Home and Community Based Services in Health Reform

Filed in Long Term Care, Medicaid by on October 14, 2009 2 Comments

jacobi-176x220_1As we head to floor votes and reconciliation, it’s important to keep our eyes on some of the less visible programmatic issues in the reform proposals.Many of these issues are old friends, have been kicking around Congress for years, and have been hammered out by members, advocates, and staff over many months.It would be a shame for them to be left on the cutting room floor in the interest of a “cleaner” bill.Home and community based care is one of those issues.

The reform bills adopt two complementary strategies to improve access to long term care (LTC): correct Medicaid’s institutional bias, and shift some LTC financing away from Medicaid.There is some history on which to build for the first strategy. Home and community based service (HCBS) reforms have chipped away at Medicaid’s institutional bias over recent years.HCBS waivers have increasingly moved care to the community settings, and reforms derived from DRA ’05 allowed further state flexibility in this area.Governors are strongly in favor of moving LTC funding to the community –- usually the most appropriate and economical setting –- but are seeking financial protection from increased demand.A recent paperfrom Harriet Komisar and others for the Scan Foundation proposed a four-prong proposal for HCBS Medicaid reform:

  • Require –- or provide strong financial incentives for –- states to expand home and community-based services.
  • Provide federal financial assistance to states through an enhanced matching rate to help finance expansions.
  • Make home and community-based services eligibility available on an equal footing with nursing home care.
  • Invest in workforce development.

The amended Senate Finance bill offers some help along these lines.It would, at p. 62, do two important things.First, it would incorporate the Community First Choice option, permitting states to expand HCBS waivers with increased federal matching funds; second, it would permit state plan amendments to cover HCBS for people up to 300% of the poverty level, with increased federal matching funds for a five year period.

The second strategy is to shift some of the LTC financing responsibility from Medicaid. Medicaid, for reasons indefensible in principle, is the default financer of LTC, paying about 43% of LTC costs (nursing home, home care, and assisted living), compared with 28% out of pocket, 18% from Medicare, and only 7% from private insurers.The active bills all incorporate the CLASS Act (Community Living Assistance Services and Support Act), which creates a social insurance system with opt-out payroll deduction funding.It would provide funding for community care for persons with severe functional limitations.Like the Cash and Counseling Program, it would permit qualifying insureds to make many choices in their own home care, deciding which non-medical support services are most essential, and who should provide them. It would broaden the base of LTC funding, further individual autonomy and a community care focus, and obviate the need for patient impoverishment. The benefits would be limited, however, in part because (unlike Medicare Part D) the program is designed to be entirely supported by participants’ premiums. This change doesn’t, as Urban Institute’s Howard Glackman has urged, “get Medicaid out of the long-term care business,”but it does expand sources of long-term care funding beyond the Medicaid program –- a good thing.

These HCBS provisions in the reform bills represent modest but positive steps toward broader access to financing for care for elders and others with chronic illness and disabilities, and toward a shift in focus from institutional care to community care. They appear to be relatively uncontroversial, at least in concept. Let’s hope they aren’t ditched in reform’s mad dash home.

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