Imagine, for a moment, that you were badly injured in an accident and have spent two years rotating between a hospital for multiple surgeries, a rehab hospital for recovery, and finally a nursing facility for long-term care. Over these two years, you gave up your job, let go of your apartment lease, and have given away all of your furniture. You learn that you have finally been approved for Medicaid home and community based services (HCBS). With these services you could move back to your own home, engage in community activities, while still receiving the care you need. Except, you have no place to go, no furniture, and no plan. Or, imagine a similar scenario, where you have a spouse waiting for you back home, but you worry about the financial stability of your family if you choose to move back home. Millions of people in the U.S. face similar challenges every day. Medicaid HCBS provides the care and support that older adults and people with disabilities need to live at home and keeps families together. Yet for many people living in institutional settings, the transition back home is filled with difficulties.
Two important provisions that aid with these transitions, the Money Follows the Person (MFP) Medicaid Demonstration Program and the spousal impoverishment protections for HCBS are set to expire in 2027 if Congress does not act to extend them.
Money Follows the Person
MFP is a Medicaid program that helps support older adults and people with disabilities transitioning from an instructional setting back home to their communities. The program gives states enhanced funding to help facilitate an individual’s transition back home, and can help pay for housing identification and coordination, home set-up and modifications, food assistance, and other costs not typically covered by Medicaid. Since the program was established in 2005, 47 states have used the program to help over 144,000 people move into the community.
MFP improves outcomes for individuals and saves states money. Individuals who transitioned home through MFP reported improved quality of life, including improved satisfaction with quality of care, lower rates of depression, better access to community participation, and enhanced feelings of dignity and respect. At the same time, states saved 23-30% per person transitioned back to the community. The program helps drive innovation and help states build better infrastructure to improve HCBS. Historically, this program has enjoyed wide bipartisan support.
Spousal Impoverishment Protections
While MFP helps people return home, spousal impoverishment protections help married couples remain in the homes. Congress enacted spousal impoverishment protections in Medicaid in 1988 to ensure that spouses of individuals who needed long-term care in an institution would be able to maintain a modest amount of income and live in the community, without experiencing poverty. Beginning in 2014, the Affordable Care Act temporarily extended these protections to individuals whose spouses were eligible for Medicaid HCBS, allowing couples to remain at home together, without jeopardizing their care or financial security. Like MFP, the spousal impoverishment protections for HCBS have also had strong bipartisan support.
Need to Make MFP and the Spousal Impoverishment Protections Permanent
The MFP program and spousal impoverishment protections have never been permanently funded. Bipartisan legislation to make these provisions permanent has been introduced but has failed to move forward. Instead, they have been repeatedly renewed on a short-term basis, creating uncertainty and harm. Between 2018 and 2020, for example, the instability in funding caused many states to pause their MFP programs and led to a 50% drop in the number of transitions. Without assurance of stable funding beyond 2027, state will need to decide whether to limit or wind down their programs. At the same time, many families are being forced to make decisions about long-term care without knowing whether the spousal impoverishment protections in Medicaid HCBS will still be in place beyond 2027.
Both MFP and the spousal impoverishment protections have a proven record and strong bipartisan support. Now is the time for Congress to act, to end the instability and uncertainty around these programs and make them permanent.
