Nursing Homes Need Financial Support To Prevent Mounting Closures


Chronic Medicaid underfunding has put nursing homes in a long-standing financial crisis, but financial challenges have worsened amid the pandemic. The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) estimates that within a two-year period (2020-2021), the long term care profession will lose $94 billion due to declining revenues and the increased costs needed to fight the pandemic.

Staffing and PPE are two major expenditures for nursing homes. in 2020 alone, nursing homes spent roughly $30 billion on personal protective equipment (PPE) and additional staffing. Nursing homes are now struggling to find enough workers, but it is difficult for many to offer competitive wages given their financial constraints. A recent report by LTCG, the leading insurance administration and claims solution provider for long term care insurance, found that the hourly rates for facility-based care increased between 2.5 percent and 2.8 percent depending on room type. 

Without financial support, closures are inevitable. In Michigan, two facilities have recently announced they are closing, both citing pandemic-related financial challenges. Dozens of seniors now have to find a new place to live. Pat Honeysett, daughter of a resident at the William Crispe Community House, explained that her mother “made friends with the people there. Seeing someone go, and not knowing you won’t see them again is hard.” 

The closures do not stop there. There have been closures nationwide, including California, Indiana, Connecticut, Massachusetts, Nebraska, New York, Rhode Island and Wyoming. AHCA/NCAL estimates that more than 1,600 nursing homes could close this year if nursing homes do not get the help they need. 

Closures abruptly disrupt the lives of the residents, forcing them to find care that’s often further away from loved ones. For rural nursing homes, this is especially devastating. Mark Parkinson, president and CEO of AHCA/NCAL, shared that, “when a small facility closes, it’s very difficult for the residents, there usually isn't another building to move to that's two, three or four miles away, sometimes they have to move 10-20 miles to get to the next nursing home.”

Lawmakers must act now. AHCA and LeadingAge have proposed the Care For Our Seniors Act – a comprehensive reform proposal that will help address many of the long-standing challenges in America’s nursing homes. However, these policies will not be possible without significant investment from Congress and state governments – particularly Medicaid reimbursement reform.  

Millions of seniors depend on long term care. We must address these issues now to ensure that all nursing homes can keep their doors open and continue providing quality care to our most vulnerable population. It’s time to rally together and make long term care residents and staff a priority.

ABOUT AHCA/NCAL
The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) represents more than 14,000 non-profit and proprietary skilled nursing centers, assisted living communities, sub-acute centers and homes for individuals with intellectual and development disabilities. By delivering solutions for quality care, AHCA/NCAL aims to improve the lives of the millions of frail, elderly and individuals with disabilities who receive long term or post-acute care in our member facilities each day. For more information, please visit www.ahcancal.org.