Older Adults' Living Expenses and the Adequacy of Income Allowances for Medicaid Home and Community-Based Services

08/01/2016

This brief assesses the adequacy of the income allowances granted to older Medicaid HCBS enrollees and their spouses. We measure household expenditures made by older households and compare them to the Medicaid HCBS income allowances provided by the state in which they reside, to see how much they would have to reduce their spending if they enrolled in Medicaid HCBS and did not allow their expenses to exceed those income allowances. The results show that 48% of low and moderate-income households headed by an adult age 65 or older spent more than their state's Medicaid HCBS income allowances in 2009, and 29% spend at least 50% more than the allowances. Single adults are more likely that couples to spend more than they would be allocated by Medicaid HCBS, because spousal income allowances are generally much larger than the maintenance needs allowances provided to Medicaid HBCS enrollees. These findings suggest that some states do not allow Medicaid HCBS enrollees to retain enough income to cover community living expenses, potentially limiting access to the program. Raising Medicaid HCBS income allowances could enable more older adults with disabilities to remain in the community and receive the care they need.

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