How the Republican Healthcare Plan Could Affect the LTPAC Industry – Part 2

ObamaCare - Trump Care


As we mentioned in our last piece, the gradual repeal of the Affordable Care Act (ACA) – also known as Obamacare – has significant potential to affect how seniors plan for and manage their healthcare.  The long-term and post-acute care (LTPAC) sector has the possibility of being affected by changes now, and more importantly, in the coming years as the changes are implemented.


While the administration is still figuring out details as they attempt to repeal the ACA for the second time, there are several key underlying themes that LTPAC providers should be aware of as they plan for future operations and endeavors.


Medicaid cuts and restrictions: Currently, 72 million Americans rely on Medicaid to some extent. Many of these are seniors or the disabled – the two groups of people who rely on LTPAC facilities and services for care.  According to the American Health Care Association, 63% of skilled nursing facility residents and 19% of assisted living residents rely on Medicaid on any given day for their care. The National Center for Assisted Living (NCAL) argues that since Medicaid is already stretched thin, providers continue to struggle with operating costs such as skilled labor and increased use of medical technologies, which exceed reimbursements from Medicaid.


Changing Medicaid and Medicare eligibility rules: While it is still unclear, there are several Republican provisions that propose reducing the number of eligible Medicaid beneficiaries and/or raising the age limit and income level for certain Medicare options.


Limiting or eliminating Medicaid and Medicare services: In an effort to cut costs, several Republican-backed proposals suggest eliminating payments for services deemed unnecessary, thus requiring patients to pay out-of-pocket for said services, or rely on Health Savings Accounts (HSAs), which would be a significant problem within poorer populations.


Reducing reimbursement discounts: According to consulting group Husch Blackwell, one of the key tenets of the Republican program is cutting already deeply discounted reimbursement rates to service providers.


Even as details are being worked out on a daily basis, LTPAC providers and facilities need to remain both aware and educated about these changes at both the state and federal level so that they can adapt their business models to fit the ever-changing healthcare regulation.