Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. General Comments on Medicaid's Role in Residential Care Settings


In all the states, while some respondents had concerns about specific Medicaid-related issues, there was unanimous agreement that Medicaid payment for services in residential care settings was overall a positive development. Medicaid payment was universally viewed as a way to reduce nursing home utilization, and in so doing, both save money and increase community alternatives to nursing homes, thereby providing consumers with more choice. A respondent in Oregon stated that the public has many more options because Medicaid participates in the funding of residential care services.

Respondents in Florida noted that prior to the use of the personal care option in residential care settings, many people needed services but did not meet the nursing home level of care criteria and could not afford to pay privately for residential care. Adding personal care under the Medicaid plan was key to the state's efforts to provide additional revenue to residential care settings that previously received only SSI and a state supplement as full payment for room and board and services. Medicaid coverage of personal care in residential care settings has attracted providers who, in the past, were reluctant to take state supplement recipients.

Florida respondents also noted that covering services in residential care settings through the waiver program was responsible for major cost savings. One stated that each dollar spent on the waiver would cost $2.70 in the nursing home. Minnesota respondents expressed satisfaction with Medicaid coverage because it enabled many people to be served in settings outside the nursing home.

North Carolina respondents felt that Medicaid coverage of personal care in residential care settings had improved the quality of care and had saved the state money by shifting some of the cost of personal care to the federal government. However, some felt that the adult care home population is becoming more and more impaired, and that the homes are not able to provide the level of care that many residents need. One respondent felt that the state is using limited resources inefficiently by providing nursing care to large numbers of people in residential care settings through the Medicaid Home Health benefit. Another noted that even though occupancy rates in some adult care homes were low, some facilities did not want to accept Medicaid residents because they would have to submit cost reports.

View full report


"med4rcs.pdf" (pdf, 3.73Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®