Medicaid Changes Under Trumpcare Could Hamstring Skilled Nursing

As the Senate reportedly prepares to release its version of legislation that would repeal and replace the Affordable Care Act, a leading health care nonprofit warns that changes to the Medicaid program under the American Health Care Act could harm the skilled nursing industry.

Medicaid represents the largest payer for skilled nursing services, providing $55 billion for SNF care in 2015 and covering six in 10 nursing home residents, according to a new set of data from the Kaiser Family Foundation. And since both houses of Congress plan to overhaul Medicaid’s funding mechanisms, Kaiser claims that the Obamacare repeal could limit providers’ ability to adapt to changing care needs.

“Reductions in federal Medicaid financing as proposed by the American Health Care Act could limit states’ ability to respond to these needs,” the Kaiser report says. “Lower reimbursement rates can lead to reductions in staffing, which can result in lower nursing home care quality and poor care outcomes.”


Kaiser specifically called out the proposed switch to a per-capita cap system, under which states would receive fixed dollar amounts for each Medicaid program participant, as well as the potential loss of optional coverage that states extend to residents through the Supplemental Security Insurance program.

The version of the American Health Care Act that passed the House of Representatives already includes a per-capita cap system for Medicaid as part of $800 billion in total cuts for the program. Early reports have indicated that the Senate’s bill would slash funding even deeper by slowing the rate at which Medicaid payments would rise with the cost of living over time.

Republican leaders in the Senate have yet to provide a full health care bill for debate or submission to the Congressional Budget Office for scoring, though reports Wednesday indicated that the GOP would release a “discussion draft” on Thursday. Politico also reported Wednesday that the Senate’s bill would indeed include even steeper cuts for Medicaid funding while also providing a “carve-out for certain children with complex medical needs.”


Sen. Rob Portman, an Ohio Republican, framed the Medicaid proposal as a move toward efficiency, according to Politico.

Even before the details of the Senate’s plan began to gradually leak out,  AARP sounded the alarm about the potential effects of Trumpcare on older Medicaid recipients, arguing that the House’s plan to base all future increases on fiscal year 2016 spending would eventually prove insufficient to care for a rapidly aging population.

By the Numbers

The District of Columbia had the highest proportion of certified nursing home residents receiving Medicaid in 2015, with 80% according to Kaiser’s analysis; for comparison, the national average is 62%. Among states, Alaska led with 79%, followed by West Virginia at 76% and Mississippi at 75%. Louisiana and Georgia rounded out the top five.

Florida led the way when looking at spending on skilled nursing facilities as a percentage of overall Medicaid long-term care (LTC) dollars; 59% of that state’s Medicaid LTC spending went to nursing homes, followed by Hawaii at 58%, Indiana at 57%, Michigan at 55%, and Alabama at 53%.

For comparison, the two states with the lowest proportions — Minnesota and Oregon — spent only 17% of their Medicaid LTC money on nursing home care.

“Capping Medicaid financing could lock in differences in the share of long-term care spending devoted to nursing homes, which varies significantly across states as of FY 2015,” Kaiser noted.

Written by Alex Spanko

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