- As states restructure their long term care programs, a larger share of Medicaid funding is being redirected toward home and community-based services such as the “Money Follows the Person Demonstration.” If state economies downturn, this will put pressure to dampen rate increases to nursing homes, and reverse the trend achieved in nursing home funding in the past few years of rate increases, on average, keeping pace with cost increases.
- Medicare cross-subsidization of Medicaid continues to play an important role in sustaining nursing home care, even in better economic times. Even with positive Medicaid rate trends, on average, the combined margin from the two payer sources is still negative.