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Medicaid Home and Community-Based Services Programs: 2010 Data Update

As states continue to implement various aspects of the Affordable Care Act (ACA), developing and expanding home and community-based alternatives to institutional care remain priorities for many state Medicaid programs. While the majority of Medicaid long-term services and supports (LTSS) dollars still go toward institutional care, the national percentage of Medicaid spending on home and community-based services (HCBS) has more than doubled from 20 percent in 1995 to 45 percent in 2011. State Medicaid programs are operating in an environment of slow economic recovery and are facing the competing priorities of implementing the ACA’s new streamlined eligibility and enrollment processes and determining whether to adopt the ACA’s Medicaid expansion. States also are choosing among the ACA’s new and expanded LTSS options, some of which offer enhanced federal matching funds, to expand beneficiary access to Medicaid HCBS.

This report summarizes the key national trends to emerge from the latest (2010) participant and expenditure data for the three main Medicaid HCBS programs: (1) the mandatory home health services state plan benefit, (2) the optional personal care services state plan benefit, and (3) optional § 1915(c) HCBS waivers. It also briefly discusses the provision of Medicaid HCBS through § 1115 demonstration waivers and highlights findings from a 2012 survey of Medicaid HCBS participant eligibility and enrollment and provider reimbursement policies.

Key Findings: Trends in Medicaid HCBS Participants and Expenditures, 2000-2010
  • In 2010, nearly 3.2 million people accessed LTSS through one of the three main Medicaid HCBS programs, representing an almost two percent increase in enrollment from the previous year and the lowest rate of increase since 2007 (Figure 1). Of this population, 807,659 people received home health state plan services (in 50 states and DC), 951,853 received personal care state plan services (32 states), and more than 1.4 million were served through § 1915(c) waivers (47 states and DC). From 2009 to 2010, participation in personal care state plan services programs and § 1915(c) waivers grew by four percent and three percent, respectively, while the number of individuals receiving home health state plan services declined by three percent. The number of individual § 1915(c) waivers fell slightly to 284 nationwide in 2010.
Figure 1: Growth in Medicaid HCBS Participants, by Program, 2000-2010

Figure 1: Growth in Medicaid HCBS Participants, by Program, 2000-2010

  • In 2010, Medicaid HCBS expenditures for home health state plan services, personal care state plan services, and § 1915(c) waivers totaled $52.7 billion, a six percent increase over 2009 expenditures (Figure 2). In 2010, spending growth in HCBS programs was led by § 1915(c) waivers (9%), followed by home health state plan services (7%). Spending on personal care state plan services declined by seven percent in 2010, the only decline recorded over the study period.
Figure 2: Growth in Medicaid HCBS Expenditures, by Program, 2000-2010

Figure 2: Growth in Medicaid HCBS Expenditures, by Program, 2000-2010

  • Per enrollee annual spending on Medicaid HCBS averaged $16,673 in 2010, but there was considerable variation among states and programs. Across the states, expenditures per capita ranged from $7,844 in Texas to $34,506 in New York. Per enrollee spending also varied across the three main HCBS programs, ranging from a national average of $7,077 for home health state plan services participants to $26,218 for § 1915(c) waiver participants. These program-to-program differences were due to the types and extent of services offered in the different home and community-based programs. Per capita spending also varied among § 1915(c) waivers targeted to different populations. For example, per capita spending in § 1915(c) waivers targeted to beneficiaries with intellectual and developmental disabilities (I/DD) was considerably higher than for other beneficiary groups, reflecting the I/DD population’s relatively more intensive need for LTSS.
  • A minority of states use § 1115 demonstration waivers to deliver HCBS. As of 2013, three states (Arizona, Rhode Island, and Vermont) do not operate any § 1915(c) waivers and instead use § 1115 waivers to administer statewide Medicaid managed care programs that include all covered HCBS for all populations and services. Another five states (Delaware, Hawaii, New York, Tennessee, and Texas) use § 1115 waivers for Medicaid managed care programs that include HCBS for at least some geographic areas and/or populations; these states also offer HCBS via § 1915(c) waivers for other geographic areas and/or populations.
2012 Policies in Medicaid HCBS Programs
  • In 2012, all states reported using cost controls in § 1915(c) waivers, such as restrictive financial and functional eligibility standards, enrollment limits, or waiting lists. About 24 percent of § 1915(c) waiver programs used financial eligibility standards that were more restrictive than those used to determine eligibility for Medicaid coverage of institutional care. However, only 10 § 1915(c) waivers used more restrictive functional eligibility criteria than those used for institutional care. More than half of states offering personal care state plan services (62% or 21 states) have some form of cost controls in place, with the majority utilizing service unit limitations. Over half of states (59%, or 30 states) had some form of expenditure or service restriction in place in their home health state plan services programs.
  • In 2012, almost 524,000 people were on § 1915(c) wavier waiting lists, and the average waiting time exceeded two years. The growth in the number of people on waiting lists continued to increase, although by a smaller amount than in the prior year (19% in 2011 compared to 2% in 2012). The average national waiting time for waiver services was 27 months, with wide variations among waivers for different target populations and across states. The average length of time a person spent on a waiting list ranged from four months for mental health waivers to 47 months for I/DD waivers.
  • The use of beneficiary self-direction as an alternative service delivery model was present in each of the three major Medicaid HCBS programs. The self-direction model includes initiatives such as beneficiary choice in the allocation of Medicaid service budgets and/or the selection and dismissal of service providers. Forty-two (or 87%) states with § 1915(c) waivers permitted or required self-direction in at least one of their waivers in 2012. Of the states offering personal care state plan services, 20 (or 59%) permitted self-direction. In contrast, only seven (or 14%) states allowed self-direction of home health state plan services in 2012.
  • Home health and personal care agency provider reimbursement rates increased slightly from 2011 to 2012. The national average reimbursement rate per visit for home health agencies was $93.16 and $89.73 in 2012 and 2011, respectively. Agencies providing personal care state plan services also saw a nominal increase in the hourly reimbursement rate ($17.91 in 2011 to $18.19 in 2012).

Over the past two decades, the increase in access to community-based alternatives to institutional care has resulted in a rebalancing of Medicaid long-term care dollars. Section 1915(c) waivers account for two-thirds of spending on LTSS provided in community settings. In the coming years, it will be important to monitor states’ adoption of state plan options and other initiatives to expand Medicaid HCBS, differences in services and spending across states, and the impact of cost control policies on access and quality.