Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. Nursing Homes


Minnesota has relied extensively on the institutional model of long term care since the 1960s, when the availability of federal funds for nursing home care spurred considerable growth in the state's nursing home industry. Nursing homes provide a more medical model of long term care than many elderly persons need or want, but have often been the only option available.

A moratorium on new nursing home beds has been in effect since 1983, and even though the elderly population is increasing, nursing home utilization has dropped. Because projected utilization indicates that Minnesota's current bed supply will be adequate through 2025, the moratorium on new nursing home beds will continue, except in situations of "extreme hardship," e.g., when a county's ratio of beds per 1,000 is very low.1

Because Minnesota still has the 6th highest number of beds per 1,000 persons age 85 and over in the nation, two recent initiatives have been undertaken to reduce the number of beds. First, in 2000, the state created the nursing home bed layaway program, permitting nursing homes to take licensed beds temporarily out of service and have those beds treated as though they were de-licensed. In the 18 months since enactment about 2,350 beds have been put in layaway and the occupancy level of remaining beds has reportedly increased substantially. Given the nursing home moratorium, without this program, nursing homes would be reluctant to de-license beds.

Second, in 2001, with the goal of accelerating the re-balancing of the state's long term care system, the state provided incentives for the closure of up to 5,140 nursing home beds during fiscal years 2002 and 2003. This program was combined with initiatives to conduct local long term care systems planning and to develop and expand home and community service programs. As of June 30, 2003, Minnesota had already closed 2,500 beds and had received applications to close another 2,000.

1. Long term Care Task Force: Reshaping Long term Care in Minnesota.

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