HCBS waivers and state plan services differ in several important ways. First, waiver services are available only to beneficiaries who meet the state’s nursing home LOC criteria; that is, they would be eligible for Medicaid payments in a nursing home if they applied. Nursing home eligibility is not required for beneficiaries using state plan services.
Second, states may set limits on the number of beneficiaries that can be served through waiver programs. The limits are defined as expenditure caps that are part of the cost neutrality formula required for CMS approval. Waivers are only approved if the state demonstrates that Medicaid long-term care expenditures under the waiver will not exceed expenditures that would have been made in the absence of the waiver. States do not receive federal reimbursements for any waiver expenditures that exceed the amount stated in the cost neutrality calculation. In contrast, state plan services are an entitlement, meaning that all beneficiaries who meet the eligibility criteria must be served. Federal funding matches state expenditures without any cap.
Perhaps the most significant difference between the two options is the ability under HCBS waivers to use more generous income-eligibility standards. To be eligible for personal care under the state plan, individuals must meet Medicaid’s community-based eligibility standards, which (depending on the state) are: (1) the Supplemental Security Income (SSI) level of income ($623 per month in 2007), (2) an amount above the SSI standard up to 100 percent of the federal poverty level, or (3) the state’s medically needy income standard.26
For nursing home and HCBS waiver applicants, states may use the special income standard (SIS), an optional eligibility category that allows individuals with income up to 300 percent of the federal SSI benefit ($1,869 in 2007) to be eligible. However, states can only offer this option in HCBS waivers if they offer it to nursing home applicants. Offering the higher income-eligibility standard in the waiver program “levels the playing field” between institutional and non-institutional services.
Table 1-10 summarizes the major differences between waiver services and state plan services.
Although the majority of states use Medicaid to cover services in residential care settings, the number of Medicaid beneficiaries who receive such services is considerably lower than might be expected because many states limit the number of people served under waivers. States using personal care under the state plan to cover services have higher participation rates than states using the waiver because state plan services cannot be capped.
TABLE 1-10. Differences Between State Plan and Waiver Services
|State Plan Service||1915(c) Waiver Services|
|Entitlement||States must provide services to all beneficiaries who qualify for Medicaid||States may limit the number of individuals served and restrict services to specific groups (e.g., age 65 or older, persons with MR/DD)|
|Scope||Must be available in the same amount, scope, and duration to all beneficiaries across the state||May limit amount, scope and duration to specific geographic areas or beneficiary groups|
|Duplication between HCBS and the State Plan||Services provided in accordance with state plan||May not duplicate services available in the state plan; may have different limits, definitions, or providers than state plan services|
|Service Criteria||Must meet state plan requirements for services||Must meet the state’s nursing home LOC criteria|
|Income||Must be SSI eligible or meet the state’s community-based income-eligibility standard||State may set eligibility up to 300 percent ($1,869) of the monthly federal SSI payment standard ($623) if also used for nursing home eligibility|
|Approval Period||Continuous unless amended by the appropriate state agency||Initial waivers approved for three years; renewals for five years|
For example, roughly 37,000 Medicaid beneficiaries living in residential settings are served under the state plan in North Carolina (20,442), Michigan (10,300), and Missouri (6,000). Waiver participation is highest in Wisconsin (8,542), Washington (6,193), Oregon (5,983), and Arizona (4,034). Florida serves 3,623 beneficiaries in its waiver program and 11,389 through the state plan.
States do not report the number of Medicaid beneficiaries in residential care settings by age or type of disability. The vast majority of the individuals served are age 65 and older but some may be under age 65. Some may have serious mental illness, acquired brain injuries, or MR/DD. Whatever their age or diagnosis, to be eligible for Medicaid coverage they must meet either the state’s nursing home LOC criteria for waiver services or the state’s service criteria for Medicaid state plan personal care services.
Participation figures are under-reported since a few states do not track and report the number of Medicaid beneficiaries by home or community settings. A few states reported the annual unduplicated number of Medicaid beneficiaries served in residential care settings, but most reported the number of people for a given month. Based on available data, participation is estimated to be just over 115,000 in 2007, down from 121,282 in 2004.
26. Except in 209(b) states which have a Medicaid income-eligibility threshold that is lower than the federal SSI payment.
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