Retirement-industry professionals say they have serious concerns about the potential results of Gov. Christine Gregoire's proposed 2011-2013 biennial budget, which could eliminate entirely or drastically reduce funding for a variety of programs serving seniors.

Some of those proposals include significant reductions in funding or entire eliminations of programs for the elderly and disabled, such as in-home care services, prescription drug co-payment reimbursements, and increases in licensing and basic utility fees for long-term care facilities.

"This year's budget is a huge step in creating a gap that's unsustainable," contends Bill Ulrich, president of Spokane-based Consolidated Billing Services Inc., which provides financial management and billing services to long-term care providers in the region. "From my perspective, working with skilled-nursing facilities ... it should be a concern to everyone because in some fashion, we all have parents that are there or will be there someday, and someday we'll be in that system too."

What's also worrisome to some advocates is that a few of the cuts that originally were proposed to go into effect at the beginning of the new biennium, on July 1, were made effective Jan. 1, for the last six months of the 2009-2011 biennium. The state Legislature approved those cuts during last month's emergency legislative session called by Gov. Gregoire to create a supplemental budget for the remainder of the current biennium.

Jerry Reilly, chairman of Olympia-based Washington's Eldercare Alliance, says one of those recently implemented cuts is a 10 percent reduction in service hours for the elderly and disabled who receive in-home personal care through Medicaid. Personal care providers assist the elderly and disabled with daily tasks, such as bathing, medication management, dressing, and other activities. Reductions in services will range from four to 22 hours a month per patient.

Gregoire's website estimates that measure will save the state $97.5 million during the next two years.

"All of these proposals are fiscal boomerangs," Reilly says. "They will save money in the short run, but cost more in the long run."

Jim Lippold, executive director of Providence Adult Day Health, at 6018 N. Astor on Spokane's North Side, says, "That's one of the real concerning cuts. Without that support, they're at risk of being placed in nursing homes, which costs about $90,000 a year, versus the smaller cost for in-home care. So it has a backwards effect."

The worries, however, don't end there.

Reilly says another program eliminated during the Legislature's recent emergency session was the Medicare Part D co-payment subsidy. As a result, he says, the state will no longer reimburse qualifying clients for co-payments related to prescription drug purchases, which is expected to save the state about $16.4 million.

"Washington state has always picked up the co-pay required for those people, because many have multiple prescriptions and it's smart for the state to do that," Reilly says. "If those people don't take their medications, their condition is more expensive for the state. We're already seeing people who aren't renewing their drugs because they don't have the money."

Lippold says he's also concerned about the elimination of the Medicare Part D subsidy.

"If (patients) are on a limited income, they will have to make difficult choices about getting prescriptions refilled and taking medications that help them stay well and out of the hospital and other higher levels of care," Lippold says. "There will be cascading complications that result from this."

Providence Adult Day Health provides nursing care, health assessments, and exercise activities to about 150 people here, he says, and employs about 20 people. Lippold says about half of the center's clients are being funded through state and federal dollars. While that facility isn't currently in danger of having its funding cut, he says he's still concerned about the domino effect that may occur due to the elimination of other services for the elderly and disabled.

Another organization trying to preserve funding for programs designed to assist the elderly and disabled is the Washington Health Care Association, based in Tumwater, Wash. Its president and CEO, Rich Miller, says the organization is encouraging the Legislature to reject a reduction of reimbursement rates for assisted-living facilities. If passed, that measure could reduce reimbursements by 7 percent for Medicaid clients housed in those facilities, he says.

Miller says the state also is seeking to raise utility fees for those facilities by about 5 percent.

"We're opposing that because it would lower the state reimbursements in assisted living and therefore would reduce access for people that need that level of care," he says. "Because the reimbursement rate would be so low, the skilled nursing facilities wouldn't be getting enough money from Medicaid to keep operating."

Gregoire also has proposed, as part of an effort to place fees on the users rather than state taxpayers as a whole, raising the licensing fees for privately operated adult family homes.

"Again, I'm concerned," says Lippold. "Those (facilities) operate on a shoestring anyway and have a narrow margin of profit, so to make that even narrower will put some people out of business, and that's a community alternative to an institutionalized facility."

Ulrich says one funding solution being brought forth to the Legislature by retirement-industry groups to help balance some of these cuts is what's being called the Safety Net Assessment Fund. He says advocates of the proposal hope to attract more federal dollars to match state funds for long-term health-care services, with some of the money coming from an assessment paid by long-term care providers.

"It's basically a provider tax," he says, adding that public sentiment in the state seems to be against the idea of provider taxes.

The money raised by those assessments would go into a dedicated fund which in turn would be spent on the providers, while also hopefully attracting more federal dollars, he says.

Ulrich adds that other states have similar programs in place to bring in more federal dollars to state-operated programs.

Miller says the Safety Net Assessment also would make unnecessary the 8 percent cut proposed by Gregoire for skilled-nursing facilities, because the program would be expected to generate enough federal dollars to void those cuts.

"The 8 percent cut would reduce the ability to maintain quality of care and also would be absorbed in the largest budget component of a facility, which is labor," he says. "So there would be a reduction of caregivers, which jeopardizes the quality of care."