In recent weeks, I’ve written about what the House Republican plan to cap federal Medicaid contributions would mean to the frail elderly and younger adults with disabilities who are receiving care at home. Today, I’ll take a look at what it would mean for skilled nursing facilites and their nearly 900,000 residents whose care is paid for by the joint federal/state program.

The picture is not pretty.

The situation is this: Overall, the feds today spend more than $300 billion on Medicaid. In a typical state, the federal share is about 60 percent of costs, and in some states the federal government pays nearly 80 percent. About one-third of those dollars are spent on medical care for poor women and children. But Medicaid also is by far the largest payer of long-term care in nursing facilities, funding nearly  2/3 of these costs. Medicaid spends nearly $120 billion each year on long-term care supports and services, both in the community and in nursing homes.

The budget plan passed by the House a few weeks ago would dramatically change Medicaid. The federal payment would be capped each year, so that states would be responsible for an steadily increasing share of program costs. In return, states would receive maximum flexibility in how they spend Medicaid dollars.

What would it mean for nursing facilities? To start, almost certaintly less money. Already, in many states these facilities lose money on their Medicaid beds. To some degree these losses are offset by private pay patients (who often are charged twice as much) or by Medicare, which funds far more lucrative rehabilitation and post-acute care. Typcially, Medicaid’s long-term care reimbursement may average about $120-a-day while the Medicare payment may be $500.

In that environment, nursing homes have already begun closing Medicaid beds and increasing Medicare services. If Medicaid payments are reduced even more, that trend will accelerate. Facilities may also be forced to cut staff and services.

But residents may suffer in other ways as well. Today, states must provide nursing home care to people as long as they are poor enough and sick enough to meet eligibility rules. Those rules are already very stringent. For instance, to be Medicaid eligibile a person typically must have less than $2,000 in financial assets. Under so-called maintenance of effort rules, state cannot raise those eligibility standards for nursing home residents. But, if those requirements are eased or even abandoned, states will be able to further limit who can get care. To qualify, people may have to be even sicker and poorer than they are today.

Some patient advocates also worry that states could begin to require families to contribute to the cost of care or even  ease quality standards.

It is hard to know how all this will play out. It is possible that Washngton will continue to pay its full share of Medicaid but, at the same time, give state the flexibility they want to run the program. If that happens, expect the wide differences in Medicaid long-term care benefits that already exist among the states to get even more dramatic.