President Donald Trump

The Department of Health and Human Services would see a 10% funding cut, and the Department of Housing and Urban Development would see a 15% funding cut, under the $4.8 trillion budget proposed Monday by President Donald Trump.

The document covers fiscal year 2021, which begins in October. It is not expected to be passed by Congress in full; rather, it’s an opportunity for the president to convey his priorities. Nonetheless, organizations representing senior living operators told McKnight’s Senior Living that they are continuing to review the 138-page proposed budget and 202-page related “Major Savings and Reforms” document with an eye toward how the proposed cuts would affect operators and those they serve and a promise to advocate for their members.

“The president’s budget would result in significant cuts to federal healthcare spending, including Medicare and Medicaid. While the intent is to reduce waste, fraud and abuse, it could ultimately limit resources available for long-term care at a time when demand is increasing,” Argentum President and CEO James Balda told McKnight’s Senior Living.

“Argentum supports proposals that will protect these programs and their beneficiaries, reduce the cost of care and prescription drugs, and help Americans better plan for their future care needs. As Congress and the administration negotiate these details, we will continue to advocate for policies that support these efforts.”

The American Health Care Association / National Center for Assisted Living and LeadingAge also are homed in on proposed Medicaid cuts contained in the budget.

“Proposals to fundamentally alter the vital safety net that the Medicaid program provides to many Americans can have an outsized impact on older adults who rely on Medicaid for their healthcare as well as to fund critical long-term services and supports,” LeadingAge said in a statement to McKnight’s Senior Living.

Mike Cheek, senior vice president of reimbursement policy at AHCA / NCAL, said the organization was still reviewing the proposal, “but we’re concerned about any changes to Medicaid that would threaten funding and access to long-term care.”

Approximately 16.5% of assisted living residents rely on Medicaid to pay for their daily services, according to NCAL. The proposed budget would cut $700 billion from Medicaid over the next decade, although not all of those cuts would be directly to programs for older adults.

Trump’s FY21 budget requests $94.5 billion for HHS, which is a 10% decrease from the level enacted for the 2020 budget, according to the administration.

Because fraud related to personal care services was responsible for 45% of convictions from Medicaid Fraud Control Unit efforts in 2018, the budget proposes to require states to implement claims edits to automatically deny unusual PCS payments such as duplicative services, services provided by unqualified providers, or services provided to those no longer eligible for Medicaid, as recommended by the HHS Office of Inspector General. The budget also proposes to extend states’ authority to investigate and prosecute abuse or neglect in home- and community-based settings.

As for HUD, the FY21 budget requests $47.9 billion in gross discretionary funding for the agency, an $8.6 billion, or 15.2%, decrease from the level enacted in the 2020 budget.

The proposed HUD budget includes $180 million to construct approximately 1,200 new units of housing for the elderly and housing for persons with disabilities. “By providing rental assistance and supportive services in settings that prioritize universal design and accessibility, HUD can help residents delay or prevent the need for more institutional settings,” the document states.

The budget would eliminate the Community Development Block Grant and HOME Investment Partnerships Programs, however, calling them “wasteful” and “recognizing a greater role for state and local governments and the private sector.”

“These eliminations would save taxpayers $4.8 billion in 2021,” according to the administration.

LeadingAge described the HUD-related reductions as “significant.” 

“About 1.6 million older adult households rely on the full scope of HUD’s rental assistance programs, which help about 4.6 million households. A 15% cut to HUD would undoubtedly harm older adults,” the organization said in a statement to McKnight’s Senior Living.

LeadingAge, however, said it was “heartened” by the request that Congress provide funding for new Section 202 homes, for full funding of existing service coordinators, and for an extension of HUD’s 40-site Integrated Wellness in Supportive Housing, or IWISH, demonstration.

The request for new homes, according to the organization, “will yield an expansion of the supply that will help to make progress in meeting the need for more affordable housing. What’s more, the value of the support for services, both service coordinators and an extension of the IWISH demonstration, cannot be overstated.”

LeadingAge, though, said it “strongly opposes” the budget proposal’s “deep cuts to other rental assistance programs as well as the proposal to raise rents and impose work requirements on HUD-assisted households, including older adults.” The organization said it will work with Congress “to parse the damaging proposals from the promising ones.”

For information on how the president’s budget proposal would affect skilled nursing operators, see sister media brand McKnight’s Long-Term Care News.