Governor Kelly Ayotte entered office under unenviable state budget circumstances. While her proposed budget cut spending, in her February state budget address she emphasized “prioritizing those who are depending on services provided by the State.”
Among other things, the proposed budget appeared to maintain care funding progress for the state’s roughly 3,500 nursing home residents on Medicaid. When the House-passed budget included 3% Medicaid cuts, a bipartisan Senate Finance Committee vote rejected those cuts — cuts the governor had vocally opposed. And the final budget Ayotte signed afforded a modest 2.4% average nursing home rate increase when the state fiscal year began July 1.
Yet it turns out the state budget could not sustain this. Unless action is taken, on Jan. 1 nursing home residents will experience their first state funding cut since January 2015. And many cuts will be very severe.
One of our state’s largest nursing homes is the Merrimack County Nursing Home in Boscawen, which carries on a tradition of care for the poor dating back to 1865. On Jan. 1, this 290-bed facility, which has over 220 residents on Medicaid, would see a projected Medicaid cut of $11.16 per resident, per day.
Like other facilities, both nonprofit and for-profit, it has no margin to make up for this kind of loss. Like many other facilities, it has already had to turn away prospective residents who do not have approved Medicaid applications, as the county is owed about $360,000 for care it has provided to those whose applications are stuck in a pending status.
Every county-owned nursing home statewide would take a cut, and the hit to county property taxes to make up for this can only be imagined — if tax increases are even possible. For instance, one doubts Coös County, with the state’s highest poverty rate, can ask more of its property owners to spare its two small nursing homes from cuts.
There appears to be no rhyme or reason in the projected Medicaid cuts. How, for example, can it be imagined that the only nursing home in Epsom could weather a 7.06% cut, or $18.73 each day for every Medicaid resident it cares for? How can a Catholic Charities’ facility like Mount Carmel Rehabilitation and Nursing Center in Manchester take a 12.07% Medicaid cut?
The inflation that was such an issue in the 2024 elections has far exceeded Medicaid reimbursement increases, making potential cuts unbearable.
Despite leading health care sectors in wage increases since the COVID-19 pandemic began, nursing homes have still not recovered their pre-pandemic workforce numbers. There are not enough licensed staff to go around for all health care settings, creating fierce competition for workers. Rural facilities, particularly, must rely upon staffing agencies at punishing prices. Amidst these challenges, would there be an expectation that nursing homes absorb Medicaid cuts by cutting caregiver wages and shifts?
Nationally, three nursing homes have closed for every one that has opened since the pandemic began. With the nation’s second-oldest population, and a moratorium on new nursing home beds, we only recently saw the first nursing home close since 2016 — a small North Conway nonprofit. Cuts on Jan. 1 would change that, and I have providers asking me about the procedure for closing facilities, which requires a comprehensive plan and advance notice of at least 60 days.
This calamity must be avoided, and funding obtained to prevent the January 1 cuts.
Brendan Williams is the president & CEO of the New Hampshire Health Care Association based in Pembroke.