John O'Connor
John O’Connor

It appears assisted living operators are embracing Medicaid payments at a perilous time.

When assisted living got its sea legs in the 1980s, private pay ruled the proverbial roost. But much has since changed. These days, all but a few states let Medicaid dollars flow into assisted living communities. The rationale is simple: It’s a bargain compared with the skilled care settings down the street.

Senior living operators also have become far more willing to embrace the program, warts and all. For although its funding may not be generous, Medicaid remains a reliable payment source. That’s no small consideration at a time when residents increasingly are hard to come by.

Even before President-elect Donald Trump pulled off one of the major election upsets in recent history, the program’s fiscal appetite was fueling concern. Spending for the program surpassed $530 billion in fiscal 2015, with the federal government kicking in 62% of that amount.

Trump and House Speaker Paul Ryan (R-WI) have indicated they would like to see Medicaid changed from an entitlement program into a block grant program.

That would be a major shift indeed. For those unsure of the difference, entitlements cover everyone who happens to be eligible. By contrast, block grants set up finite sums of money. Once they are allocated, there are no more dollars to be doled out.

What does that mean? As a practical matter, you soon could find yourself in line behind other recipients, be they sick children, pregnant women or other deserving cohorts. Should the money be gone by the time you get to the front of the line? Too bad.

Several attempts to enact Medicaid block grants over the past quarter century have come up short. Providers, healthcare advocates, Democrats and others have consistently stood in the way. It remains to be seen whether this coalition will win out again. Especially since the GOP now controls both the White House and Congress.

The early handicapping is that block grants have an uphill battle, but they could prevail.

Some are speculating that per capita caps might win the day. They are similar to block grants, except states receive a specific allocation per enrollee.

What can be predicted with more certainty is this: Medicaid as you have known it is probably going to be changed. And not for the better.