LEGISLATIVE FISCAL ESTIMATE

SENATE, No. 3319

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: DECEMBER 3, 2024

 

 

SUMMARY

 

Synopsis:

Increases personal needs allowance to $140 for low-income persons residing in certain facilities.

Type of Impact:

Annual increase in State expenditures and revenue; potential increase in annual county expenditures.

Agencies Affected:

Department of Human Services and county-operated psychiatric hospitals.

 

 

Office of Legislative Services Estimate

Fiscal Impact

CY 2025

CY 2026

CY 2027

 

 

State Expenditure Increase

 

 

 

At least $27.5 million, adjusted for indeterminate county share

 

At least $28.2 million, adjusted for indeterminate county share

 

At least $28.9 million, adjusted for indeterminate county share

 

 

State Revenue Increase

 

 

 

At least $11.7 million in federal Medicaid  reimbursements, plus indeterminate county reimbursements

At least $12.0 million in federal Medicaid reimbursements, plus indeterminate county reimbursements

At least $12.3

 million in federal Medicaid reimbursements, plus indeterminate county reimbursements

 

Potential County Expenditure Increase

 

Indeterminate

 

Indeterminate

 

Indeterminate

 

 

 

 

 

·         The Office of Legislative Services (OLS) concludes that State expenditures would increase by at least $27.5 million in CY 2025 due to increasing the monthly personal needs allowance  by $90 for residents of nursing homes, State and county psychiatric hospitals, and State developmental centers who receive Medicaid with or without Supplemental Security Income (SSI) benefits.  The State would receive $11.7 million in additional federal Medicaid reimbursements, for a net State cost of $15.8 million.  This estimate assumes that all necessary federal approvals are received and the bill is implemented January 1, 2025.

·         The OLS estimates that State expenditures would increase by $28.2 million in CY 2026 and $28.9 million in CY 2027, while revenue from federal Medicaid reimbursements would increase by $12.0 million and $12.3 million, respectively, due to required annual cost of living adjustments.  

·         The State and counties would divide portions of the increased personal needs allowance costs incurred under the bill for certain patients.  The OLS lacks the informational basis to estimate the county versus State shares of such costs, or the associated county reimbursements to the State.

·         The OLS anticipates that the bill will generate additional State expenditures and revenues associated with residents of private psychiatric hospitals and private intermediate care facilities, but available data were insufficiently detailed or timely to estimate those impacts.

 

 

BILL DESCRIPTION

 

      This bill increases the monthly personal needs allowance from the current rate of $50, pursuant to the FY 2025 Appropriations Act, to $140 for Medicaid-eligible residents of nursing homes, psychiatric hospitals, and intermediate care facilities (including State developmental centers) who do not receive federal SSI benefits.  For Medicaid-eligible residents of these institutions who receive federal SSI benefits, the bill also increases SSI State supplementary payments to provide total payments of $140 per month when combining the State and federal SSI payments.

      Additionally, the bill increases the monthly personal needs allowance to a minimum of $140 for SSI recipients residing in rooming and boarding houses and residential health care facilities.

      The bill stipulates that, beginning January 1 of the year following the bill’s enactment and annually thereafter, the personal needs allowance for Medicaid-eligible institutional residents not receiving federal SSI and for SSI-eligible residents of rooming and boarding houses and residential health care facilities will be increased by the same percentage as the Social Security benefit cost of living adjustment for that year.  The SSI State supplementary payments for institutional residents who are eligible for both Medicaid and federal SSI will be increased by the same percentage.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that State expenditures would increase by $27.5 million in CY 2025 due to increasing the monthly personal needs allowance by $90 for an estimated 24,874 residents of nursing homes, State and county psychiatric hospitals (for patients not subject to federal Medicaid exclusions), and State developmental centers who receive Medicaid with or without SSI benefits.  State revenue would increase by $11.7 million due to federal Medicaid reimbursements for a portion of these expenditures, for a net State cost of $15.8 million.  This estimate assumes that all necessary federal approvals are received and the bill is implemented January 1, 2025.

      Currently, Medicaid beneficiaries residing in these institutions retain $50 per month as a personal needs allowance from any personal income that must otherwise be contributed to the cost of their care.  For Medicaid beneficiaries who do not receive federal SSI payments and who contribute other income toward their institutional care, increasing the personal needs allowance to $140 would require the State to pay an additional $90 per month to Medicaid providers or managed care organizations, as applicable, to offset the reduced beneficiary contributions.  The OLS estimates that 21,210 such Medicaid recipients would experience a decrease in their contributions to care under the bill, which would increase State Medicaid expenditures by $23.5 million in CY 2025.  These Medicaid expenditures would generate $11.7 million in State revenue from federal Medicaid reimbursements, for a net State cost increase of $11.7 million for this population.

      Separately, for Medicaid beneficiaries residing in these institutions who are also federal SSI recipients, the federal SSI payment provides $30 per month for an eligible recipient’s personal needs allowance.  The State currently supplements the federal SSI payment by $20 to ensure that those SSI recipients receive a $50 total monthly payment equal to the current personal needs allowance for other Medicaid recipients in institutional care.  Under the bill, the State would increase its SSI supplementary payment by $90 to provide a total monthly benefit of $140 when combined with the federal SSI payment.  In CY 2025, the OLS estimates that State expenditures would grow by $4.1 million from providing these increased supplementary payments to 3,664 Medicaid beneficiaries who are SSI recipients and receiving institutional care.  These increased State supplementary payments would not be eligible for any federal reimbursements.

      The bill’s total impacts on State expenditures and revenue would grow in future years due to annual increases in the monthly personal needs allowance amount linked to Social Security cost of living adjustments.  Assuming annual 2.5 percent increases based on the 30-year average of past cost of living adjustments, State expenditures would increase by $28.2 million in CY 2026 and $28.9 million in CY 2027, while State revenue from Medicaid reimbursements would increase by $12.0 million and $12.3 million, respectively.  Future years would show similar year-to-year growth if the Social Security inflator follows historical averages, although variation is possible.

      The OLS does not anticipate that the bill’s provision increasing the monthly personal needs allowance to a minimum of $140 for SSI recipients residing in rooming and boarding houses and residential health care facilities (which do not include nursing homes, psychiatric hospitals, or intermediate care facilities) would have a State fiscal impact since residential expenditures for these settings are generally not Medicaid-reimbursable and since federal SSI payments for eligible residents in these settings already exceed $140 per month.  The OLS also notes that, under current regulations, the States’ monthly personal needs allowance for individuals residing in such settings currently exceeds $140 in 2024.

      The State and counties would divide the bill’s increased personal needs allowance costs for patients at county psychiatric hospitals, as required under current law, while counties would reimburse the State for portions of county patients’ costs at State psychiatric hospitals and developmental centers.  However, the OLS lacks the informational basis to estimate the State versus county share of increased county facility costs or the amounts of additional county reimbursements for increased State facility costs.

      Finally, this estimate does not account for Medicaid-eligible residents of private psychiatric hospitals and private intermediate care facilities for persons with developmental disabilities.  To the extent that these residents receive Medicaid coverage for their institutional care, either with or without SSI benefits, the State costs and revenues incurred under the bill would increase accordingly.  Due to insufficiently detailed and timely data regarding such residents, however, the OLS cannot quantify those additional fiscal impacts.

 

 

Section:

Human Services

Analyst:

Sarah Schmidt

Lead Research Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).