Medicaid Home and Community-Based Services Programs: 2013 Data Update

Developing home and community-based alternatives to institutional care has been a priority for many state Medicaid programs over the past three decades. The national share of Medicaid long term services and supports (LTSS) spending on home and community-based services (HCBS) has nearly tripled, from 18 percent in 1995 to 53 percent in 2014.2F¹ States’ efforts to expand HCBS have been driven by beneficiary needs and preferences, the United States Supreme Court’s 1999 Olmstead decision finding that the unjustified institutionalization of people with disabilities violates the Americans with Disabilities Act,3F² and efforts to control growth in total LTSS expenditures. Spending on LTSS comprised 32 percent of total Medicaid spending in 2014,³ with HCBS typically costing less than comparable institutional care.4F Budgetary constraints during a time when overall state revenues are slowing, forcing more moderate spending growth across state budgets, and the administrative complexities of implementing and coordinating the various Medicaid LTSS options may pose challenges as states and the federal government continue to work to increase beneficiary access to HCBS and rebalance LTSS expenditures.

Over the last fifteen years, the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured (KCMU) has worked with researchers at the University of California, San Francisco (UCSF) to track the development of the three main Medicaid HCBS programs: (1) the home health services state plan benefit, (2) the personal care services state plan benefit, and (3) § 1915 (c) HCBS waivers. Medicaid HCBS also may be provided through options created and expanded by the Affordable Care Act (ACA), such as the § 1915 (i) HCBS state plan option, the Money Follows the Person demonstration,5F⁴ and the Community First Choice state plan option; participants and expenditures attributable to these programs are outside the scope of this report. In addition, a minority of states provide some or all of their HCBS through § 1115 demonstration waivers, which are briefly discussed in this report.

Beginning in 2002, we also surveyed the policies states use to control spending growth in § 1915 (c) waiver programs, such as eligibility criteria and waiting lists. In 2007, we expanded the policy survey to include home health and personal care services state plan benefits and, in 2015, we added questions about state policy changes in response to new U.S. Department of Labor (DOL) minimum wage and overtime rules affecting direct care workers and the Centers for Medicare and Medicaid Services’ (CMS) rules defining characteristics of Medicaid home and community-based settings. In these state-level surveys, we collect data on eligibility criteria, providers, services, and reimbursement rates. This report summarizes the main trends to emerge from the latest (2013) participant and expenditure data for the three main Medicaid HCBS programs and findings from the 2015 survey of policies impacting the home health and personal care services state plan benefits and § 1915 (c) waivers.