This report documents how the recession continues to affect state programs for older individuals and adults with physical disabilities. States have used many administrative tools to curtail expenditures. At the same time, demand for publicly funded services has grown, and resources—including staff—are stretched thin, according to this new 50-state study. Specifically, 31 states cut aging and disability services programs (non-Medicaid) in FY 2010, and 28 states were expecting to cut these programs in FY 2011.

Major revenue sources—personal income, corporate, and sales taxes—for 2011 are expected to be below pre-recession levels for most states. Faced with significantly falling tax revenues, states are also contending with increasing service demands, forcing many states to impose new limits on non-Medicaid long-term services and supports (LTSS). States are “holding steady” with Medicaid LTSS because funding from the ARRA stimulus funds requires them to maintain eligibility.  However, many states expect they will need to make additional cuts in LTSS when the funds phase down and expire in June 2011.

On a brighter note, many states are using the economic downturn as an opportunity to balance services from institutional to non-institutional settings.  The Affordable Care Act provides states with new opportunities to expand home and community-based services, yet many states are reluctant to commit to these programs until further federal guidance is issued.

Individual State Profiles (PDF)

For more information, please contact Wendy Fox-Grage, wfgrage@aarp.org; 202-434-3867