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December 2013 Policy Study, Number 13-12


Iowans Want to Age in Place


Medicaid 1915 (c) HCBS Waivers



In general, each state’s Medicaid plan must cover eligible individuals throughout their state. This means uniformity across the region in quantity, duration, and scope of coverage, or the requirement of “state-wideness” for their program. Of course, there are some exceptions: in particular, the states that opt for Section 1915 (c) HCBS-waiver programs are allowed to target these waivered services by various determinants, including age and medical diagnosis. These may be offered on a less-than-statewide regional basis.


According to CMS, Medicaid spending for home and community services has increased dramatically since 1988. In that year, spending for all LTSS topped 23 billion dollars. Of course, almost 90 percent of this spending was for nursing home and SNFs for patients with “intellectual disabilities.” At that time, a mere 10 percent was for HCBS – including all waivers, personal-care services, home-health services, and case management.[21] By 2008, Medicaid spending for all LTSS had risen to 106 billion.[22] Nursing home and SNFs costs had fallen to just over 57 percent, and HCBS had increased by over 30 percent, topping 42 percent that year. Of course these numbers reflect the aggregate totals for all states that offer Medicaid under the Federal Medical Assistance Percentages (FMAP) and do not reflect the differences among each state in their proportion of spending for nursing home/SNF versus HCBS.[23] One example is that during 2008 just ten states spent over 50 percent of their budgets for LTSS on HCBS. Although there has been, and will continue to be, substantial growth in the number of older adults who qualify for HCBS, the growth of HCBS in relation to that of care received in a nursing home or other institutional setting has been greater for patients with intellectual and developmental disabilities than for the elderly.[24]


According to CMS, in 2008 there were just four states (NM, WA, OR, and CA) who reported spending greater than 50 percent of their Medicaid budget on HCBS for both the aging and disabled populations.[25] The other 42 states reported spending nearly half of their budget on HCBS solely for patients with developmental disabilities. One example of this was seen in Oregon. They reported spending 100 percent of their LTSS budget on HCBS for intellectually and developmentally disabled patients, but just over 53 percent on the same services for their aging and disabled patients.[26]


Combined numbers reported in 2008 for all of CMS’s Medicaid total long-term-care spending for individuals with developmental disabilities was just over 35 percent, and nearly 65 percent was spent on HCBS.[27] The spending for the elderly and children with physical disabilities was the reverse, at over 68 percent for nursing home and other institutional care and only 32 percent for HCBS.[28] Again, as the number of older adults in our population grows over the coming decades, especially in rural areas, state Medicaid plans will need to be structured to support them with lower-cost HCBS in their patient-preferred care locations. The disparity in spending between the two groups, those with intellectual and developmental disabilities and those who are elderly or have physical disabilities, will need to be balanced.



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