On Oct. 1, federal Medicare payments for nursing home care increased 2.4 percent. Contrary to popular opinion, Medicare covers nursing home care only in limited circumstances (after a qualifying hospital stay), but its fair payments are all that keep most New Hampshire nursing homes solvent.
The reason is easy enough to see. Effective Jan. 1, New Hampshire’s Medicaid rates, for the roughly 63 percent of nursing home residents on Medicaid, will go up a projected .11 percent, or 7 cents per resident per day. To put that into perspective, the Consumer Price Index rose about three times more than that increase just last month (.3 percent). In total, inflation has risen 2.5 percent over a year’s time, greatly outpacing Medicaid funding, as has been true for years. For long-term care, this will compound a workforce crisis, making this the bleakest holiday season in memory.
Medicaid care providers cannot be competitive in this red-hot job market with the limited resources the Legislature has provided. Frugal budgeting has led to a budget surplus. Our state has successfully socked away money in a Rainy Day Fund. And yet, in terms of long-term care workforce needs, it’s not sprinkling, it’s pouring. For nursing homes, underfunding has forced the application of a “budget adjustment factor” that reduces, by over one-quarter, what the state’s “full” payment would be – and even that “full” payment falls short of actual costs. As citizens, we don’t have the luxury of “balancing” our books by not paying our bills. Why should state government?
We frequently hear rhetoric about the “New Hampshire Advantage.” Well, the New Hampshire Advantage can no longer be to pay a licensed nursing assistant less than a toll attendant. The New Hampshire Advantage can no longer be a society willing to spend more on doggy day care than the Medicaid payment for assisted living. We need to stop hand-wringing about losing our young people and treating it as a great mystery. How can we be surprised if we’re not willing to pay them enough to stay in the state with the nation’s second-oldest population? Maine and Massachusetts are rolling out their red carpets with significant Medicaid funding increases for low-wage caregivers. This will only add to a net exodus of caregivers, living in New Hampshire and working outside of it, that already measures in the thousands.
Already, nursing homes are taking beds “offline” because they cannot staff to their capacity. We risk jamming up in hospitals those ready for a discharge to a nursing home. Similarly, it can be challenging for a nursing home to discharge a rehabilitated resident into a home-and-community-based setting if there are no Medicaid assisted-living beds available, because of the state’s budget motel payment rate, or because a home care worker is unavailable. Our health care system is interdependent. The entire system needs more funding, and much more policy attention to addressing some of the workforce pipeline issues plaguing health care.
To be sure, workforce challenges confront all New Hampshire employers, as we have the nation’s third-lowest unemployment rate. So, one might ask, what makes long-term care so special? The answer is that a manufacturer or restaurant struggling to find workers is not artificially constrained by the state itself through Medicaid reimbursement. They can raise their prices in a free market. Long-term care providers cannot.
The more hopeful news is that, in 2019, the budgetary means would appear to exist for New Hampshire’s policymakers to make up for years of Medicaid funding neglect, and, working together, achieve a bipartisan success and lasting legacy for the betterment of our state and its most vulnerable citizens.
(Brendan Williams is the president and CEO of the New Hampshire Health Care Association.)