Waiver Myths...and the REAL Truth
- Myth: The state can save money by requiring high levels of cost sharing
- Myth: Families earning 500% of the federal poverty line ($95,450 for a family of three) or more are wealthy enough to afford home nursing care themselves
- Myth: Families can just get private insurance to cover these expenses
- Myth: "Wealthy" families are getting completely free heath care through this program
- Myth: The waiver is a "cadillac plan"
- Myth: Letting the waiver expire will save the state money
- Myth: Providing nursing care in the home is more expensive than institutional care
- Myth: The costs of caring for kids in the waiver is skyrocketing
- Myth: These kids don't really need a nurse; a home health aide would be fine
- Myth: Eliminating the waiver would only affect "wealthy" families
- Myth: Programs like this waiver are optional and states don't need to provide them
- Myth: Medicaid is only for the poor
- Myth: All children on the waiver are on it permanently
- Myth: The majority of the most expensive children on the state Medicaid program are getting nursing in the home
- Myth: Cutting this program will only affect a few people, and won't matter to me
- The state itself acknowledges this would not raise money. Take a look at these minutes from the 1/24/12 Children with Complex Medical Needs Workgroup.
- Idaho only raised $114,000 from cost sharing, and their program has four times the number of children in it.
- Wisconsin raised about $300,000 in 2007 from ALL of its programs combined.
- Counterintuitively, cost sharing can actually cost the state more money.
- Here's the math. Let's say that 200 families are subject to cost-sharing, and their average income is $80,000. The state potentially could raise $800,000 if each family paid 5% of their income, which, incidentally, is far more than the "nominal" percentage of three states that use cost-sharing (Maine, Arkansas, and Nevada) charge. But cost sharing dollars are not matched by the federal government, meaning that if Illinois had instead paid half that amount, $400,000, they would have received $400,000 back from the federal government (assuming a 50% federal match).
- Thus, by taxing these families, the state LOSES $400,000 in federal dollars, meaning they only end up making half the expected amount from cost sharing. Add in the cost of collecting payments, and pursuing families who do not pay through collections, and most of the revenue simply disappears.
- Moreover, if just a few children are hospitalized because they sacrifice necessary medical care to avoid cost-sharing, the expected benefits of cost-sharing would disappear entirely.
- Any cost sharing that must be adopted for political purposes should be applied equally to families of children living at home and children who are institutionalized for fairness. In addition, the state cannot single out one population, such as children who receive home nursing, and be in compliance with the Olmstead decision.
Truth: The cost of caring for these kids is more than most families can afford.
- The math is simple: the average cost of a child on the waiver is $188,210. A family who earns $95,450 a year cannot afford to pay $188,210 a year out-of-pocket for nursing care. Even a family who earns twice this amount could not afford nursing care.
- A family would have to earn $300,000 or more to be able to afford home nursing out-of-pocket for most of these kids.
- The state has proposed cost sharing within this program, and hopes to raise $5.1 million from it. If only families over 300% paid in, the average family would have to pay $51,000 a year. They are asking a family who earns $70,000 to contribute 73% of their income for nursing care! Obviously, virtually all families would be unable to afford these amounts.
Myth: Families can just get private insurance to cover these expenses
Truth: Private insurance does not cover nursing care in most instances.
- Very few insurance companies cover nursing care at all.
- When nursing care is covered, it is typically limited by a maximum dollar amount or number of hours, which rarely covers more than a few days of nursing per year. For example, a plan may only cover 320 hours of nursing--roughly the equivalent of three weeks of care for many of these children. Or a plan may only cover $1000 of nursing care per month, which may only add up to one to two days a month.
- Illinois does not mandate private insurers operating within the state to cover home nursing. The state could save a tremendous amount of money by passing this simple requirement. The state actually sued Blue Cross Blue Shield on behalf of the MFTD Waiver for failure to cover home nursing--and won $25 million in a settlement--but still does not legally require Blue Cross Blue Shield or any other insurer to cover home nursing.
- All children on the waiver who have private insurance ALWAYS have the private insurance as the primary payor. Medicaid is ONLY billed if private insurance denies a claim, only pays a portion, or does not cover a service.
Myth: "Wealthy" families are getting completely free heath care through this program
- Illinois has the highest rate of underinsurance for children with special needs in the country, with 38% of children considered underinsured.
- In addition, these families have extensive out-of-pocket costs that neither insurance nor Medicaid covers, often totaling as much as $10,000 to $30,000 a year, including:
- Insurance premiums
- Uncovered disposable supplies, such as gauze, betadine, surgilube, etc.
- Physician-prescribed OTC medicines and supplements
- Specialized equipment for visual and hearing impairments
- Medical equipment, such as medical strollers, adapted car seats, or positioning chairs
- Wheelchair van purchase
- Noncovered home modifications
- Assistive devices, such as communication devices, switches, computers, and software
- Specialty therapy visits, such as respiratory physical therapy or communication therapy
- Special education costs
- Special needs trusts and other legal fees
- Travel and lodging for frequent medical visits
- Increased utility costs for medical equipment, typically $100/month
Myth: The waiver is a "cadillac plan"
Truth: Most of these families are struggling on a daily basis to meet the uncovered needs of their children, due to unfilled nursing shifts, difficulties navigating the system, and financial, educational, medical and legal problems.
- Only 60% of allotted nursing hours are actually provided. While some of these hours are not used due to hospitalization, the vast majority remain unfilled because nurses cannot be found to staff the cases. Nurses who work in home care earn about $10/hour less than nurses in hospitals or outpatient facilities.
- It is routine for families to have periods of 48 consecutive hours with no nursing, meaning a parent must stay awake for two days straight to care for the child. This happens frequently on weekends and holidays.
- Some of these children are so medically complex that they cannot leave home, meaning a parent cannot even run an errand, go to the pharmacy, attend a school event for a sibling, or even get a cup of coffee when a nurse is not available to watch the child. Many parents have not had a night out or vacation in years.
- Nurse turnover is frequent and replacement is not guaranteed. Many nurses call in sick at the last minute and typically no replacement is available.
- Families must spend hours per day navigating the system, dealing with equipment providers, durable medical equipment companies, home health agencies, nursing agencies, therapists, schools, pharmacies, and insurance companies, while also coordinating their child's care.
- Studies show that most of these families are struggling financially, emotionally, and physically on a daily basis just to get by. Caregivers have higher rates of physical injuries directly related to caregiving, financial troubles, and mental health disorders, including depression and PTSD.
Myth: Letting the waiver expire will save the state money
Truth: If the waiver is eliminated, many children will have no alternative but to live permanently in hospitals, and it costs three times as much to care for these children in hospitals! They can be cared for at home for $15,684 a month, but it costs $55,000 to care for them in a pediatric hospital. If only 30 (6%) children are placed in hospitals, the entire $19 million anticipated budgetary savings will be erased.
- The only options for families whose children lose the MFTD Waiver are:
- Permanently hospitalize their child, so the child then becomes Medicaid-eligible. The state itself has said 95% of children on the waiver are too medically involved to go to a skilled nursing facility and must live in a hospital. Children become eligible for Medicaid under federal law if they are institutionalized in a hospital.
- Quit their jobs or reduce work hours to financially qualify for Medicaid. If nursing care is taken away, parents will have to stop working to take care of their children, which will then qualify the entire family for Medicaid, but now without private insurance paying a large portion of the child's bills. In addition, there will be less tax dollars generated if parents quit their jobs. Eliminating the waiver creates a disincentive to work and maintain private insurance coverage.
- Give up custody of their child to DCFS. 1 in 6 kids who receive home nursing in Illinois are already in DCFS. Children who receive home nursing are 34 times more likely to be in DCFS than the general population of children in Illinois. Eliminating the waiver will make this problem even worse. Because most of these children are so medically fragile, most would end up hospitalized or in institutions. Those that can be placed in foster homes typically receive substantially more nursing hours and other services than they would with their biological parents. The entire cost of the child's care--medical and otherwise--would need to be shouldered by the state. Watch this video about how these children are at such high risk for foster care placement:
- See this new study from Illinois' Health and Medicine Policy Research Group which states:
cuts to home care...ultimately do not result in cost savings; and investment in home care...ultimately results in cost savings. Medicaid home care cuts result in an overall INCREASE in Medicaid expenditures due to cost shifting to more expensive institutional care (nursing facilities, hospitals and emergency rooms).
- A large percentage of kids on the waiver qualify for Medicaid financially, and their home nursing costs will not decrease with the elimination of the waiver.
- Illinois will lose much of the $30 million in federal matching dollars it receives specifically for this program if it is eliminated.
- Most of these children still require a nurse 40 hours per week to attend school, which is federally mandated by Cedar Rapids Community School District v. Garret F. If this nursing is not covered or billable through Medicaid any longer, the cost will fall completely on local school districts, who cannot receive federal matching Medicaid dollars for nursing. Just one child easily will cost a local school district $50,000 per year.
Myth: Providing nursing care in the home is more expensive than institutional care
Truth: This is a false comparison, since the vast majority of children on the waiver are too sick or medically involved to live in a nursing home or skilled nursing facility.
- HFS suggested at a 1/24/12 stakeholder meeting that it may be cheaper to put children into residential care facilities, even though this policy would be counter to Governor Quinn's plan to return citizens to the community. See the minutes below:
- But on the waiver's 2007 application, the state itself designated 95% (666 of 700) available spots on the waiver for children who require a hospital level of care (see below). Thus, the comparison that needs to be made is between the cost of care at home ($15,684/month) and the cost of care at a pediatric hospital ($55,000/month).
- In addition, children who live in hospitals and institutions tend to have higher rates of infections, leading to higher costs.
Myth: The costs of caring for kids in the waiver is skyrocketing
Truth: Adjusted for inflation, costs per child have decreased compared to 2000.
- The cost per child on the waiver in 2000 adjusted for inflation was $203,019. The cost per child in 2010, the last year data was available, was $188,210. This marks a 7% DECREASE! See the raw data here.
- While the cost varies slightly per year, with some years marking an increase and others marking a decrease, overall the cost per child has stayed virtually the same over ten years.
- In addition, the waiver has a maximum of 700 spots, meaning that its expenses will never exceed the average cost per child times 700 children.
Myth: These kids don't really need a nurse; a home health aide would be fine
Truth: Most of these children cannot be legally cared for by anyone but a nurse because they require medications and procedures that the Illinois Nurse Practice Act states must be performed by a nurse. For example, children who receive intravenous medications must be cared for by an RN.
- Even if the Nurse Practice Act were changed to permit care by unlicensed staff, most of these children have extremely life threatening conditions. It is unreasonable to expect that an untrained professional could handle this type of situation and successfully intervene to prevent a child's death. The state itself explained this in its 2010 report on the program.
- Children in other states have died, in part because they were left with unskilled providers. See, for example:
- In Illinois, you can become a Certified Nursing Aide if you are 16 with an eighth grade education, as long as you can attend a 75 hour course and pass a simple test. See the requirements here. These children require individuals with much more experience and training.
Myth: Eliminating the waiver would only affect "wealthy families"
Truth: If the waiver is eliminated, families of four earning as little as $46,100 may not be eligible for Medicaid.
- Eliminating the waiver would completely cut off all families earning $69,150 or more (for a family of four) from Medicaid, meaning they would lose home nursing care, Medicaid coverage, and additional waiver services.
- Families earning between $46,100 and $69,150 (for a family of four) would be financially eligible to buy in to Medicaid. But children must be uninsured for twelve months in order to buy in to Medicaid. This means that any family in this income bracket who has private insurance would be ineligible for Medicaid, meaning they would lose home nursing care, Medicaid coverage, and additional waiver services.
- Only families of four earning less than $46,100 could buy in to Medicaid regardless of insurance coverage.
Myth: Programs like the waiver are optional and states don't need to provide them
Truth: While the government does not require states to have specific programs for this population, the Americans with Disabilities Act (ADA) mandates that necessary services be provided, "in the most integrated setting appropriate," for all individuals with disabilities. The "most integrated setting" has been interpreted to mean in the community.
- The Affordable Care Act (2010) also heavily criticizes states that institutionalize people with disabilities, and provides support and funding to states specifically to move individuals from institutions to the community.
- Because states are mandated by Social Security law to provide Medicaid coverage to medically needy children residing in institutions, states that do not offer equivalent community-based support are subjecting themselves to potential lawsuits, since policies that only grant Medicaid eligibility to children in institutions violate the ADA as clarified by Olmstead.
- Illinois has already had 12 Olmstead or related cases for failing to provide home and community based services to individuals. Illinois lost or settled all of the cases that have reached completion.
- A class action suit for children aging out of the MFTD waiver is currently pending against Illinois, and the Department of Justice has issued a brief in support of the lawsuit.
- Virtually all states have programs like the MFTD waiver so children can live at home instead of in hospitals.
Truth: Medicaid has always served vulnerable children with disabilities regardless of family income through federal SSA mandates, granting them Medicaid coverage when they are forced to reside in institutions like hospitals.
- States are given the option of choosing to also serve these children in home settings through TEFRA legislation and HCBS waivers. To both save money and keep families intact, virtually all states take
- advantage of these Medicaid programs for children. The idea of serving these children outside of the Medicaid system--or not at all--is virtually unprecedented, even in these challenging economic and political times.
- If the state, despite the cost savings generated through the waiver approach, wishes to make Medicaid only for the categorically needy and not the medically needy, then the path is clear: require private insurers to cover the services that these families need so Illinois is not the state with the highest level of underinsurance among children with special health care needs in the United States. If the state wants Medicaid to be only for the poor, then make private insurance work for the middle class.
Myth: All children on the waiver are on it permanently
- In fiscal year 2010, there were 622 unique children on the waiver for at least a portion of the year. A head count of children on May 1, 2011 showed only 498 children.
- The vast majority of the children leave the waiver because their health improves and they no longer need it. For example, many children require a tracheostomy in their first few years of life, but no longer need one after age two or three. These children are discharged from the waiver quite regularly.
- Some children also pass away or age out of the program and transition to adult programs.
Myth: The majority of the most expensive children on the state Medicaid program are getting nursing in the home
Truth: 84% of children (4896 of 5821 children) who cost $50,000 or more per year DO NOT receive home nursing.
- Children receiving home nursing account for only 16% of the most expensive children, and children on the waiver account for only 9% of the most expensive children.
- The state is unfairly targeting children with disabilities who get home nursing, which is counter to the Olmstead decision. This decision mandates that citizens must receive access to appropriate programs regardless of the type of disability or healthcare need, as long as the magnitude of their need is equivalent.
- The most expensive children in the state are not the children who require home nursing--which tends to keep them at home, thereby avoiding costly hospitalizations. The most expensive children in Illinois are children with blood disorders and cancer, who are hospitalized for long periods of time and undergo expensive treatments.
Myth: Cutting this program will only affect a few people, and won't matter to me
Truth: Eliminating the program will have many ripple effects that will adversely affect more than just these children and their families.
- Hospitalizing these children permanently means there will be less Pediatric Intensive Care Unit beds available when other children get sick. In winter months, Pediatric Intensive Care Units are already full and often need to turn away children in need of life-saving medical care.
- Eliminating this waiver will increase costs to taxpayers, reduce the inflow of federal matching dollars, and further strain the tenuous budget situation in Illinois.
- Disability does not discriminate. Someone you care about may some day have a car accident, have a premature child, give birth to a child with medical complications, or acquire a serious infection. This program needs to be in place for all Illinois families if and when they need it.
- Your local school district will have to pay the cost of nursing for these children during school hours if they are no longer eligible for Medicaid, putting strain on local districts, especially in rural areas. These costs will need to be paid for by property taxes instead of federal matching dollars.