Will the Republican Plan Kick Granny Out of the Nursing Home

by | Jul 5, 2017

Will the Republican healthcare reform plan kick the elderly out of nursing homes?

Democrats say...

…the Republican cuts to Medicaid will force states to kick the elderly out of nursing homes.

Republicans say...

… we aren’t cutting Medicaid but increasing Medicaid funding every year.
Doesn’t Medicare pay for long-term care?
No. Medicare does not pay for long-term care. Medicaid does pay for long-term care, but only after you’ve spent your savings first. Most of the people in nursing homes today are relying on Medicaid to pay for their care. About 1 in 5 seniors is on both Medicare AND Medicaid. They are called “dual eligibles”.

Which side is telling the truth?

Neither side is telling the whole truth. 

If you have a relative who is currently in a nursing home and relying on Medicaid, you do NOT have to worry about them being kicked out.  However, over the next several years, as the Baby Boomers age, waiting lists will grow longer and care resources will be squeezed.

It is true that the Republican plan will increase Medicaid funding each year by the medical inflation rate. The Congressional Budget Office estimates the Republican plan will increase Medicaid funding from $393 Billion in 2017 to $464 Billion in 2026.

The problem with the Republican plan, however, is that it doesn’t take into account the changing demographics of the elderly population. The average 85-year old on Medicaid needs more than twice as many Medicaid dollars as the average 65-year old on Medicaid. 

Nine years from now, when the Baby Boomers reach the magic 8-0 they’ll begin to use long-term care services en masse. The modest Medicaid increases in the Republican plan will not keep pace with the increasing costs of care. At that point states will need to cut back on services, lower reimbursement rates to nursing homes, raise taxes or take other cost-shifting measures.

Our feelings of distress when were told there was a long waiting list!
A close relative of ours needs to move into a care facility. She needs help with bathing and dress. After several months and many discussions, she agreed to move near us so we can help oversee her care.

We went to a nursing facility near us to make the arrangements. We we were told there was a long waiting list. There were four other people in front of her and they had no idea how long it would be until a room was available. We were distraught!

Fortunately, our relative owns a long-term care insurance policy. When we told the administrator that our relative’s long-term care policy would be covering the full cost of her care she said she could move in right away. She explained that the waiting list only applies to those who rely on Medicaid to pay for their care.

If there are waiting lists for care now, at present Medicaid funding levels, how long will the waiting lists be 9 years from now when the Baby Boomer’s turn 80? One of the wisest decisions our relative made was when she purchased her long-term care policy ten years ago. 

Please share your thoughts or comments below.

Headline: 13 companies now selling long-term care insurance.

Want More Information?

  • Hidden
  • Hidden
  • This field is for validation purposes and should be left unchanged.

Rate Increases? Check Your State

RSR Map Placeholder

Search LTCi Policy Terms

long-term care insurance dictionary image