Most of the analysis of the Republican's proposed budget (crafted largely by Wisconsin Rep. Paul Ryan) has focused on its potential impact to the Medicare program. As discussed in yesterday's New York Times, however, the impact of that budget on seniors might be felt more acutely in the reduction in Medicaid payments for nursing home costs.
Approximately seventy percent of all nursing home residents are on Medicaid. A significant portion of those residents began receiving nursing home Medicaid coverage only after spending down most of their assets (or if they had good legal advice, after protecting a portion of their assets through effective planning). Under the proposed GOP budged, Medicaid (like Medicare) would be doled out in block grants to the states, with the annual grants to increase only at the rate of inflation. Since health care costs have consistently increased well in excess of the inflation rate, states would necessarily have to curtail their Medicaid expenditures, unless they were to raise state taxes to cover the shortfall.
Click here to read the New York Times article.