Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. Insufficient Capacity in the Waiver Program


There was a consensus that the major barrier to providing affordable assisted living in Wisconsin is insufficient capacity in the statewide waiver program. Even though the Medicaid waiver program provides services in residential care settings, few people benefit because of the long waiting lists. There are over approximately 9000 elderly and working age disabled on waiting lists for state COP and waiver services.

  • Typically, people do not spend down by paying privately for home care; rather, they go to residential care as private pay. The problem for many is that it is very likely that there will be a waiting list for services once they spend down. Providers cannot count on residents being able to access funds when needed, so they wind up moving to a nursing home.

  • Many RCACs do not bother to become certified to serve waiver clients because they see no need to do so. Only about 20 percent of registered facilities have become certified, generally because residents have spent down.

  • On an individual basis, it would cost the state less to keep people who spend down in an RCAC than put them in a nursing home. But fear of induced demand and fear of having a state funding source drive what's available keeps the state from expanding the waiver to cover people in RCACs who have spent down. Doing so would make the waiver program an entitlement for people who spend down in RCACs. Another concern is that if the state kept everyone who spent down in an RCAC on the waiver, then it would wind up spending all of the waiver money in RCACs, and have very little left for home care.

  • The state pays lip service to the goal of providing alternatives to nursing homes. There are insufficient waiver services. It is a major disconnect for families when their relative can't stay in an RCAC or CBRF because there is no waiver slot, but the state will pay more money to put them in a nursing home.

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