Policymakers working to reshape the way long-term care is delivered in the state have long criticized what they call an institutional bias: Anyone who qualifies can get Medicaid coverage to live in a nursing home, but getting Medicaid to pay for home care is complicated.
To qualify, someone must fit into one of several specific programs, which don’t cover the same services and have varying applications and requirements. The programs are capped, so someone who qualifies might end up on a waiting list.
Now advocates say they’ve identified a solution: An option in federal law, known as a 1915i state plan amendment, that would make it easier for people to access home and community-based services. It would also allow the state to move state-funded home-care programs into Medicaid and get partial reimbursement for the costs.
“We honestly believe that this is the single most important thing the state could do to level the playing field,” said Julia Evans Starr, executive director of the Connecticut Commission on Aging.
But there’s a catch: To take advantage of the option, states can’t limit the programs. Anyone who qualifies for Medicaid home care coverage would get it. And the current eligibility requirements would need to be relaxed.
That could be good news for the more than 500 people on waiting lists for home care waiver programs, which cover adults with disabilities or acquired brain injury, or children with disabilities or complex medical needs.
But for state officials grappling with a massive budget deficit, the prospect of creating a new entitlement program, where anyone who qualifies would get services, is a significant risk.
“In the current fiscal environment, creating a series of new entitlements would be cost-prohibitive,” the state Department of Social Services said in testimony on a bill that would require the state to seek a 1915i amendment. The bill passed the legislature’s Human Services Committee.
According to the legislature’s nonpartisan Office of Fiscal Analysis, it would cost about $20.4 million a year to provide services to the 570 people currently on waiting lists; with federal reimbursement, the state would pay $10.2 million. The costs could increase if more people seek to enroll.
But using the 1915i option could also bring the state savings because it would move a portion of the Connecticut Home Care Program for Elders, which is fully state-funded and has no enrollment limit, into Medicaid, bringing in federal reimbursement. If everyone in the program now met the requirements under the 1915i plan, the state could save about $27.8 million a year, according to OFA.
The Malloy administration is looking to use a more limited version of the 1915i plan amendment–just for people in the home care program for elders. That could allow the state to realize the savings OFA identified without incurring the costs of expanding coverage for other groups.
DSS is also looking into another program, called the state Balancing Incentive Payment Program, created under the federal health reform law for states that spend less than half of their Medicaid long-term care funding on home and community-based services. If Connecticut participated, it could get reimbursed for an extra 2 percent of its Medicaid long-term care costs, on top of the usual 50 percent.
Connecticut would also have to make changes if it participates: It would have to establish a single entry point system, wouldn’t be allowed to tighten eligibility standards, and would have to aim to spend 50 percent of its Medicaid long-term care funds on home and community-based services by Oct. 1, 2015. That would be an increase from 35 percent in 2009.
Silos and barriers
Long-term care represents the largest piece of the state’s $4 billion Medicaid budget. In the 2009 fiscal year, the state spent close to $2.5 billion on long-term care in Medicaid for about 40,000 people. Just under half received institutional care, but it accounted for 65 percent of the cost. The rest received home and community-based services.
The state’s Long-Term Care Plan calls for “rebalancing” the way care is delivered, with a goal of having 75 percent of people receiving Medicaid long-term services in the community and 25 percent in institutions by 2025. Home and community-based care tends to be less costly, and surveys suggest it’s what people want.
Advocates for seniors and people with disabilities say making it easier to access home and community-based services would help the state reach that goal. Currently, the state uses a series of pilot programs and Medicaid waivers to cover home and community-based services, which have different criteria and are operated by different departments. They’re often referred to as silos.
“People have to navigate through a pretty convoluted array of Medicaid waivers, small state plan pilots,” said Claudio Gualtieri, program specialist for public affairs for AARP Connecticut. “There’s a lot of little fragmented state pilots. There’s an array of Medicaid state waivers, and it’s just not rational, really, to someone approaching this from the outside as a consumer.”
Gualtieri said the process could be more standardized, so people don’t have to “hold your breath and hope you get on a plan, or that the state continues to fund those state pilots that exist.”
With the exception of the home care program for elders, the existing waiver programs require people to need nursing home-level care to qualify. But many people who qualify end up waiting for a slot in a waiver program. Evans Starr said the long-term care advisory council and other advocates frequently hear from people “who are desperate and on waiting lists and can’t get the services they need to stay in the community.”
“We all identified the 1915i as the very best mechanism for structural change for Connecticut,” she said.
The Malloy administration has expanded one program, called Money Follows the Person, which helps people move out of nursing homes and receive home and community-based services. The administration set a goal of having 5,200 people moved out of nursing homes by 2016.
Advocates for rebalancing have applauded the move, but say that doing it without other changes in home care programs creates a perverse incentive. To qualify for Money Follows the Person, a person must be in a nursing home for three months. Advocates worry that people stuck on waiting lists for home care waiver programs could see going into a nursing home as a way to have a better shot at getting home services through Money Follows the Person.
“One of the keys to being successful and living in the community is having informal supports, so asking someone to give up their home, their neighbors, the church that they go to and those informal networks to go into a nursing home and then reintegrate back, hopefully within the same community but not always, it breaks up that great informal free network of care that people in the community sometimes can rely on,” Gualtieri said.
The 1915i option was created in 2005, but last year’s health reform law made changes that supporters say make it a better fit for the state. States can use universal criteria, making coverage available to anyone who meets certain criteria, or they can provide programs for specific groups, as the DSS proposal would do.
But the 1915i option would also require the state to lower its threshold for allowing people to receive coverage. The state could set the criteria, but it must be less than requiring nursing home-level care, the current standard for most waiver programs.
Supporters say the state could tailor the eligibility requirements to set a fairly high bar for qualifying–possibly beyond what the bill calls for–and limit a potential influx of people. In addition, the federal law allows states where participation exceeds projections to modify certain eligibility criteria to control expenses.
Other features of the program could constrain enrollment, including a relatively low asset limit, requiring people above certain income levels to contribute to the cost of their care, and a requirement that the state be allowed to recoup its expenses when a participant dies, supporters said.
But lawmakers are often wary of the “woodwork effect”–when an entitlement is offered, new people come out of the woodwork.
Last year, the state made state-administered general assistance, or SAGA, into a Medicaid program for low-income adults. The move was forecasted to save the state $53 million by bringing in federal reimbursement for a formerly state-funded program. But the shift also came with several eligibility changes, including eliminating an asset test and lowering the age limit for participating. Participation in the Medicaid program grew by 38 percent in its first 10 months, adding between $78.9 million and $96.9 million to DSS’ Medicaid deficit for this fiscal year.