What Republicans’ possible Medicaid cuts could mean for nursing homes

Holly Lewis has already seen what happens when a nursing home has staffing troubles.

Five years ago, as the COVID pandemic raged, Lewis watched institutional knowledge disappear from her mother’s nursing home as nurses and certified nursing assistants left. Her mom, Katherine, who has dementia, had to get accustomed to new faces, while new staff had to learn Katherine’s likes, dislikes, abilities and habits — details that affect quality of care.

WATCH: U.S. nursing homes grapple with staffing shortages and requirements

“When the staffing is cut, those workers become overburdened,” Lewis said.

She’s worried about staffing cuts because congressional Republicans may be looking to cut billions of dollars from Medicaid funding to cover an extension of President Donald Trump’s 2017 tax breaks. Though Medicare is the primary health insurance provider for senior adults, it’s Medicaid that pays for nursing home coverage and other long-term care.

Experts say there are a handful of ways long-term care services for older adults might be affected.

“Nursing home care is a mandatory benefit. But yet there’s still ways that they could potentially limit Medicaid spending there, and it’s either in price or quantity,” said David Grabowski, professor of health care policy at Harvard Medical School.

Medicaid, the largest payer for long-term care facilities, covers around 2 in 3 nursing home residents, and reducing dollars to the massive, yet already resource-limited, program could have disastrous effects on older adults’ health, safety and quality of life.

A federal study of most states released last year found that in 2019, while nursing home costs per Medicaid recipient averaged around $253, the program only paid $198. On average, Medicaid paid 82 cents for every dollar of cost.

Older adults must meet state-specific income and asset thresholds to qualify for that care, which often requires them to spend down most, if not all, of their money, leaving them without a cushion or a backup plan.

“There’s no plan B,” said Jason Sullivan-Halpern, director of the California Long Term Care Ombudsman Association. “This was the only path that they had. And at that point, there is really nothing for them to return to.”

How Medicaid cuts might affect long-term care

The current budget proposal would extend expiring tax cuts, adding about $3.8 trillion over the next decade to the federal deficit, according to the Congressional Budget Office. In return, the House committee that manages Medicaid has proposed trimming nearly $700 billion in spending to the program.

That bill is now in reconciliation, where both chambers of Congress must eventually pass a single plan from their respective proposals.

WATCH: Exploring the potential impact of Medicaid cuts in Trump’s big budget bill

Skilled nursing facilities, or nursing homes, are the most care-intensive facility in the continuum of long-term care. While assisted living residents may need help with performing activities of daily life, such as bathing, walking, eating and using the bathroom, residents of nursing homes need more skilled health care for longer periods of time. Some patients enter skilled nursing facilities as they age, needing more intensive care, while others stay for short-term rehabilitation. Other types of long-term care include adult day care, home-based care and hospice care.

The cost of care depends on the type of facility and the location, but on average, a room at a nursing facility runs between $9,000 and $11,000 per month, according to CareScout.

Medicaid covers more than 60 percent of residents in nursing homes, about 20 percent of people in assisted living, and more than half of all residents of long-term care facilities. States are required to cover nursing home care for all adults 21 and older, and cannot limit access to care or impose waiting lists.

But if states encounter gaps in federal funding, they either have to generate income or make cuts on their own.

While the current proposal doesn’t appear to make any direct cuts to long-term care, experts say reduced federal funding for Medicaid overall will still likely have indirect effects on states’ ability to pay for that care.

That might look like ending assisted-living coverage,or reducing or eliminating the reimbursement offered to some home- and community-based caregivers. States also may lower the rate they reimburse nursing homes for Medicaid residents or change the eligibility requirements for qualifying.

Any one of those options would have profound effects, experts say.

By reducing or eliminating the optional benefits states offer, such as assisted-living care, people would likely stay in their homes and go without the care they need until a crisis.

“They’ll stay home as long as they can and then there’ll be an accident. They’ll go to the hospital and people will say, ‘We can’t have Mom go home alone,’” said Vincent Mor, professor of health services, policy and practice at the Brown University School of Public Health.

Cutting reimbursement to nursing homes would significantly affect the facilities’ already tight finances, experts also said.

“There are very few states, if any, that come close to paying the cost of a bed,” Mor said. With reimbursement cuts, “you’re gonna lose one or two nurses or aides — if you can find them now.”

The federal study of nursing homes in 2017 found that facilities cut staffing when their Medicaid payments dropped.

Experts stressed that nursing homes already have a difficult time finding and retaining staff, given low pay and strenuous work. More than half of the direct care employees at nursing homes are people of color, and many are immigrants.

In the event that nursing homes can’t pay their staff, they’ll have to reduce access, and many will shutter, said Clif Porter, president and CEO at the American Health Care Association and the National Center for Assisted Living (AHCA/NCAL), a nonprofit group representing long-term and post-acute care providers.

An AHCA report found that 774 facilities closed between February 2020 and July 2024, while only 243 opened over the same period. As facilities close, people in rural areas may have to drive further to see their loved ones, while nursing homes in more urban areas may find they have to compete with better paying hospital systems for staff, Porter said.

WATCH: How planning for long-term care is burdening middle-class Americans

Another possibility is that understaffed facilities will force nurses, CNAs and other employees to spend less time per patient — already a growing problem in facilities that accept Medicaid. Those factors could increase isolation and loneliness, a well-established social determinant of health, among residents.

“There will be perhaps a few more falls, a few more bed sores. But what there’s going to be a lot more of is ‘failure to thrive,’” Mor said.

“There won’t be anybody around with whom to form a relationship,” Mor said, because staff will be too busy “filling out paperwork necessary to document the level of care provided.”

All of this is familiar to families, staff and researchers, who experienced understaffing and intense workloads during the pandemic.

“This happened during COVID, and if that happens again, then what we’re going to see are nurses getting burnout, making mistakes, CNAs getting burnout, quitting,” Lewis said.

Sullivan-Halpern, whose office of the ombudsman handles nursing home residents’ complaints about care, was more blunt.

“Let me be very clear: If these cuts happen in the way they may appear to happen at this moment, people are going to get sick and die,” he said.

Rising need for elder care rises as Americans age

Elder care is rarely perfect now, experts say, and as aging baby boomers start to need more intense assistance, it’s likely to strain further those limited resources.

“The number of people who need long-term care in this country is large, and it’s only going to grow as the baby boomers age and we have more older adults who need help with their activities of daily living,” Werner said.

Nursing facilities with more Medicaid beds are more likely to have lower ratings on the federal government’s Nursing Home Compare site, according to a KFF analysis. The federal government awards higher ratings based on qualitative metrics; facilities with more Medicaid beds have less staffing and more health violations than those with fewer. And that affects the care of all patients at a facility, whether they pay with Medicaid or privately.

“In nursing homes particularly, there’s definitely a geographic representation of the patients that are served based on the community that the facility is in,” said Porter of AHCA/NCAL.

“If you’re in an affluent community, you probably have less Medicaid patients versus an economically challenged community where you can have 100 percent, or close to that, in Medicaid patients,” he added.

READ MORE: A closer look at who relies on Medicaid

Other payers, including Medicare (which covers short-term stays in specific circumstances), private pay and those with long-term care insurance, help subsidize Medicaid patients, Porter said. But if there aren’t enough non-Medicaid patients, there might not be a market for nursing facilities, especially in lower income areas.

These problems are solvable. Experts told PBS News that there are ways to ensure older adults get the quality and type of care they need, whether at home or in a residential facility. But most require more investment and resources, not less.

One method that has shown promise is the nonprofit Green House Project’s model of skilled nursing homes, which typically have fewer than 15 beds — far smaller than the national average of 100 beds.

Staffing costs in those models don’t seem to be higher than in large homes and staffing turnover may be lower in Green House homes, said Dr. Rachel Werner, executive director of the Leonard Davis Institute of Health Economics and professor of medicine at the University of Pennsylvania. Resident turnover also tends to be lower, she said, and costs nursing homes incur during the first week or two are generally higher than costs later in the stay.

“If you believe that small nursing homes are able to provide better quality of care and prevent certain complications that are costly to nursing homes like pressure sores and falls, they may be able to save those costs,” she added. “So what appears to be sort of an expensive model of care may actually end up being more efficient.”

Beyond that, however, some experts stressed that Medicaid is probably not the most effective way to deliver skilled nursing care.

Werner said she thinks it’s “not unreasonable” to create a separate, long-term care entitlement outside of the current systems of Medicaid and Medicare. A more feasible alternative, she said, would be to shift long-term care coverage to Medicare, since so many seniors rely on the program already.

Since Medicaid was established 60 years ago, there’s been a rise in chronic conditions, Werner said.

“Those chronic conditions are closely associated with long-term care needs,” she said. “And so I think that the idea that we should have a benefit designed that could help support people as they age to manage long-term care, manage chronic conditions, and then ultimately manage the fall from chronic conditions that requires long-term care, in some ways makes a lot of conceptual sense.”

By 2060, nearly a quarter of the U.S. population, or around 95 million Americans, will be 65 or older — including nearly all millennials. Cutting long-term care benefits now “seems like the wrong direction,” Werner said.

“We could solve some of our long-term care crisis by providing more support to staff, rather than less support to staff,” she said. “We should pay them a living wage. We should provide benefits. We should provide a career trajectory for them within the care that they do. And it would actually, I think, be cost-effective in the long run because it would reduce turnover and improve quality of care for nursing home residents.”