the economic stimulus legislation in February 2010 to help with the shortfalls were only extended through June 30, 2010.

    4. Medicaid averages 20 percent of state budgets today and one-third of that is for LTC. By 2030, Medicaid is projected to average a third of state budgets and half of that will be to cover the cost of LTC.

    5. The dollars sucked up by Medicaid is causing money to be pulled from other critical programs like education and public works, not to mention the jobs lost in both the public sector, as states lay off employees, and the private sector, as states cancel vendor contracts.

    6. For example, 25 states had layoffs in 2010 and 12 had salary reductions.

    7. In 2014, spouses of Medicaid home care recipients will be able to keep the same amount of assets as spouses of nursing home residents can currently keep.
Twenty percent of Americans are on Medicaid now, and Medicaid pays 16 percent of health care expenses in the U.S. Where will this numbprer be by 2030?
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