States Restructure Senior Care in Wake of Recession

Many states have made cuts to aging and disability services budgets, according to a recent report conducted by the AARP Public Policy Institute; yet, demand for such services hasn’t slowed — in fact, demand for senior care and disability services continues to grow at an alarming rate. The report surveyed programs and funding in all 50 U.S. states, finding that 31 states cut aging and disability budgets (non-Medicare) in the 2010 fiscal year, and 28 states expected to make cuts in the 2011 fiscal year. Balancing state aging and disability services budgets

The report, Weathering the Storm: The Impact of the Great Recession on Long-Term Services and Supports, finds that state incomes are expected to be below pre-recession levels in 2011, as funding from major sources is still down, including personal income, sales and corporate taxes. Increasing demands for services are forcing states to place restrictions on non-Medicaid long-term services and supports (LTSS), although these programs are currently bolstered through funds from the American Recovery and Reinvestment Act (ARRA). ARRA funds are set to expire in June 2011, when states will be faced with more difficult decisions.

Most Medicaid cuts focused on cuts to provider payments, although a few states implemented service cuts, particularly personal care services. This is a concern because during a recession, demand for payment assistance increases as more families facing financial hardship qualify for assistance.

One bright spot in the midst of this funding crisis is the Affordable Care Act, which aids states in expanding efforts for home and community-based services; however, many states are hesitant to embrace such programs until government initiatives provide ample guidance.

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