A Medicaid professional consultant helping an elderly woman to protect her assets and money from the nursing home spend down.

Medicaid Funding by State

Medicaid state's patient-per-day reimbursement rates

Medicaid Rates in the Senior Housing Industry Individuals who operate nursing homes have a great concern about the future of Medicaid rates. The state and federal healthcare reforms that are in process have been a cause for increased concern. There are many states that are currently dealing with budget deficits which could result in cutting healthcare costs. This could pose a serious threat to the senior housing industry.

Medicaid Patient-per-day Reimbursement – Costs by States

Statistics have revealed that more than two-thirds of residents of skilled nursing facilities are made up of residents receiving Medicaid benefits. One of the most important revenue components in a skilled nursing facility is the Medicaid patient-per-day, or PPD, reimbursement rate. In 2007 and 2008, the average PPD reimbursement rate nationwide was $171.67. Alaska ranked as having the highest rate, at $396.81 and Texas had the lowest at $111.66. In 2009, the average was a little higher, at $176.00. Again, the highest rate was in Alaska, with a rate of $435.64. Delaware is the next highest, at $262.78. The lowest states were Illinois at $117.41 and Missouri at $120.21. On average, all states had an increased average of around 2.5%.

Since many states in the country are suffering financially, the PPD rate continues to be a cause for concern. Currently, there are only eight states that have a lower PPD rate now than they did in 2007 and 2008. These states include Iowa, Kansas, Michigan, Missouri, Nevada, Vermont, Washington and West Virginia. These states had an average decline of around 2.3%. Iowa had the lowest decline at 0.05% and Nevada had the highest, at 7.95%.

Of course, there were more states with increased rates. Georgia had an increase of 10.42%, bringing the PPD rate from $126.61 in 2007/08 to $139.81 in 2009. North Carolina had the smallest increase. This state saw an increase of 0.19%. While the majority of the states have had a significant increase in the rate, there are four states that have managed to hold steady. These four states are Connecticut, Massachusetts, Ohio and South Carolina. What Does the Future Hold?

Future of Medicaid's Funding

People's life expectancy is increasing, meaning that people will live longer and longer. With this increased expectancy comes an increase for the need of skilled nursing. Unfortunately, many people will not have the financial resources to pay for the cost of healthcare in a nursing facility. This will increase the number of seniors who will rely on Medicaid.

So many states are in financial distress, so looking ahead does not offer positive thoughts. Since states are dealing with debt, they cannot focus attention on the Medicaid system and therefore, cannot look ahead to plan for senior healthcare in the coming years. To combat these financial difficulties, some states have begun to include Adult Day Care and Home Health Programs as part of the operations of a skilled nursing facility.

Just as the states are seeing increased costs, the operators of the nursing homes are seeing the same. Even though the PPD rates are increasing on average, they are not enough to keep up with the costs related to operating the facility.

These facts may not have much influence on healthcare reform, but they will be a reason to debate the funding of Medicaid. Each state relies on Medicaid to help care for senior residents, and it is clear that these programs need continual funding to ensure the health and safety of American senior citizens.