Big Beautiful Act is Big But Mostly Bad For Nursing Homes

Since the pandemic, Gracedale has been suffering from a perfect storm of resident deaths, staffing shortages, declining census and funding shortfalls that could have sunk the home but for the infusion of cash from the American Rescue Plan Act.  The county-owned nursing home is struggling valiantly to remain a last refuge for older (and even younger) people with nowhere else to go. Despite some negative comments on this blog, it has great support from the community. No one in or running for county office supports privatization, despite what you may hear on the campaign trail. There can be no dispute, however, that the current model is unsustainable because it relies too heavily on outside agency nursing care. A strategic plan to change that is far less Icarian than I would have expected. The American Rescue Plan and Cares Acts certainly helped Gracedale. But what about the recently enacted One Big Beautiful Bill Act (OBBBA)?  Is it good or bad for nursing homes?  I believe it's mostly bad and base this conclusion on reports from Skilled Nursing News and the AARP. 

1) It delays minimum staffing standards until 2034. - In 2024, the Biden administration finalized rules that would require nursing homes to provide 3.48 hours of nursing care to residents each day. While this delay has been blasted  because it obviously reduces skilled nursing care, it's incredibly stupid to impose such a requirement when nursing homes face unprecedented staffing shortages. This gives Gracedale and other LTCFs a bit of breathing room. 

2) It reduces retroactive Medicaid coverage. - Most residents at Gracedale have Medicare, but that only provides coverage for 100 days. To cover the cost, residents must also apply for Medicaid coverage. Under the OBBBA, Medicaid will cover medical expenses incurred for two months after they applied. Previously, there was a three-month window. Since residents at homes like Gracedale lack the financial means to pay these costs, the home would be forced to eat these costs itself, and that's expensive. 

3) Home equity limit changes. - Under Pa. law, a person can apply for Medicaid , but the value of his primary residence is exempt it is worth $730,000 or less. The OBBBA increases that exemption to $1 million with no adjustments for inflation. While this might seem beneficial, it is likely to reduce the pool of people eligible for Medicaid as home values increase. 

4) Dual Enrollment Changes for Medicaid and Medicare Delayed Until 2034. - Most Gracedale residents have both Medicare and Medicaid, but getting them enrolled in both programs successfully has been challenging. Under the Biden administration, two separate rules were adopted to simplify the process. The OBBBA delays implementation of these new rules until 2034, and this is estimated to reduce te number of "dual-eligible" residents by 1.3 million.