A new federal budget proposal could reshape Medicaid, delay staffing mandates, and impact long-term care funding. Here's what to know.
The House of Representatives’ Committee on Energy and Commerce has released a budget proposal that impacts Medicaid and nursing home regulations. The proposal includes a moratorium on the federal nursing home staffing mandate until January 1, 2035, following a recent federal court ruling that struck down minimum-hour requirements of the staffing rule (Skilled Nursing News, May 12, 2025). The committee aims to find $880 billion in savings, with total Medicaid savings estimated at $172 billion over a decade, primarily through tighter eligibility checks and work requirements.
While the core Medicaid program remains intact, there are concerns about potential indirect impacts on nursing homes due to state budget deficits. The proposal also calls for a freeze on current provider taxes and prohibits states from establishing new ones, which are crucial for funding Medicaid programs. Congress faces tight deadlines concerning the debt ceiling and the new fiscal year starting October 1, which may complicate the reconciliation process (McKnight's, May 13, 2025).
Industry advocates express ongoing concerns about potential harmful cuts to Medicaid and the impact on care access for vulnerable populations. The Centers for Medicare & Medicaid Services (CMS) proposed a rule to close a Medicaid tax loophole that allows states to disproportionately tax Medicaid-related services, inflate federal matching funds, and reduce their own financial responsibility (Skilled Nursing News).
The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) is actively engaged in advocating for the protection of Medicaid and the aging services infrastructure. The largest association of for-profit providers welcomed the direction of the initial discussions, urging Congress to protect access to care and repeal the staffing mandate (McKnight's).
Katie Smith Sloan, president and CEO of LeadingAge, expressed concerns about the proposed provider tax moratorium and stricter uniformity rules, stating that these changes reduce state flexibility to adjust or redirect funds. She emphasized that such limitations could threaten the viability of providers and limit access to care for older adults. Sloan warned, "The policies in the bill represent dangerous cuts to Medicaid. Cuts at the federal level force states into impossible choices: reduce services, limit access, or slash provider payments. No matter the route, the result is the same: older adults, their families, and the providers who serve them, lose." (LeadingAge, April 30, 2025).
As policymakers weigh these transformative changes, it’s more important than ever for long-term care providers and stakeholders to stay informed and engaged. The proposed reforms have far-reaching implications that demand attention and advocacy to protect the integrity of care delivery systems. For expert insights, support navigating regulatory shifts, or to learn how your facility can prepare for what's ahead, please contact Polaris Group today.
