Interstate Variation and Progress Toward Balance in Use of and Expenditure for Long-Term Services and Supports in 2009. 2. State Policy Variables


Many Medicaid policies could increase the use of HCBS. For example, states have the options to provide personal care and expanded home health services under their Medicaid state plans and to waive certain Medicaid regulations to cover HCBS for select subpopulations under Section 1915(c) waivers. Other state policies, such as nursing home regulations and SSI supplements that support independent living, may also influence the use of HCBS (Irvin and Ballou 2010; KFF 2012). Under the DRA, states have even more options to provide HCBS via state plans through 1915(i) and 1915(j) waivers, although only limited changes of this type had been implemented by 2009.

TABLE III.1. Factors That May Affect LTSS System Performance

Factor Measure (source)   Hypothesized Relationship  
with HCBS
Cost of living Single-family house price index, 2009 (Federal Housing Finance Agency 2011) -
State financial resources   Per-capita personal income, 2009 (BEA 2013) +
Fiscal constraints Total taxable resources per-capita, 2009 (BEA 2009), and percentage of state budget for LTSS (National Association of State Budget Officers 2010)   +
Environmental factors Average winter precipitation, 1971-2000 (NOAA 2002) -
Demand for services Percentage of potential Medicaid eligibles age 75 or older, 2009 (Mathematica analysis of ACS 2009 data) +
Workforce availability Home health aides and personal and home care aides (BLS 2009) per 1,000 elderly or persons with a disability (ACS 2009), 2009 +

+ = hypothesized positive relationship between measure and HCBS.
- = hypothesized negative relationship between measure and HCBS.

To understand how some of these policies may be related to rates of HCBS use and expenditures, we investigated the following factors and the relationship between HCBS balance in 2006. We found that the following factors were correlated with HCBS balance, with some factors only being associated with balance for specific subpopulations:

  • Consumer-Direction. Consumer-direction of personal care services has been shown to improve client satisfaction with services. In 2006, states that allowed for any consumer-direction tended to have higher rates of HCBS balance for aged enrollees and enrollees with physical disabilities. Since that study, more nuanced information on rates of consumer-direction across states has become available to further explore this relationship.

  • State Plan Coverage. States may offer personal care services under their state plans, eliminating the need for the individual to be covered by a waiver program to receive HCBS, where enrollment can be limited. In 2006, availability of personal care services through the state plan was associated with higher rates of HCBS balance for aged enrollees.

  • Residential Care Coverage. States that support residential placements other than traditional institutions, such as assisted living facilities, may have more enrollees who can use HCBS. In 2006, states that had any Medicaid coverage for residential care had higher rates of HCBS balance among aged enrollees.

  • SSI Supplements to Support Independent Living. States that supplement federal SSI payments for people living in the community may encourage the poor with disabilities to remain in the community. In 2006, states that offered optional state supplements to federal SSI payments had higher rates of HCBS balance among aged enrollees and enrollees with ID/DD.

  • Waiver Waiting Lists. States that set a relatively high level for HCBS waiver enrollment will have fewer people on waiting lists and provide more HCBS. In 2006, waiver waiting lists were not found to have a significant relationship with HCBS balance, but additional information has become available since that study to better assess this relationship.

  • Institutional Supply. Individuals in states with limited numbers of nursing home beds, assisted living facilities, and limited access to ID/DD facilities may have increased need for HCBS. Or, it may be that states that have committed to increasing community care may find that institutional beds are reduced due to low demand. In 2006, states with greater supply of nursing home beds had lower rates of HCBS balance among aged enrollees and enrollees with ID/DD. Similarly, states in which ICFs/IID with 16 or more beds accounted for larger percentages of ICFs/IID had lower rates of HCBS balance among aged enrollees. Since that study, additional data on availability of residential and assisted living units and placements in small ID/DD facilities have become available for assessment.

  • Payment Policies. Policies that encourage the supply of HCBS in a state -- such as higher rates for such services -- may increase the number of HCBS providers who provide care to Medicaid recipients. However, policies that pay nursing homes and ID/DD facilities more may encourage the growth of that industry, thus increasing the use of institutional services. In 2006, higher rates of reimbursement for home health visits and higher average adult day care daily rates were associated with higher rates of HCBS balance among aged enrollees.

TABLE III.2. State Policies and Other Supply-Site Factors Potentially Associated with Spending and Use of Medicaid LTSS and Associated Data Sources

Policy or Supply-Side Factor Measure (source)   Hypothesized Relationship  
with HCBS
Consumer-direction Number of people consumer-directing services per 1,000 adults age 18+ with disabilities, 2010 (Reinhard et al. 2011)* +
Personal care and residential care coverage State covers state plan personal care, 2009 (KFF 2012) or covers residential care, 2009 (Mollica 2009)* +
SSI supplements State-administered optional state supplement to federal SSI payments, 2009 (Social Security Administration 2009) +
Waiver waiting lists Waiting list members (2011) per HCBS waiver enrollees in 2009 (KFF 2012; MAX 2009)* -
Nursing home bed supply Nursing home occupancy rates, 2009 (CMS 2012)* -
Small ICF/IID availability Percentage of total out-of-home placements in settings for 6 or fewer persons, 2011 (Braddock et al. 2013) -
Assisted living availability Assisted living and residential care units per 1,000 people age 65+, 2010 (Reinhard et al. 2011) +
LTSS system accessibility ADRC/SEP functionality score, 2010 (Reinhard et al. 2011) +
Payment rates that encourage HCBS supply   Average home health aide hourly rate, 2009, and average private pay daily rate for adult day care, 2009 (MetLife 2009)*   +
Support for informal caretakers Percentage of families caring for individuals with ID/DD receiving state agency support, 2011 (Braddock et al. 2013) +

+ = hypothesized positive relationship between measure and HCBS.
- = hypothesized negative relationship between measure and HCBS.
* = factor was assessed in previous study, but newly available data resulted in new measure for assessing relationship with HCBS.

In addition to these factors, newly available data allowed us to assess the relationship between HCBS balance and the following state factors:

  • System Accessibility. LTSS systems that make HCBS more accessible to individuals needing LTSS may increase the number of people using these services.

  • Support for Informal Caretakers. State support for informal caretakers for individuals with ID/DD may result in more caretakers being able to care for these individuals in the community.

Table III.2 lists the state policies that may affect HCBS use, how we measured them for this analysis, and how they may be related to Medicaid HCBS use.

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