Long-Term Care: Consumer-Directed Services under Medicaid

Publication Date: January 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health

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Abstract:

Medicaid is a health insurance program jointly funded by the federal and state governments that pays for health care services for certain low-income individuals. Since the program's inception in 1965, Medicaid has played a vital role in providing long-term care services to individuals with a disability or long-term illness. "Longterm care services" refer to a wide range of supportive and health services for individuals with a disability or chronic illness. Medicaid primarily finances longterm care services and supports in institutions but has increasingly supported care in home and community-based settings under an optional program benefit.

States have been developing options for Medicaid beneficiaries with a disability (consumers) to manage and direct their home and community-based services including hiring their own providers, as an alternative to a traditional model of using agency-based providers. These options for consumer direction have most often included personal care services and other home and community-based services authorized under Section 1915(c) of the Social Security Act. The premise underlying consumer-direction is that the individual receiving the service is able to determine what he or she requires and can use good judgment in purchasing those services and overseeing their delivery.

Legislation to expand consumer-directed Medicaid long-term care services has been introduced in each of the last three Congresses. The legislation would have required states to cover personal care attendant services under the Medicaid state plan for certain Medicaid-eligible individuals. The legislation also specified that the consumer (or his or her representative) must be allowed to select, manage and dismiss his or her personal care attendant(s). Similar legislation is expected to be introduced in the 109th Congress.

The Centers for Medicare and Medicaid Services (CMS) and others have undertaken initiatives to facilitate states operating consumer-directed programs. One of the more well known of these programs is the Cash and Counseling Demonstration. As Congress considers proposals to encourage development in this direction, it faces such questions as: What beneficiary protections need to be built into these programs? How does one ensure the quality of consumer-directed services, and under what circumstances should states be required to seek a federal waiver?

This report discusses options for consumer-directed services under Medicaid; factors states need to take into account in developing consumer-directed programs; and considerations for future policy development. This report will be updated as necessary to reflect any substantive program or policy changes.