ALBANY, N.Y. (WSYR-TV) — A new report by the Association of Aging in New York reveals the New York State could save as much as $500 million by providing home care to “Low care” older adults currently in nursing homes.

According to the report, home care costs the state 30 percent less per person than nursing home care, or over $28,000 less per week for an individual receiving 40 hours of care per week.

While nursing home care may still be needed for some who require a high level of care, the report states that New York State would save significantly by giving older adults access to care from their own homes and communities, rather than moving to a nursing home.

“Anyone searching for home care in New York for themself or their family members knows that the State is failing to provide enough home care workers. This report reveals the State is also failing to provide the most cost-efficient care, by prioritizing nursing homes over home care,” said Association on Aging in New York Director Becky Preve. “Without investment in a strong, high-quality workforce of home care workers, many older adults will continue being forced into nursing care — a higher expense for the State and a less favorable choice for most older adults.”

For the many individuals who require fewer hours of personal support, home care costs $33,280 (for 20 hours), 65% less than the cost of nursing care.

Not only would home care for “low care” older adults save the state money but provide a solution to the care needs of these New Yorkers while also representing a cost-effective solution that will optimize Medicaid spending.

Nursing homes are not only expensive but also not staffed enough as the current shortage of home care workers and nursing care workers has created insufficiencies for older adults in New York state over recent years.

According to the report, this shortage is due in large part to insufficient wages and benefits paid to home care workers.

“In New York, home care workers are employed primarily by fiscal intermediaries or home care agencies that are reimbursed by the state’s Medicaid system, which pays for the vast majority of home care services. If the Medicaid reimbursement rates do not adjust sufficiently to meet the demand for home care workers, there will not be enough workers to care for those in need.”

Much like home care, nursing care is also paid for via Medicaid expenditures, and in the most recent state budgets, additional funds have been allocated to improve nursing home care.

Cost comparison of home care versus nursing care

Type of CareAverage Medicaid RateSavings ($)Savings (%)
Nursing Care $95,265/year
Home Care (20 hrs per week of  personalized assistance)$33,280/year$61,985/year65%
Home Care (30 hrs per week of  personalized assistance)$49,920/year$45,345/year48%
Home Care (40 hrs per week of  personalized assistance)$66,560/year$28,705/year30%

By looking at the state budget, having individuals stay in their homes saves the state an immense amount of funds by removing the total cost of housing and food from the state’s budget.

The report states that if NYS were to offer services in an “a la carte” fashion it would avoid overspending on costs that can be borne by the family in question. This would also allow flexibility in the number of hours that a home care worker provides for an older adult, which also saves the state money by not having the cost of 24-hr care for those who do not need that level of assistance.

In the rare instance that an older person needs 60 hours per week of one-on-one home care, then the cost of home care would become less cost-effective than nursing care.

By allowing for flexibility in the number of hours of care, and the services provided for a “low care” older adult, home care offers the state a more cost-effective approach than nursing homes.

Type of careHome CareNursing Home
Hands-on careIncludedIncluded
Food preparationIncludedIncluded
Other home-making tasks (eg. laundry,
cleaning, etc)
Basic medication management supportIncludedIncluded
24-hour careDepending on needIncluded
Food costsNot includedIncluded
Shelter/Housing costsNot includedIncluded
Utility costsNot includedIncluded
Skilled nursing careNot includedIncluded

Additionally, the report used data from LTC Focus, a research group collecting data on long-term care in the US, which revealed in many counties in New York, 6% – 9.5% of nursing home residents are considered to be “low care,” as shown in the map below.

Given that about 75% of older adults state that they’d prefer to stay in their homes, it is likely that many of these individuals did not have a sufficient home care option.

Percentage of residents of nursing homes considered to be “low care”

Association On Aging in New York State
Credit: Association On Aging in New York State report

Read the full report below