State Variation in Medicaid LTSS Policy Choices and Implications for Upcoming Policy Debates
Medicaid is a key source of coverage for seniors and people with disabilities, including those who need long-term services and supports (LTSS) to meet daily needs. Waivers are the primary way that states expand financial eligibility and offer home and community-based services (HCBS) benefit packages to seniors and people with disabilities. Unlike Medicaid state plan authorities, which require states to cover (and provide federal matching funds for) everyone who meets the associated eligibility criteria, waivers allow states to limit the number of people served. States’ ability to cap HCBS waiver enrollment can result in waiting lists when the number of people seeking services exceeds the number of waiver slots available.
Waiting lists are one proxy for unmet need for HCBS, but waiting lists alone are an incomplete measure. Most eligibility pathways based on old age or disability, and nearly all HCBS benefits, are optional, creating a great deal of variation among states. This brief draws on several KFF state-level surveys to examine multiple measures, beyond waiting lists, to evaluate state choices about optional Medicaid eligibility pathways, spending, and services for seniors and people with disabilities.
Our review of a range of measures finds substantial state variation in adoption of policies to expand Medicaid for seniors and people with disabilities. While there has been some criticism that the ACA Medicaid expansion might crowd out other benefits, states’ ACA expansion status does not appear to be a strong predictor of policy choices related to seniors and people with disabilities. In some cases, a state’s choice to adopt the ACA expansion is associated with state take-up of options to expand eligibility and services for seniors and people with disabilities, while in many cases, state variation in policies for seniors and people with disabilities appears to be entirely unrelated to ACA expansion status.
Understanding current state-level variation in Medicaid eligibility, spending, and services for seniors and people with disabilities is important to inform upcoming policy debates. The Biden Administration supports expanding Medicaid HCBS through legislative changes to eliminate waiver waiting lists. COVID relief legislation being discussed in Congress would provide a time-limited 7.35 percentage point increase in federal Medicaid matching funds for state spending on HCBS, to fund a variety of activities to expand access to HCBS and support direct care providers during the COVID-19 public health emergency. Policymakers also may consider legislation to end Medicaid’s historical institutional bias by making HCBS a mandatory benefit, a policy that has garnered more interest in the recent months, given COVID-19’s disproportionate impact on people in institutional settings.