The Better Care Reconciliation Act would reduce the country’s Medicaid spending by $772 billion over the next decade, the nonpartisan Congressional Budget Office projected in a report Monday. That could shut down nursing homes across the country, health-care leaders argue, and trigger widespread layoffs in one of the nation's fastest-growing fields of employment.
Janet Snipes, executive director of Holly Heights, said the proposed cuts would oblige her to reduce her workforce: currently about 170 employees who care for 130 residents.
Shrinking the staff, she said, would hamper the center's ability to make life comfortable for the patients — an effort that includes bingo and Nintendo Wii, in addition to standard meal and medical services.
“We can’t take a significant cut and not do staff reduction,” she said. “And when staff is reduced, care can be compromised.”
Tadesse, who quit a job at Walmart to work at Holly Heights, is afraid Medicaid cuts might reduce her hours. Certified nursing assistants at her facility make about $16 an hour, or $33,000 annually.
“If they cut my hours,” she said, “it would affect me tremendously.”
Under the Senate version of the GOP health-care plan, roughly 22 million Americans would lose their health insurance over the next 10 years, the CBO projected. About 15 million would be knocked off Medicaid, the public insurance for the country’s poor.
“The largest savings would come from reductions in outlays for Medicaid — spending on the program would decline in 2026 by 26 percent in comparison with what CBO projects under current law,” the report states.
Though Medicare generally covers older people, Medicaid funds long-term services, including nursing home stays. Nearly two-thirds of America’s 1.4 million nursing home residents rely on Medicaid to cover their care.
Some enter the facilities with little financial resources. Others outlive their savings. Without Medicaid coverage, doctors say hundreds of thousands would spiral into debt or live without critical services for the disabled.
The public money keeps nursing homes running, Snipes said, since most Americans can’t afford the service on their own.
The cost to live at Holly Heights is about $6,000 a month. That includes medical care, food, social functions, laundry, hearing aids, and dental needs.
Mark Parkinson, chief executive of the American Health Care Association and National Center for Assisted Living, which represents about 11,000 nursing homes nationwide, said on a conference call Monday that Medicaid cuts under the proposed health-care law would cost individual nursing homes an average of $100,000 a year over the first three years.
That would spell disaster for a typical nursing home, which makes about $150,000 annually, he said.
“Within a year or two, most buildings in the country would be below their break-even points,” Parkinson said. “This is not hyperbole.”
Roughly 1.7 million people work at nursing homes, mostly in caregiving roles, according to AHCA figures. And health-care employment is rapidly growing — especially in areas that serve the elderly. Providing comprehensive, around-the-clock care tends to be labor-intensive.
The Census Bureau estimates that the number of people ages 65 and up in the U.S. will grow from 40 million in 2010 to 72 million by 2030.
Employment of nursing assistants and orderlies, which covers nursing home employees, is expected to keep pace, with a projected growth rate of 17 percent through 2024 — or double the growth rate for all occupations, according to the Bureau of Labor Statistics.
Nursing assistants make an average of $26,590 per year. Sara Rosenbaum, founding chair of the Department of Health Policy at George Washington University, calls the growth of such health-care employment “a Medicaid workforce.”
“You destroy the Medicaid program,” she said, “and you can kiss your nursing homes goodbye.”
Layoffs in nursing or health aide roles would disproportionately hurt female and black workers, BLS data suggest. Women fill eighty-seven percent of roles in the sector, while black workers hold 27.3 of the jobs. (The broader workforce is nearly half female and only 11.6 percent black.)
The Hebrew Home at Riverdale, a nonprofit nursing home in the Bronx, is home to roughly 900 residents cared for by 800 employees. There’s art therapy, pet therapy — comforts provided by fundraising. The bulk of operations, however, is supported by Medicaid.
Ninety percent of residents pay with Medicaid, said Daniel Reingold, chief executive of RiverSpring Health, a senior care organization in New York that runs Hebrew Home. And entry-level caretakers, who happen to be mostly women, make about $27,000 per year with benefits.
The jobs don’t require college degrees and represent a path to stability in the Bronx, where 30 percent of residents live in poverty.
“The economic impact that our employment brings to the Bronx is significant,” Reingold said. “Cuts like this could end up having an impact on wages and benefits.”