The people of Butte, Nebraska say the state’s certificate of need (CON) laws are saving nursing home care in their community.
The Butte Senior Living Facility closed in April 2025 when its owner, Accura HealthCare, decided to shut down the facility. The town, with a population of 274, is now trying to find a solution for its aging residents.
The closure has made residents acutely aware of the state’s CON laws, which they must navigate to take over the facility or add additional beds.
Legislative Bill 437 would repeal Nebraska’s CON law. It is facing heavy lobbying from the nursing home industry, which says facilities are closing because of low Medicaid reimbursement rates and staffing shortages.
“We’re trying to solve a problem by addressing the wrong solution,” Jalene Carpenter of the Nebraska Health Care Association said at a March hearing, the Nebraska Examiner reported at the time.
Lower Supply, Higher Prices
There are many reasons why nursing homes are closing, including laws that eliminate competition, says Stephen Moses, a visiting fellow at the Paragon Health Institute and president of the Center for Long-Term Care Reform, which advocates for universal access to top-quality long-term care through private financing as an alternative to Medicaid dependency.
“CON laws harm more than they help,” said Moses. “The main problem is excessive Medicaid dependency and inadequate reimbursements.”
Many states enacted CON laws decades ago in a bid to protect markets for health care facilities and equipment. The idea was to encourage health care investment when costs were high.
Instead, CON laws limited the supply of nursing home beds, which drove up the cost for care, allowing states like Nebraska to bill Medicaid for more money, Moses noted in a 2003 article, “The Heartland Model for Long-Term Care Reform: A Case Study in Nebraska,” published on his organization’s website.
Growing Dependence on Medicaid
A report by Moses in October 2022 for the Paragon Health Institute, “Long-Term Care: The Problem,” described how income is no longer an obstacle for qualifying for Medicaid to pay for long-term care.
The ease in qualifying for Medicaid has given consumers little reason to save for long-term care or buy private insurance for it. Over time, Medicaid tightened up the rules, but an industry of attorneys and financial consultants emerged to help consumers dodge them.
“CON laws make it difficult for innovation,” said AnneMarie Schieber, a research fellow at The Heartland Institute and managing editor of Health Care News, “In the case of Butte, the residents might develop an ‘out of the box’ solution to care for their disabled, such as a direct-pay model, something CON isn’t set up to consider. Beds would certainly be needed, but immediately, a CON board could set up any roadblock or deny the request in its entirety.”
Some companies may have an ulterior motive for supporting CON laws, says Schieber.
“CON laws have been used by big players to keep competitors out of the market,” said Schieber. “Nobody likes a better, cheaper disrupter.”
Kenneth Artz ([email protected]) writes from Tyler, Texas.
Artz has more than 20 years’ experience in nonprofit organizations, publishing, newspaper reporting, and public policy advocacy.
