Although budget cuts are popular in Congress right now, especially among Republicans who support the budget sequester that indiscriminately hacks $85 billion in domestic government spending, sometimes a spending cut is really a spending increase, especially when those in charge of the cutting fail to understand the value of the goods or services no longer being purchased.

Take Meals on Wheels (MOW), the popular program that provides hot meals to home-bound senior citizens and the disabled. Although Meals on Wheels is a private association, most of its local chapters receive badly needed federal funds, and the sequester is expected to cut their funding by about $10 million in 2013 alone. The cuts will cause 4 million fewer meals to be served in 2013, yielding poor nutrition, hunger, social isolation and other harm to seniors and the disabled.

Ironically, the argument that such so-called “shared sacrifice” is necessary to achieve fiscal balance took a major hit last week when a study by the Center for Effective Government showed that the sequester cuts to Meals on Wheels programs could cost taxpayers far more than they save. The $10 million “savings” on MOW will be dwarfed by at least $489 million per year in increased spending on Medicaid caused by the cuts, according to the report. 

The reason for this is that Meals on Wheels saves money by helping clients live at home instead of in more expensive nursing homes. In fact, the Administration on Aging found recently that about “92% [of clients] say Meals on Wheels means they can continue to live in their own home.” As MOW clients tend to be poor, their nursing home bills are paid by Medicaid, at an average annual cost of $57,878. When seniors receive home care, in contrast, the cost to Medicaid is about $15,371 per year, or $42,507 less than nursing home care.

Based on that data, the study concludes that 46,998 individuals would be forced into out-of-home care, with Medicaid covering 39,478 of them. And if the sequester is not reversed for FY 2014 and beyond, Medicaid-related costs will increase even more in those years.

-Matt Bewig

To Learn More:

Sequestering Meals on Wheels Could Cost the Nation $489 Million per Year (by Jessica Schieder and Patrick Lester, Center for Effective Government)

Budget Cuts Devastate Meals On Wheels: Enrollment Slashed, Services Canceled (by Bryce Covert, Think Progress)

D.C. Lawmakers Fended off Sequester Threat to Their Air Travel, but Courts Are on Their Own (by Ken Broder, AllGov California)

Potential Impact of Sequester (Meals on Wheels Association of America)