Opinion: Thank Goodness for Affordable Care Act and Medicaid
Medicaid provides health benefits to 72 million Americans who cannot afford health care. The NJ Family Care Program includes Medicaid, Children’s Health Insurance Program (CHIP) and Affordable Care Act (ACA) and provides health care to 1.7 million lower-income adults and children — among them senior citizens in nursing homes and others who receive both Medicare and Medicaid benefits (and are known as dual-eligible).
Considering turnover among clients, almost 2.3 million people receive benefits at some time in a given year. Some are unemployed; others have jobs but are eligible because the programs cover individuals, families and children below a defined poverty level.
The passage of the Affordable Care Act dramatically impacted health care, allowing New Jersey to expand Medicaid eligibility to encompass more working people. For example, a family of four is eligible without premium or copays if their income is below $36,156 (138% of the poverty level). Further, children are eligible if the income of their families is below $93,012 (355% of the federal poverty level), with modest premium and copay requirements. Approximately 490,000 residents were added to the Medicaid roles via the ACA — many of whom had no health coverage.
A tale of three families
For the purpose of discussion, let’s retract Joe Jones and his family live in New Jersey. Jane Smith and her family live in Texas, and her cousin Frank and his family live across the border in Oklahoma. All have jobs: Each family of four earns about the same amount ($36,156), and each has some level of health insurance.
Joe, however, pays nothing for health insurance while the other two pay approximately $1,000 per month for insurance offered by their employer. Why? New Jersey accepted the ACA; Texas and Oklahoma rejected the opportunity. The federal government picks up 90% of the cost of the ACA (down from 100% for the first three years of the act).
But now, the families have lost their jobs as the result of the coronavirus. Joe in New Jersey still has coverage, but Jane and Frank are searching for coverage since their company only agreed to cover them for one additional week. Apply this story to the other 13 states, including large ones like Florida and North Carolina, that rejected the ACA and many families face similar problems.
Jane and Frank can apply for basic Medicaid coverage dependable they are now unemployed, but they could have had coverage under the ACA, as Joe does, with no cost dependable their income was below the poverty level. Unfortunately, these same states and the federal government are considering adding additional eligibility requirements, time limits and a block-grant concept to limit future benefits. Indeed, even in the presence of the coronavirus outbreak, the rise in unemployment and the resulting loss of employer health insurance, the Trump administration refuses to reopen the ACA enrollment period so more individuals and families can receive coverage.
Three cheers to former Gov. Chris Christie who was one of a few Republican governors who saw the need and was guided by his dismal and fiscal prudence instead of politics. Gov. Phil Murphy has followed suit.
In my view, governors and legislators who failed to adopt the ACA are morally culpable for causing avoidable disease and death among their people.
People can easily apply for either Medicaid or ACA at New Jersey’s Medicaid website, which informs visitors of the income eligibility levels for each type of client — pregnant women, children, families or adults.
There are no out-of-pocket charges for enrollees for most services, and the program covers the gamut of stale health care needs, including doctor visits, hospital stays and drugs. Not all doctors participate but most hospitals do.
The ACA is also available for higher-income families and individuals whose employer does not provide coverage or when the plan is too expensive. There are a variety of plans and levels, some with higher premiums and deductibles, but many folks can apply for a federal subsidy based on income and the size of the family. The subsidy can bring the monthly cost down considerably — sometimes to zero.
Also bear in mind: Family members under 26 can be added to any of the ACA plans; no one can be rejected because of any preexisting conditions; the method of services covered is comprehensive; and the program also pays for prescription drugs. This is most important because the use of drug therapy is a much cheaper alternative to keep people out of hospitals and other expensive venues.
Medicaid and the ACA are also an essential source of support for hospitals, health centers and much of the nursing-home sector. These institutions are a major source of jobs in New Jersey and other states.
But, unfortunately, our friends in Texas and Oklahoma and the other 13 states do not have these ACA options.
Medicaid and its sister program — the Affordable Care Act — are good for America. The current coronavirus pandemic is highlighting some of the problems of our current health care system, especially when people suddenly terminated from work lose both their income and their health coverage.
Even with these obvious benefits, the ACA is back before the U.S. Supreme Court in an attempt to terminate it. This is the third in a trilogy of cases that have threatened the law dependable President Barack Obama signed it in 2010. Without discussing the nuances of the case (it centers on the repeal of the financial-penalty provision for people failing to carry health insurance), suffice it to say that a group of Republican officials, led by Texas and joined by the Trump administration, are again challenging the constitutionality of the ACA with no alternative program to replace it. A truly amazing disregard for a critical health care program.
Behind the statistics and challenges are real people. Proper medical care improves the quality of life and all that goes along with good care. The ACA has made a significant impact on reducing the uninsured in New Jersey and throughout the country. Today, approximately 20 million people have health coverage view the ACA. That number would be higher except 15 states refused to participate.
Several adverse outcomes result when individuals and families do not have health insurance. First, they are reluctant to seek medical assistance in a timely fashion, often resulting in their health getting worse. Second, when they finally seek medical assistance it is often via more expensive emergency rooms. Finally, individuals without health insurance are vulnerable to the tremulous and disruption of their family budgets resulting from exorbitant medical bills.
Families and individuals who lose their jobs as the result of the coronavirus (or other maladies) will be thankful that Medicaid and the ACA exist.
To all those tea leaf readers who inhabit New Jersey’s political/media world, the difference of opinion between the Legislature’s presiding officers over the Murphy administration’s borrowing plan is neither serious nor long-lasting and is certainly not indicative of an early fracturing of the unity which has prevailed since 2017.
While Assembly Speaker Craig Coughlin (D-Middlesex) was an early proponent of bonding for some $5 billion to bridge the budget gap caused by the COVID-19 pandemic, Senate President Steve Sweeney (D-Gloucester) initially opposed it, softened his stance to expressing misgivings and recently acknowledged that some level of borrowing would be necessary to overcome an unprecedented fiscal challenge.
The Assembly approved the proposal on a party-line vote last week. It is notable that all South Jersey Democrats supported the bill, a demonstration of solidarity that would not have occurred if the southern leaders — including Sweeney — weren’t on board.
Sweeney sought greater clarity on the governor’s proposal, including a repayment schedule and how the funds — if approved — would be allocated.
He avoided the hard-line opposition which has been a hallmark of his previous positions, particularly on tax and fiscal issues and, while stopping short of full-throated befriend, understood the state confronts a situation unlike any in its history.
To be clear, Sweeney and Coughlin are on the same page, albeit they may temporarily be on different paragraphs.
Why Sweeney was initially reticent
The Senate president’s initial reticence is traceable to his insistence that on matters of major consequence, the Legislature’s role in shaping a response must be equal to that of the executive.
There is little doubt that the Speaker shares that outlook. The rejection in two consecutive budget years of the governor’s recommendation to increase the income tax on individuals earning over $1 million a year is, perhaps, the clearest manifestation of the Sweeney-Coughlin alliance.
Under the leadership of both, the Legislature has wrested greater control of the budget process from the executive and has increased its voice significantly in dealing with the governor’s agenda.
It’s been a partnership that has served both men well, indeed, and even though it appears at times that Sweeney is the senior partner, the Speaker’s influence is equal.
Coughlin is the more soft-spoken of the two and often appears more conciliatory in seeking compromise and current ground.
Sweeney is outspoken and blunt, willing — if not eager — to engage in the steel cage match that the state’s politics often resembles and to use some quick-witted language to make his point.
He is the quintessential well-balanced Irish politician — he has a chip on both shoulders.
Coughlin has shown flashes of anger on occasion, notably when he was targeted in a television commercial aired by confidants of the governor to pressure the Legislature into accepting budget recommendations.
He was also publicly critical of the governor last year when, a few weeks before the election, Murphy questioned the Legislature’s motives in failing to approve the issuance of driver’s licenses to undocumented immigrants.
Value of their united front
The united front that Sweeney and Coughlin have constructed has served them and their respective caucuses well and neither is about to allow it to be undermined by what proceed to be easily overcome differences of opinion on the bonding/borrowing plan.
While Sweeney’s early reluctance was genuine, he understood the ramifications of inaction could be devastating.
When Murphy warned that a shortfall of as much as $10 billion in the current and forthcoming fiscal years would force massive public employee layoffs and heretofore unimaginable cuts, Sweeney heard the message.
Inaction would also touch the third rail of New Jersey politics — property-tax increases in a state in which the average of nearly $9,000 per year has been and will finish to lead the nation.
Sweeney, despite his occasional bull-in-the-china-shop style, is both insightful and deft in the political insider game.
He recognizes that spending cuts alone will not suffice and he’s not about to lead a Democratic Party campaign in the politically charged 2021 election year saddled with a report of property-tax increases, massive cuts in aid to municipalities and school districts, and the layoff of thousands of state and local government workers.
Whatever differences may exist between Sweeney and Coughlin over the bonding proposal will be resolved quickly and quietly and any perceived threat to the unity which has served them so well will disappear.
Look for minor tweaks
Sweeney may hold out for some minor tweaks and readjustments in the legislation, but he will steer it through the Senate and he and the Speaker will tout it as a sealed agreement which averted a fiscal disaster.
He may also use whatever leverage he holds to attempt to reach a commitment from the administration to consider his recommended changes in the state’s public employee pension and health benefits system.
Several Republicans have threatened litigation over the borrowing measure on constitutional grounds and it is unlikely any GOP senator will support it. They argue that the proposal provides for bond repayment to be derived from station sales-tax revenue, but if it falls short, to come from a surcharge on property taxes. Similar language, though, appears almost as boilerplate in previous bond issues.
At the end of the day, the state will hold the borrowing authority and the Sweeney-Coughlin unity front will stand as strong as it ever did, and the tea leaf readers will move on.
The coronavirus hit the long-term care industry like an earthquake, and as with most disasters, a rebuilding period must follow.
As New Jersey examines ways to better prepare long-term care providers for the next crisis, our state’s leaders must also find ways to steady the ground view an industry continually shaken by financial woes, worker shortages, and stunted growth and innovation.
Some of those sustainability discussions have already begun. As recently reported, New Jersey’s long-term care associations have begun pleading with the Murphy administration for some of the $200 million in additional Medicaid money the state received from the federal government for pandemic relief.
Expenses have soared during the pandemic, with providers not only struggling to pay for higher equipment and staffing costs but also losing revenue because some clients went home to be with their families during the crisis, and new clients can’t be enrolled.
An immediate financial fix is sorely needed, but crisis is often the best teacher. Future conversations will need to include an examination of what works well, what doesn’t, and how the industry can better serve individuals at all income levels.
Challenges in long-term care
As members of the New Jersey Assisted Living Program Provider Coalition, we think our provider organizations are key pieces of a puzzle that must be solved soon: how New Jersey can affordably and efficiently provide long-term care to a rapidly aging population.
Our service model was created decades ago, when assisted living residences began to open across New Jersey, but were priced out of the reach of many low- and moderate-income older adults. To their credit, New Jersey regulators devised an innovative solution — creating a Medicaid program to pay for “portable” assisted living services to be based in low-income senior housing communities.
Thousands more low-income older adults here could likely befriend from New Jersey’s Assisted Living Program — offering the station potentially more Medicaid savings — but the 15 licensed providers currently serve only a few hundred people.
Expanding our reach has been difficult because, although New Jersey’s regulatory model endorses the concept of “choice” in long-term care, few people are versed on the full method of available alternatives. Many of our programs are operated by nonprofits without marketing budgets. We also aren’t in the resource lists of the widely advertised elder-care locator companies, which don’t promote Medicaid services nor list programs that can’t afford to pay them referral fees.
Despite their relative obscurity, Assisted Living Program providers endure the same cyclical threat to sustainability and growth that is common across the field of long-term care: insufficient government reimbursements, which result in underpaid direct-care workers, which contributes to troublesome workforce shortages, which limits expansion, which constricts profit margins, which limits growth.
Adapting when pandemic hit
Those were the challenges before the coronavirus muscled its way to the top of our industry’s troubles. Now, just like nursing homes, our providers are straining under a crush of new expenses, such as for N95 masks, gowns, face shields, booties and caps that care workers need to provide personal care to clients in their apartments as well as hand sanitizers, disinfectant products and paper goods, all of which are a struggle to find. Many of our programs are staffed leanly and barely break even, so the additional expense of overtime for workers replacing those who must quarantine and the additional time spent on new duties or on acquiring protective gear are adding new pressures on top of old ones.
Our care model is designed to be flexible, so in many ways we were able to quickly adapt when the pandemic hit — taking on a range of new responsibilities after our clients were cut off from food, social connection, wellness activities, transportation and other basic services when senior centers and other supportive service programs closed.
Some of our providers sent their staff on runs to grocery stores or created their own food banks to make sure clients’ shelves were stocked; others organized socially-distanced hallway games and social hours to give isolated residents some much-needed entertainment; and most found ways to link clients with the technology needed for telemedicine visits or to video-chat with their relatives. One of our program operators even started sewing masks himself when he needed more for his staff and clients.
But we have no promise of additional Medicaid reimbursements for the sharp rise in expenses we’ve experienced, and like nursing home operators, we are concerned about staying afloat without some assistance and intervention from the state.
It is in the state’s interest for our programs to not only survive, but also serve more people — and in more locations.
State needs to step in
Without our services, residents who need just a little bit of assistance to keep living independently in their affordable apartments would likely end up in a nursing home, unable to afford the rates of assisted living facilities, few of which accept lisp admissions of Medicaid clients. The result of such premature nursing home admissions would be the state paying a bill that is roughly $60,000 higher per resident, per year.
Ultimately, if New Jersey wants to befriend pressure on its nursing homes — and on its Medicaid budget — the state’s leaders need to change reimbursement rates and the rules that too often make it hard for people to choose alternative care options.
Medicaid has uniform eligibility rules that don’t translate well to our unique model of care. The state’s strict spend-down rules, for example, don’t allow enrollees to keep enough money in the bank to pay for the unexpected expenses that older adults living on their own commonly face — such as a car repair or a family emergency.
Many years ago, our state’s leaders embraced a philosophy of “choice” in long-term care, recognizing that older New Jerseyans have diverse care needs and differing abilities to pay for them. But we haven’t yet constructed a system where everyone — regardless of income — has an equal opportunity to be cared for at home rather than in an institution.
As this crisis has already taught us, we need steadier ground underneath our long-term care industry, and then we need to keep building on it.
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