Stretching the Medicaid Dollar: Home and Community-Based Services Are a Cost-Effective Approach to Providing Long-Term Services and Supports

Approximately 17.4 million children and adults with disabilities and older adults rely on Medicaid for health care and assistance with long-term services and supports (LTSS). Of these 17.4 million Medicaid enrollees, approximately 5 million receive LTSS through Medicaid.

LTSS include assistance with daily tasks such as eating, bathing, dressing, transportation, and managing medications and finances. LTSS can be delivered in institutional settings (such as nursing facilities) or through home and community-based services (HCBS). However, an overwhelming majority of people would prefer to live in tBheir homes and communities for as long as possible. Related to those preferences, they want to maintain their independence and have control over their own decisions.

The Medicaid program is the largest payer for LTSS, covering 51 percent of national LTSS expenses in 2013. Over the past 30 years, Medicaid LTSS dollars have increasingly gone toward HCBS, allowing more people to stay in their homes and integrated within their communities. However, the pace has not been fast enough, particularly in light of the increase in the aging population. Importantly, HCBS are not only the preference of most people, they are cost-effective. HCBS are typically less expensive than nursing facility care, so increasing investments in and access to HCBS could allow the Medicaid program to serve more people without increasing costs.

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