As experts in real estate, we know it’s not enough to be familiar with the housing market. We also have to look at the specific needs of our partners and key factors likely to influence their ability to secure homes. In this post, we focus on three trends for HCBS providers to keep an eye on in 2019: 1) anticipated changes to Medicaid; 2) the expiration of the Money Follows the Person program; and 3) a new tax plan that may affect homebuyers. We’ll take a brief look at each factor—and highlight how leasing with us may help you navigate the new year.
1. Changes To Medicaid: More People Will Be Covered
Recent midterm elections have given hope for positive change to Medicaidin 2019. Thirty-six states in the U.S. have approved higher income limits for Medicaid. This increase in eligibility will add around 500,000 more people to the program; however, the increase also demonstrates the need for higher funding for the program in order to support the growing number of individuals receiving assistance.
This increase means providers will have to consider how to meet a greater demand for services, while waiting for sources of funding to increase as well. Advocacy groups are optimistic the midterm results will herald a shift in support—and funding—for older adults moving to community-care based settings, children with advanced medical needs, and individuals with disabilities who have lower incomes. However, the timing of such funding remains unclear.
2. Expiration Of Money Follows The Person Program: States Running Out Of Funds
Disability advocate groups are hopeful for advancement in disability support programs outside of Medicaid. One of the programs that offers additional support outside of the constraints of Medicaid is Money Follows the People. This program, initiated in 2005, gives the elderly and the disabled the funds necessary to move out of institutions and into group homes or alternative community settings. However, in 2016, the bill funding Money Follows the Person expired, leaving states left to use whatever money remained in the program to fund their operations.
While the money originally in the program has lasted until now, it is expected to fully run out on December 31, 2018—and Congress has not yet completed the necessary steps to pass H.R. 5306, or the EMPOWER CARE Act, to reauthorize and fund the program—even though States urgently need the money. Because the money is expiring and long-term funding is not yet secured, it may become more challenging for providers to sustain housing options for the people they support.
3. New Tax Plan: Good For Renters, Not Buyers
As of April 2019, taxpayers will begin to see the effects of the changes to the tax plan overhaul enacted by the government, which are likely to impact many individual and pass-through entity homeowners. For renters, the tax plan will include lower rates and higher deductions, resulting in an overall lower tax bill. Many homeowners, however, will find that their tax bills are higher due to limited itemized deductions and exemptions.
In addition to these shifts, the housing market is expected to be difficult for both sellers and buyers. Inventory is unlikely to rise significantly, with buyers likely to face increased costs and higher rates. Taking all of this into consideration, providers looking to buy homes may find it more beneficial to consider leasing instead.
CapGrow Partners provides real estate expertise with multiple options.
In some ways, 2019 presents a potential “Perfect Storm” that HCBS providers will need to weather. A growing number of people insured under Medicaid will be looking for services, but a lack of funds necessary to support needed services and rising housing prices for buyers creates a difficult situation. The good news: There is an alternative to navigating the storm alone, and CapGrow Partners can help.
Our committed, responsive and experienced team is different from other organizations in that we come from a background that directly supports the work of our partners. We are the perfect “one-stop-shop” for your needs, as we offer a matchless combination of experience and resources to help you expand your services or find the perfect home. To talk more about our flexible solutions or to learn more about our partnership benefits, contact Dené Sanchez (773-329-4678) or visit our website.