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LTC Bullet:

More Medicaid Woes

Wednesday September 29,1999


An article in this week's Washington Business Journal (9/27/99) reveals the extent to which state Medicaid programs continue to struggle with limited dollars and growing demand. The Center for Long-Term Care Financing promotes public policy reform that encourages Americans to plan ahead for their long-term care (e.g., with insurance or related products) and to avoid Medicaid dependency so that Medicaid can survive as a high quality program for the truly needy.

In her article "Nursing Home Struggle: Virginia Keeps on Cutting Medicaid Reimbursements," Suz Redfearn describes the looming crisis for many Virginia nursing
homes dependent on inadequate Medicaid reimbursement (which accounts for 70 percent of payments to the state's nursing homes).

According to Stephen Morrisette, President of the Virginia Health Care Association, almost none of the state's nursing homes are making any profit and some are starting to declare bankruptcy. Commenting on Virginia's $78/day reimbursement rate (47th lowest in the country), Morrisette quips, "How many hotels can you stop at and get a room for that? And we provide not just a room but 24-hour nursing care and meals and therapy and activities."

According to the article, Virginia's Medicaid budget for long-term care has been trimmed by $60 million over the last ten years. "Since Medicaid is one of the largest [budget items], it's the first place they look when it's time to cut," says Morrisette.

Despite attempts by the Virginia General Assembly to ameliorate related problems such as low wages and poor staff retention, Morrisette believes all these factors could "spell the end of the nursing home industry in Virginia at a time when the over-65 population is set to burgeon."

Acknowledging that Medicaid will not be able to handle the coming elder-boom, Morrisette has been working with the Governor and the General Assembly to encourage people to purchase long-term care insurance.

What does the future hold? Medicaid's woes will only worsen until courageous lawmakers admit that Medicaid cannot survive as a de facto nationalized long-term care program. The Center for Long-Term Care Financing's "LTC Choice" plan offers a blueprint for public policy reform that can save Medicaid for future generations. The only catch is that Americans must face the fact that long-term care is a personal responsibility that can and should be handled with advance planning in order to avoid Medicaid dependency.

Today, lawmakers can either work to create a system that eases Americans into this unavoidable reality or wait and do nothing. Unfortunately, the bitter pill will only become more distasteful as precious time is lost.


Suz Redfearn, "Nursing Home Struggle: Virginia Keeps on Cutting Medicaid Reimbursements," The Washington Business Journal, September 27, 1999 at