By Carl Zacharia
On June 16, 2025, the House of Representatives passed a budget and associated proposals which will have a significant and direct impact on Medicaid funding for long-term care (LTC), particularly for nursing homes and home and community-based services (HCBS), which are essential for seniors and people with disabilities.
Key Impacts on Medicaid Long-Term Care
• Reduced Federal Funding: The House bill cuts Medicaid by $700-$880 billion over the next decade, with cuts expected to heavily impact long-term care since Medicaid is the primary payer for nursing home care and HCBS.
• Nursing Home Pressure: Medicaid covers roughly 60% of extended nursing home stays in the U.S., serving nearly 1 million residents. Reduced federal funding may force states to cut reimbursement rates, limit services, or tighten eligibility, making care access harder for seniors and disabled individuals.
• Home and Community-Based Services (HCBS): About half of Medicaid spending on older adults funds HCBS, helping over 4.5 million people receive home care. Proposed cuts could reduce or eliminate these services, increasing family caregiving burdens and institutionalization risks.
• Provider Tax Restrictions: The bill freezes provider taxes that states use to generate additional federal matching funds for Medicaid. This further reduces resources for nursing homes and LTC providers, threatening their financial stability and ability to serve Medicaid patients.
• Stricter Eligibility: The legislation includes tighter eligibility rules and expanded work requirements, potentially disqualifying people from Medicaid LTC. This particularly concerns seniors and disabled adults who cannot work and depend entirely on Medicaid for essential services.
Most Affected Populations
• Seniors in Nursing Homes: Nearly two-thirds of nursing home residents rely on Medicaid for daily care. Lower funding could reduce care quality, cause facility closures, or create more restrictive admission policies.
• People with Disabilities: Medicaid provides primary long-term support for individuals with intellectual or developmental disabilities. Cuts threaten both institutional and home-based care options.
• Family Caregivers: With fewer available supports, family members will likely face increased caregiving responsibilities, financial strain, and emotional stress.
Florida-Specific Impacts
HCBS at Greater Risk
Florida’s HCBS Waiver programs face higher risk from Medicaid cuts than institutional care placements. The state’s ability to cap HCBS services, combined with their optional nature, means seniors and disabled individuals relying on home and community-based care will likely experience the most significant reductions in access and support.
ICP Medicaid Funding Structure
Florida’s Institutional Care Program (ICP) Medicaid is jointly funded by federal and state sources:
• Federal government pays 60-70% through the Federal Medical Assistance Percentage (FMAP)
• State covers remaining share using general revenue, local government funds, and certified public funds
• Patients contribute a portion of their income toward care costs
Senate Action and Timeline
The Senate has introduced a more aggressive version proposing even deeper Medicaid cuts, stricter eligibility requirements, and further limits on states’ use of provider taxes for Medicaid funding.
Ongoing Negotiations: Key differences between House and Senate versions include the scope of Medicaid cuts, provider tax handling, and new work requirements for recipients. The chambers must reconcile these differences before sending a final bill to the President.
Senate leaders are pushing for passage before the July 4 deadline, but debates, negotiations, and possible amendments make the outcome uncertain.
In Conclusion
The federal budget’s Medicaid cuts represent a critical threat to the long-term care system that millions of vulnerable seniors and people with disabilities depend on, with potentially devastating consequences for nursing home quality, home-based services, and family caregivers who will bear increased responsibility as these essential supports are reduced or eliminated.
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