The Center on Budget and Policy Priorities Reports That At Least 46 States Have Imposed Cuts That Hurt Vulnerable Americans and the Economy  

The Center on Budget and Policy Priorities is one of the nation’s premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals. http://www.cbpp.org/

"With tax revenue still declining as a result of the recession and budget reserves largely drained, the vast majority of states have made spending cuts that hurt families and reduce necessary services. These cuts, in turn, have deepened states’ economic problems because families and businesses have less to spend. Federal recovery act dollars and funds raised from tax increases have greatly reduced the extent, severity, and economic impact of these cuts, but only to a point. And federal aid to states is slated to expire well before state revenues have recovered."

"The cuts enacted in at least 46 states plus the District of Columbia since 2008 have occurred in all major areas of state services, including health care (31 states), services to the elderly and disabled (29 states and the District of Columbia), K-12 education (34 states and the District of Columbia), higher education (43 states), and other areas. States made these cuts because revenues from income taxes, sales taxes, and other revenue sources used to pay for these services declined due to the recession. At the same time, the need for these services did not decline and, in fact, rose as the number of families facing economic difficulties increased."

"These budget pressures have not abated. Because unemployment rates remain high — and are projected to stay high well into next year — revenues are likely to remain at or near their current depressed levels. "

"Cuts to state services not only harm vulnerable residents but also worsen the recession — and dampen the recovery — by reducing overall economic activity. When states cut spending, they lay off employees, cancel contracts with vendors, reduce payments to businesses and nonprofits that provide services, and cut benefit payments to individuals. All of these steps remove demand from the economy."

"For instance, at least 44 states and the District of Columbia have reduced overall wages paid to state workers by laying off workers, requiring them to take unpaid leave (furloughs), freezing new hires, or similar actions. State and local governments have eliminated over 400,000 jobs since August 2008, federal data show. Such measures are reducing not only the level and quality of services available to state residents but also the purchasing power of workers’ families, which in turn affects local businesses and slows recovery."

Illinois Gov. Pat Quinn announced a 6 percent Medicaid budget cut to nursing homes for the upcoming fiscal year – cutting more than $100 million from services to the sickest and frailest of Illinois citizens.

That massive cut will put the health and well-being of thousands of nursing home residents in peril, and thousands of health care workers could lose their jobs. Those budget cuts will also result in 7,000 senior care jobs being lost – at a time when Illinois citizens need jobs more than ever.

Saukvalley.com, an Illinois based news outlet reports that "...state budget cuts inevitably will endanger many nursing home care reforms recently passed by the Legislature, such as increased nursing staff, enhanced background screening on all residents, and expanded psychiatric services, training and staff."

"Nursing home providers already have played their part by working with the Legislature last month to tax themselves $145 million. Using that tax, the state receives additional federal funding to support services for seniors, both in the community and in nursing homes."

"By cutting services for our frailest seniors, the state loses millions of dollars of additional federal funding. The state would lose as much as it’s saving, while devastating services to seniors we care for. It makes no sense fiscally."

"Nursing homes are people serving people. More than 70 percent of expenses go for labor costs. The huge budget cut is going to strike a terrible blow to our seniors, employees, families and communities."

 

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Block Grants Would Cripple Long-Term Care Services for Poor Elders

Howard Gleckman, author of Caring for Our Parents: Inspiring Stories of Families Seeking New Solutions to America's Most Urgent Health Crisis cited the devastating impact of a proposal to limit the federal share of the Medicaid program whi is jointly funded by state and federal funds and eliminating federal regulation of the program.

"Powerful Republicans" reports Gleckman, are pushing these changes which he says "...would do profound damage to the Medicaid benefit for long-term care, whether it is provided at home or in nursing facilites."

This plan would turn Medicaid from a federal entitlement into a block grant. Over time, states would be responsible for paying a growing share of the program costs but in exchange would have broad flexibility over who to cover and what benefits they'd receive.

"In such an environment, says Gleckman "chances are good that fewer aged and disabled would be eligible for benefits and they'd receive less assistance than they do today. At the same time, providers such as nursing homes and home health agencies would likely get lower Medicaid payments even though the program reimbursements are already at dangerously low levels."

"Today, the federal government pays about 57 percent of Medicaid costs (the actual amount varies from state to state and ranges from 50 percent to about 80 percent). While the elderly and disabled account for only 25 percent of the 50 million Medicaid enrollees, the program spends two out of every three of its dollars on this population. More than one-third of the total Medicaid budget, or $125 billion, went to long-term care supports and services alone in 2009, according to a new study by the Kaiser Family Foundation."

The block grant proposal, says Gleckman, "...is likely to generate major cuts in both benefits and reimbursements. In addition, without minimum federal standards, the differences among state long-term care benefits, already dramatic, would only grow.As a result, residents of one state may receive much better long-term care than residents of a neighboring jurisdiction."