Indianapolis – Governor Mike Pence issued the following statement regarding SEA 460, which provides a three-year partial moratorium on the construction of new nursing home facilities. Previous administrations have enacted similar or more comprehensive moratoriums in 2006, 2007, 2008, and 2011.
“As a strong advocate of free-market economics, I hesitate to support any restriction on commerce, but in an industry that derives 85 percent of its revenue from state and federal sources, we must always consider the impact of our policies on the cost to taxpayers. Despite my reservations, I am willing to allow a partial moratorium to become law without my signature because, on balance, it serves the interests of Indiana taxpayers and gives industry time to adjust to anticipated changes to long-term care.
“Hoosiers should know that this is a partial moratorium that includes several prudent exceptions that will not restrict construction of replacement nursing facilities and the construction of new nursing facilities in counties where occupancy rates exceed 90 percent. This legislation also will not impact the construction of assisted living and independent living facilities, which remain key to the state’s overall long-term care strategy.â€
“A three-year pause on new facility construction will give our state and the long-term care industry the opportunity to achieve a better balance between institutional care and home- and community-based services while we engage in a much-needed discussion about reforms to our current Medicaid reimbursement formula.
Indiana ranks higher than all but three states in the percentage of Medicaid long-term care dollars spent on nursing home care. In addition, the state has a 77 percent occupancy rate when the national average is 86 percent. A study by the Family and Social Services Administration concluded that, based on the current Medicaid reimbursement formula, a three-year pause on new nursing facility construction will save approximately $24 million in Medicaid expenditures.
