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Study Finds States Moving to Managed Care for Older Americans Who Need Long-Term Services and Supports


February 3, 2012

Study Finds States Moving to Managed Care for Older Americans Who Need Long-Term Services and Supports

Under budget pressure, states broadly restructure LTSS 

WASHINGTON—A new report released today by AARP’s Public Policy Institute, the National Association of States United for Aging and Disabilities (NASUAD) and Health Management Associates (HMA) shows that while the recession continues to impact state budgets, more states are restructuring the way they deliver long-term services and supports (LTSS).  

The report, “On the Verge: The Transformation of Long-Term Services and Supports,” takes a comprehensive look at Medicaid and non-Medicaid financing of LTSS in each state and provides a snapshot of the status of LTSS for older Americans and adults with disabilities. It shows 11 states planning to implement Medicaid managed LTSS in 2012-2013, joining 12 states that currently deliver services on a capitated basis.

“While many states are hopping on the managed long term care train,” said AARP senior vice president Susan C. Reinhard, who directs the Public Policy Institute, “they need to understand that while it is a model with great promise, it also poses real risks for what is a particularly vulnerable group of individuals.  States should proceed with caution.  If implemented thoughtfully and with appropriate consumer protections and assurances that individuals will receive the services and supports they need, managed long term services and supports has the potential to improve care through development of coordinated services, more efficient use of resources, and increased emphasis on preventive services and home and community-based care.”  

The report found six clear patterns emerging from the states:  

States are transforming the financing and delivery of LTSS.  A significant number of states either have or plan to implement Medicaid Managed LTSS.  Also, a majority of states report focusing on better integrating Medicare and Medicaid services for their “dual eligible” population.

The aftermath of the Great Recession continues to impact state budgets.  States continue to face fiscal challenges following the recession, and many made cuts to non-Medicaid LTSS funded services such as congregate meals, transportation and the Senior Community Service Employment Program (SCSEP). 

Demand for publicly-funded services continues to increase.  The vast majority of states remain concerned about their budgets and their ability to maintain services in the face of increasing demand for publicly-funded LTSS due to rising numbers of older adults and persons with disabilities in need of these services.

States continue to remain committed to home and community-based services (HCBS).  The report found that many states continue to use the economic downturn as an opportunity to balance services from institutional to non-institutional settings.  In addition, states reported that they continue to make progress in serving more individuals with LTSS needs in their homes or communities, as opposed to nursing homes.

Changes in LTSS State leadership are at an all-time high.  A record number of new state officials took policy leadership positions.  In some states, the state aging and disability director has changed more than once in the past 12 months.

Uncertainty around the Affordable Care Act (ACA) remains.  The ACA provides states with new options to expand HCBS, but pending litigation on the ACA’s constitutionality makes adoption of these options a challenge.

“As states continue to experience the impact of the recession, they also continue to respond to these challenges in a variety of  ways, seeking to preserve current service levels in an environment of decreased funding and increased demand,” said Martha Roherty, NASUAD Executive Director.  “By capturing a snapshot of the impact of the recession on state delivered long-term services and supports, this survey has again highlighted the need for a renewed investment at the federal level that will allow older adults and individuals with disabilities to maintain their dignity and independence by receiving services in whatever place they call home.”

In addition to a detailed analysis of the six common themes, the report also includes extensive state-by-state data on budgets, plans for LTSS expansion, integration of dual eligibles, Medicaid HCBS waivers, and nursing facility activities.

“The growth in Medicaid expenditures and reining in these costs continue to be primary concerns for states,” said Jenna Walls, Senior Consultant with HMA.  “State Medicaid programs have always been incubators of innovation, and it is clear from this survey that states are turning their efforts toward fundamentally changing the way health care is delivered for seniors and individuals with disabilities. States seek a two-fold objective - improve quality to drive down cost.”

The report is a follow up to a 2011 study entitled “Weathering the Storm:  The Impact of the Great Recession on Long-Term Services and Supports.” The full report, along with an interactive map that displays state-by-state information, is available at

AARP is a nonprofit, nonpartisan organization with a membership that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.1 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. 

The National Association of States United for Aging and Disabilities, founded in 1964, represents the nation’s 56 officially designated state and territories agencies on aging and disabilities. The association’s mission is to design, improve, and sustain state systems delivering home and community based services and supports for people who are older or have a disability, and their caregivers.

Health Management Associates (HMA) is an independent, national consulting firm specializing in publicly financed health care reform, policy and programs including Medicaid, Medicare, managed care and long-term care innovations and financing strategies.  HMA has 12 offices and more than 80 consultants serving public and private clients nationwide.

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David L. Allen

Media Relations

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