Medicaid Matters Weekly is a blog series aimed to be a trusted source for timely updates, insights and expert guidance on the ever-changing landscape of Medicaid, with a special focus on long-term care. Each week we’ll highlight critical developments, how they impact your clients, and offer practical tips to keep your planning strategies sharp and your clients protected.
How Medicaid Cuts Quietly Erode Care Quality
When major Medicaid policy changes hit the headlines, the focus is often on coverage loss and cost savings. But what doesn’t always make the news, and what families feel first, is a gradual erosion of care quality that begins long before a facility closes or a service line is dropped.
The recently passed One Big Beautiful Bill Act (OBBBA) includes steep reductions in federal Medicaid spending, alongside changes to eligibility verification, coverage windows, and provider funding. While these provisions are framed as budget reform, the practical reality is that lower reimbursement rates force care providers to make impossible decisions between cutting staff, delaying maintenance, reducing therapy services, or increasing the ratio of residents to caregivers.
I have been fielding daily questions from estate planning practitioners about what OBBBA means for their Medicaid planning practice, and I can confidently tell them: It makes your services more valuable than ever.
Many skilled nursing facilities already operate with thin margins. Medicaid, being the largest payer, often reimburses well below the actual cost of care. With new budget constraints looming, even well-managed facilities may have to:
- Reduce staff hours or eliminate higher paid positions like RNs or therapists
- Narrow admission criteria, preferring private-pay residents over Medicaid applicants
- Downsize services, especially in rural or lower-income regions
These subtle shifts don’t generate headlines, but they show up in delayed response times, medication errors, caregiver burnout (which never truly recovered post-COVID) and rising client complaints, all while facilities remain “open.”
As trusted advisors, we have an opportunity, and arguably, a responsibility, to prepare clients for a Medicaid environment where eligibility alone does not guarantee quality of care or accessibility.
LWP Practice Tip: The days of waiting until a crisis may soon be over. Help clients plan proactively, whether that means transitioning to home-based care earlier to begin the Medicaid enrollment process, investigating waiver programs, or preparing to supplement care privately, even if it’s just temporary.
The Medicaid system may not “break” overnight, especially since many benefit cuts in OBBBA are conveniently delayed just long enough to make it through mid-term elections. However, it is fraying in ways families won’t always see until it’s too late. By shifting our planning conversations from “if” a client qualifies to “what that qualification actually gets them”, we help families navigate a system that’s increasingly complex and resource-constrained.
Remember, for our soon-to-be-aged loved ones, who need skilled care after a life well lived – Medicaid matters.
Join us for our upcoming webinar on July 24th at 12PM EST as we break down what every estate planning attorney must know now that OBBBA is law. In this exclusive webinar, Britt Shearin, Esq. will break down the most disruptive elements of the law and show you how to adapt and update your strategies, workflows, and client conversations to survive (and thrive) in the post OBBA era.
Register now and make sure your practice is ready! Register Now
