Medicaid Cuts Would Be A Blow To Nursing Homes

Medicaid cuts in the proposed GOP budget could cost millions of older Americans access to nursing homes. 

Many people mistakenly believe that Medicare covers the cost of nursing homes; however, they’re primarily funded by Medicaid. In fact, Medicaid is the biggest source of funding for long-term care for disabled and elderly people, paying more than half the $415 billion spent on these services every year, according to health care think tank KFF.

Medicaid covers about 80% of nursing home care on average, according to an October 2024 report from the Office of the Assistant Secretary for Planning and Evaluation (ASPE), an advisory group for the Department of Health and Human Services.

However, the budget proposal passed by the House of Representatives last week would cut over $700 billion from the program, and experts said those cuts would jeopardize nursing homes’ funding. 

Currently, the federal government covers between 50% and 76% of Medicaid costs on average, depending on the state. The proposed federal funding cuts will force states to cover more of the costs of Medicaid, and many simply don’t have the resources to do that, experts said.

Without state funding, nursing homes would lose large portions of their budget, with many having to cut back or even close. Nursing homes and assisted living facilities that aren’t forced to close could become overwhelmed, said Shannon Benton, executive director of The Senior Citizens League. 

If nursing homes are at capacity or close, more seniors may also be forced to visit hospitals or emergency rooms for care. However, many of these facilities are also heavily funded by Medicaid.

The Republican budget, which includes these proposed Medicaid cuts, moved to the Senate after a 215 to 214 House vote last week. Some senators have been vocal about opposing changes to Medicaid.