State budget shortfalls make Medicaid difficult for elderly and others

State budget shortfalls make Medicaid difficult for elderly and others

The economic devastation accompanying the pandemic drove Washingtonians onto Medicaid in record numbers last year, even as the state held back money meant to protect the lives of mothers and elderly people who rely on the publicly funded insurance.

Now state lawmakers are looking to bolster key aspects of the state Medicaid system, which has seen enrollment jump 11 percent during the pandemic and now insures 2 million Washingtonians. That’s more than one in five Washington residents, including nearly half the state’s children.

“COVID has really shown a light on the disparities in our health outcomes,” said state Sen. Emily Randall, a Bremerton Democrat. “Folks are not getting the same access to care.”

Lawmakers are proposing funding increases to:

  • Close a hole in coverage that limits thousands of new mothers to only three months of postpartum care, a shortcoming that can prove fatal, according to a recent report on maternal deaths. One in 9,000 births in Washington ends with the death of the mother.
  • Provide better care for older people suffering from Alzheimer’s disease and similar illnesses by raising pay rates to open up, it’s hoped, more space in assisted living apartments for people with dementia who are insured through Medicaid.
  • Slow the loss of nursing homes after dozens that served people on Medicaid closed because of low state reimbursement rates.
  • Entice doctors and nurses to keep seeing Medicaid patients, so the state’s poorest residents can receive basic medical care without waiting for months or driving for hours.

Legislators’ current moves (as of mid-February) to shore up the public-health system come after Governor Jay Inslee, as he faced an imploding state budget in the pandemic’s early days, vetoed millions of dollars in spending the Legislature passed last spring. By June, Medicaid-paid dental insurance, hospice care and abortion services were all on the chopping block, as was medical care for noncitizen children.

A mild rebound in Washington’s economy and a resulting improvement in tax revenues appears to have secured those programs for the moment. Because of Democratic gains in Congress that state lawmakers hope will translate into increased federal funding for public insurance programs, they are looking at targeted improvements to Medicaid with state tax dollars.

Marketed as Apple Health in Washington, Medicaid is a publicly funded insurance program that uses federal and state money to provide free health coverage to the elderly, people with disabilities, and lower-income residents, nearly 80 percent of whom are employed, as well as children. The $9.7 billion program currently draws $2.7 billion from state coffers each year, with the federal government picking up the rest.

Since reconvening on Jan. 11, the Legislature has held hearings on bills that would increase Medicaid payment rates to primary-care doctors — an effort to reduce the number of doctors dropping out of the Medicaid system — and extend postpartum coverage from 60 days to one year. Other legislation would increase payment rates to Washington’s nursing homes, which had been struggling financially even before COVID-19 ravaged the industry.

Washington has seen 25 nursing homes close since 2017, a loss of more than 1,000 beds, according to industry statistics provided by Alyssa Odegaard of LeadingAge, an advocacy organization representing not-for-profit nursing homes and assisted-living facilities. That’s a significant decline for an industry serving about 18,600 people.

About 63 percent of nursing home residents are insured through Medicaid, and the program’s low reimbursement rates are driving nursing home operators out of business, said Odegaar. Medicaid reimbursement rates — about $274 a day — don’t come close to covering the costs of care in Washington. That gap between revenues and expenses has created an industrywide annual shortfall of $117 million in the state. While residents paying out of pocket or with other insurance balance the books at some homes, many operators are on the verge of shutting down. Washington’s reimbursement rates are lower than those in Oregon and Idaho, states with less expensive operating costs. Although emergency federal funding helped keep nursing homes open during the pandemic, the shortfall is expected to deepen unless the Legislature acts, Odegaard said.

Nurse salaries are the dominant cost at nursing homes, and low pay makes recruitment and retention challenging — especially at a time when a pandemic is attacking those who need care and those who care for them.

“You’re not able to attract enough staff and you’re not attracting the best staff, because you’re competing with hospitals and clinics that are paying more and offering better benefits,” said Robin Dale, president of the Washington Health Care Association, which represents for-profit nursing homes and assisted-living facilities in the state.

“The state, to some degree, gets the nursing home system that it pays for,” Dale continued. “If they’re not paying an adequate rate, you’re not going to have the best nursing home that you can have.”

The funding gap translates into fewer nurses and nursing aides. That means nursing home residents wait longer for help and more often wind up hospitalized, Dale said. High staff turnover creates space for mistakes while leaving little room for bonds to build between nursing home staff and patients.

Bills currently before the Legislature would narrow the gap by changing both the way inflation adjustments are figured and increasing reimbursement rates. Together, they would inject about $11 million of state and federal money into the system annually, compared with Medicaid expenditures on nursing homes of $703 million in 2019.

For some older Washingtonians, budget shortfalls mean disconnection. Residents in need of nursing care sometimes have to move into homes far from their spouses, families and friends. Hundreds of residents are also displaced each year as facilities close. About 1,300 residents have had to move since 2017 becaause of closures.

Some nursing homes are turning away Medicaid clients to make ends meet. Particularly in rural Washington, Medicaid-insured residents increasingly have to leave their communities to find a home.

That shortfall is driving operators to stop accepting residents on Medicaid or requiring them to pay in cash for years before allowing them to use the insurance, which reimburses providers for 58 percent of their costs.

Inslee vetoed a $1.4 million rate increase for facilities serving residents with dementia passed during the 2020 legislative session. Advocates hope the increase, which amounts to $10 a day per resident, will survive this year’s session.

On a different front, half of all babies born in Washington enter the world covered by Medicaid. But that medical insurance coverage is often short-lived for the mother.

Medicaid covers any pregnant person with an income under about $34,000 a year. That’s the limit for a single pregnant person, which increases with family size. Any children born into those families would be covered, but the income limits are far lower for parents — about $23,700 a year for a single parent.

New parents currently have two to three months of postpartum coverage. That essentially ensures they are insured long enough for one post-pregnancy checkup. But more than a quarter of all pregnancy-related deaths occur more than 45 days after birth, and many birth-related ailments, particularly some postpartum mood disorders, don’t manifest themselves until later.

Mothers usually have their postpartum checkup about six weeks after giving birth, leaving them days or a few weeks to get care before their insurance lapses. “That’s a healthcare cliff that no one deserves,” said Randall, the lead sponsor of a bill that would extend coverage to a year.

Primary care — routine medical checkups and check-ins for adults and children — is another piece of Washington’s publicly funded health system that’s targeted for improvement. Under-reimbursement by the state Medicaid program has prompted many providers to stop accepting patients with public insurance. The problem is particularly acute in rural areas, where residents increasingly must wait or travel for basic medical services.

Broadly speaking, Medicaid pay rates are too low for many providers, particularly those providing primary care, family medicine and pediatric care, said MaryAnne Lindeblad, the state Medicaid director with the Health Care Authority, which administers federally funded insurance programs in Washington.

Lindeblad stopped short of suggesting more money is the solution. Rates, she said, could be adjusted to better fund areas of healthcare that deliver long-term benefits to patients, like primary care.

“There’s a lot of money that comes into the system,” Lindeblad said. “I’m not ready to say there’s not enough money, but perhaps we can look at how we can use those dollars more effectively.”

About 63 percent of nursing home residents, like this one being loaded into an ambulance at a facility in Kirkland last year, are insured through Medicaid. The program’s low reimbursement rates have caused some facilities to go out of business, according to industry advocates.
(Matt M. McKnight/Crosscut)

Written by Levi Pulkkinen, a reporter for InvestigateWest. Reprinted from, a non-profit Pacific Northwest journalism site.