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In Brief: Public Funding and Support of Assistive Technologies for Persons with Disabilities

Introduction and Purpose

This In Brief summarizes the findings of the AARP Public Policy Institute report, Public Funding and Support of Assistive Technologies for Persons with Disabilities, by Marc Freiman, William Mann, Jessica Johnson, Shin-yi Lin, and Catherine Locklear.Recent advances have focused attention on the potential of technology,in addition to medical care and assistive services, to enable older persons and individuals with disabilities to function in their communities. But in part because health care programs focus on health, not on functioning per se, the potential of assistive technologies (AT) is not being fully realized.

The purposes of this report are to: present an overview of government programs that fund or support assistive technologies, including their limitations; take a brief look at the degree to which private sector programs fill the gaps in government coverage of AT; and provide estimates of the costs of assistive technologies and sources of payment.

Principal Findings

Government funding of the range of assistive technologies is a patchwork, the overall effect of which is incomplete and irregular. Medicare and Medicaid are health care programs that generally require substantiation of medical necessity to cover an assistive technology, as opposed to improvement in functioning (a broader concept). As a result, in 2002 Medicare spent just over $2 billion on assistive technologies, with most of this total for wheelchairs and orthotics and prosthetics, but provided only limited coverage of AT for activities of daily living (ADLs). Home modifications, transportation AT, and cognitive assistive technologies are not covered at all. By statute, hearing aids are not covered, nor are eyeglasses generally covered.

State Medicaid plans vary substantially in their coverage of assistive technologies. Almost all cover prosthetics and orthotics and eyeglasses to some degree, but a few states severely restrict these types of coverage. Roughly 80 percent of plans cover at least some types of assistive technologies for ADLs and for personal mobility. Only about 60 percent of state Medicaid plans cover hearing aids, and roughly the same percentage cover some type of augmentative communication assistive technologies. None of the state Medicaid plans covers cognitive AT, transportation AT, or home modifications.

States also provide some coverage for AT under limited Medicaid waivers, as part of the waivers’ coverage of a range of services in the community for waiver participants, who otherwise would be in an institutional setting.

Veterans Benefits can cover at least portions of the broad range of assistive technologies, although not all veterans receive the most comprehensive coverage. Programs that focus on maintaining or returning a person to work may provide some support for assistive technologies that fulfill vocational goals.

Each of the reviewed programs has its own eligibility criteria, and some must operate within fixed funding levels and/or prioritize among potential recipients. The Assistive Technology Act of 2004 creates and partially funds a number of projects that further the use of assistive technologies, but does not significantly fund the purchase of AT directly.

While this report focuses on government programs, many nonprofit private sector programs also play a role in funding assistive technologies, with great diversity in their focus and geographic range. AT is often not the primary focus of these programs, but rather is one of several means to improve or maintain the functioning of targeted persons. One feature of these programs stands out: their budgetary scope is limited.

Using the limited data available, we conclude that overall spending on assistive technologies for 2002 amounted to roughly $15–$20 billion. These data also indicate the substantial burden that assistive technologies place on individuals’ finances – over half the cost of assistive technologies is paid for out-of-pocket.


Substantial progress has been made in making public buildings and spaces, the workplace, and travel and communication more accessible to persons with disabilities. Not as much progress has been made in equipping people with the assistive technologies that allow them to take advantage of these venues, or that support individuals’ abilities to live independently in their own homes.

Assistive technologies may have the potential to relieve the effects of shortages of needed allied health and social services personnel, and to diminish burdens on family caregivers. However, empirical analyses of the potential for substitution have not uniformly provided evidence of the replacement of services by technologies.

Whether there should be more public funding of assistive technologies, and the degree to which additional public funding should come through Medicare and Medicaid, are important policy debates that are not the focus of this report. We do recommend that:

  • states provide broader coverage of assistive technologies in Medicaid Section 1915(c) HCBS waiver programs; and
  • researchers evaluate the relative effectiveness and cost-effectiveness of assistive technologies, as well as combinations of assistive technologies and assistive services.


  1. PPI Report #2006-04

Written by Marc Freiman, AARP Public Policy Institute
January 2006
©2006 AARP
All rights are reserved and content may be reproduced, downloaded, disseminated, or transferred, for single use, or by nonprofit organizations for educational purposes, if correct attribution is made to AARP.
Public Policy Institute, AARP, 601 E Street, NW, Washington, DC 20049

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