The American Health Care Act (AHCA)—the Republican plan to repeal and replace Obamacare—would alter the way Medicaid is funded, and could influence more states to shift care back to skilled nursing facilities (SNFs), according to a recent report.
By switching Medicaid financing to per capita caps, which provides states with an aggregate amount of funding based on the number and category of eligible beneficiaries, as the AHCA does, states are more likely to fund institutional care—in settings like SNFs—according to the report by LeadingAge and the Center for Consumer Engagement in Health Innovation.
“Per capita caps would cause a shift away from home and community based services (HCBS) toward institutional care such as nursing homes,” the report reads.
This is because institutional care is mandatory under Medicaid rules, while HCBS are not. With fewer resources, states would likely direct more funding to mandatory services, such as institutional care in SNFs.
Medicaid has historically spent more on institutional care than HCBS, but the health care system has increased spending on services outside institutional care settings over the last few years. Approval of the AHCA would reverse that trend, the report concludes.
While there could be more attention on SNFs under per capita caps, overall funding cuts would still have a significant impact on the health care workforce and overall access to long term services and supports. For SNFs, a major concern in the AHCA is that the Medicaid financing structure doesn’t take into account the massive influx of seniors expected in the coming decades.
“A per capita system would have serious implications for people receiving long-term services and supports (LTSS)—including millions of older adults with functional and cognitive impairments,” the report reads. … “Medicaid is the primary payer for LTSS so reductions in Medicaid funds would have serious consequences for people receiving LTSS.”
As a result, states are unlikely to be able to meet the rising demand for care in the future.
“The proposed financing structure in the AHCA does not adequately take into account a variety of important factors associated with whether or not states can meet growing LTSS needs,” the report explains.
Beyond directly impacting access to care for seniors, approval of the ACHA would also results in massive job losses—to the tune of up to 713,000 home health aides and personal care aides, according to the report.
The AHCA, which was approved by the House in May, is currently under consideration in the Senate, where Republicans have been working on their own version of the bill. The legislation is rumored to be on track to receive a vote before Congress’ July 4 recess; however, there has yet to be a formal hearing on any such legislation in the Senate and no public version of the bill has become available.
Written by Amy Baxter