Analysis of a pending health reform bill reveals that more 1,800 caregivers in Michigan may lose their jobs

Aug 27 2009

An American Health Care Association (AHCA) analysis of a pending U.S. House health reform bill, HR 3200, finds seniors in Michigan requiring nursing and rehabilitative care will face funding cuts of $1.5 billion over the next 10 years. This equals the 10th highest state cut across the nation.

These cuts are in addition to a recently-enacted Medicare regulatory change cutting Medicare-funded nursing home care by $12 billion during the same time period.

Nationally, the study finds, seniors’ Medicare cuts will total $44 billion over the next 10 years, prompting Michigan’s long term care community to warn that seniors’ care needs are endangered by the legislation, as are the jobs of more than 1,800 caregivers in Michigan.

“We ask lawmakers to consider how cuts of this magnitude will affect senior care and urge Congress to revise its plan and ensure seniors are helped by reform measures,” said David LaLumia, President and CEO of the Health Care Association of Michigan (HCAM). “The Medicare cuts found in the current House bill would force providers to cut staff, which will have a direct impact on patient care. Lawmakers must recognize that labor expenses make up about 70-percent of facility costs so that is what is affected first when cuts are made. Additionally, nursing homes currently operate with the smallest of overall margins amongst all healthcare providers at approximately three-percent.”

The new analysis of the House bill’s Medicare funding reductions through ten years, combined with the $12 billion ten-year Medicare cuts just put into effect by the Centers for Medicare and Medicaid Services (CMS), is computed by the AHCA Reimbursement and Research Department using the Congressional Budget Office (CBO) score of both HR 3200 and the recent CMS funding rule, along with Medicare Skilled Nursing Facility (SNF) utilization data.

Other states with cuts exceeding $1 billion through ten years include California, Florida, New York, Texas, Ohio, Illinois, Pennsylvania and Indiana.

In crafting a final bill, LaLumia urged lawmakers not to implement healthcare reform at the detriment of America’s elderly. “Seniors and their caregivers depend on Congress to provide funding for Medicare, and we respectfully ask lawmakers to do so.”