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Trump Should Have Proposed “Money Follows the Person” Funding

In his 2019 budget, President Trump missed an opportunity to propose reauthorizing the Money Follows the Person (MFP) demonstration, which since 2007 has helped over 75,000 Medicaid beneficiaries in 44 states who need long-term services and supports transition from institutions back to their own homes and communities. MFP funding expired on September 30, 2016 and while states can spend unused 2016 MFP funds through September 30, 2020, they may start to scale back their transition activities due to funding constraints. The President should propose to reauthorize and fund this successful and cost-saving demonstration.

MFP has helped states and the federal government save money. From 2008 to 2013, it generated $978 million in reduced Medicare and Medicaid costs after the first year of transitioning participants to home- and community-based care. MFP gives federal funds to states to help “rebalance” how they provide long-term services and supports, moving such services from nursing homes and other institutions to people’s homes and communities, where it’s not only more cost-effective but also where most people want to be, improving their quality of life. The demonstration has played a significant role in Medicaid’s 30-year shift in funding long-term services and supports from nursing homes to home- and community-based settings.

Compared to others who transition out of institutions, MFP participants are less likely to be readmitted to institutional care after their initial transition to the community. MFP also has improved the quality of life of its participants, with 92 percent reporting that they liked where they lived one year after entering community living, a 30-percentage-point increase compared to when they were receiving institutional care. (See chart.)

The most recent MFP evaluation also shows an 18-percentage-point decline in barriers to “community integration,” defined as people’s transition from institutions back to their homes and communities to get the care they need. Moreover, the more integrated that MFP participants are in their communities, the less likely they are to have symptoms of depression compared to participants who aren’t as integrated.

By failing to include continued funding for MFP in his budget, the President lost an opportunity to improve health outcomes, drive greater value in Medicaid, and ensure financial sustainability over the long term. Nevertheless, he can still take steps to restore funding for this effective demonstration.