Protecting Against Threats to Medicaid and the Real Reforms to Improve Care for Older Adults and People with Disabilities

July 30 marks 61 years since President Lyndon Johnson signed the law creating the Medicaid and Medicare programs. Medicaid was enacted alongside Medicare to establish a health care safety net and economic security for families with low incomes. Over the years, thanks to action and advocacy from people with disabilities, health care advocates, and policymakers, Congress has expanded Medicaid’s reach and focus, making the program the primary payer of long-term care for older adults and individuals with disabilities, including care in home- and community-based settings.

Despite Medicaid’s cornerstone value of providing a safety net to people who cannot otherwise afford health care (including those with complex and chronic health care needs, people with disabilities, and older adults), in recent years lawmakers in Congress and Trump administration officials have shifted course through federal law (H.R. 1) and rulemaking, imperiling seniors, disabled people, and their family caregivers.

Their policy actions cut nearly $1 trillion from Medicaid, and have put integral and longstanding parts of Medicaid, including home- and community-based services (HCBS), in jeopardy. It is essential to protect HCBS as these services empower over 8 million older adults and people with disabilities to live and participate in their communities instead of costlier institutions, and to make choices that are best for themselves, their families, and their unique care needs. Medicaid is the only insurance that meaningfully covers HCBS, making care affordable that would otherwise cost more than $60,000 per year.

H.R. 1 deeply cuts federal Medicaid funding to states and limits state policymakers’ ability to raise revenue to finance their Medicaid programs. Across the country, older adults, people with disabilities, and their families are both paying the price for these cuts, with likely dismal downstream outcomes including shrinking networks of Medicaid providers, less access to comprehensive and affordable care, and reductions in critical services. In particular, as states absorb the effects of H.R. 1, at least 18 states have already proposed or enacted state Medicaid cuts that will take care away from older adults and people with disabilities and will cut payments and supports for family caregivers and care workers.

Ironically, contrary to their stated effort to “protect” and “preserve Medicaid for those who need it most,” Republicans in Congress and the White House have undercut Medicaid for everyone, stripping critical care away from people with disabilities and older adults. Instead, what Congress should be doing is investing in real reforms that sustain critical services like HCBS and protect access and affordability for those who rely on Medicaid most. 

H.R. 1’s New Paperwork Requirements will Hurt Enrollees

Many adults with serious health conditions and disabilities do not access Medicaid through the disability pathway because they have not yet qualified for the Supplemental Security Income program (SSI) or do not meet SSI’s strict disability eligibility standards. If they are income-eligible, individuals often access Medicaid through the Affordable Care Act’s (ACA) Medicaid expansion, making the expansion a significant source of coverage for adults ages 19-64 with disabilities and serious health conditions. Because many of H.R. 1’s signature policies — including work reporting requirements, mandatory cost sharing, and more frequent eligibility determinations — are targeted at the Medicaid expansion population, these policies will significantly impact the more than six in ten Medicaid adults with disabilities that do not receive SSI.

In addition to being flawed from the start — as the vast majority of adults who have Medicaid coverage are working, and Medicaid helps people with disabilities work — H.R.1’s policies will certainly lead to huge coverage losses, including for disabled individuals and seniors. 

Medicaid expansion covers millions of people with disabilities and older adults ages 50 to 64. It also covers millions of family caregivers under age 65, including those who are not working due to caregiving responsibilities. They will now need to navigate new requirements, complex paperwork, and bureaucracy to continue receiving care, or prove they are exempt under strict definitions. Exemptions often fail to reach those they are meant to apply to because of these burdens and a failure of automated data checks in capturing people who are eligible.

Rulemaking Means Older Adults and People with Disabilities Bear the Brunt

While H.R. 1 offers an exemption from work reporting requirements for people with serious or complex health conditions (termed “medically frail”), the Centers for Medicare & Medicaid Services (CMS) has recently set new rules that will make it much more difficult for people with disabilities to access this exemption. CMS is going beyond what Congress included in the law and is requiring medically frail enrollees and applicants to not only prove their health condition, but also prove that, because of their condition, they lack capacity to work — pitting employment against health insurance for millions. To keep their medically frail exemption, people must document their health and incapacity to work every 12 months.

Medicaid applicants and enrollees with disabilities and serious health conditions will need to obtain documentation from a health care provider, which poses challenges in actually accessing care for people who are uninsured or underinsured. Moreover, the fact that providers themselves are typically not equipped to determine their patients’ capacity to work makes this hurdle nearly impossible to clear. 

CMS’ new prohibitions on self-reporting (also known as self-attestation) after 2027 will mean that Americans with significant health care needs — including people with disabilities — will struggle to meet the documentation and paperwork challenges required. This rings especially true for older adults, as those ages 50–64 subject to the work reporting requirement are disproportionately more likely to have a chronic condition and, among those who are not working, the vast majority (86%) report a health condition that keeps them from working. Unfortunately, these groups are at high risk of losing access to Medicaid despite their continued eligibility and high need for care.

Initially, the Congressional Budget Office estimated the work requirements will reduce Medicaid enrollment by 5 million people by 2036, but the more restrictive changes in this rulemaking will mean even more people will lose their Medicaid coverage. The most recent analyses from Manatt Health incorporate these changes and estimate that by 2034, over 9 million more people will see their Medicaid coverage terminated. These changes stack up with the other rules from CMS that even further limit how states finance their portion of Medicaid and limiting flexibilities that enable states to provide HCBS to more people with disabilities and older adults. 

Rhetoric and Administrative Actions Against States Have Jeopardized HCBS

This year, the White House has been publicly committed to rooting out what it calls “widespread fraud, waste, and abuse” in the Medicaid program. What began with CMS withholding $500 million in federal dollars per quarter from Minnesota led to a March Executive Order creating a Task Force to Eliminate Fraud chaired by Vice President Vance. The Executive Order explicitly references concern that “other similar problems exist” in additional states, including California, Colorado, Illinois, Maine, and New York. 

Unfortunately, HCBS has been at the center of this anti-Medicaid rhetoric, where an increase in Medicaid spending on these services is the administration’s cited cause for concern. This was exactly the case when the administration announced it was withholding over $1 billion in federal funds from California, almost entirely reimbursement for HCBS already delivered, in May. Last week the administration said it is withholding another $800 million from California for the same services.

In reality, increased spending on HCBS reflects a positive trend: fewer people are relying on expensive institutional care, and more people are instead living at home where they overwhelmingly want to receive care. HCBS is integral in providing greater independence and freedom to people with disabilities and older adults — and it ultimately saves states and the federal government money, while relieving financial burdens on families.    

Limiting or freezing Medicaid funding does not improve the program — it destabilizes it, shrinking provider networks and available services, which hinders access to critical care.

Real Reforms Will Instead Move Medicaid Forward

The demand for HCBS is growing as our population ages and people with disabilities live longer. While repealing H.R. 1 is critical to stop the immediate and growing harm of people losing Medicaid coverage, it will not be enough to go back to the previous status quo. We must prioritize investment in policy solutions that strengthen federal funding to states to support their ability to cover a comprehensive set of Medicaid services and benefits. We must also ensure that Medicaid and Medicare can meet the needs of older adults and people with disabilities to live with dignity in their communities. 

To do so, Congress will need to make new financial and programmatic investments to strengthen Medicaid and Medicare, including by making the Medicaid Money Follows the Person program and HCBS spousal impoverishment protections permanent, and by passing the HCBS Access Act, which would require states to cover HCBS in their Medicaid programs just as they are required to cover nursing facilities and other institutional services. Congress should also expand access to home-based care by enacting a comprehensive home care benefit in Medicare. Home- and community-based services are essential to the lives of older adults and people with disabilities. Real reforms and investments in HCBS will bring down the cost of care, create financial stability, and enable families to thrive — building the future we all deserve.

Simon Marshall-Shah is the Director of Strategic Partnerships at Families USA.

Tory Cross is the Associate Director of Federal Policy and Government Relations at Caring Across Generations, a national organization of family caregivers, care workers, disabled people, and aging adults working to transform the way we care in this country.

Natalie Kean is the Managing Director, Health Advocacy at Justice in Aging, a national organization that uses the power of law to fight senior poverty by securing access to affordable health care, economic security, and the courts for older adults with limited resources.