How will Medicaid cuts affect Minnesota nursing homes?

Funding cuts under President Donald Trump’s “big, beautiful bill” are estimated to strip $500 million annually from Minnesota Medicaid programs, which help 1.2 million people, according to state leaders. And that’s bound to have an outsized effect on elder care.

As care can cost upwards of $10,000 per month for seniors, analysis from KFF Health News finds that more than half of Minnesotans in nursing homes are covered by Medicaid. The nursing homes themselves are dealing with critical provider shortages and new funding caps from the state Legislature.

Toby Pearson, president and CEO of Care Providers of Minnesota, joined MPR News host Cathy Wurzer on Morning Edition to break down what these funding gaps mean for seniors, their families and care providers.

The following has been lightly edited for clarity and length. Listen to the conversation by clicking the above player button.

What are long-term care providers expecting in the months to come?

Right now, it's kind of an unknown, which is really disconcerting for a lot of long-term care providers, but should be more disconcerting for access. What we've heard from the Medicaid director is that they've estimated somewhere around $500 million that will not be coming to the state as a result of the actions by the federal government. The question for us as a state is, how much of that $500 million are you going to make up? And then the other question is, where is it going to come from?

Senior care providers are very concerned about the indirect effects, like, are they going to come and ask senior care providers to cough up more savings? Last year at the Legislature, they decided to go with the lesser of the CPIU or 4 percent for a cap on how much you can increase for specifically for nursing homes. And we all know health care inflation is more than that. So that's going to drive a lot of you know, savings for the state, but it's going to drive a lot of concern for providers and equal access for folks in the community.

Where might the situation be difficult? The metro or greater Minnesota?

It's kind of a tale of two areas for two different reasons. The first one under the big, beautiful bill was a Medicaid look-back provision, which goes from 90 days to 60 days. And what that means for folks is that if you are looking to get into a nursing home, you have basically 90 days to go through the eligibility process, and then the facility can get paid back for up to 90 days of services they provided before you're actually determined eligible. Counties in greater Minnesota typically don't have as much of a problem meeting the 90 days, though the 60 days will be a little tighter.

But a lot of the metro counties, just by sheer volume, struggle with meeting the current 90-day requirement. It means providers are going to say, “Well, we can't take you until we know you're eligible, because if we take you and it takes more than 60 days to determine you're eligible, we won't get paid.”

However, greater Minnesota could struggle because of a lack of Medicare usage, which, unlike Medicaid, pays for short-term care. If you're not doing a lot of Medicare in greater Minnesota, and there are increased cuts to nursing homes, that Medicaid money isn't going to cover your costs.

What should families who have a loved one in a nursing home or are about to place them in a home know?

First off, you will hopefully get very good care in your nursing home. Start early, reach out to them, make sure that they have beds available. The providers are doing the best they can. They had to lay away 3,000 beds in the last five years, but they're trying to build things back up. Make sure you get your process started for determination, because the earlier you get started, the more likely it will be a success.

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