Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. Room and Board Charges are Unaffordable for Waiver Clients


Minnesota. Room and board or rental rates are not defined or controlled directly by Medicaid. However, Medicaid's financial eligibility rules do limit the amount of income that Elderly Waiver or Personal Care clients will have available to pay rent or room and board. If the client has inadequate income for room and board, the client may be eligible for the state's Group Residential Housing (GRH) program, which can be paid to a licensed or registered setting with which a county human service agency has negotiated a monthly rate. The amount of the GRH payment is based on a federal/state standard of what an individual would need, at a minimum, to live in the community. The maximum GRH room and board payment limit in 2003 is $680.

However, a few respondents noted that if private pay residents spend down to Medicaid waiver eligibility in a facility that does not accept Medicaid clients, they will have to move. Others may spend down to waiver eligibility in a facility that accepts Medicaid, but they may not be able to afford the rent, and have to move to other subsidized housing with lower rents. One said that many providers don't take Medicaid payment because they are concerned about having to continue serving people who spend down.

A few respondents said there are anecdotal reports that people are having to move when they spend down, but no data are available on how frequently this occurs. The state plans to start looking at the number of people applying for the waiver while in residential care to get some idea of the extent of spend down. One noted that most people who leave purpose-built assisted living go on to nursing homes and that it is not clear whether it is due to increased frailty or spend down.

Wisconsin. Wisconsin also does not limit the amount that Medicaid clients can be charged for room and board. There was general agreement among respondents that room and board costs in both RCACs and CBRFs were unaffordable for waiver clients. Some noted that the SSI payment does not cover the cost of room and board and said they didn't know any CBRFs that accepted the SSI benefit as the full rate. An industry survey in 2000 found that the average room charge without meals was $841 per month, but the typical waiver client's income is in the $545-$725 range.

There was disagreement about whether Wisconsin should limit the amount that can be charged to Medicaid clients for room and board. One noted that the issue had been discussed but rejected by the state's legislators, who wanted the market alone to decide the rates.

Another noted that while room and board costs are a barrier, there is no way to supplement these costs without cost shifting to other public funding sources, such as the Community Options Program (COP) -- the state's general revenue funded HCBS program. Some counties opt to use COP funding to pay for room and board for a few waiver clients in smaller CBRFs. Others felt it was a good idea to have facilities cross subsidize the Medicaid population -- have a small percentage of Medicaid residents with the majority private pay. They noted that each facility should be able to afford to take a few Medicaid residents and that a mix of clients also helps to assure quality.

A number of respondents felt that using state dollars with no federal match to pay for room and board gives too large a proportion of the state's HCBS funds to the residential care industry. Several respondents discussed the need for a greater supply of affordable residential care and stated that state and federal policy needs to create incentives to build more affordable units.

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