That amounts to about $14.17 per Medicaid patient per day, according to Jesse Slome, executive director of the American Association for Long-Term Care Insurance, a national trade group.  “That’s a $5,200 annual shortfall per-patient a shortfall that adds up,” Slome notes.  “And, Medicaid payment rates are likely to sink further in 2010 and 2011 as states face bigger gaps between tax revenue and the demand for services by poorer residents in their state.”

The study, commissioned by the American Health Care Association (AHCA) noted that states are slashing budget programs to fill deficit holes. Also, funding from the American Recovery and Reinvestment Act of 2009, also known as the federal stimulus package, enacted this year will end at the end of 2010. 

One of the saddest realities of this year, as this study notes, is that states did not use money that they received from the stimulus package the way they were supposed to. The package offered states a temporary higher federal match on provider tax funds. But instead of using savings from the higher federal match to increase nursing home reimbursements or lower the provider tax rate, states used it to subsidize state budget deficits.

Experts note that nursing homes desperately need Medicaid funding. They have been underpaid for years and have been relying on Medicare to compensate for their shortfalls.  Now the situation appears even worse after the Centers for Medicare & Medicaid Services reduced Medicare payments in the fall. 

Robert Van Dyk, chairman of AHCA, sums up the situation well: “The substantial gap between the cost of providing quality care to seniors and what Medicaid actually pays—combined with the enormous pressure on state budgets caused by the ongoing recession—represents a clear and present danger to America’s most vulnerable frail, elderly and disabled citizens.” 

Slome concludes that the inability of taxpayers to continue paying the increasing cost of long-term care through government programs including Medicaid should give people a reason to consider self-reliant options including private long-term care insurance.

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