At a recent town hall meeting, President Obama championed home-based care for the elderly and disabled over the much more expensive care offered by institutions. “I actually think homecare ends up being cost-efficient in many cases rather than institutional care, and it helps keep people in their homes,” said Obama. And although many legislators and policymakers agree with him, the Medicare program appears to be encouraging people to do just the opposite.

The Centers for Medicare and Medicaid Services maintains policies that restrict patient access to the types of medical equipment, such as power wheelchairs and oxygen, necessary for the elderly to remain in their homes. The new healthcare law discourages beneficiaries from purchasing a power wheelchair for one month after it is initially prescribed.Furthermore, Medicare has adopted a 36-month cap on oxygen reimbursements.

According to health policy journal Health Affairs, “An estimated 75-90 percent of disabled, older, community-dwelling adults use some form of assistive technology. Moreover, evidence suggests that such technology might be more efficacious than personal care in reducing functional limitations, might reduce reliance on personal care and might slow functional decline and lower health-related costs.”

In 2005, a study by a group of prominent economists found that the Medicare program pays $10,770 a year less for beneficiaries with power mobility equipment because they need fewer hospitalizations and emergency room visits associated with falls. “The largest net savings appear in the category of inpatient expenditures,” wrote the economists. “Significant Medicare savings are also reported for outpatient, home healthcare and physician services expenditures. The combined reductions in these Medicare expenditures more than offset the increase in durable medical equipment expenditures for those receiving Medicare funding for powered mobility.”