Years in the making, Democratic Gov. Tom Wolf’s administration is rolling out a new Medicaid feature that’s designed to reduce the future number of enrollees in nursing homes and, along with it, a fast-growing expense in a state where the elderly population is exploding.
The program takes effect Jan. 1 in 14 southwestern counties. A launch is planned in 2019 for Philadelphia and its four collar suburban counties and in 2020 for the remaining 48 counties across central and northern Pennsylvania.
It is perhaps the biggest change in Pennsylvania’s $30 billion Medicaid program since 2015, when income eligibility guidelines expanded at the close of Republican Gov. Tom Corbett’s administration to include hundreds of thousands of low-income adults.
This shift means insurers will be paid to manage Medicaid’s long-term care services, with a financial incentive to get enrollees the nursing care and services they need in a home, where it is half as expensive as a nursing home.
“Long term, you are expecting to see savings because you are going to be seeing more people getting services in a less expensive environment, which also happens to be where people want to get their services, at their home,” said Teresa Miller, Wolf’s acting human services secretary.
The cost difference is significant, as it’s roughly $62,000 per year for nursing home care and half that for skilled nursing care at home, state officials say. State officials expect this to slow the growth of the state’s Medicaid-covered daily nursing home population of more than 50,000.
Few people may actually move out of nursing homes as a result of this shift. Often, just finding a place to live for someone who has made a nursing home their home is a complicated task.
What is more likely is that the system will help someone stay in their home longer when they have a health complication that requires more attention, said Richard Edley, executive director of the Rehabilitation and Community Providers Association, which represents agencies that work with the disabled.
The drive to save money on care for the elderly comes as the number of adults 65 and older in Pennsylvania is expected to grow by a third over the next decade while the number of working-age residents shrinks.
Medicaid currently covers home nursing help, but insurance companies are expected to simplify the bureaucracy and respond quickly to needs in a system that, some say, encourages a move to a nursing home, is difficult to understand and can be slow to respond.
“There’s a financial incentive for them to make it as smooth as possible and clear the bureaucratic hurdles that are there right now that prevent people from getting those services under Medicaid as quickly as they may want to right now,” said Ray Landis, of the AARP’s Pennsylvania chapter.
Much of Pennsylvania’s Medicaid program is already administered by insurers. By adding long-term care to the insurers’ portfolio, Pennsylvania will join about half the states, with many more considering it, state officials say.
Wendy Fox-Grage, a policy adviser to AARP, said it is difficult to say whether insurers have improved the delivery of long-term care services overall, in part because their data on costs and outcomes is confidential.
Providers, from home health groups to nursing home operators, worry about glitches in a new payment system, and some say that many details of how they are supposed to coordinate with insurers are a mystery.
Hiring insurance companies to manage Medicaid’s long-term care provision in Pennsylvania has been discussed for well over a decade.
The idea ran into opposition from nursing homes, suspicion of for-profit insurance companies, territorial battles and — after Wolf’s administration began pushing for it in 2015 — delays in scrounging the money necessary to get the program on its feet.
Meanwhile, other states forged ahead and provided a road map.
“Everybody just came to the realization that we can do this better with this kind of system than we’ve been doing it up to this point,” Landis said.
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