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Happy at Home: Federal Funds Can Help Older Adults Stay Put as They Age

Shifting Medicaid spending from institutional to home-based care, a process known as rebalancing, can reduce state costs.

By Samantha Scotti  |  May 8, 2023

Studies suggest that more than 70% of older adults want to remain in their homes as they age. Home- and community-based care tend to be more cost-effective than institutional care, such as nursing homes. Estimates indicate that gradually shifting Medicaid spending from institutional services to home- and community-based care, a process known as rebalancing, can reduce state costs by about 15% over 10 years.

The federal American Rescue Plan Act temporarily increased funding states could use to improve Medicaid home- and community-based services, known as HCBS. States have through March 31, 2025, to use the funding for a variety of HCBS services, including expanding care; addressing waiver waitlists; investing in the direct care workforce; improving access to telehealth; and addressing social drivers of health, such as housing.

“This is the single largest infusion of federal funds into home- and community-based services ever.”

—Camille Dobson, ADvancing States

The recent NCSL webinar “Leveraging ARPA Funds to Improve Health Care in the Home and Community” covers state strategies to support HCBS through federal spending plans.

“This is the single largest infusion of federal funds into home- and community-based services ever,” Camille Dobson of ADvancing States, an association representing state aging and disability agencies, says in the webinar. The funds allowed states “to make core infrastructure changes to make their services more effective and efficient for individuals receiving HCBS.”

State respondents from Arizona and Colorado provide insight into specific priorities from their state spending plans, with both states highlighting workforce development as priorities. Jakenna Lebsock with Arizona Medicaid describes initiatives that reshape direct care workforce curriculum, retention payments and tuition reimbursement. Similarly, Bonnie Silva with Colorado Medicaid discusses Colorado’s plan to standardize direct care workforce training curriculums and increase direct care workers base wages to $15.75 per hour.

While this one-time funding is time-limited, states are recognizing the importance of long-term planning and coordination, and considering whether and how to commit to newly created programs and initiatives.

Improving services and supports for older adults and individuals with disabilities will likely remain a priority for lawmakers for many years to come. As policymakers consider ways to improve HCBS, several NCSL resources may be helpful:

Samantha Scotti is a project manager in NCSL’s Health Program.


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