Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Medicaid: An Evolving Program with Considerable State Flexibility


Medicaid is the major source of public funding for long-term services and supports provided in home and community settings. Medicaid was enacted in 1965 as a companion program to Medicare.4 It was designed as a joint Federal-state entitlement providing primarily medical care to low-income Americans.5 When first enacted, Federal Medicaid funding for meeting long-term care needs was available mainly when individuals were placed in an institution (e.g., a nursing home), with few avenues for supporting them in their homes and communities. State funds were used to pay for “home care” programs, but only on a limited basis.6

In the 45 years since its enactment, Medicaid’s “institutional bias” has been steadily diminished through numerous amendments to Federal laws and policy. Since the early 1980s, there has been a steady increase in the options available to states to secure Federal Medicaid funding for comprehensive home and community services. The Deficit Reduction Act of 2005 (DRA-2005) authorized a new optional State Plan authority for states to provide home and community-based services (HCBS) without a waiver, and most recently, the Patient Protection and Affordable Care Act (hereafter referred to as the Affordable Care Act), enacted in 2010, authorized an additional optional State Plan authority to provide “Community-based Attendant Services and Supports”--called the Community First Choice Option.

Over the past two decades, states have greatly expanded the availability of home and community services. The portion of Medicaid long-term care spending directed to home and community services has been increasing steadily by one to three percentage points each year as states continue to invest more resources in alternatives to institutional care. In 2009, home and community services accounted for 45 percent of total Medicaid long-term care spending.7 Many states are using innovative and fiscally responsible methods to enable more persons with disabilities to receive necessary services in their communities instead of in institutions.

The Medicaid program provides many options to increase the availability of home and community services while controlling costs. As states work toward the goal of integrating people of all ages with all types of disabilities into their communities, they may need to go through a process of fundamentally rethinking how programs serving people with disabilities are structured and how resources are allocated.

The chapters in this Primer stress that when deciding how best to use the Medicaid program to expand the provision of home and community services, states need to consider their unique needs, resources, and social, political, and economic environments. Additionally, all of these factors must be considered in the context of the technological and demographic changes driving the need for publicly funded long-term care services and supports.

Key among these changes are advances in medical technology that have enabled increasing numbers of people with congenital and acquired disabilities to both survive and live longer lives. A second change is that the nation’s population is aging. The group most likely to need long-term care--people over age 85--is estimated to grow from 5.3 million in 2006 to nearly 21 million by 2050.8

Terminology and Definitions

In this Primer, the term “persons with disabilities” includes persons of all ages--young children, adolescents, and working age or older adults--with all types of disabilities due to physical and mental impairments and/or chronic illnesses. Because the Primer’s focus is on Medicaid home and community services, the term “people with disabilities” refers primarily to those individuals who need long-term care services. However, not all persons with disabilities need these services.

The service systems for different disability groups use different terms for the same or similar services. For example, the service system for older adults uses long-term care or long-term care services, whereas the service system for people with developmental disabilities uses long-term services and supports or just supports. States also vary in their use of terms: personal care is also called personal assistance or attendant care, which is provided by personal care providers, personal assistants, personal attendants, and direct care workers, among other names.

To eliminate confusion, the Primer uses terms consistently in all chapters and specifically notes when terms are used interchangeably. When discussing a particular state’s service system, or Federal statutes and regulations, the Primer uses the specific terms they use. For example, the term home and community-based services is used only when referring to Federal statutes, regulations, or programs that use this term. In general, the Primer uses the term home and community services or just services and supports.

A law enacted in October 2010 amended provisions of Federal law to substitute the term “an intellectual disability” for “‘mental retardation,” and “individuals with intellectual disabilities” for “the mentally retarded” or “individuals who are mentally retarded.”9 Intermediate Care Facilities for Persons with Intellectual Disabilities (ICF/ID) is the new title for the program formerly known as Intermediate Care Facilities for the Mentally Retarded. The Primer uses these new terms, except when the former terms are used in the titles of previously published books, reports, and articles.

To ensure brevity without excessive use of acronyms when referring to systems of care, the Primer generally uses the shortest term (e.g., long-term care rather than long-term care services and supports).

Finally, many of the Medicaid provisions discussed in the Primer were enacted when the Centers for Medicare & Medicaid Services was known as the Health Care Financing Administration (HCFA). Throughout the Primer, the current name--CMS--will be used, even when referring to actions the agency made when it was named HCFA.

Moreover, the aging population includes individuals who have spent their lives providing informal care for adult children with intellectual disabilities and other developmental disabilities (ID/DD, hereafter referred to as developmental disabilities). Now that many individuals with developmental disabilities are outliving their parents, an increase in the number needing services and support is expected in the coming years.10 Finally, most assistance to people with disabilities is provided by informal caregivers, typically women. However, continued reliance on this support in the coming years may be unrealistic, given high rates of women’s labor force participation, smaller families, and geographic mobility.

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