This is, perhaps, the last in my series of blog posts on Medicaid Estate Recovery (MER) and Why Rep. Jan Schakowsky’s H.B. 6698, Stop Unfair Medicaid Recoveries Act, must pass.
The idea of MER is to help with funding of the Medicaid Long Term Care program. It has failed to do that bringing in, on the average .5% of the Medicaid LTC budget. Yes, that is one half of one percent.
How Medicaid Could Save 28 Times as Much as MER – Pay for Custodial Care in Assisted Living Facilities
Here is the simple solution that could save the Medicaid budget many, many times more: Pay for custodial care in assisted living facilities.
The Alzheimer’s Foundation reports that 48% of nursing home residents have Alzheimer’s or other dementing diseases. Many of these residents moved from assisted living facilities where they received custodial care to the nursing home because they ran out of money to pay. Medicaid will pay for this care in a nursing home.
According to the Genworth Report in 2021 the average cost of a semi-private nursing home care is $94,900. The cost of assisted living is $54,000. If Medicaid paid $54,000 per year instead of $94,900 it would save $30,900 per resident, how much might it save?
Of course, not every Medicaid nursing home resident receives only custodial care. So what if two thirds of that 48% could have Medicaid pay for care in an assisted living facility instead of a nursing home? That would be 32% of the nursing home residents. And if Medicaid saved 30% on 32% of the LTC population Medicaid’s bill would be 86% as much. That savings is 14%.
For the math folk it works like this. Suppose there are 100 residents in a nursing home. If Medicaid pays 94,900 for each per year the total is $9,490,000. But if Medicaid pays $54,000 for 32 residents that is $1,728,000. Then Medicaid pays $94,900 for 68 residents: $6,453,200. The total is $8,181,200. That is 86% as much for a 14% savings. A 14% savings is 28 times greater than a .5% savings.
Seems simple because it is.
All the best,
Jim