State budget cuts caused by the economic recession pose a serious threat to long-term care services for elders and individuals with physical disabilities, according to a new report by the AARP Public Policy Institute.

The research report provides “the most comprehensive analysis to date on the budget cuts to both Medicaid and non-Medicaid–funded long-term services and supports (LTSS) in each state,” the study’s authors write.

Less Funding Despite Greater Demand

The AARP’s study, entitled “Weathering the Storm: The Impact of the Great Recession on Long-Term Services and Supports,” notes that 31 states have made cuts to the budgets of non-Medicaid LTSS programs during the 2010 fiscal year, and 28 have — or intend to — cut those same programs in FY11.

These cuts are taking place despite the increased demand for long-term care, as the recession pushes more Americans into eligibility for government programs.

The report identifies several other themes that have emerged from its analysis:

• States have been increasingly promoting home and community-based care throughout the economic downturn. All told, 22 states reported that they expect the number of nursing facility residents covered by Medicaid to decline.
• Additional funding provided by the American Recovery and Reinvestment Act (ARRA), signed by President Obama in February 2009, helped states temporarily maintain Medicaid-funded long-term services.
• The Affordable Care Act (ACA) — the national health reform bill signed into law last March — provides states with many new opportunities to expand home and community-based care.

Looking Ahead

While measures such as the ACA and the ARRA have undeniably — if temporarily — bolstered state long-term services, “virtually all states will continue to face daunting budget issues” in FY12 and beyond, the report’s authors write.

Some of the challenges states will face include:

• The expiration of ARRA funds, currently scheduled for June 2011;
• Budgetary pressures to cut home and community-based services rather than Medicaid nursing home coverage, since the latter is a mandatory service under Medicaid state plans; and
• An unusually high level of turnover among governors, which will cause a reshuffling of key personnel in Health and Human Service agencies, Medicaid agencies, and other departments. This will cause “serious voids in institutional knowledge,” write the authors of the AARP report.

Accompanying the report on the AARP website are individual profiles of 49 states, as well as Washington, D.C., breaking down each state’s specific budgetary issues pertaining to long-term services.

– by Matthew Ozga