Association for Public Policy Analysis & Management

One in three 65-year-olds will require long term care at some point in their lives. Most nursing home stays cost over $3,500 a month, an expense that eventually exhausts the financial resources of most families. Medicaid currently covers these expenses for 6 out of 10 nursing home residents. Not all those who require care need enough help to justify moving into a nursing home, but in many states Medicaid will not pay for care received at home. In these states, moving into a nursing home is the only way to get help paying for care. The Balancing Incentives Program (BIP), which is part of the Affordable Care Act, encouraged states that spend most of their Medicaid dollars on nursing home care to adopt programs and practices that extend coverage for care while living at homes, living with relatives, or living in assisted living facilities. In participating states, the BIP may have enabled some elderly to return to home and community settings or prevented them from needing to move into nursing homes. When living outside of a nursing home, low income elderly may also be eligible for Supplemental Security Income (SSI) payments. SSI is income assistance available to financially needy elderly, disabled and blind persons living in the community. People living in nursing homes are generally not eligible for SSI. Our project will examine whether and how the BIP changed living arrangements and receipt of SSI. It is a first step towards understanding whether the BIP improved the lives and well-being of economically-disadvantaged elderly adults. If changes in living arrangements are found, future work will examine the impact on the health of those affected and on relatives who may be providing or coordinating their care.