Much of the nation’s long-term care is paid for with Medicaid funding. Medicaid pays 43 percent of all long-term care, while Medicare pays 24 percent and a mix of private health plans and consumers funds the rest, according to the Kaiser Family Foundation. Only half of people who need long-term care are elderly. The other half are younger than 65 years and have severe intellectual disabilities, as well as physical disabilities.

Four million Medicaid beneficiaries, roughly 6 percent of the total, use long-term services and supports (LTSS). Some require nursing home care to handle all of their needs. However, particulary since the mid-1990s, states have shifted Medicaid resources away from nursing homes and toward home and community-based services (HCBS). In 1995, only 13 percent of Medicaid long-term care spending went to home and community-based care, increasing to 45 percent by 2010.  Increasingly states are moving away from unmanaged, uncoordinated LTSS to managed long-term services and support (MLTSS) programs, where contractors are accountable for providing beneficiaries with a defined set of long-term care services and support in exchange for a prepaid capitation payment. There are a range of MLTSS models – some include just Medicaid benefits and other include both Medicare and Medicaid benefits.

Home and Community-Based Care Expansion Efforts Under Health Reform:

The Affordable Care Act (ACA) will strengthen the emphasis on home and community-based care by giving states several options to expand such programs for Medicaid enrollees. A helpful brief from the Center for Health Care Strategies (CHCS) describes those opportunities and tracks which health reform HCBS policies states have implemented so far.

Below is a quick list of the ACA’s long-term care programs, which the brief describes in detail:

  • Aging and Disability Resource Center Counseling Program Grants, which help Medicaid beneficiaries navigate the long-term care system.
  • Balancing Incentive Program gives enhanced Federal Medical Assistance Percentage (FMAP) rates to states that meet home and community-based care spending targets and that implement several reforms, including a single point of entry for long-term care.
  • Extension of the Money Follows the Person demonstration programs, originated by the G. W. Bush Administration, through 2016.
  • Community First Choice Option (CFCO) now eligible for state plan amendments, meaning states can apply to provide community based services to individuals with incomes up to 150 percent of the federal poverty level who are eligible for nursing home or institutional care.

The CHCS brief describes the progress in implementing those policies for 10 states that are part of the SCAN Foundation long-term care efforts. The Centers for Medicare and Medicaid Services (CMS) has approved eight of them for the Money Follows the Person demonstration extension. Aging and Disability Resource Center Counseling was the second-most popular option, with nine states pursuing it.

Federal Objectives for Reform and Expansion of Medicaid Home Care:

CMS has identified six objectives for the reform and expansion of community-based long-term services and supports in Medicaid:

  1. Person-driven: The system affords older people, people with disabilities and/or chronic illness the opportunity to decide where and with whom they live, to have control over the services they receive and who provides the services, to work and earn money, and to include friends and supports to help them participate in community life.
  2. Inclusive: The system encourages and supports people to live where they want to live with access to a full array of quality services and supports in the community.
  3. Effective and Accountable: The system offers high quality services that improve quality of life. Accountability and responsibility is shared between public and private partners and includes personal accountability and planning for long-term care needs, including greater use and awareness of private sources of funding.
  4. Sustainable and Efficient: The system achieves economy and efficiency by coordinating and managing a package of services paid that are appropriate for the beneficiary and paid for by the appropriate party.
  5. Coordinated and Transparent: The system coordinates services from various funding streams to provide a coordinated, seamless package of supports, and makes effective use of health information technology to provide transparent information to consumers, providers and payers.
  6. Culturally Competent: The system provides accessible information and services that take into account people’s cultural and linguistic needs.