About 15% of Pennsylvania’s population is over 65 years old, and that percentage is expected to increase to 20% in the next 15 to 30 years. While this is one of the highest percentages in the United States, it reflects a demographic shift happening across the country that will affect many other states in the near future.

Currently, slightly more of Pennsylvania’s seniors are living in nursing homes than are receiving in-home care, a situation that is expensive for the state and not in line with most seniors’ wishes. Recently, Pennsylvania Governor Tom Wolf has proposed a plan to help more of the state’s seniors get health care at home. He believes his plan will not only help “protect our seniors to make sure they go through their senior years with dignity,” but will also save a good portion of the state’s Medicaid budget.

Improving the Bottom Line

The savings between nursing homes and home health care are significant. The Philadelphia Nursing Home, for example, costs nearly $90,000 per year while home care is less than a third of the cost. According to Wolf, transitioning 5,500 of seniors from nursing homes to in-home care could save the state more than $162 million per year. This breaks down to nearly $2,500 per person who currently lives in a nursing home.

There would be some costs associated with more people taking advantage of in-home health care, and Governor Wolf has proposed a $39.2 million budget to invest in the Departments of Human Services and Aging. However, with his projection of $162 million in savings, it still leave a net savings of nearly $122 million.

The plan would also positively affect employment. That $39.2 million could go toward jobs as the demand for home health workers increased.

Changing the System

Wolf also intends to modernize the system. Currently, many people are in nursing homes who don’t need to be because it takes a waiver to allow individuals to receive home-based care instead. Because the system is paper-based, it can be difficult to obtain that waiver. Updating the technology would allow the waiver requests to go through faster.

An aging population, high health care costs, and outdated systems are not unique to Pennsylvania. People over 65 currently represent about 13% of Americans, a number that is expected to reach 19% by 2030. Over the next few years, all states will undoubtedly be looking for ways to provide both better and less expensive care for their seniors.