21 Jul ONE BIG BEAUTIFUL BILL IMPACT ON NURSING HOMES
Although the One Big Beautiful Bill signed by President Trump on July 4, 2025, may not directly impact nursing homes, such skilled nursing facilities are likely to feel the pinch. Medicaid is a joint program between the federal and state governments. Most nursing homes in Texas accept Medicaid, which helps pay care costs in addition to drug costs. Most Medicaid cuts affect only states that have “expanded” Medicaid – which gives Medicaid health insurance benefits to low-income individuals who are not disabled. Texas has not adopted Medicaid expansion.
Federal law permits states to use provider taxes on hospitals, nursing homes, and other providers to fund a portion of the non-federal share of Medicaid payments since this increases the total amount of Medicaid payments reported to the federal government. Provider taxes generally increase Medicaid revenue due to a federal matching program that can reach up to 90%. In Texas, it is generally more than 60% of Medicaid payments that the federal government pays. Although nursing homes and intermediate care facilities are spared the reduction in provider tax cuts, hospitals (which will be taxed) often support other Medicaid programs in some states. For example, cuts in provider taxes to a hospital could result in other programs supporting Medicaid will now likely have to increase uncompensated care, which will lead to staff reductions, longer waiting times for emergency services, and result in some hospital closures. This could force more into nursing homes, although reimbursement rates would not increase.
Some of the Medicaid eligibility requirements that are changing include:
#1. As of January 1, 2027, redeterminations are to be made every 6 months (instead of annually) if in an expansion state. Texas is not a Medicaid expansion state.
#2. Eligibility can only be retroactive to 2 months prior to the month of application (presently 3 months) beginning in the year 2027.
#3. States are permitted to limit the equity on the homestead (which is a non-countable resource) to a maximum of $1,000,000 (although it could increase that amount if the home is on a lot that is zoned for agricultural use). There is no home equity limit if the Medicaid recipient’s spouse or disabled child is living in the home. The present home equity limit for a single person applying for Medicaid is $730,000.
It should also be mentioned that a CMS rule requiring long-term care facilities to meet minimum staffing has been placed on hold until October 1, 2034.
Also, many facilities have used immigrants for staffing. Tougher immigration laws could result in increased costs for facilities that would likely be passed to the patient.
As budgets get tighter, Medicaid eligibility requirements could get tougher. These changes should result in less Medicaid spending by the government.
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