June 22nd will mark the eleventh anniversary of the Olmstead Decision, the Supreme Court ruling that said people with disabilities had a civil right not to be locked up in institutions. Last year, President Obama and Secretary Sebelius both issued press releases lauding the achievements of Olmstead’s first decade. How much hoopla will be made on Tuesday waits to be seen.
The Civil Rights Division of the Department of Justice has intervened in five states since December, putting a stop to life-threatening budget cuts that reduced home nursing and care services to people with disabilities. Federal Medicaid regulators and the DHHS Office for Civil Rights have intervened in another seven states since Obama took office, to stop the same life-threatening budget cuts. Lawsuits alleging state budget cuts are endangering the lives of people with disabilities have been filed, heard or decided in at least 21 states in the same time period.
Olmstead appears to be failing in almost half the country.
Following the Olmstead decision in 1999, DHHS urged states to create new programs that allowed people with disabilities to qualify for Medicaid on the basis of their own income and assets, rather than than the income and assets of their entire family. Medicaid, already a federal/state partnership, would be the vehicle through which federal funds would flow to the states to pay to support people with disabilities living with their families and in their communities. States were given great leeway in designing these “Medicaid waiver programs,” under the general assumption that local governments would be anxious to provide these needy services to their most vulnerable citizens.
The Federal government made it clear to the states that children with disabilities had a special right to the home and medical services without which they would require institutionalization. Federal law gives children with disabilities the right to any service their doctor says is “medically necessary”, even if that service is not normally offered in the particular state’s Medicaid plan.
When Olmstead fails and Medicaid cuts target the disabled, then people die.
States are targeting people with disabilities for budget cuts for two primary reasons. First, it gives them the “biggest bang” for the budgeting buck. According to a recent article in the Wall Street Journal:
Although only about 10% of the Medicaid budget goes to treat the 618,000 developmentally disabled Americans— the same percentage as a decade ago—
average spending for each person is more than 10 times higher than for all
Medicaid recipients. “Since their services cost the most per person they draw
attention,” says Mr. Lakin [head of a program that tracks services to the developmental disability population].
There are fewer immediate consequences for the state when it cuts those services because families won’t generally abandoned disabled relatives and leave states on the hook for housing.
In the state of Hawaii, these budget cuts produced a 36% increase in the death rate of people with disabilities receiving Medicaid, in a one year period.
Budget cuts do not necessarily occur due to a lack of funds. In states like Hawaii, where Medicaid services for this population have been turned over to profit-making corporations, cuts in services are made to support a 14-20% net profit from premiums (the percent of premiums which is not spent on actual medical costs).
In Hawaii, two for-profit companies are taking home $15 million a month just in the difference between what they are paid by the state to care for the approximately 40,000 people in the program, and what they are actually spending. For a sense of comparison, Hawaii’s Governor Lingle proposed to save the state $8 million by firing 228 state employees and closing all the outer-island Medicaid offices.
The problem with these managed care plans is that the companies are given a set amount per month per person (called a capitated payment), but how much of that is spent is not monitored. Insurance companies tell the states that such capitated payment programs will save money over current “fee-for-service” plans (where actual bills are paid individually). Few states seem to question the insurance industry’s self-interest in promoting capitated programs. Hawaii’s own actuarial figures submitted to the federal government, for instance, show the managed care program is costing the state 35% more than when Medicaid reimbursed for actual services incurred. The report showed the managed care program would save the state almost 6% in costs, but the numbers of people covered were understated and the figures did not reflect the scheduled increase in capitation rates due to take place ten months after the program began.
Until our federal government does something to right this immeasurable wrong, it will unfortunately remain up to the parents and caregivers of people with disabilities to ensure their loved ones are not put in danger by cuts in Medicaid home services.