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2005 Testimony

Testimony Before The House Finance And Taxation Committee

Regarding House Bill 1215

January 18, 2005

Chairman Belter, members of the committee, I am David Zentner, Director of Medical Services for the Department of Human Services. I appear before you to provide information on this proposed legislation.

I am responsible for the administration of the Medicaid program in North Dakota. The Medicaid program is the primary source of funding for nursing facility care both nationally and in North Dakota. At the present time, the Medicaid program assists in the payment of nursing facility services for about 56% of all nursing facility residents. The current appropriation for nursing facility care is $318.4 million. The requested appropriation in the Executive budget for the 2005-2007 biennium is $348.8 million of which $122.6 million are general funds. It is anticipated that the cost of nursing facility care will double in 14 years or less. Attachment A details the growth in the cost of nursing facility care since 1980.

The number of North Dakota citizens over 85 years of age is expected to increase from about 15,300 in 2005 to about 24,250 by 2020, an increase of 9,000. Individuals over 85 years of age are those most likely to utilize nursing facility services.

States have looked for ways to encourage individuals to properly plan for future long-term care services in order to lessen the burden on federal and state taxpayers. One of those strategies includes encouraging individuals to purchase long term care insurance, so there will be less reliance on Medicaid when the time comes for the elderly to access these services. One of the incentives being used by some states to encourage the purchase of long-term care insurance, is a tax credit or deduction for premiums paid by taxpayers.

It is likely that there will be no immediate reduction in the rate of growth for the nursing facility appropriation. However, if more individuals purchase insurance it is likely that the rate of growth will be reduced in the future.

I would be happy to respond to any questions you may have.

 

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