KITTERY – The Homestead Nursing Home is closing and its owner pinned the blame Friday on low reimbursements that don’t come close to meeting costs.

Bill Gillis said Homestead would try to relocate its 24 nursing home residents and 21 residential care residents to other facilities in the area and help find jobs for displaced staff members.

Gillis, who bought the home two years ago, estimated that Homestead’s losses for the current year would total $340,000.

He said Medicaid reimbursements from the Department of Human Services are $85.85 per patient day below the costs of care for nursing home residents and $57.85 per patient day below costs for residential care.

“Unless our governor and state legislators stand up for the elderly, it should be expected that the current underpayment by DHS will result in more closing of long-term care facilities,” Gillis said.

While maintaining that low reimbursements were the primary cause of the closing, Gillis also cited a high lease rate on Homestead’s buildings and the growing scarcity and cost of health care workers. He also said DHS was in the process of reducing nursing home beds by requiring the elderly to have more acute health care needs.

Gillis said he and his partners still intend to move forward with plans to build an 80-bed long-term care facility in Kittery.

The larger home, to be completed in 2003, would be able to spread its costs among a larger number of residents, he said.