For states, how much is it going to cost taking care of the elderly?

In 1999, the U.S. Supreme Court ruling in Olmstead v. L.C. said that the unnecessary institutionalization of people with disabilities is a form of discrimination. State Medicaid programs are required to provide alternatives so that the elderly and disabled can choose to get their care at home, instead of in state institutions or nursing homes. But the Supreme Court said there were limits. A doctor, representing the state, has to determine that the person is capable of living at home. The person has to want to get that care at home. And a state when considering its responsibility to move people out of institutions can consider its own budgetary constraints.

That makes the cost issue important. But there's disagreement over whether moving people out of institutions and nursing homes and into home-based care will save or cost money, states the NPR article.

Advocates for what's called "home- and community-based care" — HCBS — say it almost always costs less to care for someone in his own home instead of in an institution. A June 2009 report by the AARP Public Policy Institute estimates that "on average, the Medicaid program can provide HCBS to three people for the cost of serving one person in a nursing home." This is because the cost of care is more tailored to the needs of an individual. And in most cases, people who live at home need less than the 24-hour care that's paid for in institutions.

But Janice Zalen, of the American Health Care Association, the largest association of long-term care providers, argues that this is an "apples to oranges" comparison. The cost of a nursing home includes the cost of food and rent. But calculations of home-based care often include just the cost of services, such as an aide to come in several hours of day to provide care.

And Zalen argues that when someone moves from a nursing home into a home-based program, there is still likely to be someone else who moves into that nursing home, who still gets government-funded care. An April 2007 study for AHCA, by Avalere Health, a health care research and consulting firm, found that while nursing home "cost growth has slowed in some states," those savings for states were offset "in many instances" by growth in community-based care.