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LTC Bullet: NC Rest Homes Trap Private Payers

Wednesday July 15, 1998

Seattle--

The Wall Street Journal reported today (7/15/98) that North Carolina rest homes are losing private pay residents to new assisted living facilities. The exodus of private payers is particularly troublesome for homes relying on private payers to subsidize Medicaid patients. One North Carolina rest home receives $893 a month per Medicaid resident compared to $2,200 for a private payer in a private room.

Worried North Carolina rest home owners persuaded state lawmakers to impose a one year moratorium on construction of new assisted living facilities which has proven less than effective.

The article notes that the number of assisted-living facilities under construction nationally has grown 60% in the last year.

As assisted living grows in popularity and scope, rest homes dependent on private payers to offset Medicaid losses will be hard-pressed to maintain quality if private payers continue to defect.

But if the rest home industry persuades states to stifle competition and access to care by restricting the assisted living option, private payers may find themselves trapped in underfunded rest homes -- just like Medicaid patients.

Read the complete WSJ story, "North Carolina's Ban on Building Elderly Housing Spurs More Projects," at http://interactive.wsj.com/edition/current/articles/SB900431741889383000.htm

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