Home & Community-Based Services: State-Only Funded Programs.
Martin Kitchener, Alice Wong, Micky Willmott and Charlene Harrington
UCSF National Center for Personal Assistance Services

February 2007.

1. Introduction

States may be required to contribute match funding to some federally funded long-term care (LTC) programs and to different extents. In FY 2005 states spent 22.9% of total state expenditure on Medicaid (NASBO, 2006: 45). Total expenditures for HCBS are increasing and totaled $17.1 billion in FY 2003, with states paying 5.1 % and 4.8 % on total health care expenditures on HCBS in FY 2002 and 2003, respectively (Milbank 2005: 13). Medicaid spending grew quickly in the early 2000s, forcing state legislatures and officials to investigate ways to contain Medicaid costs rather than expanding services (Coleman et al 2003).

This paper introduces some of the other, non-waiver public funds that are used to fund HCBS, concentrating on (1) state-only funded HCBS programs, (2) Older Americans Act funds and (3) non-waiver, Medicaid funds. Evidently, like Medicaid programs, some of these have been affected by the budget crises that many states have experienced over the last few years. A table accompanies this paper and selected findings are reported below.

2. State funded LTC programs

State-funded programs vary in size and scope (Summer 2001) and the funding method also varies, with some being funded through general state revenue (taxes) and others using creative methods such as revenue from state lotteries or tobacco settlement monies. A recent report suggested that the advantage of state-funded HCBS is that they are not constrained by federal regulation and can cover people who might not otherwise be eligible for support (Summer 2001). Summer found that although 50 states report having state-funded multi-service programs for HCBS, some of these funds are used to match federal funds provided through the Older Americans Act or block grants. In the table accompanying this paper, we report the state-only funded programs separately from those funded partially by matching federal funds (e.g. the programs included in the accompanying table are those which are exclusively funded by state revenue and do not include OAA programs which are funded by states and the federal government).

Wiener et al found that state-only funded HCBS programs tend to be used to supplement Medicaid funding (2002) but that the use of personal care options (non-waiver Medicaid services, see below) and state-only funds is more financially burdensome for states, therefore leading them to rely mostly on Medicaid waivers. Wiener et al studied the LTC system of 7 states in detail (Alabama, Indiana, Kentucky, Maryland, Michigan, Washington and Wisconsin). Out of these, all had state-only funded programs although only Washington, Indiana and Kentucky's were large programs that serve over 10,000 people (2002). The table we present reflects this finding that most state-only funded programs are relatively small in terms of the amount spent and population served.

Whilst Wiener et al concur with Summer's assertion that state-only funded programs tend to fill the gaps in Medicaid coverage, it found that Washington and Indiana both have "very flexible service structures" although no states ran programs which did not have eligibility requirements and cost containment strategies such as individual expenditures. Some state-only funded programs have waiting lists although, as Wiener et al note, these are caused by limited state funds rather than limits on number of participants ('slots'), as is the case with Medicaid waivers (2002).

3. Key trends

Most States (and the District of Columbia) have state-only funded HCBS programs (n = 48) covering mostly elderly and/or physically disabled adults. The three states where no programs have been found are Missouri, Mississippi and Montana. A total of 157 state-only funded programs have been found, although other authors have found less than this (Summer and Ihara 2004). However, 14 states have programs which have been reported in secondary sources as being state-funded but do receive funding from other sources (Arizona, Alabama, California Connecticut, Delaware, Florida, Indiana, Massachusetts, Minnesota, New York, Oklahoma, Texas, Vermont, Wyoming). The largest participation on a state-only funded HCBS program was the 'Options' Program in Pennsylvania that cost $207 million in 2002 and served almost 230,000 people, devoting state lottery revenue to funding services for seniors. The state with the most state-only funded programs is Delaware with 6 programs.


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