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New Provision in Health Care Law Promotes Aging in Place

But will cost for states hamper widespread use?

The Affordable Care Act, the health care reform law President Obama signed March 23, 2010, keeps on ticking, despite uncertainty in federal courts and Republican efforts in Congress to repeal it.

A new provision effective Oct. 1 promotes aging in place by offering states the option of expanding home- and community-based services to more disabled and older people under Medicaid.

See also: New health care law and affordable health insurance.

The Community First Choice Option aims to encourage states to step up help with daily living activities and other health-related tasks so more people can continue living independently rather than in nursing homes.

"In-home and community-based care is going to be much more cost-effective than institutional care, and people are happier too," says Rachel Morgan, health committee director for the National Conference of State Legislatures in Washington.

But there's a big catch, Morgan and others who work with state officials say, and it won't surprise anyone: cost.

Even though Community First Choice comes with a higher federal reimbursement rate than other Medicaid programs, cash-strapped states still have to find money to start an optional program. At a time when they're already struggling with spending cuts and with coming requirements under the health reform law, states are unlikely to add optional spending.

"It's one of those things that looks better on paper than when you unwrap it," says Matt Salo, director of the National Association of Medicaid Directors.

Another new health care law provision effective Oct. 1 calls for administrative funding to set up an Independent Payment Advisory Board that would reduce Medicare costs, if spending exceeds growth targets. The first recommendations by the board, whose members Obama has not yet named, are due in January 2014. Congressional Republicans want to abolish the board, which they say would ration health care.

In August, Health and Human Services Secretary Kathleen Sebelius announced awards under the Affordable Care Act of nearly $29 million to 67 new community health centers, which will provide primary care in underserved areas nationwide and serve an additional 286,000 patients. More than 800 community health centers have applications pending.

Also of interest: When the new health care law takes effect. >>

Marsha Mercer is a writer in Virginia who covers public policy issues.

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