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Biden proposes adding $400B over eight years for Medicaid HCBS services.
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Louis and Katherine Bourgoin of Lewiston, who are two of the more than 6,000 Mainers who face losing … [+] health care provided through Medicaid. (Photo by Shawn Patrick Ouellette/Portland Press Herald via Getty Images)
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In his American Jobs Plan, President Biden has proposed increasing federal support for home-based long-term care by a staggering $400 billion over eight years. A $50 billion annual increase would represent a roughly 40 percent increase in the $129 billion Medicaid spent on long-term care in 2018 and a 70 percent increase in that year’s home and community-based services (HCBS) budget.
And it would come on top of a one-year $12 billion hike in the federal contribution to Medicaid HCBS that Congress passed as part of the American Rescue Plan in early March. Combined, the two initiatives are by far the biggest expansion of Medicaid HCBS the US ever has seen.
Biden and Congress still must turn the $400 billion promise into an actual plan. And the details will determine how transformative this initiative is.
Ambitious, but limited
Yet, for all its ambition, Biden’s plan won’t fully address the nation’s long-term care problems. It focuses on only one piece the puzzle—Medicaid HCBS. And it still won’t provide sufficient services for many older adults and younger people with disabilities who rely on Medicaid for their care. It doesn’t boost funding for a long list of non-Medicaid federal programs that are critical to those living at home. And it does nothing at all for middle-income Americans who are unable to pay for long-term care insurance but are not poor enough to qualify for Medicaid.
Biden’s latest proposal generally tracks the long-term care plan he proposed during his presidential campaign. Yet, by scaling back on some of the details in that plan, he significantly improved it. In the campaign, Biden tied $450 billion in new funding primarily to a single initiative: eliminating the Medicaid HCBS waiting lists that plagues many states.
While reducing those waits is extremely important, spending nearly all of the added federal Medicaid HCBS dollars on that single priority would have left little for other critical initiatives. And, perversely, throwing money at states with long waiting lists would have rewarded those states that most delay access to long-term care.
More flexibility, conflicting goals
The American Jobs Plan, by contrast, gives Biden and Congress vastly more flexibility in how to spend those extra dollars. And that is important because truly reforming Medicaid long-term care will require a broad range of changes, each of which costs substantial amounts of money.
Attracting enough workers to meet the expanded demand for home care will require higher pay and better benefits. Providing sufficient levels of care to maintain or even improve a beneficiary’s quality of life will mean raising her individual level of service, such as funding more hours of a personal care aide or a wheelchair ramp. Reducing waiting lists will require a greater overall supply of services and supports to serve many more people.
Policymakers also will need to decide whether to increase eligibility for Medicaid HCBS so more people who are unable to afford long-term care on their own can enroll in the program.
The problem, of course, is that given a finite amount of money, all these laudable goals conflict with one another. The more direct care workers are paid, the fewer hours of care they can deliver. The more services Medicaid provides to currently eligible beneficiaries, the fewer resources it has to expand the program to more people.
Missing pieces
Which brings me to another alternative Biden did not propose. Instead—or, perhaps, in addition to— expanding Medicaid HCBS, Congress could create a fully funded public long-term care insurance program. That would make it possible for people to get the care they need without relying on Medicaid at all.
There is a final critical piece of the puzzle that Biden also left out. To live at home, frail older adults or other people with disabilities need a broad, well-functioning infrastructure of care that government now funds outside of Medicaid. This starts, obviously, with appropriate, affordable housing. It goes without saying: With no place to live, home-based alternatives are useless.
Indeed, the one program Biden specifically called out for more support is Money Follows The Person, an initiative aimed at transferring nursing home residents back to the community. But while MFP has many benefits, it has helped relatively few older adults—in part because so many have no home to return to.
But more than just housing, a well-functioning home-based system of long-term care also requires transportation, home-delivered meals, adult day, information services, and family caregiver support among many other services. If Biden hopes to increase the level of care for those living at home with severe functional or cognitive limitations, he is going to have to fund all of these programs as well.
These objections aside, Biden has taken a giant step towards reforming Medicaid’s dysfunctional system of long-term care—failures that were laid bare by the covid-19 pandemic. It will take months for Congress to work its way through the more than $2 trillion spending and tax increase package Biden proposed yesterday. It will be an enormous step forward for those with long-term care needs and their families if, at the end of the day, Biden’s new funding for Medicaid HCBS is part of the final plan.