OLR Research Report

April 8, 2005




By: Helga Niesz, Principal Analyst

You asked:

1. what medical level of home care Connecticut currently provides (i.e. at what point does a person become ineligible for home care under Medicaid and have to go to a nursing home);

2. for information on Connecticut's home care program;

3. what other states such as Oregon and Vermont have done in regard to home care, most importantly what level of care do they provide at home (i.e. is it commensurate to their nursing home level of care); and

4. whether the state could save money by giving patients the option to receive services in an institution or at home.


In general, there is no specific medical point at which people must go to nursing homes. Modern home care can provide many of the same services that nursing homes provide as long as there are sufficient financial resources and workers available to perform the services.

But people whose limited financial resources qualify them for help under the state's Connecticut Home Care Program for Elders (CHCPE) can reach a point when the cost of caring for them at home exceeds the limits of what the program is allowed to pay, and they might have to go to a nursing home for financial reasons. And sometimes people must enter a nursing home because CHCPE can no longer safely provide the services at home.

CHCPE currently provides home care to Connecticut' seniors age 65 and over who meet certain income and asset limits and need or are at risk of nursing home placement. The program has three categories of care with specific caps on the amount the program will pay. At the highest need level (the Medicaid waiver portion), costs generally cannot exceed the cost of nursing home care. Medical care is provided through home health care agencies, while homemaker-home health aide agencies provide related supportive and nonmedical services.

People with disabilities under age 65 do not currently have access to the CHCPE, although they can get some care at home, including personal care assistance, through several other types of Medicaid waivers if they qualify.

Oregon and Vermont are among several leading states that have shifted more of their long-term care spending from nursing homes to various types of home and community based services. Oregon in particular has long been cited as a model.

On average, home-and community-based care programs appear to cost less per person than nursing home care, but the size of the difference appears to be related to a number of factors, including how the program is structured. But 24-hour home care for someone with very high medical needs and no family members to help can cost more than nursing home care. Many states, including Connecticut, limit what their programs can spend for home care, either per person or on average, to keep costs down.


In general, whether a person needs nursing home care or home care is a decision made together by the doctor, patient, and often the patient's family or conservator. It is based on the patient's medical situation, how much care he needs, his resources at home, whether the care can be safely provided at home, and what insurance or other resources are available to pay for the care.

Medically, there appears to be no specific point at which people “must” go to nursing homes. If patients have enough financial resources to cover the costs and dedicated family members who are willing to arrange home care, supervise it, and sometimes fill in care gaps, much of the care provided in nursing homes can be duplicated at home. In the case of diseases like Alzheimer's or related dementias, nursing home placement often is a decision made when the family has exhausted its own ability to care for the patient at home or when the patient becomes bedridden, incontinent, or exhibits behavior that is difficult to manage.

Medicare, the federal health insurance program for seniors over age 65 and younger disabled Social Security beneficiaries, pays for some nursing home and home care, but mostly under limited conditions for rehabilitation after a hospital stay.

Regular Medicaid in Connecticut pays for limited home care for very poor elderly or disabled people, but it entitles people to nursing home care when needed if their own incomes are too high to qualify for Medicaid but too low to cover the nursing home cost. This is what is often referred to as Medicaid's “institutional bias.”

To address this problem, most states (including Connecticut) have established a number of programs and received Medicaid “home and community-based waivers” that let them provide more extensive services outside a nursing home to targeted groups of people. With approval of such waivers by the federal Centers for Medicare and Medicaid Services, states can (1) set somewhat higher income limits for these groups, (2) limit the number of people who can qualify (“waiver slots”), and (3) make other adjustments to regular Medicaid rules. The waiver programs help people who are above the very low regular Medicaid income and asset limits or whose home care needs are greater than can be met by regular Medicaid.

For at least the past 10 years, Connecticut has gradually made various types of home and community-based care more available to prevent unnecessary institutionalization.


Connecticut currently operates the Connecticut Home Care Program for Elders (CHCPE) specifically for people over age 65 with incomes too high for regular Medicaid in the community, but who would otherwise be eligible for Medicaid in a nursing home. CHCPE has a Medicaid waiver portion, with income and asset limits, and a state-funded portion, which has only an asset limit. The program has a prescreening process that, since October 1, 2002, has screened all nursing home applicants for the CHCPE program. The program now serves 14, 752 people as of the end of February 2005.


To be eligible for the Medicaid waiver portion, an individual's income must currently be under $1,737 a month (adjusted annually for inflation) and assets under $1,600 for an individual or $3,200 if both spouses receive services. If only one spouse is a client, the couple can keep more assets by undergoing a community spouse assessment as they would before entering a nursing home, which would currently allow them to keep at least $20,620 in assets or more depending on their situation.

The state-funded portion of the program has no income limit. Its asset limit is currently $19,020 for an individual and $28,530 for a couple (adjusted annually).

In both portions of the program, people with incomes in the higher brackets must contribute to the cost of their care.

Care Levels

Once accepted to the program, clients are offered services based on their level of need. There are three levels: Category 1 provides limited care for moderately frail elders who might otherwise be hospitalized or have a short-term nursing home stay. Category 2 provides intermediate care for very frail seniors with some assets above Medicaid limits. These two categories are funded by purely state funds. Category 3 (the Medicaid waiver portion) provides extensive care for very frail elders who meet Medicaid waiver and asset limits and would otherwise be in a nursing home on Medicaid. But none of the categories provide total 24-hour care.

Since CHCPE serves people already judged to be at a nursing home level of care or at risk of entering a nursing home, they can enter a nursing home at any time. The choice can be made either by the client and his family or because the program determines it is not safe to continue services at home, according to Michele Parsons, the program's director.

Cost Limits Can Result in Nursing Home Placement

CHCPE limits what it pays for services. The statute requires that (1) the program's annualized cost of the community-based services provided to clients cannot be more than 60% of the weighted average cost of care in a nursing home and (2) the program must be structured so that the net cost to the state for long-term care facility care in combination with these community-based services is not more than the costs the state would have incurred without the CHCPE program (CGS 17b-342(a)).

The program's community-based services which are limited to the 60% of nursing home care costs include, to the extent they are not available under regular Medicaid, occupational therapy, homemaker and companion services, meals on wheels, adult day care (at out-of-home centers), transportation, mental health counseling, care management, elderly foster care, minor home modifications, and assisted living services in low-income elderly congregate housing and certain other pilot assisted living projects.

Under the state-funded portion, the annualized cost of Category 1 services for an individual cannot exceed 25% of the weighted average annualized nursing home care cost and 50% for Category 2 services. For the Medicaid waiver portion (Category 3), costs cannot exceed 100% of this average nursing home cost, currently $4,135.62 a month. Within this limit, there is also a social services monthly cap of $3,010. Thus, situations could occur where the person would have to go to a nursing home because his costs in the CHCPE program exceed these limits. The program allows some limited exceptions to the caps, as when someone temporarily needs more care because of an acute illness but has the potential to recover.


Connecticut also runs a state-funded personal care assistance (PCA) pilot program for people age 65 and over, similar to the Medicaid waiver PCA program for younger disabled people described below. Its current maximum is 100 participants. The program is available to seniors who (1) were receiving PCA services under the Medicaid waiver program for the disabled during the year before they turned 65 or (2) are eligible for CHCPE services but are unable to access adequate home care services.

An Alzheimer's Respite Care Program gives families caring for relatives with Alzheimer's or related disorders an occasional break by paying up to $3,500 per year for respite services. The program is for families where the patient does not qualify for Medicaid. There is no age restriction for the patient, whose income can be up to $30,000 a year with liquid assets up to $80,000.

More information on these and other elderly programs is available in OLR Report 2005-R-0154.

Home Care Services for Younger People with Disabilities

Other Medicaid waivers provide services to younger disabled people (who are excluded from the CHCPE program, which serves only people age 65 or older). The Personal Care Assistance Waiver serves disabled people age 18 to 64. It differs from the CHCPE program in that it is “consumer directed”; the client chooses his own personal care assistant to help him with personal care and activities of daily living. The client acts as the employer, and trains, supervises, and may fire the attendant, but a financial intermediary takes care of the paper work. The program trains the client on how to function as an employer. By contrast, in the CHCPE program, the client receives care through a home health care agency or homemaker-home health aide agency, which employs various aides, homemakers, companions, or chore persons for different functions, provides case management (not available under the PCA waiver) and usually does not allow the client to choose the aide.

Other Medicaid waiver programs in Connecticut that serve non-elderly people with disabilities include the:

1. Acquired Brain Injury Waiver, which provides a number of support services, including personal care assistance, to people between age 18 and 64 with acquired brain injury;

2. Department of Mental Retardation (DMR) Waivers, which provide a variety of home and community services to people with mental retardation who would otherwise be institutionalized; and

3. Katie Beckett Waiver, which provides Medicaid coverage, case management, and home health services mainly to children and certain others with serious disabilities who would otherwise qualify for Medicaid only in an institution.

OLR Report 2005-R-0276, enclosed, provides additional information on home care and other community-based services for disabled people under age 65 and briefly describes bills that would expand home care for these groups.

Nursing Facility Transition Grant

Connecticut also is making an effort to allow people who were previously inappropriately admitted to nursing homes to leave them and move back to the community. This project is funded by a federal Nursing Facilities Transition Grant and administered by the state's Centers for Independent Living. It is available to both seniors and younger disabled people.

Olmstead Supreme Court Decision; Long-Term Care Planning Committee

As in many other states, Connecticut's efforts to provide people with the option of home and community-based care were intensified and encouraged by the 1999 Olmstead decision. This was a U. S. Supreme Court ruling barring states from discriminating against people with disabilities by offering them long-term care services only in institutions when they could be served in the community, given state resources and other citizens' long-term care needs (Olmstead v. L. C. , 119 S. Ct. 2176 (1999)). Under the ruling, the unjustified isolation of disabled patients in institutional settings constitutes discrimination based on disability. OLR Report 2002-R-0559 contains more details on the Olmstead decision and states' responses to it.

In 1998, the General Assembly created the interagency Long-Term Care Planning Committee to study issues related to long-term care for the elderly and create a long-term care plan for them. Later, the committee, prompted by the Olmstead decision, added long-term care planning for people with disabilities to its original charge. The committee issued its latest plan in 2004; it sets a number of goals for increasing home and community based services alternatives to nursing homes. The plan is available at the Select Committee on Aging's website at:

HB 6768, currently being considered by the legislature, would require the Planning Committee's long-term care policy and plan to provide that people with long-term care needs have the option to choose the least restrictive, appropriate setting.


Although people with disabilities and older people make up only 27% of Medicaid beneficiaries, they account for 75% of Medicaid spending nationally, according to a Nov/Dec 2004 National Conference of State Legislatures Legisbrief, “Long-term Care and Medicaid,” by Johanna Donlin, which we have enclosed. The article shows that Oregon leads the nation in the percent of long-term care spending used for community-based care in FY 03 (68.3%), followed by New Mexico (65.1%), Alaska (61%), and Vermont (56.2%). Connecticut, by comparison, spent 33.4% of its long-term care dollars on community-based care (about mid-range), while 23 states spent a lesser percentage.


Oregon has worked intensively to reduce the number of people in nursing homes since 1981 when it experienced a fiscal crisis, by shifting its funding and emphasis from nursing homes to alternative care. The state makes home care the first choice for people who need long-term care, and it provides intermediate options such as adult foster care homes, residential care facilities, and assisted living for people who cannot stay in their homes but do not need, or want, to be in a nursing home.

Oregon is often cited as a model for other states and has, over the years, readjusted its system so that only about 30% of its people who need long-term care are in nursing homes while 70% receive services at home or in alternative community settings. (In contrast, according to Connecticut's 2004 Long-term Care Plan, Connecticut's Medicaid program provides 48% of its long-term care clients with home and community-based care and serves 52% of its clients in institutional settings, including nursing homes, intermediate care facilities for the mentally retarded, and chronic disease hospitals. The Plan recommends increasing the home and community-based group from 48% to 75% by 2025).

All of Oregon's in-home clients are nursing home eligible since the services they receive are under a Medicaid home and community-based services waiver, for which this is a requirement. The bulk of the services compare to those in an intermediate care facility (which is a nursing home, but not a skilled care nursing home). A local office can authorize

services up to $2,099 a month per client. If a client has exceptional needs, the case manager can request approval for a higher amount through the Seniors and People With Disabilities Division central office, but, in most cases, the cap on this exception is $3,615 per client per month.

Oregon's home and community-based waiver covers both seniors and people with disabilities. The state also has two other waivers for people with developmental disabilities and a cash and counseling demonstration waiver for in-home supports for seniors and people with disabilities, called Independent Choices.


Vermont legislation in 1996 shifted more of the state's long-term care resources into home- and community-based care.

Vermont has no cost limits that would require people in its home care programs to move to a nursing home. Service limits are currently driven by assessed individual need, according to Bard Hill, manager of the Vermont Independence Project at Vermont's Department of Aging and Independent Living. Hill informed us that some people (most of them under age 65 with very severe disabilities) cost more to serve in the community than in a nursing home, but, in the aggregate, the costs of serving people in the community remain below nursing home costs (see below). In fact, although most people in the various home care programs do not receive care at the higher level possible in a nursing home, the state does have a “high tech” program which successfully provides high volumes of skilled care to children and adults with multiple technical needs (e.g. ventilators) in their own homes. Some of these clients had actually been rejected by nursing homes, according to Hill.

According to Hill, Vermont currently has the following home and community-based (1915c) Medicaid waivers: Traumatic Brain Injury Medicaid Waiver; Developmental Services Medicaid Waiver; Children's Mental Health Waiver, Home-Based Aged/Disabled Medicaid Waiver; and Enhanced Residential Care Aged/Disabled Medicaid Waiver. It is currently working on the final design phase of a broader 1115 Medicaid Waiver that will create a single long term care program, including nursing home care and both aged and disabled waivers. Information on the proposed waiver is available at:

See earlier OLR Reports 99-R-0805, and 99-R-0891 for more information on Oregon and Vermont.


Proponents of home care assume overall costs for home and community-based care are less than nursing home costs, but home care costs for some individuals with intense medical care needs can exceed the cost of nursing home care if they require 24-hour service. To keep program costs down, some states, like Connecticut, limit what the programs can spend, either per person or as an aggregate average. Some policy makers are also concerned about a potential “woodwork effect” if home care services are expanded. In other words, they fear that people who previously did without services or relied on informal family help would “come out of the woodwork” to apply for services once they become eligible and increase the program's costs.

The Connecticut Long-Term Care Planning Committee's 2004 Long-term Care Plan estimates that increasing the proportion of people needing care who receive it at home or in the community from 28% to 75% by 2025 would reduce Connecticut's otherwise expected total long-term care expenditures of $6.4 billion by $1.2 billion. This would realign the percentage of total long-term care expenses from around 30% home and community-based/ 70% institutional to 60% home and community-based/ 40% institutional (p. 42-43, 2004 Long-Term Care Plan).

Connecticut's CHCPE is also based on the concept that it saves the state money by avoiding more expensive nursing home care. In addition, limiting the per-person cost of the services helps to ensure that the program will not cost more than nursing home care. A 2003 DSS publication, Connecticut Home Care Program for Elders: Annual Report to the Legislature, states that the program generated over $68 million in savings in FY 03 as a result of the reduced use of nursing home beds. The average monthly CHCPE cost per client was $640 on the state-funded side and $1,201 for the Medicaid waiver side.

A chart from Vermont (enclosed) shows that in FY 04 its home-based waiver average costs (including both direct and indirect costs) for people under age 65 are $142 a day versus $178 in a nursing home and, for people age 65, $91 a day compared to $128 in a nursing home.