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 At least $27.5 million, At least $28.2 million, At least $28.9 million,
Expenditure adjusted for adjusted for adjusted for
Increase indeterminate county indeterminate county indeterminate county
share share share
State Revenue At least $12.3
Increase At least $11.7 million At least $12.0 million million in federal
in federal Medicaid in federal Medicaid Medicaid
reimbursements, plus reimbursements, plus reimbursements, plus
indeterminate county indeterminate county indeterminate county
reimbursements reimbursements reimbursements
Potential
County Indeterminate Indeterminate Indeterminate
Expenditure
Increase
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
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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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
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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
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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.).
Statutes affected: Introduced: 30:4D-6, 44:7-87