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Let’s end ObamaCare’s Medicare home health cut

Elections have consequences, as President Obama famously said, and the mid-term election will certainly impact an array of policy issues. In January the new Congress will begin to tackle a list of longstanding priorities, including some changes to ObamaCare. 

Republicans have been critical of the Affordable Care Act (ACA) for years, and now have an opportunity to effect real change. While full repeal of the law is unlikely, Congress is expected to rework some of the most unpopular parts of the controversial law. 

{mosads}One candidate for attention is the ObamaCare budget cut that strikes directly at cost-saving, health-enhancing home health care. 

For decades, skilled home health care has been a key part of the Medicare program because it enables seniors to receive high-quality, coordinated health care in the lowest cost setting available – their own home. Home health has made it possible for seniors to avoid lengthy and expensive hospital stays or institutional care. Just as important, home health is one of the few places where chronically ill seniors can receive coordinated care — and Medicare needs more, not less, care coordination. 

Despite this, to pay for ObamaCare, the ACA cut Medicare funding for home health care by an unprecedented 14 percent over four years. This is a classic case of the appeal of a line item on a budget spreadsheet trumping good policy. The reality is that this cut is so deep that the administration itself admitted it will drive “approximately 40 percent” of all home health agencies into the red by 2017. Put another way, this ObamaCare cut will cause nearly half of all the home health providers in America to layoff caregivers, sell their agencies, or declare bankruptcy. 

Left unaddressed, this will have a detrimental effect beyond seniors; it will also have a direct impact on taxpayers and the economy. By causing so many home health providers to close, the home health care cut will result in higher Medicare costs as many seniors are forced into more expensive institutional settings. The closures will also cause as many as 465,000 professional caregivers to lose their jobs, according to an analysis by Avalere Health. 

But most important, the ObamaCare home health cut will have a direct impact on seniors and disabled Americans too. According to the federal government, the 3.5 million Americans who receive skilled home health care services are older, sicker and poorer than other Medicare beneficiaries. They are also more likely to be women, minorities and disabled. In short, they are the most vulnerable subpopulation in the Medicare program – and the law of the land makes them more vulnerable still. 

This is particularly bad news for patients in rural areas who depend on access to skilled home health care. If these cuts proceed without relief, Avalere Health estimates that 1.3 million seniors could lose their access to care. That will produce a result that the Medicare home health benefit was designed to prevent: compel seniors to leave their communities and travel long distances to receive care in hospitals, nursing homes and other institutional settings. 

The next Congress has an opportunity to correct this flawed policy before more seniors and health care professionals are harmed. There has already been a proposal in the House to repeal the ObamaCare home health cut and replace it with a targeted reform that produces better incentives and achieves exactly the same savings by reducing costly hospital readmissions. More options may emerge in the next year. 

The future of ObamaCare as a whole remains uncertain. Fortunately, however, targeted provisions that threaten our nation’s seniors will soon receive a much-needed second look.

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


Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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