Medicaid Long Term Care Home and Community Based Services: Trends in Programs and Policies, 1999-2006

In response to consumer demand, the Supreme Court decision in the Olmstead case and the New Freedom Initiative, states have unevenly expanded combinations of three Medicaid home and community based services (HCBS) : home health, state plan personal care services (PCS), and 1915(c) waivers. By 2006, the federal-state Medicaid program paid for 40 percent of the nation's estimated $178 billion total long-term care (LTC) expenditures while institutional care (e.g., nursing homes) consumed 60 percent of those expenditures. As 41 states and DC project budget deficits in FY 2009 and beyond, the Deficit Reduction Act (2005) reflects growing concerns about the need to preserve and expand Medicaid HCBS and the need for information on program and policy trends.

This paper draws from a unique national dataset to present the latest trends in participants, expenditures and policies for the three Medicaid HCBS programs. While data for 2006 show a steady increase in participants and expenditures, these growth rates have slowed since 2001. Inequities in access to services and limited funds have also resulted in unmet needs for HCBS. Findings from the survey of policies such on the programs in 2008 show that states are increasing the number of waiting lists for waiver services even as the number of available “slots” increases. Cost caps such as service and cost limits are also used in almost half the state plan personal care programs and almost a third of home health programs.