Don't cut home healthcare

Federal policymaking has a rich history of bad ideas, so there is a comparably deep well of techniques to spin them—as “tough decisions,” parts of a long-term plan for success, and even – counting on denial to trump reality – simply the best and smartest course of action. But really bad ideas, and policies, are in the end simply hard to disguise.

Earlier this month, for example, we saw the Obama administration do a u-turn on proposed changes to Medicare Part D. Following a cascade of criticism from virtually every stakeholder and dispassionate observer, the Center for Medicare and Medicaid Services (CMS) announced its plan to nix a proposal that would have essentially destroyed beneficial competition and limited patient choice for drugs by eliminating popular, low-premium drug plans enjoyed by roughly 14 million American seniors in Medicare’s Part D prescription-drug benefit. 

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CMS made the right choice in doing this because Medicare Part D is working. It has proven to be effective in improving quality of care and reducing program costs. And unlike most health care plans in America, it boasts an 85 percent beneficiary approval rating. 

The Obama administration’s reversal of the Part D cut was a step in the right direction. Now it’s time to roll back another truly bad policy that stands to devastate seniors whom Medicare is intended to protect.

Home healthcare is a potentially invaluable, cost-saving, health-enhancing program that stands on the ObamaCare chopping block. Home health represents one of the few places where coordinated care can be provided to seniors — and Medicare needs more, not less, care coordination.

Despite this, CMS has elected to cut Medicare funding for home healthcare by 14 percent over the next four years, ostensibly to pay for the Affordable Care Act. As a line item on a budget spreadsheet, this might seem reasonable. But in reality and as acknowledged by CMS, these cuts will drive approximately 40 percent of all home health agencies into the red by 2017– pushing agencies into bankruptcy, leading to layoffs of direct caregivers, and impacting the care seniors need.  It is hardly surprising that earlier this month, the Labor Department reported 3,800 home health jobs were lost in February alone – the largest single-month job loss in the sector in more than ten years. 

For decades, skilled home health care has been of great value to the Medicare program because it allows seniors to receive high-quality, coordinated health care in the lowest cost setting – the patient’s own home. Seniors who might otherwise require lengthy and expensive hospital stays or institutional care can receive skilled care for chronic conditions – an area that leaders in Congress have identified as needing improvement. 

In addition to having more chronic conditions, home health patients are generally older and poorer than other Medicare populations, and therefore much more vulnerable to the negative consequences of a deep cut in their Medicare benefit.

When you compare Medicare’s cost for a home health visit to a day in the hospital, it’s hard to fathom why any policymaker would even consider making cuts that could negatively impact this important benefit and limit patient access to low-cost care.

Looking at the promise of four consecutive years of devastating cuts, those who depend on home health care are growing increasingly wary. Nearly half a million jobs are at stake. More than 3.5 million seniors may see changes to the care they depend upon.

Policymakers should be wary as well. In their zeal to make Obamacare work, the administration has put into action a truly bad policy that will hurt more than it helps. Congress now has an opportunity to help correct this flawed policy before more vulnerable seniors and hardworking Americans are unfairly harmed as a result. It should put off any further cuts until a legally-mandated study of their impacts is completed.

Like Medicare Part D, home health is part of the foundation on which Medicare reform should be built — not gutted. It is time to provide the relief this community and its patients need and complete the impact analysis required by law.

Holtz-Eakin is president of the American Action Forum and former director of the Congressional Budget Office.

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