Debate: Should Medicaid Expand Home-Based Health Care Coverage?

Our tax experts discuss how expanding funding for home-based care services might affect Medicaid costs for states.

Many states have now expanded their home-based and community-based services for Medicaid recipients. Still, many others have been reluctant to expand these state-level Medicaid home-based health care services.

Critics of expanding Medicaid home-based health care services argue that expanding these programs will encourage more individuals to enroll in Medicaid for long-term care coverage, which would expand the overall costs of administering Medicaid programs in these states.

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about how expanding Medicaid’s funding for home-based care services might affect Medicaid costs for states generally.

Below is a summary of the debate that ensued between the two professors.

Their Votes:

Bloink
Byrnes

Their Reasons:

Byrnes: It seems logical to assume that if Medicaid expands coverage for home-based care that a greater proportion of older Americans would be motivated to engage in asset decumulation strategies to qualify for Medicaid. When we expand this type of funding, it’s logical to assume that more older Americans will be pushed toward government-based elder care services, which of course would then increase overall costs of the program as a whole.

Bloink: There is absolutely no evidence to suggest that increasing government funding for home-based care would increase the rate of Medicaid enrollment or the general costs of the Medicaid program as a whole. In fact, there is evidence to suggest that expanding home-based care programs in general would actually reduce the costs of the overall Medicaid program in the U.S. because of the lower cost of home-based health care for older Americans.

Byrnes: Expanding Medicaid’s home-based care program is not the way to counter the ever-increasing costs of long-term care in this country. We should be focused on the root cause: the skyrocketing costs of nursing home care in the U.S. Many Americans have no choice but to focus on Medicaid qualification as their only way to fund nursing care. We should be paying attention to the need for high-quality services at a lower price point.

Bloink: Many Medicaid recipients enter nursing homes because they have no other viable alternative to satisfy their long-term care needs. Home-based care is, of course, exponentially cheaper than nursing home care. Increasing funding would have a net positive effect by allowing more Medicaid recipients to remain in their homes for longer. That’s something we should be encouraging as a way to reduce the strain on long-term care facilities in this country.

Byrnes: Focusing on increasing government funding for yet another program is not the way to solve the problems facing elder care in America. The more money we throw at these programs, the more money they will spend on programs that are not solving the larger problem of sky-high long-term care costs for older Americans.

Bloink: Medicaid entitlement is based on a strict means-based test. It’s simply not logical to assume that more Americans would be motivated to spend down their hard-earned assets to qualify for Medicaid’s home-based health coverage services. The motivating factor here is the need for care. Americans who can afford to purchase these services on the private market will not face additional motivation to move into the public Medicaid space.

Yes, more people may receive home-based care services if these programs are expanded — but most of these people are already enrolled in Medicaid and are actually at greater risk of needing nursing home care because they don’t have access to lower-cost in-home services.

Images: Adobe Stock

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