Restrictive Personal Needs Allowances ‘Compromise the Human Rights and Basic Needs of Older Adults’.

Restrictive Personal Needs Allowances ‘Compromise the Human Rights and Basic Needs of Older Adults’
The most that a Medicaid-funded nursing home resident can keep of their personal income is a mere $30 in some states. These allowances are long overdue for adjustment, according to a new commentary coauthored by Paul Shafer in JAMA Health Forum.
More than 60 percent of nursing home residents relinquish nearly all of their income to Medicaid in exchange for full coverage of their room and board, medical care, and certain daily living needs, such as toothpaste and soap. The amount of income they can retain for any other costs, called the Personal Needs Allowance (PNA), differs by state and is as low as $30 per month.
Low PNAs place a physical, mental, and financial strain on residents and these allowances are long overdue for an adjustment, according to a new commentary by researchers at the School of Public Health and the University of Alabama at Birmingham (UAB) published in JAMA Health Forum.
PNAs are intended to cover any personal expenses not covered by Medicaid, which can include clothing, shoes, snacks, haircuts, vitamins, cell phone bills, among other necessities. While some states allow their nursing home residents to keep as much as $200 a month, many provide lower amounts that likely fall far short of adequately covering their needs.
“Imagine if after room, board, and medical care, you only had $30 per month for personal expenses like your cell phone bill, haircut, or preferred toiletries,” write Paul Shafer, assistant professor of health law, policy & management at BUSPH and Monica Aswani, assistant professor in the School of Health Professions at UAB. “This is the reality for nursing home residents in Alabama and South Carolina today. Meanwhile, the average cell phone bill alone was $141 per month in 2024.”
More research is needed to understand the negative effects of PNAs on the health and well-being of Medicaid nursing home residents, and how the lower payments may be widening health inequities among an already vulnerable population with limited funds and assets, the authors write.
They note that PNAs have not been adjusted for inflation for decades; the federally mandated minimum of $30 payment has not changed since it was enacted in the Omnibus Budget Reconciliation Act of 1987. Many states offer little more than Alabama and South Carolina’s stagnant $30 monthly payment. For example, since 2001, Louisiana’s PNA has remained at $40 and Mississippi’s PNA has remained at $44 per month. PNAs for California and New York—which have both ranked consistently among the US states with the highest cost of living—have remained at $35 and $50, respectively, since 2001. Massachusetts, meanwhile, has raised its PNA slightly, from $60 per month in 2001 to $73 per month currently.

Furthermore, the authors point out, many states exclude dental and vision care for adults from their Medicaid programs, so nursing home residents in states such as Delaware, Maryland, and Tennessee also have to pay for this care.
“Inadequate PNAs compromise the human rights and basic needs of older adults, force them to make tough choices about what personal needs they will have to forego, and highlight underlying ageist attitudes embedded within policy,” Shafer and Aswani write.
This push for increased funds for Medicaid nursing home residents comes at a precarious time for nursing home care and the federal-and-state-funded Medicaid program under the second Trump administration, which has proposed significant potential cuts in Medicaid funding as part of broader efforts to reduce government spending. If these cuts are implemented, funding for nursing homes—long plagued by high costs and understaffing—will most likely be slashed. The widespread confusion and alarm following a now-rescinded memo that placed a pause on all federal aid—and impacted Medicaid payment portals—in the administration’s first week, is only heightening health advocates’ concern about the program’s ability to provide quality and equitable care.
“Although increasing the federal floor on the PNA is unlikely to be a priority during the second Trump administration, states still have lots of room to raise it themselves,” says Shafer. “Most are well below half of the $200 maximum and advocates in several states, including Massachusetts, are engaging with policymakers about raising the PNA. We can also do more to highlight how this impacts the hundreds of thousands of older Americans living in nursing homes, often a forgotten population.”
To read the full commentary, click here.
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