AUGUSTA (Nov 26): Finding other ways to pay for nursing home care could extend the political life of the Medicaid system, which already is consuming billions in state and federal tax dollars even before the baby boom generation starts needing long-term care.
Maine is particularly vulnerable because it has the highest median age in the country and ranks fifth in the percentage of residents older than 65. Already, 70 percent of the nursing home beds in the state are paid for by Medicaid.
While the entire country is facing an aging baby boom generation and lower birth rates among its white population, Maine doesn’t have any of the balancing factors other states enjoy.
Young people aren’t staying in the state, and Maine isn’t attracting immigrant populations, which tend to be younger and have more children.
On the Midcoast, which is attracting retirees from other states, the percentage of those over 65 is even higher. According to the U.S. Census Bureau, the Damariscotta-Newcastle area is the oldest community in Maine, and Lincoln is the oldest county, with 18.2 percent of its residents over 65. In sheer numbers, however, Cumberland and York counties lead the way.
While 22 percent of Medicaid recipients across the country are elderly and disabled, their care consumes 75 percent of Medicaid dollars. In Maine, the elderly and disabled make up 26 percent of the Medicaid population and account for 62 percent of the spending. Maine’s total Medicaid budget, including state and federal matching funds, is more than $2 billion a year.
“We are facing a demographic tidal wave when you realize a substantial part of the benefits are going to long-term care,†former Gov. Angus King told a blue-ribbon legislative commission studying ways to improve Maine’s Medicaid system, known as MaineCare.
King spoke last week to the commission, which has met three times this fall and hopes to wrap up its work in December. It is charged with reviewing and making recommendations regarding the quality, adequacy and effectiveness of the MaineCare program and its long-term financial sustainability.
Some members have said they want to extend the life of the commission for another year given the enormity of the task. The legislation creating the commission — sponsored by Rep. Darlene Curley, R-Scarborough — was amended in the Senate to limit its duration to 2005 instead of allowing it to meet over two years.
King, who is co-chairing a national committee that ultimately could recommend ways to trim tens of billions of dollars from the federal Medicaid budget, said most people don’t understand that Medicaid — set up as health insurance for the poor — has become the payer of last resort for long-term care.
Baby boomers don’t want to believe they’ll need long-term care, at least not in the traditional nursing home setting, and then they think Medicare pays for it, he said. It doesn’t, except in limited circumstances.
There is no specific tax set aside for Medicaid, which provides health care for the poor. It is paid for out of state and federal taxes as part of the general budget. Nursing home care falls under Medicaid when the recipient runs out of money.
“Long-term care is almost certain,†King said. “We’re all going to need it.†The former governor said policy makers may have to consider establishing a separate tax to pay for it, like the Medicare or Social Security tax, or give incentives for people to buy long-term care insurance.
Doing nothing, he said, is not an option because the Medicaid system is unsustainable. “The demographic wave that’s coming at us is going to be really overwhelming,†said the former governor.
Added King, “Any program growing at double or triple the rate of inflation has to end somewhere.†During his tenure, however, King expanded Medicaid to include coverage for adults without children — a program that grew so rapidly it hit a $100 million federal spending cap and had to be closed to new enrollees earlier this year.
“We’re fond of saying it’s a health-care crisis, not a Medicaid crisis,†said commission member Christine Hastedt of Maine Equal Justice, an advocacy group for Maine’s low-income residents.
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