Short Paper 8: The ACA and Home and Community-Based Care Options

Background
The Patient Protection and Affordable Care Act (?ACA? or ?the Act?) was enacted in March 2010.1 The ACA will dramatically expand access to health insurance, and it also contains provisions designed to improve health through other means. This short paper discusses several provisions designed to make home and community-based services (HCBS) available to more Medicaid beneficiaries.

Expanded State Plan Option to Offer Home and Community-Based Services
The Deficit Reduction Act (DRA) of 2005 added section 1915(i) of the Social Security Act, which authorizes states to provide HCBS through a Medicaid state plan.2 Previously, such services could be offered only pursuant to 1115 or 1915 waiver programs.3 Section 1915(i) enables states to serve individuals with incomes under 150 percent of the federal poverty level (FPL) who need supportive HCBS but whose functional limitations are less severe than those served under HCBS waivers. It is intended to provide states with an opportunity to offer services and supports in the home and community before individuals need institutional care.4

Participating states must establish criteria for determining an individual?s need for covered HCBS that are less stringent that those the state uses to determine eligibility for institutional services.5 Services covered are those that could be covered for 1915(c) waivers: case management, homemaker/home health aide and personal care, adult day health, habilitation, respite care, and other partial hospitalization services, psychosocial rehabilitation services, and clinic services (whether or not furnished in a facility) for individuals with chronic mental illness.6 States may also allow individuals to direct their own care.7 States must use an independent evaluation to determine an individual?s eligibility and an independent assessment to determine the necessary level of services and supports in an individualized care plan.8

The ACA makes several significant changes to the 1915(i) option. First, it enables states to expand eligibility to individuals with incomes up to 300 percent of the SSI benefit rate (about $2022 per month) and who are eligible for (but not necessarily enrolled in) a 1915(c), (d), (e), or 1115 waiver.9 It also expands the scope of services that may be covered. One important difference between 1915(c) waivers and the original 1915(i) option was that, under 1915(c) waivers, it was possible for states to cover services not specifically listed in the statute as long as the Centers for Medicare & Medicaid Services (CMS) approved.10 In contrast, the 1915(i) option as first enacted restricted coverage to those services specifically listed. The ACA removes this limitation and states may now offer other CMS-approved HCBS services under 1915(i).11

In addition, the 1915(i) option now allows states to waive Medicaid?s comparability requirement, which requires states to cover services in an equal amount, duration, and scope for all beneficiaries who qualify for them.12 Thus, states can offer HCBS to specific, targeted populations and offer a different amount, duration, and scope of services to different groups. CMS issued a letter in August 2010 explaining how states might do this:
For example, a State could propose to have one 1915(i) benefit that is targeted and includes specific services for persons with physical and/or developmental disabilities, and another 1915(i) benefit targeted to persons with chronic mental illness. Another State might implement one 1915(i) benefit that is targeted to children with autism and adults with HIV/AIDS, but specify different services to meet the needs for each targeted population group within the same overall benefit package.13

States are no longer allowed to waive the requirement that services be available statewide nor to place caps on enrollment and maintain waiting lists.14 But, they may still limit enrollment indirectly. They are required to project and report to CMS the number of individuals that they expect to receive services under 1915(i). If enrollment exceeds a state?s estimate, it may modify the needs-based eligibility criteria to restrict further enrollment without getting advance permission from CMS. The State must give CMS and the public at least 60 days notice of such modification, and any individuals who are eligible for services will remain so until they no longer meet the original eligibility criteria.15

1915(i) plan options may operate for five years and be renewed for an additional five year term.16
The ACA also creates an optional category of eligibility that includes individuals who are eligible for home and community-based services through 1915(i). This would allow states to cover the full scope of Medicaid benefits for qualified individuals, such as physician services, hospital care, and home health, rather than only covering HCBS.17

There is good reason to welcome the 1915(i) option as it offers an additional way for states to expand coverage of HCBS. In particular, it improves states? ability to cover services for people with mental illnesses.18 It is especially helpful that states may no longer have waiting lists for 1915(i) services. But, while this flexibility may encourage states to offer benefits that they otherwise would not, it also defeats part of the purpose of having a benefit offered as part of a state plan, i.e. that states must cover benefits in an equal amount, duration, and scope for all eligible individuals. And, advocates should be aware that states could attempt to use the option to limit services. For example, North Carolina requested permission to offer personal care services (PCS) to individuals living in adult care homes through a 1915(i) plan option. At the same time, it requested permission to limit the scope of PCS for individuals living in their own homes. On balance, this would have allowed the State to reduce coverage of PCS, a crucial community based service, through a tool intended to expand the scope of coverage of HCBS. Advocates understand that CMS may reject this request. But, based on examples given by CMS itself, a state could eliminate coverage of PCS for everyone, then reinstate coverage only for people with physical disabilities, thus circumventing the comparability requirement and resulting in a net loss of HCBS. Thus, the issue requires close monitoring by advocates.

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