Relation between Federal Policy Iniatives and Medicaid HCBS for Older Adults and Individuals with Physical Disabilities

Objective: There continues to be considerable state variability in dollars allocated to Medicaid HCBS as a share of all long-term care dollars for older adults and individuals with physical disabilities.  This study examines the relation between two federal policy initiatives, Real Choice Systems Change (RCSC) and Money Follows the Person (MFP) and states’ relative investment in HCBS. Methods: State level multivariate fixed effects models examined associations between state sociodemographic, economic, supply, programmatic, political and external characteristics and the share of long-term care expenses supporting HCBS for the period 2000-2011.  Results:   Averaged across states, the share supporting HCBS increased from 17.2% in 2000 to 32.0% in 2011.  By 2011, the share ranged from 10.4 to 88.9% supporting HCBS.  Both RCSC and MFP were positively associated with an increased share allocated to HCBS across the study period, with a stronger effect observed for RCSC. States with a higher share of their population who were Black had a negative association, while those with a higher share who were Hispanic had a positive association with HBS investment.  Higher nursing home beds per capita was negatively associated with the share allocated to HCBS.  Conclusion: Findings suggest that federal policy efforts to encourage the expansion of HCBS should continue.  Research is needed to examine the effects of more recent federal initiatives, such as the new state plan options, 1915(i) and 1915(j) on states’ rebalancing efforts.