You asked (1) why Medicaid coverage is not available to someone living in a private assisted living facility and (2) whether the legislature could do anything to help people who run out of money remain in these facilities instead of being forced to move into more restrictive settings, such as nursing homes.

SUMMARY

Medicaid coverage is not presently available to people living in private assisted living facilities because state law (CGS §§ 8-206(e), 17b-342 (c), 17b-347e, and 19a-6c) limits this coverage to government-funded facilities; specifically state-funded elderly congregate housing, a pilot demonstration program that is not yet up and running, and certain federally-subsidized housing programs. This coverage is limited strictly to the "hands-on" services provided by these facilities because federal law (42 CFR § 441. 360(b)) prohibits states from paying for non-service (i. e. , room and board) costs under a Medicaid waiver (which is the mechanism by which the state currently provides its coverage through the Connecticut Home Care Program for Elders (CHCPE)). The state uses rental subsidies to help residents with room and board costs at government-funded facilities.

The state could extend Medicaid coverage to include private facilities. In fact, legislation was proposed in 2002 to do this. During the 2002 legislative session, the governor proposed a bill (SB 23) that would have created a pilot assisted living program. Under this program, up to 75 people eligible for the CHCPE would have been able to use Medicaid and state-funded service coverage to live in private facilities. Another bill (SB 6) would have allowed anyone living in private assisted living who exhausted personal assets to continue to live there, and required DSS to get federal approval to pay for their care with Medicaid funds. Neither bill passed.

But unless Congress changes the Medicaid rules, it seems unlikely that the state will be able to use Medicaid to pay for assisted living residents' room and board. Thus, the state would need to pursue alternate funding sources to help pay for these costs, such as extending the current rental subsidies to private facilities and using State Supplement funds.

FINANCIAL ASSISTANCE FOR ASSISTED LIVING

In addition to regulating assisted living, during the last several years the legislature has taken steps to make it easier for people to find and pay for it by designating certain housing for this purpose and subsidizing some of the costs.

Legislation enacted in 1998 and 1999 directed DSS, in cooperation with the Department of Economic and Community Development (DECD) and the Connecticut Housing Finance Authority, to establish an assisted living demonstration project for moderate- and lower-income people living in state-subsidized affordable housing. To qualify, an applicant must be at least 65 years old, at risk of being placed in a nursing home, and be eligible for the CHCPE. The pilot is being planned for five locations (for a total of 300 units). The first is scheduled to begin operating sometime in 2003.

In 2000, the legislature extended availability further by allowing existing state-funded elderly congregate housing facilities to offer assisted living services, using CHCPE funds. Sixteen of the state's 24 state-funded facilities are now offering these services. Also in 2000, the legislature approved CHCPE funding for assisted living in two federally assisted housing developments, and increased the number to four the following year. Two of these are currently operating.

FUNDING OPTIONS THE LEGISLATURE MIGHT WANT TO EXPLORE TO COVER PRIVATE FACILITIES

While state- and federally-supported assisted living is presently limited to government-subsidized housing, the state could extend it to include private housing.

To address Medicaid funding for services, the legislature could allow private facilities to contract with the state to have their assisted living services covered by the CHCPE. The legislature would probably want to make the private facilities accept these payments as payment in full so they could not attempt to collect more than room and board or what they might be required to pay under the CHCPE. (That program requires participants, including those who are eligible for Medicaid-funded services, to contribute towards their care once their income reaches a certain level. )

For room and board cost funding, the state could explore several options. It could limit what the facilities could charge for these costs as a condition of accepting them. Another option would be to subsidize some of these costs, similar to what DECD does currently with the rental subsidies.

Alternatively, it could allow the use of State Supplement payments to cover these costs. State Supplement benefits are available to people who are aged, blind, or disabled with limited assets and income no higher than the limit for the Medicaid-funded portion of the CHCPE. (State Supplement recipients are automatically eligible for Medicaid). Most recipients also receive Supplemental Security Income or some other federal subsidy, which would also be used to defray these costs. Currently, the state uses these payments to subsidize a number of living arrangements, including residential care homes and group homes for people with mental retardation.

Despite the limitations imposed by the federal Medicaid law, a report by Robert Mollica for the National Academy for State Health Policy suggests that several states have used their Medicaid programs (mostly through home- and community-based service waivers similar to the one Connecticut uses to run the CHCPE) in creative ways to minimize what facilities may charge for room and board. For example, he writes that nine states set assisted living service rates that include services, meals, and housing even though Medicaid pays only for the services. Connecticut could explore doing something similar if it decided to cover private facilities.

For information on how other states have financed assisted living within Medicaid constraints see OLR Report 2001-R-0849 and see 2002-R-0187 to learn what the benefits and drawbacks would be if the state were to use State Supplement benefits to pay for assisted living room and board costs.

RC: ro