Hard Times in the State for Home and Community Care Programs
September 30, 2010
ATLANTA, GA – The Great Recession has taken a deep toll on state and local programs aimed at providing home and community care, according to a major new survey issued Monday.
States are curtailing optional services, extending waiting lists, cutting provider reimbursement, and taking other stringent measures to cope with the worst economic downturn in 70 years. And it may take years before the state economies bounce back.
This was the sobering message from a comprehensive examination of state practices in handling long-term services and supports during hard times. The 50 state surveys were conducted by NASUAD, AARP public policy Institute and Health Management Associates. Preliminary findings from the report, “Weathering the Storm: The Impact of the Great Recession On Long-Term Services and Supports,” were presented at the plenary session of the National Home & Community Based Services Conference in Atlanta.
Some of the key findings:
- Most states expect their revenues from major sources –income tax, corporate taxes, and sales taxes-will be lower in 2011 than they were in the last pre-recession year, 2007. For some states, the hole is very deep-Oklahoma, Arizona, Nevada and Louisiana expect revenues to be 25% or more below the 2007 level.
-Even as state revenues shrink, the demand for services is increasing. States report a surge in requests for information and referrals, rising demand for home-delivered meals, more demand for respite care, and increased calls for personal care and assistance.
-Many states find they are forced to impose new limits on services at a time of sharply increased demand.
-States have been “holding steady” with Medicaid long-term services and supports. There have been “slightly more expansions or enhancements for LTSS than restrictions.”
The squeeze on the states will get even worse after June 30, 2011 when the extra Medicaid funds for the states provided under the stimulus legislation runs out.
The extra help from the federal government has eased the state situation for a couple of years. But in 2012, the states will have a double budget whammy-trying to replace the federal help they had been receiving while still dealing with an increasing case load. “It will be a critical year” to try to maintain long-term services and supports, according to Kathleen Gifford of Health Management Associates, which helped compile the survey.
States can’t stop enrollments because these are entitlement programs. But they can cut the number of hours or visits and individual receives, and they can cut reimbursement to the providers, who already complain that their payments are too low.
“I can’t overstress the point about how strained state resources are,” said Gifford. “I don’t think we can emphasize that enough.”
Extra funding from the federal government for state and local nutrition programs runs out at the end of this month, and 25% of the states say their waiting lists for these programs will increase significantly, according to Susan Reinhard, senior vice president at the AARP Public Policy Institute.
Another disturbing trend discovered in the survey is a jump in the number of calls to offices handling adult protective services, according to Reinhard. “As the economy grows worse, financial exploitation increases significantly,” she said. In 22 states, there was a jump in calls to adult protective services departments.
Talking to state officials this year is like “grief counseling,” said Martha A. Roherty, executive director of NASUAD. “People in the states are devastated at the things they have to do,” she said.
And it may get worse before it gets better. Traditionally, states don’t make a full recovery, with revenues up and Medicaid rolls down, until three years after the end of a national recession.
States have already suffered through “hiring freezes, furloughs and pay cuts,” according to Gifford of Health Associates. The shrunken workforce has a new challenge to meet, enrolling 16 million more people in Medicaid under the Affordable Care Act. “And now you’ve got this giant implementation to do to be ready for 2014,” she said.