‘Imperil its Future’: Policy Experts Dispute Claims That Nursing Homes Will Be Minimally Impacted by Medicaid Cuts 

As Republican lawmakers’ push for potential Medicaid cuts have gained more attention in recent weeks, claims that older adults, including those in nursing homes, will likely be insulated from the financial fallout have also surfaced. However, experts are now suggesting that this may not be the case after all.

Executives in the skilled nursing sector have said the cuts could focus on “low hanging fruit,” such as the Affordable Care Act’s Medicaid expansion program, without impacting nursing homes. 

Policy experts are now countering that notion by saying that the whole system will take a hit, not least because of the staggering amount of Medicaid cuts – over $2.3 trillion – that are being proposed.

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In fact, Medicaid provides comprehensive health and long-term care to about 4.4 million adults ages 65 and older, according to KFF, with the program being the primary payor for long-term support services (LTSS) for disabled people and older adults in need of nursing home care and home and community-based services.

And professors Sara Rosenbaum and Alison Barkoff with the George Washington University’s Milken Institute School of Public Health, disputed such claims in an editorial for Health Affairs Tuesday.

“Should Congress pursue a wide range of possible budget-cutting strategies, all Medicaid populations, from the youngest infants to the most vulnerable older adults, inevitably will feel the effects,” Barkoff and Rosenbaum wrote. “Moreover, the safety net health care providers that disproportionately serve the poorest and highest-need patients, and indeed the health care system as a whole, will be at risk. The changes under consideration, if enacted, would shake Medicaid’s very structural foundations and imperil its future as the nation’s largest public health insurer.”

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Barkoff led the Administration for Community Living in the Department of Health and Human Services (HHS) from January 2021 to October 2024, and served as the HHS secretary’s adviser on aging and disability policy.

The academics called the Republican lawmakers’ argument that cuts and changes to Medicaid are crucial to protecting certain vulnerable populations, including older adults, as not only “wrong” but “completely disingenuous.”

“There is simply no way to protect any beneficiary from the impact of far-reaching Medicaid spending reductions. Medicaid is perhaps the nation’s most complex federal health care program, and each element of the program is inextricably connected to the other. Taking unprecedented sums out of Medicaid would hurt everyone. Period,” they wrote.

The Health Affairs article notes that Medicaid for older adults could be significantly impacted by several proposed changes to federal funding and program structure.

Congress could impose block grants or per capita caps, limiting federal contributions to state Medicaid programs. These caps would result in deep cuts to Medicaid funding over time, potentially costing states over $900 billion over the next decade. States with older, higher-need populations would be particularly penalized, forcing them to reduce coverage for services like long-term care.

Moreover, reducing the minimum federal medical assistance (FMAP) contribution below the 50 percent minimum is also on the table, and it could disproportionately impact wealthier states. These states may lose over $600 billion in federal funding, affecting services for people with disabilities and older adults.

And last but not least, restrictions on how states generate funds for Medicaid could place a strain on their budgets, especially if the federal share requirement increases.

“Whether the effort to reduce Medicaid spending comes in one or two waves is unclear, and how big each wave could be is also unclear. What is clear is that what is driving the discussion right now is an aggressive quest for dollar offsets, not a vision of a stronger Medicaid program that ensures good, stable health insurance for the poorest Americans with the most significant health care needs, or a vision of a Medicaid program that continues to underpin the health care system’s extraordinary capability to respond to public health demands,” they wrote.