The Cost-Effectiveness of Medicaid Services
By Richard Shank
The AARP recently released a public policy brief outlining key findings and recommendations related to spending on home and community-based (HCBS) Medicaid programs.
They argue that any short-term savings from cutting the HCBS budget are counterproductive and will cost more money in the long term. In the current fiscal crisis, the first impulse has been to make deep cuts in optional Medicaid benefits like HCBS; however, recent evidence suggests that the cost savings associated with this sort of program make them a more appropriate investment.
AARP claims that, over time, states that invest in HCBS programs will experience slower spending growth related to Medicaid. Furthermore, they argue, the cost savings created by increased participation in HCBS carries over into cost savings in the more expensive nursing home environment as well.
These findings are a part of AARP’s mission of increasing consumer choice and control over long-term care options. During the latest economic recession, it is important to consider how to handle the increasing pressure that is placed upon Medicaid spending as families lose employer-sponsored health insurance.
The paradox has always been that Medicaid spending increases during a time of state revenue decline. In this environment though, the AARP suggests it would be fiscally damaging to slash the least expensive and most attractive services that Medicaid provides.
For more information or to see the policy brief, visit: http://assets.aarp.org
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