Assisted Living Regulations in New Jersey Need Serious Revision

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


(1)   There are residents in Nursing Homes that do not require that level of care and could function very well in assisted living but the Assisted Living Facilities will not accept them on Medicaid.

(2)   Assisted Living Facilities cannot meet costs with the reimbursement and therefore refuse to admit Medicaid residents.

(3)   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.    

(4)   Residents of New Jersey with monthly incomes over $ 2022 may never qualify for assisted living Medicaid because the N.J. legislature put a cap on income and never came back to readdress this oversight. 



In 1996, the State of New Jersey began licensing Assisted Living Facilities to provide a service that prior to that time was unavailable. Until that time, elderly New Jersey residents had limited choices:


(1)   Living at home independently if they were capable.

(2)   Living at home with home health care if they could afford the costs. 

(3)   Luxury Care facilities where one could rent a private room, have elegant meals under the auspices of a dietitian and food service supervisor, housekeeping services and minimum supervision. The costs for these homes were beyond the means of the average person. 

(4)   Residential Health Care or Boarding Homes, which consisted of small facilities, mostly older homes with multiple bedrooms that had been converted to accommodate guests, where the costs were reasonable, but the accommodations were modest, most often sharing a room with one or more other residents and sharing a bathroom with many residents.  The meals would still be under the auspices of a dietitian and food service supervisor, but the fare was very average.  Some of these homes would accept SSI residents, which meant there monthly reimbursement ranged between $ 600 and $ 700 per month for “all services. 

(5)   Skilled nursing facilities for those whose medical needs exceeded the services provided by boarding homes and residential care facilities and who could not be managed in their own home due to lack of finances, or medical conditions that needed close monitoring. 


In order to fill the gap in care and to provide a facility for senior citizens with medical needs, but not requiring a nursing home, assisted living facilities were built in the State of New Jersey and became popular immediately.   Several large chains, e.g. the Marriot and Sunrise Assisted Living, led the way in New Jersey.  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.  Now in 1996, that wasn’t so terrible as the rates for new Assisted Living Facilities were in the mid-$ 3000 per month to low $ 40000 per month range.  But, even in 1996, most of the Assisted Living facilities decided to forego accepting Medicaid as they felt that the reimbursement rates were too low and would never cover even their costs.  Additionally, most of the new facilities were designed with private rooms and Medicaid rates were based on semi-private rooms. 


Now, we are in 2010, FOURTEEN YEARS LATER!  Assisted Living costs have escalated and most of the up-scale facilities are charging $ 5000 to $ 8000 per month. But 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 two to three years of private pay before they will accept the resident on the Medicaid program. 

3 thoughts on “Assisted Living Regulations in New Jersey Need Serious Revision”

  1. View the member only New Jersey Senior Living state page for links to current regulations and legislation that may impact senior living in New Jersey.

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