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Medicaid's Bias for Institutionalized Care May Be Shifting under President Biden's Proposed American Jobs Plan

September 27, 2021
By Donald A. Dennison


Medicaid is a federal program, administered through the states at the county level, and created under the Social Security Act, 42 U.S.C.A. S. 1396 to 1396 w-5. The various Medicaid programs in New Jersey (all falling under the umbrella of NJ Family Care) are overseen by the Department of Human Services’ Division of Medical Assistance and Health Services (“DMAHS”).

In New Jersey, the Managed Long-Term Services and Supports (“MLTSS”) Medicaid program is most often utilized by those seeking long-term care and who meet Medicaid’s eligibility requirements. Once eligible, Medicaid will pay for round-the-clock care in an institutional setting, such as a nursing home, so long as the individual maintains eligibility.

Unfortunately, the same amount of care is not afforded to those who decide to remain in their home and receive community-based services through the MLTSS program. Under the home and community-based services waivers (“HCBS”), states participating in the federal Medicaid program must implement a plan to offer HCBS to individuals who wish to remain in the community. Under these plans, however, Medicaid will not pay for round-the-clock care. In New Jersey, for example, it is difficult to obtain more than forty (40) hours per week in-home care under New Jersey’s HCBS waiver.

In the 1999 case Olmstead v. L.C., the United States Supreme Court held that disabled people who are capable of living in the community, with appropriate supports, have a right to live in the community; and any attempt to segregate individuals with disabilities into facilities is a violation of Title II of the Americans with Disabilities Act (“ADA”). Under the “Olmstead test”, public entities must provide community-based service options to persons with disabilities when:

  1. Such services are appropriate (appropriateness is typically determined by a licensed physician);
  2. The affected persons do not oppose community-based treatment; and
  3. Community-based services can be reasonably accommodated, considering the resources available to the public entity and the needs of others who are receiving disability services from the entity.

But what happens when individuals are only offered forty (40) hours per week of home-based services? The answer is simple: those who require more hands-on care are essentially forced into skilled nursing facilities for their ongoing care. As a result, the effect of the HCBS hour “cap” produces the very results Olmstead sought to rectify.   

President Biden’s American Jobs Plan (which is currently being proposed) allocates $400 billion for Medicaid’s HCBS programs, intending to expand eligibility and increase access to its benefits. The net effect would enable Medicaid recipients to receive additional services at home rather than being forced into nursing homes.  This proposal comes at a critical time due to the impact of the global pandemic. As of September 21, 2021, 135,427 long-term care facility residents have died from COVID-19[1] and remain at increased risk of infection despite vaccination mandates.

Individuals who require advanced custodial care should not be forced into institutional settings as a condition of qualifying for Medicaid. Now, more than ever before, those who wish to receive services in the comfort and safety of their own homes should be able to do so without jeopardizing their health and well-being. The American Jobs Plan may be the first step in rectifying this institutional bias. If you have questions regarding qualifying for government benefits and the impact on custodial care planning, please contact the Elder Law Department at Mandelbaum Salsburg.


[1] Data from the Centers for Medicare and Medicaid Services website: https://data.cms.gov/covid-19/covid-19-nursing-home-data. This number represents the figures reported to the Centers for Medicare and Medicaid Services and does not represent the actual number of COVID-19 related deaths in long-term care facilities. In fact, this estimate is quite conservative, and the actual numbers are thought to be much higher.   

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