Residential Mental Health: The PNA and Social Security Benefit Tug-of-War
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9-9Aoede: The story of mental health care in residential facilities today is a story of a fundamental contradiction. We talk about recovery and autonomy, but the financial reality we impose on residents makes a mockery of those words. The data here is just staggering. In many states, the Personal Needs Allowance—the only money a resident on Medicaid might have—is as low as thirty dollars a month. That's a figure that hasn't changed since 1987.
Sarah: Hold on, let's establish the context here. That thirty dollars isn't meant to cover their housing, their food, their therapeutic programs, or their medication management. The Personal Needs Allowance, or PNA, is specifically a discretionary fund for personal items. The core costs of their comprehensive care, which are substantial, are covered by other means, primarily Medicaid and their Social Security benefits.
Aoede: But that's not the whole picture, and you know it. Calling it discretionary is the illusion. In 2024, the average cell phone bill alone was a hundred and forty-one dollars a month. So that thirty dollars doesn't even allow a person to maintain the most basic connection to the outside world. We're not talking about luxuries; we're talking about dignity. Alice Bonner, the former Secretary of Elder Affairs in Massachusetts, points out this is the money for shoes, for a haircut, for a newspaper. When you can't afford new shoes, your risk of falling increases. It's a direct line from financial deprivation to physical harm.
Sarah: I don't dispute the human element, but you're framing this as a simple case of facilities withholding money, and that's just not accurate. The system is built on a complex financial structure. Medicaid is the primary funding source for mental health services in the U.S., and for that system to work, facilities rely on diverse revenue streams, including resident contributions. It's not an arbitrary choice; it's a regulated necessity.
Aoede: A necessity that leaves over sixty percent of residents in comparable settings, like nursing homes, relinquishing nearly all their income. They are left with just this pittance. It creates a system of total dependency that researchers from Boston University and the University of Alabama have flatly stated places enormous physical, mental, and financial strain on residents. They say an adjustment is long overdue.
Sarah: And I would argue that without that system, many of these facilities wouldn't exist at all. The Social Security Administration itself has clear rules: if Medicaid is paying for more than half the cost of your care, your SSI benefit is typically limited to that thirty-dollar PNA. The rest of your benefit goes toward the cost of that care. This isn't a loophole; it's the established, legal framework designed to ensure the sustainability of these vital services.
Aoede: But legal and just are two very different things. The fact that residents often have no clear breakdown of how their benefits are being used creates a profound sense of powerlessness. It feels less like a contribution to care and more like their financial identity is being erased. They feel exploited, and that feeling directly undermines the therapeutic goals of fostering independence and self-worth.
Sarah: The alternative, though, is a system that could collapse. These facilities provide an incredible breadth of services—crisis intervention, therapeutic programs, 24/7 staffing. These things have immense costs. Without the ability to use resident benefits as a core part of their funding, many places would struggle to stay open. That would mean less access to care for the most vulnerable people. The focus has to be on ensuring the foundation of care is stable first.
Aoede: That's where you're completely missing the point! You're presenting this as an unavoidable financial reality, but it's not. It's a policy choice. Social Security benefits, the very income we're talking about, receive annual Cost of Living Adjustments—COLAs—to keep pace with inflation. But the PNA? It's been left to stagnate for decades. This isn't a law of economics; it's legislative inertia. It’s a systemic failure to prioritize the well-being of residents.
Sarah: Calling it a failure ignores the real-world constraints. State budgets are not infinite. You can't just mandate a five-fold increase in the PNA without a corresponding increase in state and federal funding to facilities. Otherwise, you're just shifting the deficit. Facilities are already operating under strict oversight. They have to safeguard resident funds. The current model, for all its flaws, is designed to ensure that anyone who needs care gets it, even if they can't afford it. Your proposal risks destabilizing that fundamental promise.
Aoede: But we have proof that change is possible! In 2025, several states are already moving to increase their PNAs because they recognize the inadequacy. There are federal bills like the 'Dignity and Autonomy for Our SSI PNA Beneficiaries Act' on the table right now, designed specifically to index the PNA to COLA. So don't tell me it's impossible. It's a matter of political will. The system doesn't need to be defended; it needs to be reformed. The lack of transparency isn't a side effect; it's a feature that allows this disempowerment to continue unchecked.
Sarah: And what happens to a resident if their facility has to cut back on therapeutic staff or close a wing because of the budget shortfall your reform creates? The core of this issue isn't about greed; it's about an incredibly difficult balancing act. What is the optimal balance between a facility's need for financial stability and a resident's right to financial autonomy? The disagreement isn't about whether autonomy is good; it's about the degree of autonomy that's possible and the pace at which we can achieve it without jeopardizing the entire system of care.
Aoede: Okay, I will grant you that facilities are operating within a system that puts them under genuine financial strain. The goal isn't to bankrupt the places that provide essential care. But the evidence you yourself brought up about the breadth of services they provide actually strengthens my point. If their funding is so precarious that they must rely on the last thirty dollars of a resident's income, then the problem is the systemic underfunding of mental health care itself.
Sarah: And I will concede that the human impact you described is compelling. The data from researchers on the physical and mental strain is undeniable. A thirty-dollar allowance from 1987 is indefensible in the modern world. It's clear that the status quo isn't working for residents' dignity. It seems we agree that the core problem isn't necessarily the facilities themselves, but the outdated and underfunded framework they're forced to operate within.
Aoede: Exactly. So the path forward isn't about pitting residents against facilities. It's about changing the system for both. The most obvious, practical first step is mandating that the Personal Needs Allowance receives the same annual Cost of Living Adjustment as Social Security. It ensures the allowance doesn't fall further behind and provides a predictable increase for residents.
Sarah: That's a logical step, and it addresses the legislative inertia. Building on that, we would need to aggressively advocate for increased state and federal funding for mental health care. If facilities receive more robust public funding, their reliance on residents' SSI benefits for core services could be reduced. That would free up a larger portion of a resident's own money to be retained by them, directly increasing their autonomy without threatening the facility's budget.
Aoede: And it has to be paired with transparency. Facilities could provide clear, itemized statements. They could implement financial literacy programs to empower residents to understand their benefits and manage their personal funds. This isn't just about giving them more money; it's about restoring their role as active participants in their own lives. We could even explore resident-centered budgeting models where they have input on how some funds are spent.
Sarah: I agree. A more stable, better-funded system allows for that. It allows for a model where resident dignity and facility viability aren't seen as a zero-sum game. The goal we both seem to share is a system that provides comprehensive, person-centered care. And true person-centered care must, by definition, respect and foster financial autonomy. It’s not an afterthought; it’s integral to recovery.