Up to 713,000 direct-care jobs could be lost under proposed Medicaid cuts: report

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(Photo by John Merkle)
(Photo by John Merkle)

Medicaid cuts proposed under the American Health Care Act could result in the loss of up to 713,000 direct-care jobs to provide long-term services and supports, according to a report released Thursday by LeadingAge and the Center for Consumer Engagement in Health Innovation at Community Catalyst.

The healthcare reform legislation, passed by the House of Representatives and now under debate in the Senate, would change Medicaid funding from being open-ended to being distributed from the federal government to states on a per-capita or block grant basis. The bill, if signed into law as written by the House, would cut federal Medicaid spending by $834 billion over 10 years, according to the Congressional Budget Office.

The impact would extend past senior care and services providers and their workers to older adults who need care and services, as well as their families, the authors of “Capping Medicaid” said.

“We urge Senators to reject any cuts to Medicaid because of the devastating effect it would have on the millions of older adults whose lives literally depend on it,” Katie Smith Sloan, president and CEO of LeadingAge, said in a statement.

The “Capping Medicaid” report estimates the potential effects that the cuts and caps would have on personal care aides and home health aides who provide home- and community-based services and projects that jobs would be lost in every state. The report provides state-by-state projections of the effects of 15%, 25% and 35% cuts to Medicaid-supported LTSS, with overall estimates of 305,000 to 713,000 of jobs lost nationally depending on the level of funding cut.

The states potentially losing the most workers from a reduction in the number of HCBS recipients, according to the report, would be New York, Texas, California, Pennsylvania, Minnesota, Illinois and North Carolina. (See accompanying table.)

“The proposed financing structure in the AHCA does not adequately take into account a variety of important factors associated with whether or not states can meet growing LTSS needs,” the report authors wrote. Such factors, they said, include the expected rate of growth of the 85+ population; the percent of the 65+ population with four or more chronic conditions; and higher-than-average levels of federal medical assistance, HCBS expenditures and expenditure growth on residents aged 65 or more years in some states.

“In addition, a shift to per-capita caps has the potential to result in significant decreases in home health aide and personal care aide jobs, as there would be fewer resources available to pay these workers, even as the need for their services continues to grow in the years ahead,” according to the report.

The report authors reached their estimates of job losses with a formula that used data from the Bureau of Labor Statistics and the Medicaid Analytic eXtract file from Truven Analytics.

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