Fiscal Cliff May Reduce Need for Home Care

The Fiscal Cliff, while it has the potential to impact all Americans, could actually stand to shift things in the home care arena by driving people who currently receive care at home into assisted living and skilled nursing communities instead.  

A deficit-reducing budget deal could boost senior housing and care community occupancy in upcoming quarters, indicated by a correlation between the amount of funding for programs to help older Americans age in place and the number of low-care residents in nursing homes.

States that have invested in their community-based service networks, particularly in home-delivered meal programs, have proportionally fewer low-care nursing home residents, according to “The Relationship between Older Americans Act Title III State Expenditures and Prevalence of Low-Care Nursing Home Residents,” published recently in Health Services Research


Researchers Dr. Kali S. Thomas, a postdoctoral fellow at Brown University’s Center for Gerontology and Healthcare Research, and Dr. Vincent Mor, Professor of Community Health in the Public Health Program of the Brown University School of Medicine, used state program reports and nursing home-level data to examine the relationship between state spending on Older Americans Act services and the percentage of low-care residents in nursing homes. 

Individuals were identified as low-care if they weren’t classified in the two lowest functioning RUG-III classifications, special rehab or clinically complex, and didn’t require any physical assistance for the following activities of daily living: bed mobility, toileting, transferring, and eating. The researchers looked at state-specific personal care, homemaker, chore, home-delievered meals, adult day care/health, and case management service expenditures in OAA registered programs. 

“In recent years, there has been an increase in expenditures on long-term services and supports aimed at keeping older adults in the community,” Thomas told SHN. “Accompanying these increases, we have seen a reduction in both nursing home occupancy and the percentage of residents in nursing homes who could perhaps be better served in less restrictive environments.”


The study found that increases in funding for HCBS were accompanied by a decrease in the proportion of low-care nursing home residents, from 17.9% in 2000 to 12.6% in 2009. 

Home-delivered meals were found to be especially helpful in keeping seniors with few significant ADLs out of nursing homes. Every additional $25 states spent on home-delivered meals was associated with a one-percentage-point decrease in the low-care nursing home population. 

These types of meal-based programs, in particular, are often “the first in-home service that older adults receive and can often serve as a primary access point for other HCBS,” Thomas and Mor cite the Administration on Aging, and also provide an “essential” service to caregivers by helping them maintain their own health and well-being.

The challenge for states and the Centers for Medicare & Medicaid Services (CMS) will be to build and invest in systems and programs that divert unnecessary nursing home placement for individuals who can successfully remain in their communities, the researchers conclude.

However, many states are facing huge budget constraints and frozen or reduced Medicaid funding. That’s not expected to get better, especially down the road as states who have expanded their Medicaid budgets will start getting less federal funding for additional beneficiaries. As states are forced to make cuts to Medicaid budgets, many home- and community-based programs stemming from the Older Americans Act may be the first to have their funding reduced.

With the fiscal cliff deadline approaching, many states’ Meals on Wheels programs are already thought to be in danger—a crucial component to low-care seniors’ ability to remain in their homes, the study suggests. That in turn could lead to more seniors entering nursing homes, or in some cases, residential care communities. 

“It is reasonable to assume that cutting the budget for these programs would reduce the ability for many older adults to remain independent in their homes,” Thomas confirmed to SHN. 

Access the study here

Written by Alyssa Gerace

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