60 Seconds with Steve Monroe and Ben Swett

60 Seconds is a weekly video series hosted by The SeniorCare Investor’s Steve Monroe and Ben Swett. It covers the biggest news of the week, the latest M&A trends, market statistics or other analysis at the top of their minds in the seniors housing and care industry. Any suggestions on future topics, thoughts on recent videos, or inquiries into sponsorship opportunities can be sent to editorial@levinassociates.com.

Banner Ad for The SeniorCare Investor Free 60 Day Trial

May 13, 2025 – 60 Seconds with Swett: The Republican Budget and Medicaid Cuts

Medicaid funding faces political scrutiny as Republicans navigate budget talks, though major cuts remain unlikely. A CMS rule targeting provider tax “loopholes” could still impact Medicaid-dependent providers by reducing supplemental payments. SNFs and AL providers may feel the pinch, but a proposed 10-year delay to CMS’s staffing mandate offers some relief.

Transcript

There will be significant political interest in what happens to Medicaid funding as Republicans work to pass a budget and tax bill with their very slim majority. Touching entitlements remains politically risky, and the party is divided on whether any Medicaid cuts would be acceptable heading into an election cycle. At this stage, per-capita caps on federal Medicaid payments to states do not appear to be under serious consideration.

However, even without direct federal cuts, rulemaking changes could materially affect Medicaid-dependent providers. CMS has issued a proposed rule that aims to close what it describes as a Medicaid “tax loophole” that some states have used to inflate federal matching funds while minimizing their own financial commitment. Specifically, CMS is targeting provider tax structures that disproportionately tax Medicaid revenue—such as charging higher rates on Medicaid dollars than on commercial or Medicare equivalents.

States that rely on these mechanisms to support UPL (Upper Payment Limit) or directed payment programs may need to scale back supplemental Medicaid payments if the rule is finalized. That could reduce a key revenue stream for skilled nursing facilities and assisted living providers that participate in waiver programs. For now, it’s unclear what will make it into the final budget or CMS rule, but any changes could have meaningful downstream effects on provider profitability.

One potential positive development for providers: a congressional committee has proposed delaying the implementation of CMS’s minimum staffing mandate for nursing homes by up to 10 years.

60 Seconds with Swett: Welltower is on a Roll

Welltower delivered another strong quarter with over 20% SHOP NOI growth, record occupancy gains, and raised FY2025 guidance. With $6.2B in 2025 deals and $9B in liquidity, it leads the M&A space, while development stays modest and margins recover.

60 Seconds with Swett: April Already Passes 50 Transactions

Despite market challenges, seniors housing M&A is surging, with 50 deals in early Q2. Activity is set to rise as sellers react to rate changes and delays clear. With construction lagging, M&A offers better opportunities.

60 Seconds with Ben Swett - Deal Thumbnail

60 Seconds with Swett: Adapting to the 2025 M&A Market

The M&A market is shifting with more liquidity and better deals, though high rates still weigh on activity. Join our April 24 webinar to hear experts discuss 2025 deal trends, new lending dynamics, and case studies on today’s evolving transactions.