Public-Private Cost Shifts in Nursing Home Care

by Jane Sneddon Little
July/August 1992

This article presents estimates of the degree to which individuals paying privately for nursing home services are being asked to subsidize their state’s Medicaid program. Recently published data permit making some first rough estimates of the extent of this activity. Although these crude measures must be interpreted with great care, the data suggest that cost-shifting activity is widespread and sizable.

Because, as the article shows, cost-shifting activity undermines policy makers’ efforts to regulate nursing home costs, the article suggests that private patients should not be asked to subsidize Medicaid’s long-term care program; all comparably disabled individuals in a given institution should be charged the same rate. The author concludes by explaining why her findings bolster the case for including long-term care coverage in Medicare.

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