WINTHROP — In an old farmhouse on a rural road, 24 elderly Mainers live in a residential care facility that would run out of money July 1 under a proposal by Gov. Paul LePage.

The Heritage Rehabilitation and Living Center is one of about 470 private non-medical institutions scattered around the state that are supported mostly by state and federal Medicaid dollars. They are home to people like Errie Hasty, 89, who moved in almost five years ago when she could no longer manage her medications by herself.

“I wasn’t giving myself the right stuff,” she said as she stood in the dining hall, using a walker to steady herself.

Hasty is one of the 4,291 elderly people in the state who would need to find somewhere else to live if the facilities close. Many of them would be eligible to live in nursing homes, but there are only about 400 available beds statewide, advocates for the elderly say. The facilities also provide residential care to those with mental illness or substance abuse problems, so the total number of people affected by the loss of funding is about 6,000.

Closing the facilities would save the state $60 million and reduce federal matching funds that the state receives by more than $100 million.

When it comes to controversial parts of LePage’s proposal to close a $221 million budget shortfall at the state Department of Health and Human Services, this is at the top of many lawmakers’ lists.

“Assuming 10 is most important, I would put it at 10,” said Rep. Meredith Strang Burgess, R-Cumberland, House chairwoman of the Legislature’s Health and Human Services Committee.

That committee and members of the Appropriations Committee will meet today to continue deliberations on the budget, which proposes to end Medicaid coverage for 65,000 Mainers.

The LePage administration says the residential care program is no longer sustainable as currently structured because the federal government is raising questions about the way Maine has billed for services. LePage spokeswoman Adrienne Bennett says there is money in the budget to help transition away from the system, but the budget does not spell out an alternative.

That’s up to lawmakers.

Sen. Roger Katz, R-Augusta, a member of the Appropriations Committee, said he’s confident lawmakers will find a way to answer the federal government’s questions and maintain the state’s eligibility for reimbursement for the residential care services. But they will then have to find other ways to save the $60 million. Overall, the state does need to reduce the number of people enrolled in MaineCare, the state’s Medicaid program, Katz said.

“We’ve got to come back to fiscal sanity and still protect the most vulnerable,” he said.

Rep. John Martin, D-Eagle Lake, also a member of the Appropriations Committee, said there’s little chance the proposal to close the facilities will have any traction at the State House.

“I don’t know of any legislator that would ever vote for that,” he said, noting that it’s the part of the budget that has the most immediate impact on people.

These types of assisted-living facilities began to open in the mid-to-late 1990s, when the state decided it wanted to reduce the number of people living in nursing homes to cut costs, said Rick Erb, president of the Maine Health Care Association. Nursing homes are a more expensive way to provide care, and in today’s dollars, cost Medicaid about $178 per day. Assisted-living facilities cost about $98.

Back in the 1990s, the state changed its standards so people had to be sicker to get into nursing homes, which drove up demand for home care or assisted-living facilities. The state reduced the number of nursing home beds from 11,000 to fewer than 7,000, with most of those beds being converted to the less costly option of a private non-medical institution, Erb said.

The Winthrop facility expanded at that time, so roughly half of its beds are assisted living and half are nursing home beds, said Matthew Lessard, administrator of the center. Of the 24 assisted-living residents who now live there, 20 are on Medicaid and four are private payers.

If the facility loses all of its Medicaid patients, it could not afford to stay open for the four people who pay with their own money, Lessard said.

In addition to helping people take the right medications, staff helps residents bathe and get dressed and makes sure they are getting meals. In Winthrop, there’s a day room where residents Skype with family or surf the Internet.

About half of those who live at each facility suffer from some form of dementia. Some — like Hasty — read daily newspapers, play bingo or attend church services. They can’t live on their own, but they also don’t need the kind of skilled medical care that’s provided in a nursing home.

Hasty is a widow, and only one of her four children lives in the area. She doesn’t know where she would live if the facility closes, and said nearly all of her fellow residents would have few options.

“That would be a drastic thing to do,” she said. “I’d probably be under a bridge somewhere.”

Lawmakers say they won’t let that happen.

Martin said other states have figured out how to comply with federal rules and keep the facilities open, and Maine will too. He recognizes that the proposal has caused stress for those who live there.

“So many of them in those facilities are very alert,” he said. “They read the newspaper and watch the news. How disturbing this must be for them.”

Strang Burgess said the public outcry in opposition to the proposal, which has included calls to her home, has been loud and clear.

“To individuals in these situations,” she said, “the message needs to be, ‘We get it. We understand. We’re working on it.’ “

MaineToday Media State House Writer Susan Cover can be contacted at 620-7015 or at: scover@mainetoday.com