Contact: Kevin Kavanaugh
Director of Public Affairs
(773) 478-6613
kkavanaugh@nursinghome.org


FOR IMMEDIATE RELEASE
June 27, 2002

Illinois Slashes Medicaid Funding to Nursing Homes 
By $114 Million
Greater Chicagoland Area Facilities to Lose $73 Million

(Chicago) -- The Illinois Council on Long Term Care today announced that the final state budget includes a devastating cut to Medicaid funding for nursing homes of 5.9%, totaling $114 million, effective July 1, 2002. With the 5.9% cut, Greater Chicagoland area facilities will lose $73 million in Medicaid funding.

In the Greater Chicagoland area, there are 32,523 nursing home residents dependent on Medicaid. The county-wide breakdown of Medicaid losses is as follows:

County Medicaid Loss

Cook County -- City of Chicago    $29,328,523
Cook County -- Suburban            $25,316,602
DuPage County                             $6,977,211
Kane County                                 $2,416,039
Lake County                                  $4,685,833
McHenry County                               $869,221
Will County                                    $3,042,818

Total Six County Loss                    $72,636,247

(Editor's Note: Medicaid losses for specific cities are available.)

The amounts of the cuts are greater than last year's Medicaid food budgets for the facilities in these communities. The cuts for these facilities are the equivalent of the annual salaries of 3,632 nurse aides.

Currently, about two-thirds of all Illinois nursing home residents -- more than 50,000 people -- are on Medicaid, while only 30 percent of residents pay privately. Illinois ranks 44th in the nation for its Medicaid funding, and these cuts will put Illinois even lower on that list. For 2002, the average Medicaid rate per resident per day reimbursed to nursing homes in Illinois is $94.85. With the 5.9 percent cut, the average daily rate will drop to $89.25.

On average, facilities operate at an average $8.98 per day loss on every Medicaid resident they serve. With the 5.9% cut, Illinois nursing homes will now lose an additional $5.60 per day, on average, for each resident on Medicaid, bringing the total to a $14.58 per day loss.

In the past eight years, costs at Illinois nursing homes have increased by 61 percent, while Medicaid funding has only increased by 37 percent. In total, 79 percent of a nursing facility's total expenditures go to payroll. With the current cut to Medicaid, facilities will be forced to cut staffing levels -- which will lead to a number of employees losing their jobs.

"The quality of care provided to elderly nursing home residents reflects the number and quality of the staff who provide daily care," says Terrence Sullivan, executive director of the Illinois Council on Long Term Care. "The state's $114 million cut will make it extremely difficult for facilities to offer wages and benefits packages that will attract and retain quality staff members."

"Nursing home rates are already high -- many nursing facilities in the Greater Chicagoland area charge between $100 and $160 per day," adds Sullivan. "The state's 5.9% cut to Medicaid will cause these already high rates to go up even higher. Instead of the state paying for the care it mandates for elderly people under Medicaid, costs will ultimately be shifted to family members who pay for care out of their savings."

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The Illinois Council on Long Term Care is an association of nursing home professionals representing more than 210 nursing facilities employing 26,000 employees who care for more than 38,000 residents. For information about long term care in Illinois, visit the Illinois Council's web site at www.nursinghome.org.