LeadingAge Says Medicaid Cuts Will Create Gaps in Care for Older Adults

WASHINGTON—As the Senate advances its newest budget resolution and the possibility of massive cuts to Medicaid loom, Katie Smith Sloan, president and CEO of LeadingAge, the association of nonprofit providers of aging services, reiterated the impact of large-scale spending reductions in the federal-state health insurance program in a letter to the Senate Finance Committee leadership.

“Balancing the 10-year budget cycle on the back of the Medicaid program is not a good tradeoff for the American people,” said Senator Cory Booker (D-NJ) in his March 31 filibuster.

Medicaid, Sloan said in an April 1 letter to Congressional leadership, “sustains long-term services and supports—there is no other option to pay for these services.”

Older adults and their families rely on Medicaid support for crucial care and support in a range of care settings and community types, and Medicaid is a significant payer to LeadingAge’s nonprofit and mission driven members who deliver those services in nursing homes, home health agencies and a range of other home-and community-based settings, from adult day to Programs for All Inclusive Care for the Elderly (PACE).

“The real world effect of what is being discussed—whether it is a work requirement, a change to the structure of health care taxes or a change in the federal medical assistance percentage (FMAP) formula for any segment of the Medicaid population—is large holes to be filled in state budgets. …The end result is that the health and well-being of older adults around the country will be severely harmed,” Sloan said. 

Citing examples from members who serve seniors in various care settings and communities, including affordable housing for low-income older adults, Sloan illustrated the potential devastation that would result from Medicaid’s curtailment.

• A Minnesota Adult Day Program member serving 45 enrollees, 93% of whom are on Medicaid services, said: “Any cut to Medicaid would be devastating. Some of them live with family. Cuts would take away the needed respite to not only allow family members to maintain their employment but also reduce caregiver burnout. With our individuals that live independently, this is their only source of safe engagement within their community, keeping them active and well. We have longstanding clients—some people have been coming to the center over 10+ years. One is 98 and another will be 102. Our program has helped keep them active and allowed them to remain in their community. Adult day services as a whole keep people living in their homes longer and with a higher quality of life. Taking these benefits from them will increase isolation, reduce physical wellness and force the need for higher-level care, which will be far more costly.”
• One provider in New Jersey shared the experience of NM, a five-day-a-week adult day program participant since October 2022: “She lives in her own apartment and is connected with a case management organization. She has no family or friends who contact her. NM receives assistance with showers, laundering her clothing, support in the bathroom for incontinence, medication administration and health monitoring. Prior to coming to adult day, NM was not taking her medication daily or managing her hygiene needs. She was not accepting support coming to her home. When NM had COVID-19 and was unable to attend the program while sick, she returned to the program over a week later in the same clothing and incontinence products that she was assisted to put on during her last day of attendance prior to her illness. Without the support of adult day, this would be her reality daily. She has developed friendships, a social outlet, activity engagement and access to a health and wellness program supporting her with her pain management. Without adult day, funded by Medicaid, she would require nursing home placement.” 
• Samantha Rapuk, executive director of St. John Community in Mars, Pennsylvania, shared the impact on nursing home residents if Medicaid were cut. “Many elderly nursing home residents turn to Medicaid because they have simply run out of money,” she told the Pittsburgh-Post Gazette. “They’re fathers, they’re mothers, they were active in their communities. But they outlived their resources.” Medicaid pays for care for 100 of the 140 skilled care patients at St. John’s; low Medicaid reimbursement levels mean the center loses about $30 a day per Medicaid patient—a shortfall that the complex must make up with revenue from services provided to private pay residents.
• A three-location nursing home member in rural New York state, where overall Medicaid utilization for long-term care is 70%, and its own Medicaid utilization rate, across all locations, is between 69-79%, shared that its 79% Medicaid home has an operating margin of negative 12.7%. Leadership of this organization is trying to be as operationally efficient as possible: in addition to pay cuts taken by C-suite staff, they’ve reduced costs by switching to thinner blankets and buying less expensive foods to avoid closing beds or reducing staff (the latter, to maintain quality). These providers are already hanging on by a thread; any cuts to Medicaid would force closure or reduction in available beds, Sloan said.

In addition to those stories, Sloan said the vital role of Medicaid in keeping low-income older adults living independently, safely. Two-thirds of older adults in the U.S. Department of Housing and Urban Development’s (HUD’s) Section 202 Supportive Housing for the Elderly program are enrolled in Medicaid. There are not nearly enough Medicaid-assisted living beds to cover the needs of this population and cuts to Medicaid would exacerbate that problem immensely. Furthermore, Medicaid services allow older adult residents of HUD-assisted housing to age in community by receiving the health care supports they need to age independently and avoid nursing homecare, which is much more costly to U.S. taxpayers than home- and community-based services. HUD-assisted older adults have more chronic health conditions than non-HUD-assisted older adults with the same incomes living in the same neighborhoods; the pairing of Medicaid and affordable housing allows hundreds of thousands of older adults to age in the community.

Sloan ended the letter with a call to action that Congress must “…not make changes to the federal financing component of the Medicaid program during reconciliation. Medicaid is efficient and the only program that supports long-term services and supports for older adults. Our providers that take Medicaid have already streamlined operations to the extent possible—the only options that will be left will be closure or to stop accepting Medicaid. This will leave huge gaps in care and services for older adults and ultimately, be more expensive to the health care system overall.”