Nursing Homes Worry Proposed Medicaid Cuts Will Force Cuts, Closures

Jun 28, 2017
Originally published on June 29, 2017 1:53 pm

The Senate vote on the health care bill has been pushed back, but it still has a lot of people in the nursing home industry worried. About two-thirds of nursing home residents are paid for by Medicaid. And the Congressional Budget Office found that the Senate health care bill would cut Medicaid by more than $770 billion over the next decade.

That could mean trouble for people like 88-year-old Betty Redlin. She's lived at the Victoria Care Center in Ventura, Calif. for about 2 1/2 years.

She explains that she fell and broke her hip and never regained her ability to walk. "I was living with my granddaughter," she says, "and my doctor won't [allow] going back to her place."

Betty had a career as a bookkeeper. She also raised three children. Now she's spent everything she had. There's no way she could afford the roughly $80,000 a year this nursing home costs. (That fee is pretty standard for nursing homes.) So it's Medicaid that enables her to stay here.

"There's nothing I can do about it," she says. "It's gotta be [Medicaid] or [I'm] out on the street. One or the other."

John Gardner, executive director of the Victoria Care Center, says that most of the long-term care residents like Redlin are on Medicaid or, as it's called in California, Medi-Cal.

"If you look at what it costs to provide that service and what we get from Medi-Cal, we're actually losing a little bit of money every day on that." He says they make up the difference with short-term residents who have Medicare, which pays more than Medicaid does. Private pay patients also pay more than Medicaid.

Gardner says he's an optimist. Whatever Congress does, he doesn't think that Victoria Care Center would close down, though there might have to be cuts in staff and in the costs of food and supplies. Also, Gardner says that Victoria Care Center is part of a chain of 200 facilities, which could cushion the blow.

But not everyone is as optimistic as he is. According to the American Health Care Association (AHCA), a national trade group for nursing homes, the current Senate bill's cuts to Medicaid could mean that a typical nursing home would eventually run deficits of hundreds of thousands of dollars a year. James Gomez is the CEO of The California Association of Health Facilities, the AHCA's California chapter.

"If you can't break even or make a few dollars, you're not going to keep running your business," says Gomez. And that could lead to closures. "So access [to nursing home beds] will become a huge issue."

The repercussions of cuts and closures would be felt across the nation's health care system, says Katie Smith Sloan, the president of Leading Age, which represents non-profit nursing homes and other services for older adults.

"People who are in nursing homes are there because they need the kind of services that a nursing home provides" says Sloan. "Without those services, they'll be forced to get that kind of care in a hospital, which will simply increase costs to Medicare."

Reining in Medicaid has been on conservatives' to-do list for a long time. House Speaker Paul Ryan has said he's dreamed of it since his college days. Robert Moffit, a senior fellow in health policy studies at the conservative Heritage Foundation, argues that the program isn't being used as intended.

"Do we want Medicaid, which was a program designed for the poor and the indigent, to become a kind of backdoor mechanism to establish a middle class entitlement for long-term care? Medicaid was never really intended to do that," says Moffit.

The Senate bill is likely to change. But leader Mitch McConnell has indicated that Medicaid cuts will still be part of it.

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ARI SHAPIRO, HOST:

One of the things Medicaid covers is long-term costs to most people who are in nursing homes - about two-thirds of them. Many of those people are middle class. They've used up their savings to pay for their care and then become eligible. So the Senate health care bill, which cuts Medicaid by more than $770 billion over the next decade - it's a big worry for older adults and the nursing home industry. NPR's Ina Jaffe has more on that.

INA JAFFE, BYLINE: At the Victoria Care Center in Ventura, Calif., About a dozen residents, all in wheelchairs, have gathered to listen to music together. John Gardner, the executive director, points out one woman pumping her arms in time to the beat to nurse.

JOHN GARDNER: She was a World War II nurse, and she's very strict. She said, when I was a nurse, we did - always did it this way.

(LAUGHTER)

JAFFE: Gardner knows a lot of the residents here - their names and their histories - like 88-year-old Betty Redlin.

GARDNER: Good morning. How are you?

BETTY REDLIN: Oh, hi.

JAFFE: Betty Redlin's been living here about two and a half years.

REDLIN: I fell and broke my hip.

JAFFE: And she never regained her ability to walk.

REDLIN: And I was living with my granddaughter, and I - doctor won't renew going back to her place.

JAFFE: Betty Redlin worked as a bookkeeper and raised three children. Now she's spent everything she had. There's no way she could afford though roughly $80,000 a year this place costs. That's a fee that's pretty standard for nursing homes. It's Medicaid that enables her to stay here.

REDLIN: There's nothing I can do about it. It's got to be that or out on the street - one or the other.

JAFFE: John Gardner says that most of the long-term care residents like Betty are on Medicaid or, as it's called in California, Medi-Cal.

GARDNER: Look at what it costs to provide that service and what we get for Medi-Cal. We're actually losing a little bit of money every day on that.

JAFFE: And they make up the difference with residents who can pay more. Gardner says he's an optimist. Whatever Congress does, he doesn't think that the Victoria care center would close down. But not everyone shares his optimism. According to the American Health Care Association, a national trade group for nursing homes, the Senate bill's cuts to Medicaid could mean that a typical nursing home would eventually run deficits of hundreds of thousands of dollars a year. James Gomez is the CEO of the California chapter.

JAMES GOMEZ: If you can't break even or make a few dollars, you're not going to keep running your business. And so access will become a huge issue.

JAFFE: And the repercussions will be felt across the nation's health care system, says Katie Smith Sloan, the president of LeadingAge, which represents nonprofit nursing homes.

KATIE SMITH SLOAN: People who are in nursing homes are there because they need the kind of services that a nursing home provides. And without those services, they'll be forced to get that kind of care in a hospital, which will simply increase the cost to Medicare.

JAFFE: But reining in Medicaid has been on conservatives' to-do list for a long time. House Speaker Paul Ryan has said he's dreamed of it since his college days. Robert Moffit is a senior fellow in health policy studies with the conservative Heritage Foundation. He argues that the program isn't being used as intended.

ROBERT MOFFIT: Do we want Medicaid, which is a program designed for the poor and the indigent, to become a kind of backdoor mechanism to establish a middle-class entitlement for long-term care? Medicaid was never really intended to do that.

JAFFE: So the Senate bill is likely to change, but Leader Mitch McConnell has indicated that Medicaid cuts will still be part of it. Ina Jaffe, NPR News. Transcript provided by NPR, Copyright NPR.