Health care reform

Medicare Cuts Threaten Seniors' Care, Jeopardize 50,000 Nursing Jobs

Strategic Insights

Aug 19, 2009 — 1 min read

Funding reductions in the pending House health reform bill, combined with recently enacted Medicare cuts, will place a significant burden on seniors requiring nursing and rehabilitative care. The American Health Care Association warns that the cuts will total $44 billion over ten years, prompting a concern that U.S. seniors' care needs are endangered. The AHCA analysis finds that seniors in 15 states will face funding cuts in excess of $1 billion over the same period.

Key Takeaways:

The House health reform bill, combined with the $12 billion Medicare cuts, will result in a total funding reduction of $44 billion for seniors over ten years.
Seniors in 15 states (CA, FL, NY, TX, OH, IL, PA, NJ, MA, MI) will face funding cuts exceeding $1 billion over ten years.
The AHCA analysis projects that more than 50,000 nursing staff jobs will be jeopardized nationwide as a result of the Medicare cuts.
Labor expenses comprise 70 percent of facility costs, leading to staff cuts when Medicare reimbursement is reduced.
The Centers for Medicare and Medicaid Services (CMS) has already implemented a $12 billion fund reduction.
The Medicaid program underfunds the cost of providing care by at least $4.2 billion annually, placing additional stress on facilities and staff.
The American Health Care Association President and CEO Bruce Yarwood urged lawmakers to revise the plan to ensure seniors are helped by the reform measure, not hurt by it.

Statistics:

$44 billion: Total funding reduction for seniors over ten years due to the House health reform bill and Medicare cuts.
$12 billion: Medicare cuts implemented by the Centers for Medicare and Medicaid Services over ten years.
50,000+: Number of nursing staff jobs jeopardized nationwide as a result of Medicaid cuts.
15: Number of states that will face funding cuts exceeding $1 billion over ten years.
70%: Labor expenses as a percentage of facility costs.
$4.2 billion: Annual underfunding of Medicaid program to provide care.
10 years: Time period over which Medicaid cuts and House health reform bill funding reductions will be implemented.

Sources:

PRNewswire-USNewswire, "Proposed Medicare Cuts Will Harm Seniors' Care, Place More Than 50,000 Nursing Staff Jobs In Jeopardy" (August 20).
American Health Care Association website, "About AHCA" (no specific date).