At DeKalb assisted-living facility, uncertainty over federal Medicaid cuts loom

At Heritage Woods of DeKalb, an assisted-living facility where many residents rely on Medicaid to help cover their costs, the looming changes to federal Medicaid policy are prompting concern — and in some cases, confusion — about what comes next.

Six residents and the facility’s executive director recently sat down with Shaw Local News Network to share their thoughts just days after President Donald Trump signed the One Big Beautiful Bill Act into law. The sweeping legislation includes $1.2 trillion in federal cuts to Medicaid and food stamps, largely through new work requirements for adult recipients, including some parents and seniors.

For residents like Betsy Smith, 77, the potential impact is deeply personal. Smith, a Medicaid recipient, said “it’s scary to think” that she could lose the benefits that allow her to live at an assisted-living home.

“It’s just a great place, and it’s not a nursing home, and it’s not a high-rise for poor adults,” Smith said. “It’s a good place to be.”

Beverly Wrigley, 96, said she’d recently spoken with her son about the Medicaid changes.

“I don’t think it should affect people here,” Wrigley said, referencing what her son told her.

Heritage Woods Executive Director Rachel Lawson said between one-fourth and one half of the residents living at the facility pay for the service through Medicaid.

Angeline Salemi, 82, said she thinks the cuts to Medicaid will negatively affect younger people who are unable to work.

“They don’t have sufficient jobs [...] with today’s economy,” Salemi said. “They need Medicaid to survive.”

Jennifer Losselyoung, 80, a Medicaid recipient, said she thinks there should be tighter restrictions on who can receive the health care help.

“I think Medicaid needs to be governed more closely,” Losselyoung said. “I know a lot of people who are on it who don’t need to be on it. They just need to do something. But I think it is very necessary for some struggling families and for older people.”

Gerald Wagner, 85, said he’s a current Medicaid recipient and agrees with Losselyoung.

“I hope I don’t lose any of it; otherwise, I’m fine with it because what insurance doesn’t pick up, the other one will,” Wagner said. “What Blue Cross doesn’t pick up, either Medicare or Medicaid will pick it up.”

Asked what she would do if she lost her Medicaid benefits, Losselyoung said she didn’t know.

“I don’t know what I’d do if we did get it cut,” Losselyoung said. ”It’s very necessary."

Judy Bowman, 75, who is not a Medicaid recipient, said she was curious to know if people are illegally taking advantage of the government service.

“I’m sure those on Medicaid really need it, but you wonder how much Medicaid fraud is out there,” Bowman said. “That’s concerning because we’re using tax dollars to pay for the Medicaid recipients.”

In fiscal 2024, a total of 23,755 DeKalb County residents received Medicaid, according to data provided by the Illinois Department of Healthcare and Family Services. During that same fiscal year, Illinois received more than $20 billion from the federal government for Medicaid spending, amounting to about 62% of the total funding for the state’s Medicaid programs, according to a separate HFS document.

HFS officials wrote that cuts in federal funding will lead to reduced Medicaid services and enrollment because the state cannot make up the funding gap. As a result, home and community-based services, hospice care, and community and behavioral health services will be at risk.

Lawson said people who initially paid out of pocket to stay at Heritage Woods have been able to live at the facility for longer because they signed up for Medicaid when their savings were exhausted.

Salemi said the fact that Medicaid is accepted is the main reason she chose to live at Heritage Woods of DeKalb.

“Illinois is one of the few states with a formal Medicaid-funded supportive living model,” Lawson said. “That’s why this is important to our seniors here, especially in Illinois.”

Citing Manatt Health estimates, state officials reported that the change in federal policy could force Illinois – which reimburses health care providers for services given to Illinoisans through Medicaid – to lose about $52 billion in Medicaid funds over 10 years.

How state legislators will seek to shore up that potential loss of federal funding remains to be decided, and that’s causing anxiety over the financial viability of smaller, rural hospitals.

“I see a lot of the smaller hospitals in the poorer areas are saying they are going to have to close down if there are big Medicaid cuts,” Losselyoung said. “It’s going to be a tragedy.”

Local government financial impact not yet known

Although cuts to Medicaid are expected to put home- and community-based services on the chopping block, how the policy changes will affect the DeKalb County Rehabilitation and Nursing Center is still up in the air.

The once-beleaguered nursing home is owned by the county government. Since 2022, elected officials have sought to rightside financial troubles that plagued the facility, which also accepts residents on Medicaid.

Mary Hatch, vice chair of the DCRNC’s relatively new oversight committee, said she’s keeping a watchful eye on state legislators. Those officials will be responsible for determining how federal Medicaid cuts affect Illinoisans.

“As a citizen and member of the oversight board, we’re watchful,” Hatch said. “We’re waiting to see how things settle out, and hopeful that we can weather the uncertain climate.”

Hatch, who is not a member of the DeKalb County Board, said other DeKalb County officials, such as County Board President John Frieders, might be able to speak more freely on the topic.

Frieders, a Republican from District 12, said he thinks it’s too early to say what specific effects might be locally to the publicly owned nursing center.

“It’s still up in the air,” Frieders said. “When things are definite, we will adjust. I don’t know how else we can handle it because we just don’t have enough information yet from the state or from [the] federal [government].”

DCRNC officials have written that Medicare, Medicaid and private pay make up the majority of revenue sources for the facility, which was almost sold to a private buyer in 2023.

Since the sale fell through, county officials have taken steps to increase the number of Medicare recipients able to use their benefits to pay for services at the facility.

Mellissa Kula with the Illinois Department of Healthcare and Family Services said there were six nursing facilities in DeKalb County serving Medicaid customers in 2023. That year, 27,841 DeKalb County residents were enrolled in Medicaid – the largest total in the past five years, according to department data. Of that five-figure total, Kula said 264 used Medicaid to pay for nursing home services.

In May, the county-owned nursing center had an average daily census, or resident population, of 109, according to DeKalb County documents. Of that average, about 65 residents were Medicaid recipients.

Also in May, the rehab center collected $1.3 million in net patient revenue, $332,323 below the goal set by Jordan Healthcare Group, according to county documents. Of that total, $654,262 was collected for services received by Medicaid recipients, $495,151 was collected from private payers, and $152,979 was collected from Medicare A and Medicare Advantage recipients.

Frieders said he expects county officials will need to address potential effects if and when information comes forward.

“When we get details, we’re going to have to make our plans then, because we just don’t know at this time,” Frieders said.

The exact effects of the new federal policy on Medicaid recipients in Illinois also isn’t yet known, but the changes likely will impact lower-income families, single adults and retirees.

“I think most of us thought we had put away enough money for retirement, and with the cost of everything going up so high, and that, it just is not enough,” Losselyoung said. “So that’s where Medicaid has to come in and help.”

Shaw Local News Network reporter Megann Horstead and The Associated Press contributed to this story.