Nearly 200 residents at the St. Joseph’s Center nursing home in the affluent Connecticut suburb of Trumbull were evacuated last year after Legionella bacteria was found in the facility’s water system. Two months later, they were evacuated again over critical failures in the building’s fire safety systems.

Three years earlier, residents at another Connecticut nursing home, the Quinnipiac Valley Center, were relocated after two resident deaths triggered a state health investigation.

The nursing homes were both owned by private equity-backed Genesis HealthCare, among the largest skilled nursing operators in the nation. It’s already faced lawsuits or investigations in California, Georgia, Massachusetts, Missouri, Nevada and Vermont over allegations of patient neglect and abuse.

This year, Connecticut enacted what may be the strongest law in the country addressing transparency and accountability for private equity-owned nursing homes.

It is the latest in a string of states stepping into a regulatory vacuum created by limited federal laws and a presidential administration that’s proven friendly to private equity while showing little appetite for scrutinizing private equity’s role in the healthcare industry.

Private equity’s foray into healthcare over the past several years, particularly into hospital ownership, has drawn public outrage and legislative scrutiny.

It’s all happening as states are staring down steep federal cuts to Medicaid, the public health insurance for people with low incomes that is also the primary payer for long-term nursing home stays. Those cuts, experts fear, could ultimately direct more older Americans into nursing home care.

Last year, at least seven states (California, Indiana, Massachusetts, Maine, New Mexico, Oregon and Washington) passed legislation putting more guardrails around private equity’s involvement in healthcare.

Virginia is still considering a bill to curb predatory property financing practices that have been used by private equity in nursing homes.

Illinois lawmakers sent two measures to Democratic Gov. JB Pritzker that aim to strengthen oversight and transparency requirements of healthcare mergers or acquisitions, and place new restrictions on private equity ownership of disability service providers. The first bill was Democratic-sponsored, while the second had both Democratic and Republican sponsors.

Democratic Gov. Ned Lamont signed Connecticut’s measure last week. The new law requires nursing homes that are owned by private equity to disclose their financial dealings with the state and bans private equity from controlling day-to-day care decisions about nursing home residents. Lamont also signed a related bill to curb private equity’s influence over hospitals in the wake of financial moves by equity-owned health groups in his state that led to hospital closures.

Genesis HealthCare declined an interview with Stateline, but provided a statement saying it “remains focused on supporting our affiliated centers in delivering high-quality care to patients and residents.”

The nursing home industry argues that private equity controls a relatively small share of the nation’s facilities, and that reported problems have been the result of a few bad actors. The federal government estimated that about 5% of Medicare-enrolled nursing homes nationwide had private equity owners in 2022, but admitted that some nursing homes don’t always list all of their owners in the federal database. Some researchers have pegged the real share as high as 13%.

“Focusing on private equity in long term care has become a distraction from the real issues that impact the majority of providers, like chronic Medicaid underfunding and a growing caregiver shortage,” said John Kane, a senior vice president at the industry group American Health Care Association/National Center for Assisted Living, in a statement to Stateline.

“If we truly want to improve care throughout the health care system, we need policymakers to find a proper balance of oversight while still encouraging more investments.”

But a growing number of states are moving to regulate investment companies that draw heavily on Medicaid and Medicare dollars.

“The big question about private equity is not whether profit belongs in the nursing home; it’s whether public dollars meant for care are being converted into financial returns (for investors) without enough accountability,” said Gregory Orewa, an assistant professor at the University of Texas at San Antonio whose research has focused on private equity ownership in U.S. healthcare.

“Nursing homes exist to care for the most vulnerable who cannot care for themselves,” he said, “so we should be holding private equity or anybody to high standards on providing quality care.”

Quality and profits

Private equity firms use pooled investments from pension funds, sovereign wealth funds, endowments and wealthy individuals to buy a controlling stake in a company. Then they try to maximize the company’s value before selling it at a profit, usually within a few years.

Nursing homes and other long-term care facilities are attractive to investors because demand is always there; the share of Americans 65 and older has been steadily rising and is expected to continue.

Nursing home care is heavily subsidized by the government through Medicaid and to a lesser extent Medicare, the public insurance program for adults over 65 and some people with disabilities, offering investors a predictable revenue stream.

And it’s an industry where investors can scoop up struggling independent facilities and improve their margins through corporate consolidations, streamlining management, adjusting staffing or capitalizing on valuable real estate owned by the nursing homes.

Private equity’s defenders say it provides nursing homes with much-needed capital, disciplined management and operational improvements that help facilities scale up their services.

But the private equity model’s primary goal in any sector is to generate returns for shareholders, usually within a few years.

Critics say that priority conflicts with the kind of long-term investment that’s needed to provide quality healthcare, such as paying enough to hire sufficient staff or upgrading facilities.

“One of the biggest misunderstandings is that private equity ownership is only bad,” said Orewa, of the University of Texas at San Antonio. “The issue is more structural. Nursing homes operate on very thin margins, they depend heavily on public dollars and they care for the most vulnerable people who can’t easily exit when nursing home quality declines.”

Nursing home residents aren’t like other healthcare consumers. They may lack financial literacy, or their decision-making may be impaired by cognitive decline, which could lead to them making choices not in their best interests, researchers have noted. They’re a captive audience, often choosing a facility that’s nearby or near family, rather than shopping around for the best option.

Research on how private equity ownership affects nursing homes has found few positive effects. One large 2023 study found it increases a nursing home’s death rate by 11%. Private equity-owned facilities tended to maintain care quality for sicker patients by adding registered nurses, but researchers found those gains were offset by staffing cuts to the frontline nursing assistants who handle most of the hands-on care. Other studies have linked private equity involvement to increases in emergency room visits and rising Medicare costs.

Orewa and his colleagues published a comprehensive review last year of a dozen major studies, linking private equity ownership to a higher number of deficiencies in nursing homes, increased hospitalization rates and higher mortality. They also found that private equity-owned facilities bill Medicare more than other nursing homes.

Facilities’ financial outlooks initially improved after a private equity buyout, Orewa said, but they later faced long-term challenges. The financial maneuvers that private equity uses to extract more revenue from nursing homes can hurt their stability long term.

Hidden disclosures

All nursing homes that receive federal funding are required to publicly disclose the names of any entities that exercise financial control over them. But companies can use complex methods to mask that ownership, meaning it’s difficult even for experts to find out who really owns a nursing home.

“A lot of nursing homes will not provide that information, and their information may not be audited,” said Michael Fenne, healthcare policy coordinator at the Private Equity Stakeholder Project, a research group that tracks the private equity industry.

For example: The private equity-backed Portopiccolo Group acquired more than 130 nursing homes across 9 states from 2016-2022 and yet didn’t appear in federal data as an owner of those facilities, according to the consumer advocacy nonprofit Public Citizen.

And ownership information matters to consumers looking for a safe place for their loved ones: The Portopiccolo Group’s nursing homes have faced heavy fines. A 2023 study by watchdog group Good Jobs First found Portopiccolo had an average fine per facility of more than $81,000, landing it on a list of parent companies with largest average penalties in the U.S.

Predatory tactics?

Virginia lawmakers are considering a Republican-sponsored bill that would cut funding to nursing homes that pay excessive rents to landlords. If passed, it could become a first-in-the nation effort to directly curb a financial maneuver known as sale-leaseback that state regulators have deemed predatory.

In sale-leaseback arrangements, a private equity-backed firm buys a healthcare company, such as a nursing home chain, and then sells its underlying real estate property to a separate investment trust. This sale generates quick returns for investors but saddles the nursing homes with monthly rent payments they may struggle to make, leaving less money available for patient care.

It’s a tactic that has contributed to healthcare bankruptcies across the nation, including for Genesis HealthCare and for Georgia-based nursing home chain LaVie Care Centers.

Increased need for nursing homes

By 2030, 1 in 5 Americans will be 65 or over, and most older adults say they would prefer to remain living in their homes for as long as possible.

For many, that’s possible because of services — such as home health aides or visiting nurses — that are funded through Medicaid.

But elder care experts worry those services will be the first on the chopping block for cash-strapped states facing $665 billion in Medicaid cuts over the next decade from President Donald Trump’s One Big Beautiful Bill Act. This is because federal law requires state Medicaid programs to cover nursing home care, but home-based services are optional.

Most people who receive those home-based Medicaid services need the kind of care that would land them in a nursing home without such services, said Jason Resendez, president and CEO of the advocacy group National Alliance for Caregiving.

“When we take those benefits away, it doesn’t take away the need for that care,” he said. One of the impacts of cuts to home-based services “will certainly be more folks forced to make the hard choice of going into more institutional-based care.”

And cuts to Medicaid could financially weaken smaller, independent or safety-net nursing homes that serve lower-income patients who heavily rely on Medicaid.

“Those distressed facilities may become cheaper acquisition targets for private equity,” Orewa said. “That creates an opportunity for investors with capital to buy at a discount.”

Stateline reporter Anna Claire Vollers can be reached at avollers@stateline.org.

A new report forecasts that changes to Medicaid enacted in 2025 will cut $7 billion from the program in Wisconsin alone over the next 10 years, according to the advocacy group Protect Our Care.

Calculations last year from KFF, a nonprofit, nonpartisan healthcare policy and news organization, indicate that at least 57,000 more people in Wisconsin will become uninsured by 2034.

“Wisconsinites and people everywhere have either lost coverage or they’re living with the ongoing fear of not knowing whether or not they’ll have health coverage in the next month,” said state Rep. Deb Andraca (D-Whitefish Bay) in a media call conducted Thursday by Protect Our Care.

The organization has issued a new report on the impact on Medicaid across the country from the 2025 tax cut and spending bill that passed with only Republican votes and was signed by President Donald Trump July 4. The legislation’s tax cuts primarily went to the wealthiest Americans, said Protect Our Care’s Joe Zepecki.

“Every single state in the United States is going to see these cuts and it’s going to have all kinds of consequences,” said U.S. Rep. Gwen Moore (D-Milwaukee), who also took part in the call Thursday.

The legislation included new requirements for some Medicaid recipients to prove they are working or are exempt from a work requirement. It also included requirements that those recipients submit paperwork showing they qualify for Medicaid twice a year instead of once a year.

Those requirements will take effect in 2027. The work-reporting requirements, however, have been broadly criticized by healthcare experts.

“We have also consistently seen in our research and everybody’s research that work requirement policies often do not meaningfully increase employment or access to inclusive, competitive employment,” said Dr. Kiley McLean, a social work professor, researcher and advocate for people with disabilities.

“Instead, they create paperwork barriers that cause eligible people to lose coverage, not because they are ineligible because but because the system becomes too difficult for them to navigate,” McLean said.

McLean said she has heard from people with disabilities and their families who are concerned that they could lose access to Medicaid for healthcare and personal care in their homes and communities.

“For decades, disability advocates like myself have fought to move away from unnecessary institutionalization and toward community living and inclusion,” she said. “Medicaid is what made that possible.”

States can apply waivers to cover those home and community based services — referred to as HCBS for short. But while federal law requires Medicaid coverage for people in institutions, it’s optional for home and community-based care, McLean said.

“That means when states face budget pressure or major Medicaid cuts, community services, HCBS services are among the first at risk,” McLean said.

Another call participant, Dr. Chris Ford, said he has seen the consequences on the job as an emergency room specialist in Milwaukee.

“When access to primary care disappears, when those clinics close, and when people lose that insurance, the emergency department becomes a safety net for an entire — albeit collapsing — system,” Ford said. “We are already seeing the warning signs happening now.”

Ford said he’s seen longer wait times in the emergency room, more patients who, lacking insurance, are “delaying care until they’re critically ill.”

“These cuts disproportionately hurt the very people  who already face the greatest barriers to care to begin with,” Ford said. “This is not something that is a potential. This is something that is happening already.”

This report has been updated.

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WASHINGTON — Health and Human Services Secretary Robert F. Kennedy, Jr. testified before Congress on Thursday that he’s not pleased with how spending cuts to programs that help lower-income Americans afford food will affect his efforts to bolster healthy eating habits. 

“Am I happy about the cuts? No, I’m not happy about the cuts,” Kennedy said during a lengthy hearing in front of the House Ways and Means Committee, one of several congressional panels he’ll testify before in the days ahead. 

Kennedy added that President Donald Trump and White House budget director Russ Vought also didn’t truly want to propose funding cuts to the Special Supplemental Nutrition Program for Women, Infants, and Children, often called WIC, and the Supplemental Nutrition Assistance Program, or SNAP. 

“Nobody wants to make the cuts. Russ Vought doesn’t want to make the cuts. President Trump doesn’t,” he said. “But we got a $39 trillion debt.”

Wisconsin Democratic Rep. Gwen Moore, who asked the questions, then referenced comments Kennedy made earlier in the hearing about Froot Loops, when he said it “isn’t even a food. It’s just poison.”

Moore noted the cereal is “a lot cheaper than good, healthy food.”

Froot Loops includes a corn flour blend, sugar, wheat flour, whole grain oat flour, modified food starch and other ingredients. 

Trump advocates reductions for HHS

The Trump administration’s budget request for the fiscal year set to begin on Oct. 1 proposes Congress increase defense spending by more than half a trillion dollars, accounting for a 43% boost, and that lawmakers cut domestic spending by 10%. 

It suggested Congress reduce spending at HHS by $15.8 billion, or 12.5%, to $111.1 billion, though lawmakers largely rejected proposed spending cuts to the department during last year’s government funding process. 

Vought testified earlier this week that the administration expects to ask Congress for additional defense spending for the war in Iran, though he said he couldn’t give lawmakers a ballpark estimate for how much that will add to the current request for $1.5 trillion in defense funding. 

Lawmakers questioned Kennedy about dozens of other issues throughout the hearing, including how he’s spoken about vaccines since being confirmed HHS secretary, the rise in measles cases throughout the country and comments Kennedy and Trump made about the possible causes of autism. 

Utah Republican Rep. Blake Moore, after sharing that his 10-year-old is on the autism spectrum, said he was “underwhelmed” by what the administration has released so far about possible causes. 

He also said that his wife was hurt by claims from Trump and Kennedy that women who take Tylenol when pregnant could increase the risk their children are later diagnosed with autism. 

“We don’t even know if she took Tylenol during her pregnancy, but that was a hurtful moment for her,” Blake Moore said. “And I just want to encourage the administration and your team to keep at it. And I think there’s more we can do here with low expectations.”

Medical experts say that decades of research shows autism is the result of a combination of genetic and environmental factors.  

Measles death

California Democratic Rep. Linda T. Sánchez questioned Kennedy about comments he made during his Senate confirmation hearing on vaccines, arguing that he hasn’t stuck to the commitments he made during that process. 

She then asked him if the measles vaccine could have prevented a boy from dying of the disease in Texas. 

“It’s possible, certainly,” Kennedy said. 

But, he repeatedly declined to answer a question from Sánchez about whether Trump approved the Centers for Disease Control and Prevention’s decision to remove a messaging campaign to encourage vaccination, even as she asked it several times. 

Sánchez then displayed a poster showing a photograph of Kennedy and Kid Rock to illustrate her discontent with his work so far as HHS Secretary. 

“Now, one thing that I find incredible is that you suspended this pro-vaccine messaging campaign. But somehow you’re spending taxpayer dollars to drink milk shirtless in a hot tub with Kid Rock,” she said. “And somehow you think that’s a better public health message than informing the public about the importance of vaccines.”

Day care, Medicaid, Black maternal health

Illinois Democratic Rep. Danny K. Davis pressed Kennedy about whether he agrees with a statement Trump made earlier this month when the president said, “We can’t take care of day care. It’s not possible for us to take care of day care. Medicaid, Medicare, all of these individual things. They can do it on a state basis. You can’t do it on a federal. We have to take care of one thing, military protection.” 

Kennedy responded that he was “told to make a 12% cut across our department” because the national debt, which has accumulated over decades, has reached $39 trillion. 

“We’re now having to tighten our belt,” Kennedy said. 

Davis also questioned Kennedy on funding and initiatives to reduce Black maternal mortality, saying “the Trump administration is undermining Black maternal health from all sides.”

“The GOP slashed over a trillion dollars from Medicaid, which pays for over 40% of births in the United States. President Trump just proposed cutting maternal and child health programs by over $800 million,” he said. “DOGE canceled funds for several research projects that could save countless Black mothers, like the Morehouse School of Medicine research on improving the health of Black pregnant and postpartum women.”

Kennedy responded by arguing that he and others in the Trump administration are “doing more to advance maternal health than any other administration in history.”

“There was tremendous duplication in the departments. We had 42 different maternal health services in our department,” Kennedy said. “And we cut some of those and consolidated them. Right now, we are investing huge amounts of money in maternal health.”

In the eight states that expanded Medicaid after 2018, the number of people receiving prescriptions for the opioid addiction treatment medication buprenorphine increased dramatically, according to a paper that researchers will present next month.

The states that expanded Medicaid before that period also saw gains, but they were generally smaller. That’s because other changes, aside from Medicaid expansion, made buprenorphine easier to get after 2018.

The researchers found that among all patients — those covered by Medicaid, other insurers and the uninsured — the number of buprenorphine prescriptions increased in the eight most recent Medicaid expansion states (Idaho, Maine, Missouri, North Carolina, Oklahoma, South Dakota, Utah and Virginia) by more than 21% between 2019 and 2023. Maine, Oklahoma and Virginia saw the most dramatic increases.

Among the states that expanded Medicaid in 2018 or before, Kentucky, Vermont and West Virginia experienced the largest boosts. The study, published in February in JAMA Network Open, was conducted by researchers from Rutgers University and Indiana University, based on pharmacy claims data from retailers across the country.

Stephen Crystal, director of the Center for Health Services Research at Rutgers University and one of the authors, explained that buprenorphine became more accessible after 2018 as the federal government loosened various prescribing rules, including allowing prescribing via telehealth.

“Longer-term tracking shows that expansion, whether early or later, provides essential financial access and supports the growth of a provider network that improves population-level treatment rates,” Crystal told Stateline.

Experts warn that looming Medicaid cuts could cut off buprenorphine access to thousands of patients. The broad tax and spending law President Donald Trump signed last summer is projected to cut federal Medicaid spending by an estimated $886.8 billion over the next decade, largely because new work requirements will push people off the rolls, according to estimates by the Congressional Budget Office. CBO estimates that it could increase the number of people without health insurance by 7.5 million in 2034.

Opioid overdose deaths in the U.S. peaked during the COVID-19 pandemic, reaching a high of 81,806 deaths in 2022. They’ve fallen sharply since then, to 79,358 in 2023 and 54,045 in 2024.

Medicaid is  the largest payer of opioid use disorder treatment, and in 2023 it covered nearly half of all non-elderly adults in the U.S. with opioid use disorder in 2023, said Robin Rudowitz, a senior vice president at KFF, a health policy research group.

“Having health insurance is the main way for people to have consistent access to health care services, and also particularly for Medicaid, as most people are low income, and it provides protections against financial burdens,” Rudowitz said.

“And for (opioid use disorder) specifically, research shows that when people discontinue treatment, mortality risk increases. And for discontinuation of Medicaid, specifically, when coverage lapses, mortality rate increases.”

Stateline reporter Shalina Chatlani can be reached at schatlani@stateline.org.