Bradley’s Plan Is a Loss for Seniors

For weeks, presidential contender Bill Bradley’s health plan has been hailed as a big, bold alternative to fellow Democrat Al Gore’s timid, piecemeal reform. Newsweek called Bradley “an intellectual who is not afraid to think big.” Big ideas demand scrutiny.

Most people assume that seniors are covered by Medicare, the federal program for the elderly. But Medicare doesn’t pay for long-term care beyond a few days. The average stay in a nursing home is well over two years and costs about $41,000 a year. Few seniors have the money to pay or the long-term care insurance to cover it. The only safety net for them is Medicaid, a federal/state health program for the poor. Bradley’s proposal would eliminate federal support for seniors in nursing homes.

Currently, even middle-class seniors who own homes often are eligible for long-term care assistance under Medicaid. Liberal state rules allow them to deduct enormous medical costs from their income in order to qualify as “medically needy.” Some people deplore Medicaid for the middle class as a gravy train; others consider it a well-deserved benefit for the elderly who have paid taxes and would be wiped out financially by nursing home bills. Either way, there’s no question that Medicaid is important to many seniors. Two-thirds of nursing home residents are on it.

Right now, the federal government and the states share the cost of all Medicaid programs, including health care for the poor and long-term care for the elderly. Bradley proposes a swap. Under his plan, the federal government assumes the total cost of enrolling low-income people in health plans, letting the states off the hook entirely. In return, the states would bear the total cost of long-term care on their own. “The feds would love to get rid of long-term care, because it is the 800-pound gorilla of social problems,” explains Stephen A. Moses, president of the Center for Long-Term Care Financing, a senior advocacy group in Seattle. Moses expects huge resistance to Bradley’s proposal once state officials and seniors wake up to it.

Medicaid spending on long-term care is predicted to increase rapidly. John Powell, executive director of the nationwide Seniors Coalition, calls Bradley’s proposal “a recipe for disaster” because of the large numbers of people over 85, who are the primary users of nursing home care. Hardest hit would be poor states like Arkansas, which now get more than 80% of long-term care and health care for the poor paid by the federal government, and states with rapidly aging populations such as Florida, Pennsylvania, Rhode Island and Iowa.

There is no question that the current system needs changing. Easy access to Medicaid assistance has anesthetized the public to cost and the need to save for old age. Because Medicaid generally will pay for nursing homes but not assisted living and other care, there is a perverse incentive for over-institutionalization. Too many people deteriorate in nursing homes who would do better in assisted living or adult day care at lower cost, if they could get the public to help pay.

One answer might be to make Medicaid assistance a loan rather than an entitlement for middle-class seniors and, at the same time, allow them greater flexibility in choosing between a nursing home and another kind of care. In exchange for picking up the tab, Medicaid would be reimbursed later out of their estates. That could replenish Medicaid coffers to help people who are truly needy.

Financing long-term care is one of the most formidable problems looming ahead, but Bradley’s plan dumps it on the states rather than solving it. At the same time, Bradley’s plan takes the states out of the business of health care for the poor, where they have made real breakthroughs in the past decade. The plan removes the poor from state Medicaid programs and “mainstreams” them into the Federal Employee Health Benefit Program, which currently offers federal workers and members of Congress a choice of commercial health plans. Many state officials consider the proposal naive. Commercial plans are reluctant to adapt to Medicaid patients’ needs. These plans have too few doctors in poorer neighborhoods; avoid covering costly, high-risk patients; and pull out at the first sign that costs are eating into profits. What is clear here is Bradley’s lack of experience in dealing with some of the toughest issues facing state governments.

Where faint-hearted insurance companies have fallen short serving the poor, inner-city hospitals have filled the gap by operating out-patient clinics that provide accessible care in return for much needed Medicaid revenue for the hospitals. Bradley spokeswoman Marcia Aronoff says clinics would get paid better and more reliably by big commercial health plans than by the state bureaucracy. Not so, says Dr. Allen J. Hyman of New York-Presbyterian Medical Center--a Bradley supporter: “I’d rather negotiate with Albany than with Aetna-U.S. Healthcare any day.”

Some parts of Bradley’s plan deserve high marks. His proposal to make premiums tax-deductible for everyone is sure to make health insurance cheaper and encourage more people to get insurance. Everyone would be buying with pretax dollars, just as employees of large companies already do.

The trade-offs, however, are substantial. It is astonishing that a centerpiece health plan offered by the candidate deemed a big thinker would receive so little scrutiny by the press or even his opponent. If the Bradley plan continues to be hailed as a big, bold policy idea and true to the principles of the Democratic Party without any discussion of what it actually means, many people have a lot to lose. Starting with seniors.