Finances are always a challenge for long-term care providers, with the AHCA noting that Medicaid reimbursement already falls short of the actual cost of care. Yet when cuts of this magnitude are coming, lowering that reimbursement further has to be one of the options on the table for states trying to close a new budget hole. Other obvious options: raising taxes or restricting Medicaid eligibility or benefits, none of which will be appetizing for state lawmakers left to grapple with congressional cuts.
Kari Thurlow leads LeadingAge Minnesota, a long-term care trade group. In an interview, she said her organization is still reviewing the newly passed bill but said its cuts come at a difficult time.
Nursing homes are already in a “fragile” state financially, she said, noting that Minnesota has had 25 nursing facilities close since 2019. Three-quarters were in greater Minnesota.
State legislators in the 2025 session added to financial pressures. Belt-tightening measures passed included a new cap on reimbursements to nursing homes, which Thurlow contended jeopardizes providers’ bottom lines.
The Minnesota Department of Human Services described the measure this way:
“In the past nine years, the statewide weighted average daily rate paid for Nursing Facilities has increased from $222.41 in 2016 to $362.25 in 2025, an annualized growth rate of 5.6%,” officials said. “Under the new cap, operating rate increases will be limited to changes in the CPI-U, up to 4% per year,” with CPI standing for consumer price index.