Cuts in programs for the aged & health face strong

NEWS WATCH Cuts in Programs for the Aged &.Health Face Strong W A S H I N G T O N , D.C.--Bipartisan opposition to the Reagan administration's proposed budget cuts is growing ~n Capitol Hill with strong support from numerous health and pro-elderly groups. I The cuts, which total $46 billion in nondefense spend!ng for 1982, will affect 83 major programs including Medicaid, Social Security, food stamps, subsidized housng, and unemployment insurance, and will totally elimiaate the program under the Comprehensive Employment lnd Training Act. The Reagan administration cuts are reductions from :he Carter budget which many Congressional liberals :hought had previously under-budgeted social pro~,rams. The Department of Health and Human Services will

receive a cut of $4 billion for health programs. Consolidation of the health and social services grant program and a 25 percent reduction in overall federal contribution will save $27 billion, Office of Management and Budget analysts estimate. The administration's proposed block grants to the states (which the states could use as they wished) would fund such items as community health activities, alcohol and drug abuse centers, emergency medical services, and immunization programs. Approximately 40 categorical grants would be absorbed into the block grant system. Although soc!al programs will be drastically reduced, the military's authority to spend will be increased by almost 20 percent after adjusting for inflation in 1982, ac-

Currentbase ProposedCut

1661 6,983 --

1982 9,334 -2,540

1983 9,787 -2,993

-3,347 -3,676

ReaganBudget

0,983

6,794

6,794

6,194 6,794

1984

1985

10,141

10,470

~66.._! 162

166.._22

1983

1664

Currentbase

171

172

179

Proposed Cut

- to

-62

Reagan Budget

152

166__.!1

109

-87

- 159

85

20

- 188 --

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19r

3,432 -54 . 3,378

3,731 - 145 3,586

4,003 -3.36 3,667

4,251 4,485 -468 -584 3,783 3,901

Cunant base ProposedCut

3,116 -635

3,771 -3,560

4,076 -4,073

4,408 4,762 -4,408 -4,762

Reagan Budget

2,483

2(]6

5

C~.rent base ProposedCut RanoanBudget

166.._! 6,571 -g 6,562

Currentbase ProposedCut RseganBudget

1~4

1665 166

--

t~5

--

Among the deepest of the contemplated cuts will be the consolidation of 40 federal categorical grants for health and social programs into one or two block grants to the states. The 40 programs consist of approximately 6,000 separate grants at 24,000 sites.

The President will phase out regulations that limit the number of health facilities that may be built within an area. He plans to eliminate Professional Standards Review Organizations. Critics, however, say that PSROs play a crucial role in Medicare/ Medicaid cost control.

Hardest hit will be the National Research Service Awards. The awards fund individuals and organizations for training in biomedical and behavioral research. Funding for the institutes will not be increased to keep pace with the rate of inflation, thereby effecting an automatic budget cut each year.

The administration would totally dismantle the program by 1984. Some local public sector jobs provided services to the eldedy. Critics charge that anticipated increases in welfare costs caused by the cuts will negate any budgeted savings.

i

1662 6,177 -232 7945

t663 1984 1985 9,729 11,540 13,360 -538 - 1,018 - 1,748 9,191 . tO,522_J~l 1 612

Tenants living in federally subsidized housing (many of whom are elderly) will be forced to pay 30% of their total income for rent, under an administration proposal. Tenants now pay approximately 25% of their income. The increase would be 1%

NEWS WATCH "Through cutting health services ocratic members of the Joint Ecothat Medicaid provides, elderly per- nomic Committee of Congress. For sons who normally experience many example, a man who had $29,000 in chronic conditions will increasingly taxable income last year would re~wind up in more expensive acute main at a tax rate of 32 percent becare settings. The proposals are cause his income would rise to economically counter-productive," $39,150 assuming President ReaNichols said. gan's forecast of 9 percent per year In actuality the administration inflation over the next four years. will put a cap on Medicaid that re- But the tax rate for a person with duces the anticipated federal grants $55,000 in taxable income in 1980 to states by $100 million in 1981 and would drop from 49 percent to 40 Over $1 billion next year. Individual percent while his income four years states would then have to make up from now will have increased 35 per~he difference by reducing payment cent through inflation to $74,250. rates, changing eligibility requireHouse majority leader James ments, or making their programs Wright (D.-Tex.) was joined by Remore efficient. publican Senator Robert Dole Although President Reagan promised that cuts would not be haade in seven .social programs, in"The Reagan proposals Cluding Social Security, the Reagan Program for Economic Recovery will produce imposing proposes elimination of the Social Security minimum benefit. This financial restraints "minimum wage" of SoCial Security that will limit the provides $122 a month for three milaccessibility of health lion retired workers. Most of these are retired women whose earnings care to the elderly."-,'luring their working life were very Barbara Nichols, A.N.A. low. These workers would not otherwise qualify for benefits. President Reagan will also elimiate the $255 burial payment for de- (Kan.), chairman of the Senate Fieased workers with no living rela- nance Committee, in sharply criti[ives. S h ar p ly restricting eligibility cizing the proposed cut of $1.8 bil~Oithdisability" insurance, together lion in the food stamp program. Sen the other Social Security reduc- Dole supported Rep. Claude Pepper ions, will cut $4 billion from the (D.-Fla.) in denouncing several adprogram in 1982. ministration proposals, one being the " Th e nonsense that there will not total elimination of the CE T A pro~e needy people hurt by these cuts is gram. CE T A provided funds to local ust baloney," Rep. James M. Shan- governments for job training of those 1on (D.-Mass.) told budget director who, for the most part, would otherDavid Stockman during a hearing of Wise be on welfare. :he House Social Security Subcom" T he administration claims that nittee. Stockman admitted during cuts in social programs will not hurt :he hearing that despite these cuts the truly needy," Rep. Pepper told :he administration was planning a GN, "but even a cursory examinalew benefit under Social Security tion of programs such as CETA, "or those not fully retired. The bene- which in many cases provided serit would affect mostly high wage vices to the elderly, reveals the tragic :arners. The American Association impact Reagan's cuts will have. We ff Retired Persons testified before a who are concerned about fundamen~ouse Budget Committee that re- tal human needs will have to judge luctions in social programs would all of these cuts accordingly." 'cut a large gaping hole in President Despite the administration's an~eagan's alleged safety net." nounced goal to reduce inflation and The proposed tax cuts will provide lower health care costs, it plans to elief to the wealthy but almost none phase out programs that require loo the middle class and poor, accord- cal governments to participate in ng to a report releasedby_the Dem- .health_nlannino_t~-llmit-t h . . . . . . r , ~

of hospitals and other facilities. President Reagan intends to terminate the Professional Standards Review Organizations that monitor health care services to Medicare and Medicaid patients, despite their proven cost effectiveness, because, he says, "they are an impediment to free enterprise." Federal support for Health Maintenance Organizations is also to be phased out by 1986. The National Institutes of Health, which support a number of longterm care demonstration projects and some aging research, will face a $145 million budget cut in 1982 and a reduction of $336 million in 1983. "T he fact that advanced nurse training programs will not be supported speaks for itself," Jo Eleanor Elliott, director, Division of Nursing, Department o f Health and Human Services, told GN. " W e know'that many nurses attending programs that will be cut have genuinely needed financial assistance," she said. The division will sustain a $3 million cut in funds for special project grants, $3 million reduction for the nurse practitioner program that includes funds made available for the training of geriatric nurse practitioners, and a $5 million cut in research grants. Overall nurse training funds were reduced from $34,757,000 in the Carter budget to $28,757,000 in the Reagan proposal. "On the Medicaid cap," Elliott commented, "I think the nursing arofession needs to look at this and assess the impact. The concern is what it. does to access to health care." The President's proposal to fund many categorical health programs through federal block grants to the states has met with growing resistance from numerous health lobbies. "T he National Institute of Mental Health will be wiped out under Reagan's plan," an official of the A m e r ican Mental Health Association told

GN. Clinical training funds will be eliminated within a year in the administration's budget with mental health programs overall sustaining more than a 60 percent cut. The block grant system will leave

NEWS WATCH Cuts Continued from page 166 the decision of how to use funds that were previously e a r m a r k e d by Washington for specific programs to individual states. Health groups fear that political considerations in the state legislatures m a y lead states to economize on health programs for the poor to compensate for the decreased aid available from the federal government. Congressional opposition to the

THEREAGAN BUDGET Reagan budget is expected to take place in the House, where Democrats still maintain a majority. In an interview with G N , Rep. James Wright, the majority leader, emphasized the responsibility that Democrats have to scrutinize the budget. " W e were not sent here by o u r constituents to rubber stamp a Reagan budget," Wright said. " M r . Reagan was elected President, but not with a specific m a n d a t e as he

claims. President Carter's popularity during his first few m6nths in office was actually higher than Reagan's in comparable opinion polls. Government spending is not the main cause of inflation. Energy costs contribute much more to inflationary trends and Reagan's response to this was to decontrol oil prices and send them up 15 cents a gallon in most places. I Will not dismantle social programs in this political climate."

Proposed Medicaid Cap Slashes $1.2 Billion from Program in '82--Nursing Home Industry Concerned About Impact on Financially Troubled Facilities WASHINGTON, D.C.--President Reagan's proposed cap on Medicaid will dramatically change the delivery of long-term care in America, according to health analysts here. " T h e cuts in fiscal 1982 could be devastating," J. Albin Yokie, executive vice-president of the American College of Nursing H o m e Administrators, told G N . Yokie emphasized the impact the cap will have on already financially marginal care facilities. T h e proposed " c a p " on Medicaid would allow federal Medicaid expenditures to increase 5 percent in 1982 and thereafter rise as much as the consumer price index. Physicians' fees and nursing home charges have risen at a much faster rate and would thereby force a 20 to 25 percent cut in the program over the next four years. In 1982, $1.1 billion lost from the federal budget and another $450 million lost from the states will mean an overall program reduction of over 6 percent. T h e Reagan proposal will force individual st~ttes to devise ways of living within the" cap. " T h e r e is already age discrimination in health care and in the provisions of Medicaid," Leslie Kwass, chairperson of the G r a y Panther national steering committee, told G N , "this proposal will simply amplify it. " S t a t e authorities now believe that m a n y forms of surgery and numerous procedures are 'elective'

people are perceived in this society as being incurable," Kwass said. " T h e y ' r e considered nonproductive and they're not going to get younger, so state Medicaid funds will probably go to the young." Critics of the proposed cut fear that state legislatures, rather than opting to attack powerful hospital and physician lobbies, will drop low income persons from the program. Although the public sees Medicaid as a welfare program, less than half of those below the federal poverty level receive assistance from Medicaid, as shown by Health Care Finance Administration statistics. Individual states (all states participate except Arizona) have broad powers to set eligibility criteria. At present over 10 million of America's Medicaid recipients are children; another three million are elderly who use the program to pay their deductible and copayment requirements in Medicare Part B. Washington currently pays 50 to 83 percent of medical assistance, depending on the state, and about 50 percent of the administrative costs. States with a high average income pay 50 percent of the medical costs; poorer states, such as Mississippi, pay less than one-quarter. "The cap would effectively change Medicaid from an entitlement program where the needy received care regardless of costs to a more limited benefit package that could be steadily eroded by each new

"The proposals suggest we ration health care for the poor," Rep. Claude Pepper.

of the Consumer Coalition for Health, told G N . " B y controlling eligibility and the mix of services, states can limit their costs or cater to specific populations with political clout," Kleiman said. Over half the states report serious problems in meeting their present Medicaid obligations, according to H C F A . California is planning an $800 million Medicaid cut this year. Minnesota is planning eligibility restrictions to stem a shortfall of $100 million in Medicaid funds in 1981. Wisconsin and Virginia each expect to be about $70 million short. W h e n these and other statewide cuts are added to the Reagan proposal, the real cut to Medicaid is over 15 percent this year, the Congressional Budget Office estimates. T h e states have four main ways of limiting Medicaid e x p e n s e s - - e a c h potentially disastrous to the poor. First, they can sharply restrict eligibility; second, they can require copayments. When Gov. Reagan required copayments for physician visits in California, physician use immediately declined 9 percent. Poor persons could simply not afford the