How the Recent Changes to Medicare and Medicaid Affect the Average Borrower – And What They Mean for Assisted Living in Texas

At Psalm 23 Home Care we believe in clarity and compassion when it comes to senior care and financial planning. With recent shifts in federal policy for both Medicare and Medicaid, families who may be financing care for a loved one in or coming into an assisted living setting—including here around Clear Lake, League City and greater Houston—need to understand what is changing, how it may affect them, and what it means for facilities like ours.

What’s Changing

1. Medicare Care Management Reimbursement AdjustmentsIn Texas, the proposed 2025 Physician Fee Schedule for Medicare includes changes to care-management services. For example, code G0511 for chronic care management is being removed for many rural health clinics and federally qualified health centers. This means lower reimbursements for some providers. Texas Hospital AssnWhile this directly affects providers rather than borrowers, the knock-on effect may influence what kinds of services are available, how facilities contract with medical care providers, and ultimately the cost structure of care.

2. Medicaid Eligibility and Funding PressuresAccording to recent reporting, federal legislation known as the “One Big Beautiful Bill” includes provisions that could reduce funding or tighten eligibility for Medicaid. JHU Bloomberg School of Public Health+2Holland & Knight+2In Texas, for long-term care and assisted living pathways, the eligibility criteria (income, assets, level of care) are already strict. Medicaid Planning Assistance With federal pressure and possible state changes, the availability of support via Medicaid-waiver programs may become more constrained or involve additional documentation and delays.

3. Managed Care and Services in Assisted Living SettingsFor the Texas STAR+PLUS program (Medicaid managed-care for seniors and individuals with disabilities) there have been plan-area changes effective Sept 1 2024. Texas Health and Human Services Families need to review which managed-care plan applies, how services are delivered in assisted-living residences, and whether the facility accepts that plan.

What It Means for the Average Borrower (or Family)

For someone who is borrowing funds, allocating savings, or planning how to pay for assisted living, here are the key take-aways:

• If your loved one is on Medicare only and moving into assisted living because of help needed with daily living (rather than primarily medical care), you should assume Medicare will not cover the residence cost or the non-medical supportive services.

• If your loved one qualifies for Medicaid (including waiver programs) you may receive support for services in facility settings—but you likely will still be responsible for room and board or a portion of costs in many cases. If eligibility rules become more stringent or funding becomes more limited, the burden of cost may shift more to families.

• Borrowers who are considering financing assisted living should build in buffer room for cost increases, possible delays in funding from Medicaid, or ineligibility surprises.

• Facilities may shift how they contract with medical providers, how they bill or structure care packages, or which managed-care plans they accept as these federal and state changes take effect. That could influence out-of-pocket cost for families.

What This Means for Assisted Living Facilities in Texas

For facilities like ours in Texas, a few implications and operational considerations:

• With Medicare care-management reimbursements changing, facilities may need to look more closely at partnerships with providers who offer chronic care management, telehealth, or advanced primary care management (APCM) services. These may become more important to differentiate a facility and support residents who are dual-eligible or have higher medical/clinical needs.

• Facilities that serve a significant number of Medicaid or waiver-eligible residents should monitor eligibility changes, managed-care plan changes and reimbursement shifts. A drop in reimbursement or tighter rules may increase operational risk or require rate adjustments.

• From a marketing and service perspective, facilities should be ready to educate families about these policy changes. Many families assume Medicare or Medicaid will automatically cover large parts of assisted living; given evolving policy that may not always hold true.

• For Texas facilities, local managed care changes (like those in the STAR+PLUS program) mean you may need to check which health zones you serve, which plans you accept, and communicate clearly to families what is included, what is covered by government funding, and what will remain private pay.

How Psalm 23 Home Care Can Support You

At Psalm 23 Home Care, serving the Clear Lake and Greater Houston region, our mission is to treat each resident with the same level of care we would provide to our own mother. Part of that mission includes helping families make sense of senior-care financing.We offer:

• Friendly consultations to review your loved one’s situation and how recent changes in Medicare/Medicaid may apply.

• Clear breakdowns of what our facility includes, what services may have government funding, and what costs you will likely bear.

• Guidance on exploring Medicaid waiver eligibility, managed care plans, and planning for financial resilience.

• Transparent service-packages and communication so you know up front what to expect, especially as policy shifts.

In Summary

While the recent changes to Medicare and Medicaid may not yet upend everything overnight, they do signal a shifting landscape. For families planning assisted living in Texas, especially in and around Clear Lake, League City and Houston, it is wise to plan proactively. Expect that Medicare alone will not cover the full cost of assisted living. Expect that Medicaid (or waiver programs) may help, but eligibility, coverage and timing may be less certain than in the past. And for facilities, now is the time to adapt operations, educate families, and prepare for evolving funding models.

If you have questions about how these changes impact your specific situation or would like to visit our facility and review options together, please reach out to us at Psalm 23 Home Care. We are here for you every step of the way.