The State of New Jersey has totally failed to address the Assisted Living issue.  What are the RESULTS?!:

  • There are residents in Nursing Homes that don’t require that level of care and could function very well in assisted living but Assisted Living Facilities will not accept them on Medicaid.
  • Assisted Living Facilities can’t meet costs with the reimbursement and therefore refuse to admit Medicaid residents.
  • The State of New Jersey loses money every year, (money they can ill afford to lose,), because Assisted Living Medicaid reimbursements will always be less than Nursing Home reimbursements even if the rates were increased to encourage facilities to participate.
  • New Jersey  residents with monthly incomes over $2022 may never qualify for assisted living Medicaid because the N.J. legislature put a cap on income has never come back to readdress this oversight.

In 1996, to fill the gap in care and provide facilities for senior citizens with medical needs not requiring a nursing home, New Jersey built assisted living facilities and enjoyed immediate popularity.  Several large chains, e.g. the Marriot and Sunrise Assisted Living, led the way.  These facilities were luxurious, non-institutional in design and priced well below the cost of nursing homes.

But, and it is a very big “BUT”, the State of New Jersey failed to mandate that these homes take Medicaid patients and failed to provide a reasonable reimbursement rate for these homes. Instead, they paid them a flat rate to be supplemented by SSI. The total reimbursement from the State approximated $ 2600 per month.  In 1996, that wasn’t so terrible as the rates for new assisted living facilities were in the mid-$ 3000 to low $ 40000 per month.  But most of the assisted living facilities decided to forego accepting Medicaid because of the low reimbursement rates which would’nt even cover their costs.  Most of the new facilities were designed with private rooms and Medicaid rates were based on semi-private rooms.

Now, in 2010, fourteen years later, assisted living costs have escalated and most upscale facilities are charging $5K to $ 8K per month. Yet , the State reimbursement rates remain below $ 3000 per month.  With the exception of a 2001 regulation which mandated that facilities built after 2001 would have to accept 10% Medicaid, few Assisted Living facilities accept Medicaid. And the ones that accept them may demand 2 to 3 years of private pay before they’ll accept the resident on the Medicaid program.

This problem WILL NOT DISAPPEAR and our legislators are ignoring the issue!

For more detailed analysis of this issue, please visit our website at

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