Nursing Home Use by Medicaid Seniors is Plunging


Take a look at this table, which AARP’s Don Redfoot posted earlier this week:

6-26-2013 graph for don

It is a remarkable story: Long-stay nursing home care by seniors enrolled in Medicaid has been plummeting for 15 years.

It is not clear exactly why, but there are probably several reasons. First, state Medicaid programs have been shifting care from nursing facilities to home and community-based settings–a step that seniors themselves favor and one that may save money in the long-run. While Medicaid still spends more total dollars on nursing home care than on home care, Don’s chart shows  that  nursing facility use by Medicaid-eligible seniors has fallen by nearly one-third, from 1.4 million in 1995 to just over 1 million in 2010.

The second reason, as Don notes, is that seniors’ enrollment in Medicaid is growing very slowly even though the overall older population is growing rapidly. The number of people 65 and older increased by more than 80 percent from 1975 to 2010 and the number of those over 85 (who are most likely to need long-term supports and services) has tripled. Yet, Medicaid enrollment by seniors increased by only 18 percent from 1975-2010. That’s in sharp contrast to younger Medicaid beneficiaries, who have increased by more than 200 percent.

A third reason may be that nursing homes themselves would rather provide post-acute and rehabilitation services instead of  long-stay care. Why? Medicaid pays an average of only about $125 a day for a long-term care resident, while Medicare pays $500 or $600-a-day for a post-acute short-stay patient. As a result, many nursing home operators are shifting beds from long-term care to more lucrative rehab and post-acute.

There is also the question of where seniors are living, if not in nursing homes. In 2010, assisted living facilities had about 700,000 residents, and about one in five were receiving Medicaid. Take Minnesota, for instance. It has aggressively moved Medicaid long-term care residents out of nursing homes and into home and community-based settings. But nearly all care is being provided by residential care facilities, and not in private homes.

It is also important to keep in mind that while community care might be less costly for Medicaid than nursing home care, it may not be cheaper overall. For instance, families or other government programs may be providing housing, transportation, meals, and other supportive services but they, and not Medicaid, are footing the bill. As a result, while fewer seniors may be using Medicaid nursing homes, and while the share of Medicaid nursing homes dollars is shrinking, these additional services are not free. Someone is paying for them.

Still, as Don says, the trend away from Medicaid nursing home stays for seniors is a good one. It is good for seniors, good for the Medicaid program, and even good for many facilities whose real value-added may be in post-acute care in the developing new world of health care.





  1. Tim Colling July 9, 2013 at 3:32 pm - Reply

    A problem faced by many low-income seniors is that Medicaid will only pay for SNF stays, and they cannot afford to pay privately for their own care in non-SNF settings that would otherwise be more appropriate.

  2. Pat France July 9, 2013 at 7:44 pm - Reply

    Everything I have read on this site is very interesting and I am wondering if it can be published on our website? We are the National Aging In Place Council Baltimore Chapter.
    Your reply would be appreciated. Pat France

  3. Deborah Peterson July 10, 2013 at 2:21 pm - Reply

    Nursing home administrators that I have spoken with have indicated to me that they are, indeed, reducing the numbers of beds for long-term care, in favor of short term rehab care. Obviously, there is more profit there.

  4. Phyllis Shelton July 16, 2013 at 6:34 pm - Reply

    It is important to remember that long-term care insurance pays for all types of care so there are many alternatives to nursing home care. Assisted living, adult day care, home care. Cash plans pay for any type of care, no questions asked. But plan early. What used to be 60 year old premium and underwriting is now 50.

  5. Susan Wilson July 16, 2013 at 9:03 pm - Reply

    My concern is how many seniors don’t understand that they qualify for Medicaid and could be using the benefits? It seems that a lot of folks don’t understand the system very well.

    • Terry Van Soosten July 18, 2013 at 4:57 am - Reply

      in south florida the expence is the issue there social security and madicare does not pay all there expences so there families rent mom or dad a small 1 bedroom 1 bath apartment and get a live in for care most of the live ins are not citizens of the us and get paid 250.00 a week and live in 5 days so a apartment at 800.00 amonth plus 1000.00
      plus electric food and cable is about 2600.00 instead of the 4000.00 to pay for a alf a no brainer..

  6. Been July 30, 2013 at 3:18 pm - Reply

    The other consideration is that there are few medicaid home care
    agencies as well. Noone wants to provide the care for Medicaid patients because the reimbursement is terrible. Medicaid may be available
    But no services are available.

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