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GOP plans for Medicaid could put the hurt on nursing homes

Oak Crossing nursing home in Detroit Lakes. Meagan Pittelko / Forum News Service1 / 2
Emmanuel Nursing Home in Detroit Lakes. Meagan Pittelko / Forum News Service2 / 2

DETROIT LAKES, Minn.—A game-changing Republican plan to quit fully funding Medicaid has caught the attention of a nursing home administrator here.

The plan would cap federal spending on Medicaid and force states, nursing homes, hospitals and others to make up the difference, which would grow over time.

"What a huge impact this could have, even here in Detroit Lakes," said Janet Green, regional director of Ecumen, which owns Emmanuel Nursing Home in Detroit Lakes and manages Sunnnyside Care Center near Lake Park for Becker County.

With an aging population, Minnesota could be especially hurt by the proposed changes to Medicaid, which covers many nursing home residents.

"In Minnesota, there are a rising number of older adults and people needing Medicaid to pay for long-term health needs," Green said.

Think it won't affect you? Better keep your fingers crossed.

One in every two people over the age of 65 will have some type of stay in a nursing home, with one in 10 staying longer than five years.

And it's not just older people: Of those currently receiving nursing home-level care, 40 percent are under the age of 65.

Long-term care costs, based upon a recent survey by Genworth Financial, shows median costs for home care at $65,000 a year and a private nursing home room at $97,000 a year, according to University of Minnesota Extension. Costs like that can quickly consume a lifetime of savings, leaving people dependent on Medicaid for nursing home care.

The proposed Medicaid changes could likely make it more difficult for nursing homes to attract and keep the best staff.

"Any cuts in Medicaid will mean less money to pay our staff," she said. And nursing homes, for obvious reasons, are all about people—some 70 percent of total costs are for personnel. "As you know, we have a worker shortage in Minnesota, and we have a hard time paying staff as needed," Green said.

Nursing homes tend to operate on thin margins anyway, and this move is almost sure to make things worse, she added. The sad thing is, after years of struggling to keep workers, the situation recently got better for Minnesota nursing homes.

"Two years ago, the Minnesota Legislature changed its reimbursement funding to a value-based system, based on more realistic costs to operate, and we have been able to give employees a competitive pay increase," Green said. "It made a huge impact on our ability to fill positions and provide good benefits." But with plans to cap Medicaid, "we could lose a lot of the gains we made in the last year or two," she said.

Loss of federal Medicaid funding could have a detrimental effect on efforts to keep people in their homes longer and out of nursing homes.

It costs less to provide in-home services, and people usually prefer to stay at home as long as they can, Green said. But if funding for those programs goes away, more people will try to stay at home without services, and it will end up costing the system more in the long run. "People will be sicker and need more costly care," she said.

The proposed changes to Medicaid come as part of the Republican effort to repeal and replace the Affordable Care Act (Obamacare) by imposing either a "per-capita" cap or a block grant, a plan that fits in with a long-standing Republican goal to cap and cut federal Medicaid spending.

Medicaid has been a big part of the nation's health-care system for over 50 years and insures nearly 1 in 5 Americans.

A per-capita cap (sending a fixed amount to the states for each beneficiary) or a block grant (sending a fixed amount to the states for their entire program) would give states substantially less federal funding than they would get under Medicaid today, with the cuts growing larger each year.

That would pass the buck to the states and to health-care facilities and affect the wellbeing of about 65 million Medicaid beneficiaries, including approximately 35 million children, 7 million elderly people and 11 million people with disabilities, according to Henry Waxman, a former California congressman.

States like Minnesota that skew older will be hit the hardest. And because Medicaid pays the premiums, deductibles, co-payments and other out-of-pocket costs associated with Medicare for lower-income elderly people, Medicaid changes could also hurt Medicare beneficiaries.

"Sometimes it's all about money, and we're not really looking at how it's going to affect people," Green said of the Medicaid proposal. "At the end of the day, we want to make sure we're taking care of our elderly and vulnerable."

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