Home and community-based services: public policies to improve access, costs, and quality

The population of the US is aging with the number of adults aged 65 and older almost doubling from 12 percent in 2005 to almost 20 percent of the population by 2030. With the population aging, the demand for long term care (LTC), particularly services at home, is increasing. Of those individuals receiving LTC services in the US, most paid services were funded by the government. In 2006, of the total $177.6 billion in estimated spending for LTC nationally, $124.9 billion was for nursing homes (excluding hospital-based LTC) and $52.7 billion was spent on home care. Medicaid is the primary payer for LTC services for individuals with low incomes, paying for 45.8 percent of nursing home care and 37.6 percent of home health in the US in 2006. Medicaid is a joint federal and state program, which covers individuals who are on Supplemental Security Income and those who meet each state’s income and asset requirements (the categorically needy). In some states, it also pays for individuals who spend down their incomes to each state Medicaid level because of medical costs (the medically needy). Medicaid home and community based services (HCBS) has been the focus of widespread efforts by the federal and state government to expand access for several reasons. First, there is a growing demand by individuals to remain in their homes for as long as possible rather than to live in institutions. Second, the Supreme Court ruled in the Olmstead case in 1999 that individuals have the right to live at home or in the community if they are able to and choose to do so, rather than to be placed in institutional settings by the government. Third, a number of subsequent lawsuits against states have encouraged states to expand access to HCBS. Finally, in the past decade, the federal government has provided a number of initiatives and resources to assist states in complying with the Olmstead decision and in rebalancing their services from institutional to HCBS. In spite of these efforts, there are inequities in access to services and many individuals have unmet needs for HCBS. The focus of this report is to examine issues of access, cost, and quality for Medicaid HCBS programs. The trends in state Medicaid HCBS programs, target groups, participants, and expenditures are summarized. The paper shows the progress in providing Medicaid HCBS but also identifies many current problems and policies. Inequities in access to services and limited funds result in unmet needs for HCBS. HCBS cost issues have been a primary focus of policy makers and quality problems are largely not addressed. Policy recommendations are made to improve access, costs and quality at the federal and state levels in the future.