Medicaid and the Uninsured - Long Term Care Programs for the Elderly

In recent years, several initiatives in publicly financed services for older persons with disabilities have focused on supporting community residence through greater beneficiary control and flexibility in choosing the services and supports that best meet their needs. This movement has gained strength from state efforts to control rising Medicaid long term care costs by “rebalancing” public long term care spending from institutional care to community-based alternatives. State innovations in Medicaid-financed community based long term care have tended to move programs along a continuum from the traditional set of Medicaid service benefits toward the ultimate flexibility that may be achieved with a beneficiary-managed individual budget that participants use for a preferred menu of services and supports. The beneficiary-managed individual budget model had its origins in the Cash and Counseling Demonstration. This brief describes the evolution of the model since the original demonstration and provides an overview of state activity as of January 2006 in developing individual budget model programs for elderly beneficiaries. Although Medicaid waivers have been required for individual budget model programs to date, the Deficit Reduction Act that was signed on February 8, 2006, gives states the option to use this model for an expanded range of home and community based services in their state Medicaid plans without having to obtain a waiver.

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Findings:

• Nearly half the states (22) have or are actively planning programs for the frail elderly using the individual budget model. Ten states have active programs or pilot programs. Of these ten, Arkansas, Florida, and New Jersey are the three original Cash and Counseling demonstration states. Twelve states have individual budget programs in various stages of development, 11 of which are recognized as having program designs consistent with Cash and Counseling.
• Fourteen states and the District of Columbia have or are planning programs with some degree of participant direction that include the elderly, although these programs are generally limited to personal assistance services and only in some cases include a budget for even those services. For example, Delaware, Georgia, Ohio, Oklahoma, and Texas allow a beneficiary budget or allowance, but the budget authority applies only to personal care services. Maine, New Hampshire, New York, Nebraska, Kansas, and Virginia allow elderly participants to hire their workers and use a fiscal agent to handle payments, but there is no individual budget.
• Thirteen states have active programs or are planning programs that incorporate some degree of participant direction but do not include the frail elderly.Some of these states have programs that allow individual budgets for other populations, most often only for personal care services. Two states, Connecticut and Louisiana, expressed the intent to extend existing individual budget programs for their MR/DD population to include the elderly.

In recent years, several initiatives in publicly financed services for older persons with disabilities have focused on supporting community residence through greater beneficiary control and flexibility in choosing the services and supports that best meet their needs. The initial movement toward greater beneficiary input and more community-based options for long term disability care grew out of advocacy, particularly from younger persons with disabilities. It has gained strength from state efforts to control rising Medicaid long term care costs by “rebalancing” public long term care spending from expensive institutional care to community-based alternatives. State innovations in Medicaid-financed community based long term care have tended to move programs along a continuum from the traditional set of Medicaid service benefits toward the ultimate flexibility that may be achieved with a beneficiary-managed individual budget that participants use for a preferred menu of services and supports.

In this brief, we discuss the background for the most flexible service delivery model and examine the extent to which states are adopting it for their older Medicaid long term care beneficiaries. The model has its origins in the Cash and Counseling Demonstration. Initiated as a demonstration jointly sponsored by the Robert Wood Johnson Foundation (RWJF) and the Department of Health and Human Services in the late 1990s, Cash and Counseling continues with a new round of RWJF grants awarded in 2004 for design and implementation of new or expanded state programs.

In the wake of generally positive evaluation results from the Demonstration (Foster et al. 2003, Dale et al. 2003), Real Choice Systems Change planning grants offered by the Centers for Medicare and Medicaid Services (CMS) beginning in 2001 have provided incentives for states to design and implement new models of community-based long term care, frequently in ways that enhance participant choice. Under the New Freedom Initiative the Bush administration has continued the trend toward expanding such opportunities, in particular through the Independence Plus Medicaid waiver initiative first announced in May of 2002. The Independence Plus initiative seeks to encourage states to introduce a range of participant-directed options into their community-based long term care programs and specifically to implement programs following the individual budget model.

The Independence Plus initiative is intended to give states tools and incentives to adopt some or all of the features of this model through streamlined waiver application processes, which have continued to evolve based on CMS and state experience since the initiative’s inception. In late 2005, CMS released a revised 1915(c) Home and Community Based Waiver application with the dual aims of making it easier for states to incorporate some elements of participant direction in their programs and providing specific guidance on how states may use the 1915(c) waiver mechanism to accomplish a service delivery model consistent with the tenets of Cash and Counseling (CMS 2005a, 2005b). Moreover, the Deficit Reduction Act of 2005 provides the option for states to use this model for an expanded range of home and community based services in their state Medicaid plan without having to obtain a waiver.

For the full report, click here - (courtesy of The Henry J. Kaiser Family Foundation)