Journal of Gerontological Nursing

Policies & Politics

Abstract

News From Capitol Hill

1983 Budget Proposals Affect Older Americans

On February 8, President Reagan submitted his proposal budget for fiscal year (FY) 1983. Since that time, political analysts, consumers, and Congressional staff have been digesting the impact of these proposals. Particular attention has been given to the effect on special or needy groups, a category to which some older adults belong. The Senate Special Committee on Aging has prepared a detailed analysis of how the proposals will affect older Americans. Highlights of these budgetary issues follow:

HEALTH

Medicare - The Administration's FY83 budget proposals reduce estimated Medicare outlays by $2.5 billion in FY83, from an estimated $57.9 billion to $55.4 billion. These changes are possible through:

1) Beneficiary Coverage

2.6 million Federal workers would be required to pay the Health Insurance portion of the payroll.

Employers would be required to offer employees (ages 65-69) the same health benefit package offered to younger workers and make Medicare the secondary payer to these plans. It is expected that this proposal would affect 450,000 older workers.

Medicare would begin on the first day of the month following a person's 65th birthday rather than the current practice of providing coverage the first day of the month in which a person turns 65.

2) Beneficiary Cost Sharing

All home health visits would require a 5% copayment. The Administration projects that this will cost people $1.70 per visit. About 900,000 older people currently receive home health care under Medicare.

The Part B deductible would be indexed to the Consumer Price Index. This will result in higher deductible payments.

3) Provider Reimbursement

The major cost saving item is the proposal to disallow 2% of all Medicare hospital costs. This is expected to save $653 million. This proposal is aimed at restricting the growth rate of hospital expenditures. Analysts argue it has the potential of shifting the 2% loss- to private payers or the Medicaid program.

The reimbursement rate for hospital-based pathologists and radiologists would be lowered from 100% to 80%, the same rate for other physicians.

Medicaid - Substantial changes have been proposed by the Administration, expecting to save $2.1 billion in-Medicaid, primarily through cost shifting to states and increased cost sharing by beneficiaries. Although the first is losing momentum in the election-year Congress, it is expected that some costsaving proposals may pass. Additional savings are proposed from an estimated reduction in the Medicaid population by imposing more restrictive eligibility requirements for people receiving Supplemental Security Income (SSI) and Aid to Families with Dependent Children (AFDC).

1 ) Beneficiary Cost Sharing

States would be allowed to require adult children of institutionalized Medicaid beneficiaries to contribute to the cost of the elderly parent's care.

Slates would be permitted to attach a lien on real property of institutionalized Medicaid recipients to recover Medicaid costs prior to the death of an individual.

2) Co-payments

Co-payments by beneficiaries would be increased substantially. Currently, states may require copayments only for optional services for SSI or AFDC recipients. Co-payments for physician, clinic, outpatient, and inpatient hospital services are proposed. An estimated savings of $329 million for FY83 is projected. This proposal is considered to be "costshifting" to Medicaid recipients and would affect an estimated 3.6 million older adults.

3) Cost-Shifting to States

The Administration proposal reduces the matching rate to states for optional services to SSI and AFDC recipients and for all services for the medically needy. For older adults, the major impact would be the potential reduction in support of nursing home care. States have voiced great concern over this proposal, since most states already are experiencing financial difficulty with Medicaid…

News From Capitol Hill

1983 Budget Proposals Affect Older Americans

On February 8, President Reagan submitted his proposal budget for fiscal year (FY) 1983. Since that time, political analysts, consumers, and Congressional staff have been digesting the impact of these proposals. Particular attention has been given to the effect on special or needy groups, a category to which some older adults belong. The Senate Special Committee on Aging has prepared a detailed analysis of how the proposals will affect older Americans. Highlights of these budgetary issues follow:

HEALTH

Medicare - The Administration's FY83 budget proposals reduce estimated Medicare outlays by $2.5 billion in FY83, from an estimated $57.9 billion to $55.4 billion. These changes are possible through:

1) Beneficiary Coverage

2.6 million Federal workers would be required to pay the Health Insurance portion of the payroll.

Employers would be required to offer employees (ages 65-69) the same health benefit package offered to younger workers and make Medicare the secondary payer to these plans. It is expected that this proposal would affect 450,000 older workers.

Medicare would begin on the first day of the month following a person's 65th birthday rather than the current practice of providing coverage the first day of the month in which a person turns 65.

2) Beneficiary Cost Sharing

All home health visits would require a 5% copayment. The Administration projects that this will cost people $1.70 per visit. About 900,000 older people currently receive home health care under Medicare.

The Part B deductible would be indexed to the Consumer Price Index. This will result in higher deductible payments.

3) Provider Reimbursement

The major cost saving item is the proposal to disallow 2% of all Medicare hospital costs. This is expected to save $653 million. This proposal is aimed at restricting the growth rate of hospital expenditures. Analysts argue it has the potential of shifting the 2% loss- to private payers or the Medicaid program.

The reimbursement rate for hospital-based pathologists and radiologists would be lowered from 100% to 80%, the same rate for other physicians.

Medicaid - Substantial changes have been proposed by the Administration, expecting to save $2.1 billion in-Medicaid, primarily through cost shifting to states and increased cost sharing by beneficiaries. Although the first is losing momentum in the election-year Congress, it is expected that some costsaving proposals may pass. Additional savings are proposed from an estimated reduction in the Medicaid population by imposing more restrictive eligibility requirements for people receiving Supplemental Security Income (SSI) and Aid to Families with Dependent Children (AFDC).

1 ) Beneficiary Cost Sharing

States would be allowed to require adult children of institutionalized Medicaid beneficiaries to contribute to the cost of the elderly parent's care.

Slates would be permitted to attach a lien on real property of institutionalized Medicaid recipients to recover Medicaid costs prior to the death of an individual.

2) Co-payments

Co-payments by beneficiaries would be increased substantially. Currently, states may require copayments only for optional services for SSI or AFDC recipients. Co-payments for physician, clinic, outpatient, and inpatient hospital services are proposed. An estimated savings of $329 million for FY83 is projected. This proposal is considered to be "costshifting" to Medicaid recipients and would affect an estimated 3.6 million older adults.

3) Cost-Shifting to States

The Administration proposal reduces the matching rate to states for optional services to SSI and AFDC recipients and for all services for the medically needy. For older adults, the major impact would be the potential reduction in support of nursing home care. States have voiced great concern over this proposal, since most states already are experiencing financial difficulty with Medicaid programs.

The Federal matching rate for Medicare Part B "buy in" would be eliminated. Currently, states may pay the Medicare Part B premium for individuals who are eligible for both Medicare and Medicaid. States receive matching funds from the Federal government for this program.

FOOD STAMPS

The Administration request for $9.5 billion for the food stamp program represents a $2.3 billion reduction from the FY82 budget.

The food stamp program changes are part of the Administration's "New Federalism." Financing and administration of the food stamp program would become a state responsibility in 1987. This proposal is being rejected by states, also. The Department of Agriculture estimates that nine out of ten older people would hâve benefits reduced.

RETIREMENT INCOME

Social Security - The President is awaiting recommendations of the newly formed National Commission on Socia Security Reform, which are due by December 31, 1982. Therefore, no major legislation is proposed in the Administration's budget. Proposals may come from the Budget Committees. One such proposal, belonging to Sen. Pete Domenici (R-N.M.), Chairman, Senate Budget Committee, would freeze costof-living increases for social security beneficiaries.

Supplemental Security Income (SSI) - The FY83 Administration budget proposal would reduce SSI budget authority by $286 million (from $9.2 billion to $8.9 billion). A major impact would be to reduce benefits by $240 a year for people whose incomes are generally below the poverty line (as defined by the Federal government).

OLDER AMERICANS ACT PROGRAMS (OAA)

Older Americans Act programs in FY82 were funded under a continuing resolution at 4.3% lower than the FY81 funding level. The Administration proposals for FY83 would reduce OAA funding by $77.5 million. Decreases are proposed for the following items:

* Supportive services and senior centers - $24.7 million

* Congregate meal services - $28.6 trillion

* Home-delivered meals - $9.2 million

* State agency administration - $1.7 million

* Training and research - $1.9 million

The budget proposal includes a recommendation to transfer the Department of Agriculture commodities program which supplements the nutrition program to the administration on Aging (in DHHS) and "cash out" commodities. Funding requests of $84 million would reduce the number of meals served per day by 69,000.

The Senate Aging Committee"Report, The Proposed Fiscal Year 1983 Budget: What It Means for Older Americans, can be obtained by writing to: Documents, Special Committee on Aging, Room G233, Dirksen Senate Office Building, Washington, D.C. 20510.

Senate Committee Polls Delegates

In a joint effort, the National Retired Teachers Association and the American Association of Retired Persons (NRTA/ AARP) conducted a poll of the 2,200 delegates to the White House Conference on Aging to identify those recommendations that delegates considered to be of highest priority. Topping the list were recommendations relating to income support and the availability of health care.

Chairman Heinz (R-Pa.) and Ranking Minority Member Lawton Chiles (D-Fla.) said the purpose of the survey is to determine which of the 668 recommendations of the conference are most important to delegates so that they can receive priority attention in the legislative process.

House Committee Surveys LTC Experts

The House Committee on Aging conducted a lengthy survey in April to question experts in the field of longterm care. The stated purpose of the survey is "to solicit your opinion about the probable effects of the proposed new regulation soon to be issued by DHHS as part of the Administration's plan to deregulate the nursing home industry."

Thç questionnaire has three parts. Part I summarizes the findings of the 1975 report of the Senate Committee on Aging, Nursing Home Care in the United States: Failure in Public Policy. Respondents are asked if the conclusions of the report are valid today. The second part of the questionnaire relates to changes that the administration proposes as conditions of participation - requirements to be met to receive Medicare and Medicaid reimbursement. Part III of the survey asks the respondents' opinion of Administration proposals to change enforcement and survey techniques of states.

The committee plans to release the survey results to the Department and possibly conduct hearings on one or more of the proposed changes.

LEGISLATIVE UPDATE

Older Americans Act of 1981

The Older Americans Act (OAA) of 1981 was reauthorized by both the House and Senate and funded under continuing resolution. The bill that passed extends the Act for another three years and sets funding levels for a separate Administration on Aging through September 30,1984. The intent of Congress was to maintain the OAA as a separate categorical program, although some feared attempts to incorporate the program into a social services block gTant.

Disability Block Considered by Dole

Sen. Robert Dole (R-Kans.), Chairman of the Senate Finance Committee, is considering introducing legislation that would create a block giant to include nearly 16 programs related to disabled persons. The programs combined under the Dole plan include alcohol, drug abuse, and mental health block grant; developmental disabilities; intermediate care for the mentally retarded; rehabilitation services; and crippled children's services. Funding for all of these programs totaled $4.3 billion in FY82. Opposition is expected from Sens. Orrin Hatch (R-Utah), Chairman of Human Resources Committee, and Lowell Weiker (R-Conn.), chair of the Human Resources Handicapped Subcommittee.

Metzenba um Urges Expanded Coverage

Sen. Howard M. Metzenbaum (DOhio) has introduced a bill to expand Medicare coverage to include eye care, eyeglasses, ear care, hearing aids, dental care, and dentures for the disabled and those over 65. The legislation, S.2238, is expected to cost approximately $3 billion in its first year, an expense that is expected to decline since the need for dentures is decreasing. Metzenbaum also argues "the costs would decrease as more persons will be better able to live independently" if the legislation is passed.

POLICYMAKERS

Butler Leaves NÍA

Dr. Robert N. Butler, director of the National Institute on Aging and Pulitzer Prize winner, has been appointed to head a new department of geriatrics at The Mount Sinai Medical Center's School of Medicine. Dr. Butler's resignation from the NIA creates a vacuum in the scientific community in aging. Particular concern exists since this is the time when Institute directors are defending budgets on Capitol Hill.

COLA Proposals Studied

A study conducted by Data Resources, Inc. reports that Senate proposals to hold the Social Security cost-of-living adjustment (COLA) below the increase in the consumer price index (CPI) would push 1.2 million older American below the poverty line by 1985 and 2.1 million into poverty by 1990. The rate of poverty among the elderly in 1980 was 15.7%.

Senators Domenici {R-N.M.) and Hollings (D-S.C.) have introduced proposals which would eliminate the July 1982 COLA for recipients of Social Security (OASDI), Supplemental Security Income (SSI), and federal service retirement programs. Future COLAs for these programs would be limited to three percentage points below the increase in the CPI.

ANA/AMA Forms Task Force on Long Term Care

The boards of the American Nurses Association (ANA) and the American Medical Association (AMA) each have selected four representatives to join a task force to address the health care of the chronically ill aged. Nurses selected by ANA include Patricia Archbold, Oregon Health Sciences Center; Melinda Henderson, Veterans Administration Central Office; Joan Lynaugh, University of Pennsylvania; Ida Martinson, University of Minnesota; and Cindy Cieplik, Program Coordinator, American Nurses' Association.

REGULATORY NOTES Home Care Waivers

The Health Care Financing Administration (HCFA) has granted its first waiver to the state of Oregon for the purpose of offering Medicaid-reimbursable home- and community-based services to older adults at risk of institutionalization. As part of the Omnibus Reconciliation Act of 1981, states can request three-year renewable waivers if they can prove that, on the average, home care services would not be any more expensive than the skilled or intermediate care that would otherwise have to be given to this group of older adults. HCFA also has approved a waiver request from Louisiana and Montana and is reviewing applications from California, Tennessee, Minnesota, Florida, Georgia, Kansas, Iowa, Nevada, Missouri, Rhode Island, South Dakota, and Vermont.

Rules on Ambulatory Surgical Centers

HCFA published in a March 23rd issue of the Federal Register a notice of proposed rulemaking (NPRM) that would increase the Medicare reimbursement to physicians for certain surgical procedures performed in ambulatory surgery centers to 100% rather than the usual 80%

10.3928/0098-9134-19820701-15

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