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Medicaid Cuts Are Real Threat to Home- and Community-Based Services

Republican plans to severely cut federal Medicaid funds by converting the program to a block grant or a per capita cap represents a severe threat to funding for home- and community-based services (HCBS), despite recent claims to the contrary.

House Republicans claim that the Affordable Care Act’s (ACA) Medicaid expansion for low-income adults is squeezing out funding for services for vulnerable seniors and people with disabilities, such as HCBS.

In a related matter, the Foundation for Government Accountability blames the Medicaid expansion for some states’ large waiting lists for HCBS, which give people needing long-term services and supports an alternative to nursing homes. But an analyst from the group admitted in recent House testimony that “there is no correlation” between state decisions to expand Medicaid and waiting lists for HCBS.

States have had the flexibility since 1981 to use Medicaid funds for HCBS. They can target these services to particular groups, such as people with intellectual and developmental disabilities, seniors, people with HIV/AIDS, and people with traumatic brain injuries. More than 1 million people now receive HCBS, the Centers for Medicare & Medicaid Services estimates.

States have made dramatic progress in shifting care from institutions to the community in recent years; 53 percent of Medicaid spending on long-term services and supports went to HCBS in 2014, up from 18 percent in 1995. Due to high demand for HCBS, most states have waiting lists for these services.

The data, however, show no connection between those waiting lists and the Medicaid expansion. Nine of the 11 states without HCBS waiting lists are expansion states, and the two states with the biggest waiting lists (Texas and Florida) are non-expansion states. In fact, Texas’ waiting list of over 204,000 people in 2015 represents almost one-third of the nation’s total.

A block grant or per capita cap would make it far harder for states to meet the need for HCBS by cutting federal Medicaid funding by growing amounts over time. States likely wouldn’t want to respond by ending coverage for people in nursing homes, even if they had the flexibility to do so (currently, states must cover nursing home care under Medicaid), because nursing home residents would likely suffer serious harm or even death without coverage. States would far likelier cut HCBS and other services for people in the community, so waiting lists would grow. Some states might even end their HCBS programs. Families would face stark choices on how to keep their loved ones at home.

In short, a block grant or a per capita cap would reverse states’ progress in enabling people to remain in their homes and communities instead of having a nursing home as their only choice.