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Medicaid Home and Community-Based Services Enrollment and Spending

Introduction

Medicaid continues to be the primary source of coverage for long-term services and supports (LTSS), financing over half (52%) of these services in 2017 (Figure 1). LTSS help seniors and people with disabilities with self-care and household activities. A range of conditions may give rise to LTSS needs, such as cognitive disabilities, like dementia or Down syndrome; physical disabilities, like multiple sclerosis or spinal cord injuries; mental health disabilities, like depression or schizophrenia; and disabling chronic conditions, like cancer or HIV/AIDS.1

Figure 1: Long-term services and supports (LTSS) spending, by payer, 2017.

State Medicaid programs must cover LTSS in nursing homes, while most home and community-based services (HCBS) are optional.2 Spending on HCBS surpassed spending on institutional care for the first time in 2013, and comprises 57% of total Medicaid LTSS spending as of 2016 (Figure 2). Factors contributing to this trend include beneficiary preferences for HCBS, states’ community integration obligations under the Americans with Disabilities Act and the Supreme Court’s Olmstead decision,3 and the fact that HCBS typically cost less than comparable institutional care.

Figure 2: Medicaid long-term services and supports spending, by institutional vs. community setting.

This issue brief presents the latest (2017) state-level Medicaid HCBS enrollment and spending data from the Kaiser Family Foundation’s 17th annual survey of all 50 states and DC. It includes Medicaid HCBS provided by the home health, personal care, Community First Choice (CFC), and Section 1915 (i) state plan benefits and Section 1915 (c) and Section 1115 waivers. The Appendix Tables contain detailed state-level data. Related briefs present the latest data and answer key questions about HCBS waiver waiting lists and highlight themes in state HCBS policies.

HCBS Enrollment

About 4.6 million Medicaid beneficiaries receive HCBS as of 2017 (Figure 3 and Appendix Table 1). Medicaid HCBS include four types of state plan benefits and two types of waivers.4 State plan HCBS include home health; personal care; Section 1915 (i), which authorizes HCBS targeted to a particular population with functional needs that are less than an institutional level of care; and CFC attendant services and supports. HCBS waivers include Section 1915 (c) and Section 1115,5 both of which allow states to expand financial eligibility and offer HCBS to seniors and people with disabilities who would otherwise qualify for an institutional level of care, while limiting enrollment.

Figure 3: Medicaid HCBS enrollment by program authority, FY 2017.

Nearly all (86%) Medicaid HCBS enrollees receive services that are provided at state option. Home health state plan services are the only HCBS that are required for states participating in Medicaid.6 Among the optional HCBS authorities, 48 states offer Section 1915 (c) waivers, 35 states offer personal care state plan services,7 16 states offer Section 1915 (i) state plan services,8 11 states offer Section 1115 waivers,9 and eight states offer CFC state plan services10 (Figure 4).

Figure 4: State policy choices about Medicaid HCBS program authorities, FY 2017.

HCBS waivers account for over half (52%) of Medicaid HCBS enrollment (Figure 3). While some states have taken up Section 1915 (i) and/or CFC, these newer state plan authorities have not supplanted waivers as the primary authority through which HCBS are provided. Unlike state plan services, which must be provided to all beneficiaries for whom they are medically necessary, states can cap enrollment for waiver services.11

Some states have changed HCBS waiver authorities from Section 1915 (c) to Section 1115, a trend that accelerated from 2008 to 2014 (Figure 5). Section 1115 waivers can be used to allow states to require beneficiaries to enroll in capitated managed care to receive HCBS. Section 1115 waivers also have been used to allow states to provide HCBS to multiple populations within a single waiver, eliminating the need for multiple Section 1915 (c) waivers, each for a different population.12 All 11 states currently using Section 1115 HCBS waivers without an accompanying Section 1915 (c) waiver require beneficiaries to enroll in capitated managed care and serve multiple populations in a single waiver.13 However, the two states with the most recently approved Section 1115 waivers that require beneficiaries to enroll in capitated managed care (Kansas14 and North Carolina15) continue to operate concurrent Section 1915 (c) waivers that authorize HCBS, instead of moving the HCBS authority to Section 1115.

Figure 5: Initial enrollment of HCBS waiver populations into Section 1115 capitated managed care waivers, by state:

Over half (52%, 911,000 people in 42 states)16 of Section 1915 (c) enrollment is in waivers targeted to seniors and/or nonelderly adults with physical disabilities (Figure 6 and Appendix Table 4).17 The next largest group of Section 1915 (c) waiver enrollees (44%, 769,000 people in 48 states)18 is people with intellectual or developmental disabilities (I/DD). The Section 1915 (c) waiver populations with the smallest enrollment are people with mental health disabilities (nearly 27,000 people in 12 states),19 people with traumatic brain or spinal cord injuries (TBI/SCI) (over 17,000 people in 22 states),20 children who are medically fragile or technology dependent (nearly 15,000 people in 16 states),21 and people with HIV/AIDS (nearly 11,000 people in 7 states)22 (Appendix Table 4).

Figure 6: Medicaid § 1915 (c) HCBS waiver enrollment and spending by target population, FY 2017.

In contrast to Section 1915 (c) waiver enrollment by target population, people with I/DD account for the vast majority of Section 1915 (i) state plan HCBS enrollment (84%, 58,000 people in 4 states.)23 Nearly all Section 1915 (i) state plan HCBS enrollment for people with I/DD is in California. Unlike waivers which require an institutional level of care, Section 1915 (i) state plan HCBS are provided to people with functional needs that are less than an institutional level of care. The next largest Section 1915 (i) enrollment group is people with mental health disabilities (13%, 9,000 people in 3 of 6 states reporting this data.)24 Three-quarters of Section 1915 (i) state plan HCBS enrollment for people with mental health disabilities is in Iowa. Seniors and adults with physical disabilities (3%, 2,000 people in 3 of 6 states reporting)25 make up the remainder of Section 1915 (i) state plan HCBS enrollment.

Nearly 800,000 people self-directed HCBS in states that were able to report this data. This includes over 200,000 people self-directing Section 1915 (c) waiver services in 44 of 48 states reporting for at least one waiver26 and nearly 551,000 people self-directing personal care state plan services in 12 of 35 states reporting this data.27 Self-direction enrollment varies considerably from state to state and within states among waivers. Among states reporting self-direction enrollment for Section 1915 (c) waiver services, Illinois’ waiver targeted to seniors and adults with physical disabilities had the most beneficiaries (nearly 30,000) self-directing services. Among states reporting self-direction enrollment for personal care state plan services, California had the greatest number of beneficiaries (over 485,000) self-directing services.

HCBS Spending

Medicaid HCBS spending totaled $82.7 billion in 2017, with over two-thirds (69%) going to HCBS provided through waivers (Figure 7 and Appendix Table 2.)28 Less than one-third (31%) went to HCBS provided through state plan authorities. As with enrollment, nearly all (93%) Medicaid HCBS spending was for services provided at state option (all but the 7% devoted to mandatory home health state plan benefits).

Figure 7: Medicaid HCBS spending by program authority, FY 2017.

Most Section 1915 (c) waiver spending (70%, $34 billion in 48 states)29 is for waivers targeted to people with I/DD (Figure 6 and Appendix Table 5). Although individuals with I/DD account for 44 percent of all Section 1915 (c) waiver enrollees, spending for this population is disproportionate to their enrollment as a result of their generally more intensive needs. Section 1915 (c) waivers targeted to seniors and/or people with physical disabilities, offered in 42 states,30 account for just over half (52%) of enrollment but just over a quarter (27%, $13.4 billion) of spending (Figure 6). The remaining Section 1915 (c) waiver spending goes to other target populations, including people with TBI/SCI ($743 million in 22 states),31 people with mental health disabilities ($283 million in 12 states,)32 children who are medically fragile or technology dependent ($203 million in 16 states,)33 and people with HIV/AIDS ($54 million in 7 states.)34

People with I/DD also account for the vast majority (85%, $500 million in 4 states)35 of Section 1915 (i) state plan HCBS spending. As with enrollment, nearly all Section 1915 (i) state plan HCBS spending for people with I/DD is in California. People with mental health disabilities account for 12% of Section 1915 (i) state plan HCBS spending ($74 million in 3 of 6 states reporting).36 As with enrollment, most Section 1915 (i) state plan HCBS spending for people with mental health disabilities is in Iowa. The smallest share of Section 1915 (i) state plan HCBS spending goes to seniors and adults with physical disabilities ($15 million in 2 of 6 states reporting).37

HCBS Spending Per Enrollee

In 2017, 4.6 million people received home- and community-based services (HCBS) through Medicaid waivers, with combined federal and state spending totaling $82.7 billion. Learn more:

Medicaid HCBS spending per enrollee across all program authorities averaged just over $17,800 nationally in 2017 (Figure 8), with substantial state-level variation (Figure 9 and Appendix Table 3). Three states (IL, OR, SD) spent less than $10,000 per enrollee, while 10 states (AK, DE, DC, KS, ME, MD, NY, ND, TN, VA) spent more than $30,000 per enrollee. State variation in per enrollee spending reflects different choices about the optional HCBS authorities, benefit package contents, and scope of covered services.

Figure 8: Medicaid HCBS spending per enrollee, by program authority, FY 2017.

Figure 9: State variation in Medicaid HCBS program spending per enrollee, FY 2017.

National per enrollee spending also varied among the different HCBS program authorities, ranging from just under $9,000 for home health and Section 1915 (i) state plan services to nearly $28,000 for Section 1915 (c) waivers (Figure 8 and Appendix Table 3). These differences likely are due to the type and extent of services provided in the different HCBS program authorities. Lower per enrollee spending on home health state plan services likely reflects shorter periods of service utilization compared to other service types. Lower per enrollee spending for Section 1915 (i) may reflect that Section 1915 (i) requires enrollees to have functional needs at less than an institutional level of care, unlike waiver authorities which generally require enrollees to meet an institutional level of care and therefore likely have more extensive and intensive service needs. Lower per enrollee spending for Section 1115 waivers compared to Section 1915 (c) waivers may reflect the fact that most Section 1115 waiver states use this authority for seniors and adults with physical disabilities but continue to serve people with I/DD, the costliest population, through Section 1915 (c).

There was substantial variation in per enrollee spending among Section 1915 (c) waiver target populations, ranging from nearly $5,000 for people with HIV/AIDS to over $44,000 for people with I/DD (Figure 10 and Appendix Table 6). Per enrollee spending for people with I/DD was closely followed by the TBI/SCI population (nearly $43,000).

Figure 10: Section 1915 (c) waiver per enrollee spending, by target population, FY 2017.

Per enrollee spending was similar across the Section 1915 (i) state plan HCBS target populations. Section 1915 (i) state plan HCBS per enrollee spending was about $8,000 for people with mental health disabilities (in 3 of 6 states reporting)38 and seniors and adults with physical disabilities (in 2 of 6 states reporting)39 and just under $9,000 for people with I/DD (in 4 states.)40 Lower per enrollee spending for Section 1915 (i) state plan HCBS compared to Section 1915 (c) waivers could reflect a more limited scope benefit package and/or the fact that Section 1915 (i) enrollees have fewer and/or less intensive needs (less than an institutional level of care) that Section 1915 (c) waiver enrollees (who must meet an institutional level of care).

Looking Ahead

Medicaid HCBS enabled about 4.6 million seniors and people with disabilities to live independently, outside of institutions, in 2017. These services, jointly financed by the federal government and states, totaled $82.7 billion. Medicaid fills a gap by covering HCBS that are typically not available and/or affordable through private insurance, Medicare, or out-of-pocket and provides substantial federal funding to help states meet their community integration obligations under Olmstead and the ADA.

Federal Medicaid matching funds are guaranteed to states with no pre-set limit, though most HCBS are provided at state option. Nearly all Medicaid HCBS enrollment (86%) and spending (93%) went to HCBS that are optional for states. Additionally, services provided through waivers, which give states the option to expand HCBS financial eligibility to additional populations, account for the majority of HCBS enrollment (52%) and spending (69%), compared to services offered through state plan authorities. Although efforts to repeal and replace the Affordable Care Act and cap federal Medicaid funding through a block grant or per capita cap were narrowly defeated in Congress in 2017, capped federal financing is proposed in President Trump’s FY 2020 budget.41 The optional nature of most HCBS covered populations and services puts them at risk if Medicaid financing were to change from a federal guarantee to states with no pre-set limits to capped federal funding under a block grant or per capita cap.42

Executive Summary Appendix Tables