With nearly two-thirds of all nursing home residents relying on the Medicaid program each day to pay for their long-term care, the devastating cuts in Medicaid required by the tax bill will create havoc for residents, however those cuts are structured and described. Federal cuts of hundreds of billions of dollars will inevitably force states to cut eligibility or cut services or cut provider payments (and likely all three), shifting the costs of nursing home care to states and poor residents and their families. Many facilities will close, eliminating this long-term care option for people who are unable to live independently.
The Center for Medicare Advocacy has described before that the limited coverage for nursing home care provided by the Medicare program, the absence of private insurance, and the high costs of out-of-pocket care combine to result in the impoverishment of older people and people with disabilities who need nursing home care, making them eligible for Medicaid. On average, 63% of residents rely on Medicaid, but in many states, even higher percentages of residents use Medicaid.
A specific provision in the tax bill stops implementation of a rule (“Streamlining Medicaid; Medicare Savings Program Eligibility Determination and Enrollment,” 88 Fed. Reg. 65230 (Sep. 21, 2023)) that reduced barriers to enrollment in Medicare Savings Programs and helped low-income Medicare beneficiaries, including nursing home residents, pay Medicare premiums and cost-sharing requirements. The Congressional Budget Office estimated that loss of this rule, by itself, would mean that 1.3 million Medicare beneficiaries would lose Medicaid coverage of their Medicare costs. Most nursing home residents are dually eligible for both Medicare and Medicaid.
Cuts to Medicaid will also be devastating for many nursing home workers, whose wages are so low that many are eligible for and rely on Medicaid for their own health care and the health care of their families. Nurse aides, dietary staff, laundry staff, and housekeeping staff are all low-wage workers who are at risk of losing their Medicaid.
Bureau of Labor Statistics, 2023 data for Nursing Home Workers
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The ability of these low-wage workers to continue providing care to residents, if nursing homes remain open, will be reduced.
If the tax bill becomes law, nursing home residents will suffer and many may die.
- “Issue Brief: Medicaid Cuts Will Devastate Nursing Home Residents” (Feb. 27, 2025).
- “Nursing Home Industry is Heavily Taxpayer-Subsidized” (CMA Special Report, Jul. 2021)
- “Estimates for Medicaid Policy Options and State Responses,” (Letter from Phillip L. Swagel, Director, Congressional Budget Office, to Senator Ron Wyden (D, OR) and Congressman Frank Pallone, Jr. (D, NJ) (May 7, 2025)) Katy DeBriere and Rachel Gershon, “Don’t Believe Them? The Proposed Reconciliation Bill Directly Harms Older Adults & People with Disabilities on Medicare
May 22, 2025 – T. Edelman