A State Association Perspective: Where Do Persons with Disabilities Fit in the Healthcare Debate?

By Chris Burnett
Government Issues Analyst
Illinois Association of Rehabilitation Facilities

Persons with disabilities fit into the same rocking boat we are all in as the country grapples with the soaring cost of Medicaid, the aging of the baby boomers, the recession and budget deficits but with the most at stake.  

The subject dominates the airwaves, the energy of our President, Congress, most policy wonks, politicians and the person on the street these days. The need for reform is undisputed but the road to reform is anything but clear. It is understandable why the debate has lasted decades as the stakes are high and rising as the cost of health care for all of us gobbles up ever more of the national budget, the population ages demanding more of it and the economy struggles to regain footing after the near Apocalypse of the financial crisis. 

The debate reached its current crescendo in part due to the full court press being applied by President Obama to achieve a high profile goal of his administration– one he includes as part and parcel of our national security – health care reform. While much of the talk revolves around how the non-disabled population will access or not access basic or gold-plated health insurance we wondered what experts in the field were thinking about the type of supports needed by persons with disabilities and where they fit into the healthcare reform equation. 

“While the emphasis on health reform has been mainly focused on the 45 million Americans that do not have medical insurance, over 200 million Americans lack any insurance protection for the costs of long-term services.  The lack of a coordinated, national public-private system for delivering quality long-term services and supports—one that also addresses the crisis in the recruitment of direct support professionals to provide these services—is a priority for ANCOR in the health care debate this year.”[1] An ANCOR estimate puts at 10 million the number of people currently in need of long-term services. Nearly half of all funding for long-term services is provided through Medicaid which requires individuals to impoverish themselves to receive supports. Yet, hundreds of thousands of individuals with disabilities remain on waiting lists for Medicaid home and community-based services.

Hotly debated in town hall forums around the country healthcare reform is also viewed as a unique opportunity to include persons with disabilities in mainstream healthcare. It is high on the priority list for the National Council for Community Behavioral Healthcare according to a statement by their President and CEO Linda Rosenberg; “Confronted with this once-in-a-generation opportunity to secure the resources necessary to effectively serve those in need, the National Council is pursuing a federal healthcare reform agenda which not only takes into consideration the overarching principles of the current healthcare reform debate, but strongly advocates for greater resources to community behavioral health providers to better address the whole health concerns of individuals with mental illness and substance use disorders.”

The Scan Foundation report makes its perspective clear; “Long-term care reform belongs in health care reform.  The well-being and financial security of families depend not only on access to affordable medical services, but also on access to affordable, reliable long-term care – the daily assistance and supports that many individuals need because of serious medical conditions or disabilities.”[2]

“Long-term care” can mean different things to different people but the reality is long-term care is exactly what a person with developmental disabilities or persons with mental illness and issues with substance abuse needs – care long term. It may vary in intensity from person to person and day to day but it is long-term care just as it is for the elderly or others with chronic health conditions. But are persons with developmental disabilities, mental illness and substance abuse issues considered in the term “long-term care?” Sometimes it’s hard to tell. 

The new administration seems to be trying to answer that question or at least re-write the definition. In support of President Obama’s proclamation of the “Year of Community Living,” HHS Secretary Kathleen Sebelius announced a “funding opportunity that will make it easier for older people, younger adults, and their families to learn about and access health and long-term care options through Aging and Disability Resource Center Programs (ADRCs).  ADRCs provide one-stop shop sources of information, one-on-one counseling, and streamlined access to programs and services that can enable people to remain in their own homes and communities.”

According to the press release from HHS, “States applying for ADRC grants must involve a variety of agencies, organizations and consumers representing seniors and people with physical, developmental and mental health disabilities in the design and implementation of their ADRC programs.  ADRCs also partner with State Health Insurance Counseling Programs to help people with their Medicare benefits.”

“This opportunity promotes the shared vision of the Administration on Aging and CMS on how ADRCs can help facilitate an integrated services delivery system to better support older adults, caregivers and those with disabilities who want to remain independent in their communities,” said Acting Assistant Secretary for Aging Edwin L. Walker.

Of the healthcare reform ideas being proposed we found those included in a recent report from the SCAN Foundation both interesting and, ironically, familiar. The foundation is an independent non-profit foundation dedicated to advancing the development of a sustainable continuum of quality care for seniors that integrates medical treatment and human services in the settings most appropriate to their needs and with the greatest likelihood of a healthy, independent life. While focused primarily on the long-term care of seniors, in a July 2009 report commissioned by the Foundation the authors address many of the same issues confronting persons with disabilities and their need for reliable, high quality supports and services. You will also see that their recommendations echo many of the work group recommendations made by stakeholder advisory groups that have met over the years in Illinois. I guess we’re more on top of things than we thought…but it also speaks to the difficulty of implementing these recommendations even if they’re the right thing to do. 

The Georgetown report, entitled “Long-Term Care in Health Care Reform: Policy Options to Improve Both”, was developed by a team of highly regarded researchers including Harriet L. Komisar and Judy Feder from Georgetown University, Anne Tumlinson from Avalere Health, LLC, and Sheila Burke from Harvard University’s John F. Kennedy School of Government.  

As you read through these recommendations as well as the other ideas in the mix from other sources consider the notion that persons with disabilities are not a separate category from the rest of the population with separate rules. Consider that they are integrated in the true sense of the word into their local and national communities and are a part of a national effort to improve access to and the quality of health care for the long term. Keep in mind, too, that the term “dual eligibles” has a dual meaning for persons with disabilities – it not only refers to someone eligible for Medicaid and Medicare but also refers to an individual who requires mental health supports in addition to supports for an intellectual disability. To truly be comprehensive the health care system must support the entire person for the long-term. As a society we expect nothing less. As a country we have not yet found the route to providing comprehensive health care. 

A comprehensive approach to supporting persons with developmental disabilities and mental illness and/or substance abuse has eluded us in Illinois and one could speculate in most states but that doesn’t mean we should not review all health care reform with the assumption that persons with disabilities are in the same boat with the rest of us when we talk about needing quality healthcare. 

The consolidation of the various Divisions of the Illinois Department of Human Services in the late 1990’s was originally designed to integrate those supports in one “super agency” but few would dispute that it has not resulted in comprehensive quality care for those with a range of disability support needs. Perhaps now is a time to re-think the end goal of such consolidation and either make the commitment to make it work or take another approach that achieves better results. 

Even beyond the Divisions within the Department of Human Services there is overlap in populations served and needs to be met by multiple state agencies such as the Departments of Aging, Healthcare and Family Services, Children and Family Services, Transportation and Public Health but rarely are there integrated efforts to make plans of support that are easily accessed and navigated by the public. The segregation and divides inherent in each agency fiercely guarding its share of the budget pie don’t make for much inter-agency coordination. Old habits, old walls and old ways of doing business will need to crumble before substantive change occurs. One could speculate that the health care debate might just provide the forum for such far-reaching discussions if the leadership exists to start the conversation. 

IARF’s “One Illinois” is one example of a concentrated effort to educate legislators and State administration officials that disability supports and services are healthcare and should not be segregated into a separate category when budget decisions are made.  

From a more global perspective, the findings in the Scan Foundation’s report suggest the following; 

Expand Medicaid Support for Home and Community-Based Services[3]  

Key components of the proposal include; 

Require—or provide strong financial incentives for— states to expand home and community-based services.

• Provide federal financial assistance to states through an enhanced matching rate to help finance expansions.
• Make home and community-based services eligibility available on an equal-footing with nursing home care. Disability criteria and financial criteria for eligibility should be equivalent for across settings, including spousal impoverishment protection rules. To reduce unmet needs, a proposal could go further and give states the option of extending benefits to a broader population to include people who do not meet disability criteria for nursing home services.
• Invest in workforce development to assure people can obtain the type and quality of home and community-based services they need and want.  

This first recommendation aims to make personal care services in home and community settings more widely, and equitably, available in states’ Medicaid programs. This could achieve two important outcomes. First, more people would be able to obtain needed care in the setting they prefer, rather than having their choice limited to institutional services. Second, Medicaid long-term care programs could become more efficient over time by reducing use of higher-cost nursing home services relative to what it would otherwise be. Although expanding support of home and community-based services would require an initial investment, a recent review of research evidence concluded that it can be cost-effective over time for states to develop more balanced long-term care systems.[4]

 Of the $101 billion that Medicaid spent on long-term care in federal fiscal year 2007, 58 percent was for institutional (mainly nursing home) services.[5] While the proportion of Medicaid's long-term care spending dedicated to home and community-based services has increased markedly in the past decade, an “institutional bias” in Medicaid coverage persists. Home and community based services spending as a share of total long-term care spending grew from 19% to 42% between fiscal years 1995 and 2007, although the proportion varies among states. The majority of Medicaid long-term care spending goes towards institutional services in all but eleven states.[6]  

Improve Coordination of Medical and Long‐Term Care for Medicare‐Medicaid “Dual Eligibles”  

The second proposal aims to improve the quality and cost-effectiveness of services for people who rely on both Medicare and Medicaid by promoting the development and testing of integrated care programs for dual eligibles. Assuring capacity to deliver services appropriately and efficiently can be achieved by rewarding organizations that reduce Medicare or Medicaid costs, relative to projected performance, with a share of the savings. Similarly, states could be encouraged to develop and promote such organizations by sharing with them a portion of any Medicare savings (such as in reduced hospitalizations) from successful performance.  

Key elements in integrated care models include the following:  

• A responsible entity. One entity, such as a Medicare managed care plan or a state Medicaid program, would be responsible for assuring adequate, coordinated care.
• Responsibility for coordinating the full set of acute and long-term care services covered by Medicare and Medicaid.
• Financial incentives for efficiency. A mechanism that combines Medicare and Medicaid funding can promote efficiency gains by enabling savings in one program to be used to pay for services covered by the other—for example, savings from Medicare-covered hospital or other acute care services to be used to pay for home and community-based services or other non-Medicare services.
• Mechanisms for assuring adequacy and quality of care, and data collection.
• Voluntary participation for dual eligibles. If an integrated model is producing the coordinated care it should be, then it should be able to attract and retain voluntary participants. Further, it is important that dual eligibles, like other Medicare beneficiaries, retain the right to choose traditional Medicare fee-for-service benefits.  

The third and fourth options aim to strengthen long-term care protections for the broader population; one with better coordination of medical and long-term care for Medicare enrollees; the other by establishing insurance protection for people of all ages and incomes.  

Improve Coordination of Medical and Long‐Term Care for Medicare Enrollees with Chronic Conditions  

The goal of the third proposal is to promote the innovation and diffusion of service delivery and payment models designed to improve quality and efficiency by coordinating the full range of medical and long-term services people with chronic conditions may need. The proposal would promote the development of demonstrations of care coordination models that address the need to coordinate both medical and long-term care for Medicare enrollees who need both.  

Within a flexible framework, demonstrations would need to meet certain broad requirements, which would include the following key elements:  

• Primary care “medical home” model.
  • An Illinois example of this approach is a recent administrative rule change that requires certain individuals not eligible for Medicare enrolled in both the physical disability and elderly HCBS Waivers to participate in the Primary Care Case Management Program (PCCM).  
• Explicit responsibility for coordinating long-term care as well as medical care. Care coordinators would be responsible for determining long-term care needs and assisting the beneficiary and family members in locating care options and coordinating care; they would also play a critical role in planning transitions among care settings.
• Communication with, and support and training for, family caregivers.
• Payment system to support the model.
• Option of targeting program to specific populations, such as Medicare enrollees who meet criteria indicating needs for both complex medical care and long-term care.
• Data and evaluation.
• Authority to expand successful care coordination demonstrations without new legislation.  

The U.S. Senate Finance Committee’s recent document describing proposals to improve patient care and reduce health care costs includes proposals that would promote innovation and testing of chronic care coordination models. These policy improvements could be greatly strengthened by specifically encouraging the development and testing of models that include the coordination of long-term supports and services along with medical care.   

Establish Public Insurance Protection for Long‐Term Care for the Broad Population  

In the fourth proposal, a public insurance program, financed by participants through premiums or taxes, would spread the risk across a broad population and offer protection to participants of all ages and incomes. The insurance could be designed to provide a core benefit that would be supplemented with private resources (including private long-term care insurance) and Medicaid.  

Key elements of a new public program include the following:  

• Ensure high participation among potential enrollees to spread risk widely to produce adequate revenues to pay benefits and keep enrollees’ contributions affordable.
• Provide meaningful benefits to ensure that people can obtain the services and supports they need and want.
• Establish a financing mechanism that generates revenues dedicated to pay for future benefits.  

The Community Living Assistance Services and Supports Act (CLASS Act), included in the Senate Health, Education, Labor, and Pension (HELP) Committee’s proposed health care reform legislation, would create a premium-funded insurance program in which working-age adults could become eligible for a cash benefit after paying into the program for five years, and could maintain coverage throughout their lives by continuing to pay premiums. An alternative approach would be to create a new long-term care benefit in Medicare, financed with a surcharge on income taxes and available to people who are currently working-age when they become Medicare beneficiaries. Either approach would spread risk among a broad population and allow people to pay over time to insure for potential future needs. And, while neither approach would eliminate the need to rely on family care and personal resources or private insurance to assure full support, both would greatly enhance access to quality care and financial protection for people who need services.  

Health care reform offers an opportunity to enact any or all of these initiatives—to improve the adequacy and quality of health and long-term care services for people who need both. We hope this opportunity will not be missed.  

Where are the models in healthcare reform? Are there ideas being implemented that are working? 

 States Offer Critiques, Advice on Reform[7] 

The Boston globe reports: "If you want to know how the proposed overhaul of the US healthcare system may play out nationally, talk to top executives at the biggest medical and life sciences companies in Massachusetts. As the heads of leading hospitals, insurers, and biotechnology companies, they have dealt with the complexities of near-universal healthcare since 2006, when Massachusetts became the first state to mandate insurance coverage." As the debate over health reform continues in Washington, the executives offer warnings that two Obama administration goals - expanding insurance coverage and controlling spending - are potentially incompatible. "As Massachusetts strains to deal with the increasing costs of its successful healthcare program, they raise questions about who will pay for the projected $1 trillion cost on the federal level."

The Massachusetts executives say that the health care system needs major surgery and have a range of concerns, including cost and unintended consequences of reform: "Hospitals and doctors say that lower federal reimbursements could hurt the quality of medical care, while insurers chafe at a proposed government-run health plan they argue would put them at a competitive disadvantage. ... At the same time, biotech and medical-device makers say the focus on cost savings could hinder their ability to develop life-saving drugs and innovative devices. ... Hospital executives said those steps [to increase coverage of uninsured] may eventually pare expenses, as will preventive care if more people sign up with primary care doctors." As the federal government proposes to reduce its reimbursement payments to hospitals, these facilities also may feel the pressure of more patients. According to Paul Levy, president of Beth Israel Deaconness Medical Center, "What you could get is a gradual degradation in the ability of hospitals to deliver services.”

Vermont takes a different approach – 

USA Today reports that Vermont took a different approach to reform from Massachusetts, but the state also could provide a model for the national level. State health care workers say Vermont has innovative approaches to prevention and care coordination, as well as new computerized records systems.

"Massachusetts' health care overhaul included a costly mandate that nearly every resident have insurance, paid for by employers, insurers and taxpayers. Covering the uninsured is at the heart of the debate in Washington also as Congress struggles with whether to offer -- and how to pay for -- health care for more than 46 million in the USA without insurance coverage." Vermont took a different path. Officials there "focused on cutting costs and improving care, with the goal of insuring more people. They won over critics in the Legislature and the public by not raising taxes. Instead, the state convinced insurance companies and hospitals to kick in. The federal government gave Vermont flexibility in how to spend Medicaid dollars. The only hit to the public: a tax on cigarettes that is 80 cents per pack and a $365 per employee penalty for businesses that don't offer health insurance. The program is new, and cost-savings results that might draw critics aren't in."   

Blue-Dog Deal Dogs Health Overhaul Effort[8] 

When considering where Medicaid, the largest funder of services and supports to persons with disabilities, fits into the healthcare debate one can look at the House leadership's agreement with conservative Democrats (also called “Blue Dog Democrats”) on health care legislation that drew fire from state officials worried about increased Medicaid costs and liberal lawmakers upset about a proposed reduction in subsidies for low-income families to buy insurance.

The pact with the Blue Dogs would trim $20 billion from the bill's 10-year price tag by requiring states to cover 7 percent of the cost of expanding Medicaid, the state-federal health program for the poor and disabled. The current version of the bill calls for the federal government to pay for the expansion indefinitely.

In addition, the agreement would cut $100 billion by making insurance subsidies available to families and individuals only after they spend 12 percent of their incomes on premiums, up from 11 percent in the existing bill.

The proposed reductions were necessary to offset demands from the Blue Dogs that drove up costs elsewhere in the legislation. For example, the agreement would exempt many small businesses from having to provide health insurance to their employees and would lay the groundwork for more-generous fees for hospitals and doctors treating patients in any new government-created insurance program. Conservative Democrats from largely rural areas of the South and Midwest said the changes were essential to protect small businesses and providers in their districts.

Some governors immediately voiced displeasure about the Medicaid change. In a letter to House and Senate Democratic leaders, Republican Gov. Arnold Schwarzenegger of California said that the federal government should help states decrease their Medicaid costs. "If Congress thinks the Medicaid expansion is too expensive for the federal government, it is absolutely unaffordable for states," he wrote. "I cannot and will not support federal health care reform proposals that impose billions of dollars in new costs on California each year."

State Medicaid officials also voiced their unhappiness. While contributing seven percent to the expansion of Medicaid “doesn’t sound like a lot…that’s money right now that every state would have difficulty coming up with,” said Tony Keck, health policy adviser to Louisiana Gov. Bobby Jindal, a Republican. “What kind of long-term liability does it create for the states?" Over the last eight to 10 years, Keck said, the cost of Louisiana’s Medicaid program has doubled.

Ann Kohler, director of the National Association of State Medicaid Directors, said that "states cannot afford any additional pressures on their budgets at this time."

The nation’s governors, struggling with reduced tax revenues and expanded Medicaid enrollment as part of the recession, have been cutting optional benefits for enrollees, such as dental care for adults. Under the House legislation, Medicaid would be expanded to families and individuals with incomes up to 133 percent of the federal poverty level, or about $29,400 for a family of four.

Meanwhile, liberal members of the Energy and Commerce Committee protested the reduced subsidies in the bill and vowed to find alternative savings to offset the deal with the Blue Dogs – an agreement that was essential to ending an impasse with the conservatives that threatened to prevent committee action on the legislation before the August recess.

Rep. Edward Markey, D-Mass., a senior member of the committee, vowed to work with his liberal colleagues “to minimize the impact on the poor.”

Rep. Lois Capps, D-Calif., a former elementary school nurse and a committee member active in health care issues, said the agreement with the Blue Dogs “presents one more challenge to getting the bill passed in the best possible way.” She added that “our task at this moment is to find more acceptable offsets.”

Seemingly on the defensive, House Speaker Nancy Pelosi, D-Calif., said of the Blue Dogs, “No, I don’t think there is any disproportionate influence when members speak out in favor of their own constituents."

Energy and Commerce Committee Chairman Henry Waxman, D-Calif., said he and his staff would work with the Blue Dogs and other committee members to find acceptable cuts in the bill that would cover the cost of the agreement and also bring down the overall cost of the bill from the current estimate of $1.04 trillion to less than $1 trillion.

According to committee staff estimates, the change in the method for reimbursing health care providers would add $75 billion to the cost of the bill, while the expanded exemption for small businesses would cost an additional $30 billion. The Medicaid and subsidy changes would save $120 billion, according to estimates.

Rep. Mike Ross, D-Ark., a leader of the Blue Dogs who helped negotiate the deal, said that it wasn’t clear how the committee would make additional cuts, in order to bring down the overall cost of the bill to under $1 trillion.

He said a number of proposals are under review, including reforms in the health care delivery system and hospital purchasing practices that might save an additional $53 billion over the next decade. However, he said he has left it to Waxman and the committee staff to figure out those savings.

“I know the math doesn’t add up, but they’ve pledged us they will find the additional savings,” Ross said in an interview. “They’re going to bend the cost curve.” 

If any of this is ringing a bell for you it’s because both GRF (funding grants) and Medicaid spending was a target during the recent prolonged Illinois budget impasse and the General Assembly left it up to Governor Quinn to figure out how to allocate the “bucket” of money instead of articulated appropriation lines. It is all about bringing down costs and not so much about quality of care, the expanding need and how do we make it past the next election cycle. After he made his preliminary decisions it then came to the State agencies to make lemonade out of lemons and the recipe is yet to be clearly articulated. Let’s hope they have a better recipe in Washington. 

You also may feel some resonance with the resistance to improving the reimbursement rates and for expanding services because of the cost.  It reminds us that no matter whether the debate is in Washington or Springfield, the issues are the same – shrinking revenues and an expanding need for better, more efficient and effective healthcare for all populations. The fear of raising taxes and negatively impacting ones political career or party popularity coincides with the near certainty that other sources of revenue must be identified.  

How we as a country and as a State resolve the problem will either define us as visionaries or haunt us for years to come. Beyond two wars, beyond foreign policy, the financial and housing crisis, the stimulus package and other events that have occurred during the Obama administration the outcome of the healthcare debate may well define his presidency and our future.  

So what’s the answer?  

It’s too soon to tell but there is no shortage of information and debate which is as it should be. There are pockets of examples that are finding their way toward a solution that works for them if not solid gold examples on which we can build a national system. So maybe the solution lies in piecing together what works from other States or countries and finding a way to make it work for us in Illinois. 

So what can we do?

Stay informed, stay engaged and be a part of the process or stand by and watch while your healthcare future is designed for you. It is hard to stay engaged when you’re just trying to keep your head above water and so many other immediate needs demand your attention. But it is important to follow the debate and most importantly share your thoughts on the issue with your Congressional representative and U.S. Senators as well as your local legislators.

 Never underestimate the power of passionate advocacy.  

Chris Burnett can be reached at cburnett@iarf.org.

[1] Suellen R. Galbraith, Director for Government Relations, American Network of Community Options and Resources

[2] The Scan Foundation, “Long-Term Care in Health Care Reform: Policy Options to Improve Both, July 2009

[3] In the context of the Scan Foundation report, they reference Home and Community-Based Services in the broad sense beyond just those supports required by persons with disabilities. This remains relevant because at the federal and state level there are ongoing discussions of how long-term support needs across all populations can be coordinated for efficiencies and better outcomes.

[4] John Holahan, Dawn M. Miller, and David Rousseau, Dual Eligibles: Medicaid Enrollment and Spending for Medicare Beneficiaries in 2005 (Washington, DC: Kaiser Commission on Medicaid and the Uninsured, February 2009).

[5] Brian Burwell, Kate Sredl, and Steve Eiken, Medicaid Long-Term Care Expenditures in FY 2007 (Thomson Reuters, 26 September 2008), http://www.hcbs.org/moreInfo.php/doc/2374

[6] Burwell, Sredl, and Eiken, Medicaid Long-Term Care Expenditures in FY 2007

[7] Kaiser Daily Health Policy Report, July 28, 2009

[8] Kaiser Daily Health Policy Report, July 28, 2009, by Eric Pianin and Mary Agnes Carey with contributions by Jennifer Evans.