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Medicaid Home and Community-Based Services: Results From a 50-State Survey of Enrollment, Spending, and Program Policies

Medicaid is the primary source of coverage for long-term services and supports (LTSS), including home and community-based services (HCBS) that help seniors and people with disabilities with self-care and household activities. For the past 16 years, the Kaiser Family Foundation has surveyed all 50 states and Washington, DC to track Medicaid HCBS enrollment, spending, and program policies.  This report presents our latest survey findings, including 2014 data for the three programs that comprise the majority of HCBS enrollment and spending:  the mandatory home health services state plan benefit, the optional personal care services state plan benefit, and optional Section 1915 (c) HCBS waivers.  In recognition of growing state interest in other program authorities, this year’s report adds 2016 HCBS enrollment and spending data for the Section 1915 (i) HCBS state plan option and the Community First Choice state plan option.

This report also identifies key 2016 state-level HCBS policy developments related to waiver waiting lists, financial and functional eligibility criteria, cost controls, self-direction, waiver consolidation, scope of benefits, provider policies and payment rates, and state progress in implementing the U.S. Department of Labor (DOL) direct care worker minimum wage and overtime rule and the Medicaid home and community-based settings rule.  Additionally, this year’s report discusses HCBS enrollment and waiting list changes in the context of the Affordable Care Act’s (ACA) Medicaid expansion; HCBS quality measures; and state progress in implementing selected managed long-term services and supports (MLTSS) provisions of the revised Medicaid managed care rule. The Appendix tables contain detailed state-level data.

Medicaid HCBS Enrollment and Spending Trends, 2004-2014

Nearly 3.2 million people received HCBS through one of the three main Medicaid programs in 2014, a five percent increase from the prior year.  Most of the HCBS enrollment increase from 2013 to 2014 is due to a 27 percent increase in home health state plan services.  Enrollment growth in Section 1915 (c) waivers was small (2%), while enrollment in personal care state plan services declined by six percent.  Section 1915 (c) waivers continue to comprise half of total Medicaid HCBS enrollment across the three main programs.  Home health state plan services makes up just over a quarter of total HCBS enrollment, while personal care state plan services account for just under a quarter of total HCBS enrollment.  Seniors and adults with physical disabilities comprised over half (54%) of all Section 1915 (c) waiver enrollment, followed by people with intellectual or developmental disabilities (I/DD, 42%).

The overall increase in enrollment across the three main HCBS programs from 2013 to 2014 is notable as many states also experienced enrollment increases from implementing the ACA’s Medicaid expansion in 2014.  State-level data do not support a relationship between changes in HCBS enrollment and a state’s Medicaid expansion status.  Some of the states with larger increases in HCBS enrollment from 2013 to 2014 were ACA expansion states.  States with HCBS enrollment decreases from 2013 to 2014 included both expansion and non-expansion states, with some of the greater HCBS enrollment decreases in non-expansion states.

Total Medicaid spending on HCBS across the three main programs was $58.5 billion in 2014, an increase of three percent from the prior year.  Spending growth was led by home health state plan services (11%), followed by a 10 percent increase in personal care state plan services, and a one percent increase in Section 1915 (c) waiver services. Nearly three-quarters (72%) of Medicaid HCBS spending went to Section 1915 (c) waivers.  Section 1915 (c) waiver services targeted to adults with I/DD accounted for 70 percent of all Section 1915 (c) waiver spending, while waiver services targeted to seniors and nonelderly adults with physical disabilities was 27 percent of waiver spending.

Medicaid HCBS spending per enrollee averaged $18,458 nationally in 2014, with substantial state-level variation.  For example, five states spent less than $10,000 per enrollee while seven states spent more than $30,000 per enrollee. Higher per enrollee spending in some states is at least in part due to the transfer of most HCBS waiver populations to Section 1115 MLTSS programs, leaving all or most enrollment in the three traditional HCBS programs comprised of people with I/DD, who may have more intensive needs and therefore higher spending compared to other target populations.  Per enrollee spending also varied across the three main HCBS programs, ranging from $7,570 for home health services to $26,563 for Section 1915 (c) waiver services and reflecting differences in the type and extent of services provided by the different programs.

Key Medicaid HCBS State Policies, 2016

Most of the 24 states with capitated MLTSS programs in 2016 already were implementing key policies contained in the revised Medicaid managed care rule.  Seventy-one percent of MLTSS states provided beneficiaries with independent options enrollment counseling, 54 percent allowed beneficiaries to disenroll if their LTSS provider leaves the health plan network, 58 percent required network adequacy standards for LTSS providers, 83 percent had a state-level advisory committee, and 79 percent had a state-level managed care advisory committee.

Three-quarters of states reported Section 1915 (c) or Section 1115 HCBS waiver waiting lists in 2016, totaling 656,195 individuals.  The average waiting time across all waivers with waiting lists was 23 months, with substantial variation by waiver population, ranging from five months for HIV/AIDS waivers to 48 months for waivers targeted to people with I/DD.  Eighty-seven percent of waivers with waiting lists offered non-waiver Medicaid services to individuals who were waiting for waiver services.

The data do not support a relationship between a state’s Medicaid expansion status and changes in its HCBS waiver waiting list between 2015 and 2016.  Most ACA expansion states (56% or 18 of 32) either have no HCBS waiver waiting list or had a decrease in their waiting list from 2015 to 2016.  Among states that experienced a waiver waiting list increase from 2015 to 2016, the average increase was lower in expansion states compared to non-expansion states.

Over three-quarters (77%) of Section 1915 (c) HCBS waivers set financial eligibility at the federal maximum (300% of SSI).  Nearly all Section 1915 (c) waivers used the same functional eligibility criteria for their waivers as for nursing home eligibility.  Most states used some form of cost controls, such as fixed expenditure caps or hourly service limits in each of the three main HCBS programs.

Nearly all states (49 of 51) offered self-direction as an option in their HCBS waivers. Most states (20 out of 31) offered self-direction in their personal care state plan services programs, while few (6 out of 51) did so for their home health state plan services programs. Fifteen states reported plans to restrict direct care worker hours or make other policy changes in response to the U.S. DOL minimum wage and overtime rule, up from seven states that reported doing so in 2015.

States were further along in identifying policy changes necessary to comply with the home and community-based settings rule in 2016 compared to 2015.  Forty-two states reported that they anticipated having to change state rules or policies, up from 21 states in 2015.

The average home health agency reimbursement rate decreased slightly from 2015 to 2016, while the average personal care agency reimbursement rate increased slightly.  In 2016, the average home health agency rate was $92.52 per hour, and the average personal care agency rate was $19.01 per hour.

Conclusion

Over the past three decades, increased access to Medicaid HCBS has resulted in greater enrollment in and spending on these services.  The size and scope of Medicaid HCBS programs continues to vary across states.  Section 1915 (c) waivers continue to account for the majority of HCBS enrollment and spending.  While working to expand beneficiary access to HCBS, states also have been implementing the ACA’s Medicaid expansion.  The data do not support a relationship between changes in HCBS enrollment or waiting lists and a state’s Medicaid expansion status.  States also continue to focus on policy changes to implement federal regulatory requirements, including the MLTSS provisions of the Medicaid managed care rule, the DOL minimum wage and overtime rule, and the home and community-based settings rule, with most states reporting policy changes in these areas.  As the population ages and medical advances continue to emerge to support people with disabilities living longer and independently in the community, stakeholder interest in state trends in Medicaid HCBS enrollment, spending, and program policies is likely to continue.

Introduction

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.