Legislation Would Protect Housing for Seniors on Medicaid

A new bill being considered by New Jersey lawmakers would ensure that seniors residing in assisted living facilities would keep their housing even after their money ran out and they qualified for Medicaid. (1)

The bill would require companies that operate assisted living facilities within the State to set up escrow accounts that would be used to cover the living and care expenses of residents at similar facilities should the company close its facilities for any reason. In this way, companies would be prevented from evicting individuals who have spent all of their money and subsequently qualify for Medicaid. (1)

This measure is in response to a 2009 case involving Assisted Living Concepts, a Wisconsin-based company that operates over 200 facilities in 20 states, including 7 in southern New Jersey. Originally the company promised potential residents that once their financial resources were depleted from payment of their living expenses at the facility, they would then be allowed to apply for Medicaid, which would be acceptable payment for their subsequent living expenses at their facility. However, an investigation by the State’s Public Advocate found that the company instead tried to evict residents once their personal financial resources were depleted. (2)

One particular case involved an 83-year-old woman who had spent in excess of $300,000 of her own money in living expenses at the Chapin House in Rio Grande located in Cape May County. Once that woman became eligible for Medicaid, the company tried to evict her. The Appellate Division of the State Superior Court agreed that the company was in violation of its Certificate of Need application, which is required as part of the State’s licensing procedure. Instead of complying with the court’s mandate to halt the eviction, the company said it would convert four of the seven assisted living facilities it operated in the State to senior apartments and surrender its licenses for those facilities. As a result, eviction notices were sent to over a dozen residents of its facilities. (2)

The Assembly approved the new legislation by a 79-0 vote. The bill has been sent back to the Senate for consideration. (1) In addition to the escrow account, the proposed bill requires the companies to pay for services to determine how much money would be needed to fund this account. If the facilities closed as a result of bankruptcy, money remaining once creditors had been paid would be used to cover those costs. (3)

(1) http://www.trentonian.com/articles/2010/11/28/news/doc4cf2fc28be786036471313.txt

(2) http://www.politickernj.com/42853/weinbergwhelan-bill-protect-residents-assisted-living-facility-scams-clears-health-committee

(3) http://www.mcknights.com/new-jersey-assembly-passes-protections-for-assisted-living-residents/article/191769/