What the One Big Beautiful Bill Means for Elder Care
And other Trump initiatives to make caregiving more difficult.
In a recent Risking Old Age in America podcast, Howard Gleckman, a Senior Fellow at the Urban-Brookings Tax Policy Center, explains the likely effects of the Medicaid cuts in the House passed budget bill, also known as President Trump’s “One Big Beautiful Bill,” on older adults and people with disabilities who account for 40% of Medicaid funding.
He expects that the biggest cuts will be for home health services since they are optional, unlike Medicaid coverage of nursing home care, which is mandatory. “States are required to provide Medicaid long-term care in nursing homes. That's a federal requirement. They have no choice. They also provide what they call ‘home and community based services,’ but they don't have to do that. What concerns me is if the states receive less money from the federal government and they have to think about cutting. They can't cut nursing home coverage, but they can cut home and community based services. And that's where I'm afraid they're going to cut.”
Inadequate Payments to Nursing Homes
Gleckman expects the states to reduce the amount they pay nursing homes which will affect both the quality of care and the availability of nursing home placements. “The other thing they can do is cut the reimbursement that they pay to nursing homes, which is going to force nursing homes to either stop taking Medicaid patients or provide worse service (if that's possible).”
We discussed the conflicting claims by nursing homes that Medicaid already doesn’t pay them enough and nursing home residents’ advocates that the industry hides their profits through creative bookkeeping. Gleckman says, in effect, that they’re both right. “There is a lot of fancy bookkeeping going on, but the research suggests that even when you discount the fancy bookkeeping, they’re still not being paid enough from Medicaid.”
The industry is able to make ends meet, and perhaps make a profit, due to the Medicare payments for residents receiving post-hospital skilled care. “So what happens is it's a little game that everybody plays. Medicare overpays and Medicaid underpays. And on average the nursing home does okay. But a lot of nursing homes are going out of business, particularly not-for-profit nursing homes because they just can't make the numbers work anymore.”
Medicaid Work Requirements
Gleckman explained that it’s not clear whether exemptions to the new work requirement to be imposed on Medicaid recipients under the age of 65 will apply to family caregivers. “It says parent, guardian, or caretaker relative of a disabled, individual or dependent child. It doesn't say anything about parent. So far I haven't been able to get an answer from the people who are writing this bill about whether you're exempted if you are a family caregiver for a parent.”
It could get even more complicated, he said, if two or more siblings are caring for one or both parents. Would they both qualify for the exemption? And how would they meet the administrative requirements for showing that they qualify for the exemption.
Administration for Community Living
The Trump administration’s closing of the Administration for Community Living is also likely to have a negative impact on seniors and younger adults with disabilities. It only had 200 employees, but it oversaw the Older Americans Act programs including Meals on Wheels, adult day health, fall prevention and elder abuse programs, as well as a suite of services meant to help people stay living at home. The Department of Health and Human Services says that it’s simply reassigning the programs to three other offices, but it has already fired half the staff, creating great uncertainty.
“For example, let's say you're a community organization and you're running a local Meals on Wheels program. Now your program has to be renewed because it has to be renewed every couple years. There's nobody at the other end to renew the program.”
Senior Housing
Gleckman pointed out that the Trump administration has said it wants to eliminate funding for affordable senior housing at a time when the need is only growing. This will have two harmful effects. First, without places to move, seniors will stay in their homes longer, exacerbating the existing housing shortage. Second, many who could live in supported housing will have to move to nursing homes if they have no affordable alternative.
“What some of these budget cuts will do will limit the amount of alternatives that people have. Medicaid will pay for room and board in nursing home and nowhere else. I estimate that 30% of older adults who are living in nursing homes have no clinical need to be there.”
Immigration
Finally, there will be fewer workers available to care for seniors and other disabilities due to the Trump administration’s immigration policies. Gleckman estimates that about 30% of care workers “on the books” are immigrants. Many of these have green cards so should not be affected by the crackdown, but many are here from countries like Haiti and Venezuela which the administration has announced will end, respectively, on August 3rd and September 10th, when they’ll lose their work authorization. And this does not include the undocumented immigrants who provide care in the “gray” market off the books.
Recommendations
In closing, Gleckman had two recommendations for policy makers, that they institute a broad-based long-term care insurance program for all Americans and a government program to help developers build independent assisted memory care facilities for middle-income older adults.
00:06 Medicaid Cuts and Their Impact on Elder Care
01:25 Technical Details of Medicaid Funding
04:16 Effects of Medicaid Cuts on Long-Term Care
05:36 Medicaid Home and Community-Based Services
06:55 Challenges in Nursing Home Funding
11:00 Work Requirements for Medicaid Recipients
13:42 Changes in Medicare and the Older Americans Act
20:59 Impact of Immigration Policies on Caregiving
25:17 Tax Proposals and Long-Term Care Insurance
26:49 Recommendations for Policymakers and Baby Boomers
30:30 Conclusion and Final Thoughts