New Jersey has become the latest state to allow Medicaid coverage to pick up in-home care costs for senior citizens. By now, it has become widely recognized that nursing homes are extremely expensive, and not always the best choice for everyone, so states are trying to improve care and cut costs simultaneously. New Jersey Governor Chris Christie is scheduled to put this new amendment in New Jersey’s state health insurance into action this week.
The law has some creative aspects to it which are designed to help seniors that make more money than what the state’s Medicaid program typically allows still receive funded in-home care. Excess money above the state maximum of $2,163 per month is put in an approved trust account at a bank, and then in-home care becomes paid for by the state, with the trust being used only for previously approved expenses.
It’s a framework that will hopefully be picked up by many other states in the near future, and improved upon as it goes. Ultimately, New Jersey’s move is a response to the fact that existing Medicaid policies all over the nation are forcing seniors into nursing homes prematurely. It is expensive for the state to have to fund this, and it isn’t fair to the elderly that do not wish to be in a nursing home against their will and without an actual medical cause to be there. Almost $100 million of the state’s resources have been set aside by the state to help fund this new project, but there’s really no good estimate as to how popular the program will be. It also doesn’t take into account future usage which will likely increase if it is implemented successfully, especially considering the growing senior population.
In New Jersey, the average nursing home stay costs about $205 per day, the state says. In-home care is much cheaper, with some estimates saying that it can be provided for at about half of that cost. But, even if New Jersey is only able to cut their senior care costs by 25 percent with this new program, it will still be a huge savings. The state has budgeted $125 million for this next fiscal year to long term care, and saving a good portion of that would help immensely. Other states with larger populations would benefit even more, especially places like New York and California where the cost of living is high and the senior population is much higher.
There are some risks with this, namely, the fact that it enables more people to be able to legally enroll in the state sponsored Medicaid program. However, even with new enrollees benefiting from a state paid insurance policy, it should still save money. More than half of all nursing home stays are paid for by Medicaid in New Jersey, a trend that is extremely common all over the country. Cutting some of these costs will only benefit the state in the long run, even if the initial launch of the program counts as a short term loss. Because of the high quality and low cost of in-home care, the success of this is highly likely.
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