(CNN) -- More than 30,000 Medicaid recipients in Louisiana, many in nursing or group homes, could lose their benefits due to proposed state cuts -- a situation that could force thousands to move.
Louisiana Department of Health Deputy Secretary Michelle Alletto said the agency will notify about 37,000 Medicaid recipients, whose eligibility to receive the benefit could end on July 1, they may have to move out of the nursing and group home facilities because of the lack of state funding.
The letters, which will be mailed out Thursday, also will go to Medicaid patients with developmental disabilities and some who receive home-based services to give recipients time to develop appropriate plans, the agency said. The health department also will evaluate any eligibility options, according to the agency.
"We cannot provide services with no money to pay for them," agency Secretary Dr. Rebekah Gee told reporters Wednesday.
The proposed cuts could force nursing homes to close, leaving more than 25,000 people unemployed, according to the Louisiana Nursing Home Association.
At least one nursing home has started notifying people about the possible loss of benefits.
"Worried over calls from Broadway Elder Living Center advising that #Medicaid support for my 90 y/o father (a Korean War vet) and my 86 y/o mother may get cut off," David Grabert wrote on social media on Tuesday.
"Mom called me crying over this unconscionable threat to losing nursing home care desperately needed," Grabert wrote.
Grabert couldn't be reached late Tuesday.
Medicaid is a health insurance program for certain low-income individuals and their families that is jointly run by the federal government and individual states. People 65 years of age or older who meet the income and asset limits for their state are eligible for Medicaid.
More than 1 million people are part of the Medicaid program in Louisiana, health officials said.
Last month, the Louisiana House of Representatives approved a state budget that would cut four Medicaid programs for the disabled and elderly, The Times-Picayune reported. The House version of the state budget included $538 million in state health care cuts, the paper said, citing documents from the health department.
The four programs are optional programs under Medicaid that the state doesn't have to provide to maintain its status as Medicaid provider, said Jay Dardenne, commissioner of the Division of Administration.
The largest of the four programs slated for elimination is the Medicaid Long Term Care Special Income Level Program, which provides Medicaid to the elderly, blind and disabled with incomes between $750 a month and $2,250 a month or less, according to state health officials.
Alletto said that group includes 17,000 people living in nursing facilities, about 2,000 in group homes for those with developmental disabilities, another 7,000 receiving certain waivers from the health department and hundreds of other people in community-based programs.
The Louisiana Nursing Home Association said the Medicaid Long Term Care Special Income Level program provides health services for about 80% of nursing facility residents.
Alletto said other Medicaid programs are slated to be affected in the proposed budget, including outpatient drug and alcohol treatment for those with a substance use disorder and mental health programs for adults.
Dardenne said the health department need about $648 million to fund the programs slated to be cut.
"The budget that left the House of Representatives, as we all know, has eviscerated the Medicaid program," Dardenne said.
'The stress .... could kill people'
Jim Tucker, CEO of CommCare Corp., a nonprofit that operates 12 nursing homes in Louisiana, said residents could be affected by the glum news.
"Our patients are old, they are frail. They have multiple health issues,' said Tucker, a former speaker of the Louisiana House. "And the stress of coming to realize that they are going to lose their funding that allows them to stay in a nursing home, and have no other known option, I believe could kill people."
"It is the worst treatment for Louisiana 's greatest generation that you could possibly fathom coming out of Baton Rouge," Tucker said.
The Senate hasn't voted on the budget yet, The Times-Picayune reported.
The budget shortfall is largely a result of the elimination of certain state taxes, which are set to expire on June 30, The Times-Picayune said. Dardenne said the loss amounts to about $1.4 billion.
Once residents are deemed ineligible for the benefits, "they will have to be discharged from their nursing facility overnight, leaving their families to scramble to find other housing options and the vital healthcare services that they require to continue to live," said Mark Berger, director of the Louisiana Nursing Home Association
Changes to the Medicaid system, however, will not happen overnight.
The state would have to get approval from federal Centers for Medicare & Medicaid Services, and nursing homes residents can appeal the state's request, Tucker said. If the state's request is approved, the state would have create plan to relocate Medicaid recipients.
Some nursing homes are hoping for the best.
"We've been knowing about this, but now it's real and it's not about the letter, it's about the faces of real people who we've been serving for years and years," Sister Ann Lacour of Chateau de Notre Dame, a New Orleans faith-based retirement community, told CNN affiliate WVUE.
She added: "Hopefully we won't have to work with it because our Legislature will find a solution to answer this."
CNN's Amanda Jackson contributed to this report.
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