POULSBO — Although Gov. Gary Locke’s budgetary rock has yet to make a splash in the pond, his proposal to cut $1.6 billion for 2002 is already causing ripples throughout many long-term care facilities in Washington and particularly in Kitsap.

The proposed cut of $71 million state-wide in Medicaid related funding has administrators at long-term care facilities wondering how they will make up the losses if the Legislature backs the proposal in their budget this month. Potential waves created by a budget cut could threaten the existence of Martha and Mary Lutheran Services Center in Poulsbo, as reported in the Herald last week.

Other area long-term care facilities, Liberty Shores Assisted Living Community and Harbor House Alzheimer’s Community on Viking Avenue would also feel the impact .

Sigrid Howard, administrator at Liberty Shores and Harbor House, said while her facility’s expected Medicaid loss of $25,000 each year pales in comparison to the expected $1.1 million budget slash at Martha and Mary, the cuts are still significant.

“We’re in a much different boat than Martha and Mary,” Howard explained, noting that her center was not as reliant on the the state-sponsored program — which assists low-income seniors with health problems — as the Lutheran services center.

Nonetheless, proposed reductions will affect how many Medicaid residents Liberty Shores and Harbor House can afford to care for. The combined center actually consists of two separate facilities; with 62 assisted-living residents at Liberty Shores and 47 Alzheimer’s patients at Harbor House.

Howard estimated that 25 percent of the latter group was reliant on the state-sponsored health care. Costs associated with caring for Alzheimer’s patients are much higher because they often require 24-hour care.

But under the proposed budget, it would be much more difficult for facilities to retain such residents who rely on Medicaid.

“They’d be displaced,” Howard said. “We’d have to find them another place to live, but there is no guarantee that we’d be able to do that in Poulsbo or anywhere nearby for that matter.”

Another problem, she explained, is the fact that many of the larger long-term care facilities in Seattle were opting not to renew their Medicaid contracts with the state — meaning that not only will more seniors be looking for homes, but there will be even fewer places for them to live.

“We’re just not going to have as many options,” Howard said, shaking her head before adding, “I find it absolutely dreadful that residents who have lived with us for two or three years might have to move.”

But if the state budget passes as proposed by the governor, this is exactly what would happen, she admitted.

Unlike Martha and Mary, which has an 111-year-old tradition of opening its doors to everyone in need, Liberty Shores and Harbor House has the option of accepting only privately insured patients. However, it is not an option which Howard would like to take.

“I want to keep our (Medicaid) contract. We have a responsibility to our residents,” she said. “But we’ll need to make some tough choices.”

Howard said it costs about $85 each day to feed and care for each resident and Medicaid reimburses Liberty Shores and Harbor House anywhere from $58-65 for qualifying seniors. While the center would not lose all of its state dollars, Howard noted that the anticipated $5 a day loss per resident would be enough to cause problems for her organization.

“This will have a major impact on communities,” she pointed out. “We’ve got to find other ways to fund the shortfalls and not do this to the most vulnerable people in our society.”

U.S. Rep. Jay Inslee agreed.

“This is a big problem,” Inslee said last week from Wash., D.C. “We are trying to increase the Medicaid reimbursement rate nationally.”

Inslee said Washington was in a unique situation because its level of Medicaid reimbursement has historically been on the low end. With financial duress sweeping the country, he said, it would be even harder for the state to catch up with the rest of the nation.

“It’s a double whammy,” he explained. “In order to finance tax cuts, Medicaid has not been adequately funded. This is a very acute problem. I’m trying to get the majority of people here (in Washington, D.C.) to support this because we’re basically raiding Medicaid to pay for tax breaks for the wealthy and special interests.”

And in Olympia, as local long-term care officials await the outcome, a vote on the proposed budget in the Senate could come as early as this week.