Our major “insurance” plan for nursing home care and other long-term services and supports, by default, is Medicaid. Medicare covers relatively little of this kind of care and few elders have private long-term care insurance, which covers less than five percent of the cost of current services. 

Two-thirds of Medicaid spending goes toward coverage of health care and long-term services and supports for people aged 65 and over. 

LeadingAge members rely on Medicaid to meet the costs of recruiting, training and retaining qualified staff as well as other essential operations that ensure high quality clinical care and quality of life for nursing home residents and home health clients. 

Due to the current recession, many states already have had to reduce their Medicaid spending and most are contemplating even more draconian cuts for next year. Cutbacks in federal Medicaid funding would have a severe impact on state as well as family budgets. 

Any reduction in federal Medicaid funding to mission-driven, not-for-profit long-term services and supports providers would make it next to impossible for them to serve the numbers of elders they do now.

The elders who receive services covered by Medicaid are the frailest and most financially vulnerable members of their communities. They have no other resources to cover the cost of essential services. Their needs will not disappear if they or the services they receive are cut from the Medicaid program. 


Under the guise of “reform,” substantial cutbacks in federal Medicaid funding have been proposed by transforming the program into a block grant or imposing a global spending cap. 

These kinds of cutbacks in Medicaid funding represent bad ethics and bad economy. We oppose these proposals because: 

  • Block grants are unnecessary to give states flexibility in the use of their Medicaid funding
    The current system provides waivers that have enabled states to pursue a number of innovations in the delivery of health care and long-term services and supports.

  • Under a block grant, states would receive a fixed amount of federal Medicaid funding.
    Instead of the increased federal allocation states now receive when their own spending rises, under block grants, states would receive a fixed amount of federal Medicaid funding. States would no longer be cushioned against the impact of recessions, when demand on the program typically increases even as state revenues shrink. The burden of increased costs would be shifted to the states.

  • Medicaid spending cuts can only be accomplished by:
    1. Changing eligibility rules to reduce the number of eligible participants.
    2. Limiting or eliminating services covered by the program.
    3. Cutting payment rates to service providers. This is already going on in most states.

  • Federal Medicaid regulations currently require coverage of nursing home care. Block grants would eliminate this requirement, jeopardizing coverage of the frailest elders. Half of nursing home residents have dementia; half also have no family caregivers.

  • While Medicaid now requires coverage of nursing home care, coverage of home and community-based services (HCBS) is optional. If states eliminate optional coverage, elders will lose the opportunity to receive services in their homes; ultimately these elders could be forced to prematurely enter residential care settings.

  • A loss or reduction in Medicaid coverage would shift the burden of long-term services and supports onto elders and their families
    Family members currently provide a large share of long-term services and supports on an unpaid basis, but they also have substantial financial responsibilities for raising and educating children and saving for their own retirement.


To ensure the continued availability of essential long-term services and supports, LeadingAge urges Congress to:

  • Maintain the current Medicaid system.
  • Resist any efforts to turn Medicaid into a block grant program.
  • Resist any efforts to institute global spending caps.