August 19, 2009
MEDICAID COVERAGE OF ASSISTED LIVING SERVICES
By: Nicole Dube, Associate Analyst
You asked (1) if Medicaid coverage is available to someone living in a private assisted living facility and (2) what the legislature could do to help seniors who exhaust their own resources remain in these facilities instead of being forced to move into more restrictive settings. You have a constituent living in a private Alzheimer's assisted living facility who can no longer pay for his care and was told he must transfer to a nursing home in order to receive Medicaid coverage.
The state provides Medicaid coverage for assisted living services through its 1915(c) Medicaid waiver program, the Connecticut Homecare Program for Elders (CHCPE). But coverage for residents of private assisted living facilities is limited under state law to a small CHCPE pilot program (CGS §§ 17b-365 & 17b-366). Coverage is also provided in certain state-funded elderly congregate housing sites and federally-subsidized housing programs (CGS §§ 8-206(e), 17b-342 (c), 17b-347e, and 19a-6c). In order to receive coverage, participants must meet CHCPE eligibility criteria and, in some cases, contribute to the cost of their care.
Medicaid pays only for assisted living services; federal law (42 CFR 441.360(b)) prohibits the state from using Medicaid funds to pay costs that are not for direct services (i.e. room and board). State rental subsidies help residents of government-funded facilities with room and board costs. But participants in CHCPE's private assisted living pilot must pay these costs with their own resources.
Unless federal Medicaid rules change, the state would need to pursue alternative funding sources to help pay room and board costs for residents of private facilities. This may include extending the current rental subsidies for government-funded facilities to private assisted living facilities and using State Supplement funds.
STATE ASSISTED LIVING PROGRAMS
Private Assisted Living Pilot Program
The CHCPE pilot program helps pay for assisted living services (but not room and board) for people in private assisted living facilities who have exhausted their own resources. The Department of Social Services (DSS) administers the pilot, which has two parts: one funded through a Medicaid waiver, the other purely state-funded. They have a combined cap of 75 participants (CGS §§ 17b-365 & 17b-366). Through this pilot, the state pays for assisted living services for seniors who meet all CHCPE eligibility requirements.
According to DSS, there are currently 79 participants and 140 people on the waiting list who appear to meet financial eligibility for the program. While the current number of participants exceeds the maximum statutory limit, DSS calculates this limit based on the average number of participants over the course of one year.
Attempts in recent years to pass legislation to increase pilot program slots have been unsuccessful, primarily due to state budgetary constraints. Because the state provides assisted living services through CHCPE, it is not a covered service under the state Medicaid plan and, unlike nursing home care, it is not an entitlement. Federal law allows states to limit the number of Medicaid waiver participants (“waiver slots”) and prohibits the cost of a participant's care from exceeding nursing home care costs (known as “cost neutrality”).
CHCPE also provides assisted living services in certain state and federally subsidized elderly housing sites. DSS, the departments of Economic and Community Development (DECD) and Public Health, the Office of Policy and Management, and the Connecticut Housing Finance Authority operate a pilot assisted living demonstration program for low- and moderate-income seniors living in government subsidized elderly housing in four locations (for a total of up to 300 units).
CHCPE pays for the assisted living services of those who qualify financially. The law permits a combination of subsidized and unsubsidized units in the same facility and gives DECD discretion to set the rental subsidy for the pilot at any percentage of the annual aggregate family income and define income and eligibility for these subsidies. Four locations are currently open: Herbert T. Clarke House in Glastonbury, The Retreat in Hartford, Luther Ridge in Middletown, and Smith Street Assisted Living in Seymour.
DECD also created assisted living demonstration programs with state money in three existing federally funded housing developments: Tower 1/Tower East in New Haven, Immanuel House in Hartford, and Juniper Hill in Mansfield.
Currently, all 23 state-assisted congregate housing projects can offer more extensive “assisted living” services and receive payments from CHCPE for those who qualify financially; 15 congregate projects actually offer the services.
MEDICAID COVERAGE IN OTHER STATES
According to a June 2008 report issued by the Pennsylvania General Assembly, all but six states fund assisted living services through their Medicaid programs, primarily through 1915(c) home and community-based waivers.
Specifically, 37 states (including Connecticut) and the District of Columbia provide assisted living services through 1915(c) Medicaid waivers for individuals who qualify for nursing home levels of care under the states' Medicaid program. Two states, Vermont and Arizona, provide assisted living services through 1115 Medicaid waiver programs. Sixteen states provide these services through their state Medicaid plans. Of these, six states rely solely on the Medicaid state plan and 10 states use both their Medicaid state plan and waiver programs to fund these services. (A copy of the report is attached.)
One significant difference between providing coverage through a waiver versus the state plan is that under the state plan, the services become an entitlement. Applicants must spend down their own income and assets to the same very low levels as other Medicaid beneficiaries living in the community. Under a Medicaid waiver, the state must demonstrate cost neutrality and can limit the number of participants and impose other restrictions, including somewhat higher income limits. In addition, waiver services are only available to applicants eligible for nursing home care.
POTENTIAL OPTIONS TO FUND PRIVATE FACILITIES
Currently, the only Medicaid coverage available to help seniors remain in private assisted living facilities is through the CHCPE pilot program. To increase the financial assistance available to this population, the legislature could consider expanding the number of pilot slots or allowing private facilities to contract with the state to have CHCPE cover their assisted living services.
If Connecticut allowed public/private contracts, it may choose to require the private facilities to accept Medicaid payments as payment in full, which would preclude them from collecting from participants more than room and board or what they might be required to pay under CHCPE. (CHCPE requires both state and Medicaid-funded participants to contribute toward their care once their income reaches a certain level.) The Pennsylvania legislature's report notes that other states, such as Texas, require this of private facilities with whom they contract.
Room and Board Costs
To address the room and board portion of the assisted living costs, the state could explore several options including (1) limiting the room and board costs state-contracted private facilities could charge these residents, (2) creating a private assisted living subsidy similar to other state-funded rental subsidies, or (3) using State Supplement payments to cover these costs.
The State Supplement program provides cash assistance to aged, blind, and disabled individuals with limited assets and income. Recipients are automatically eligible for Medicaid. To qualify, applicants must have another source of income such as federal Supplemental Security Income (SSI), Social Security income, or Veteran's benefits that could also be used to help pay room and board costs. Currently, the state uses these payments to subsidize certain living arrangements, including residential care homes.
According to the Pennsylvania report, in 2007 37 states provided optional state supplement assistance to SSI recipients in a variety of licensed residential settings, including assisted living facilities. Benefit levels vary across states; 17 provide monthly benefits at or above $400. The report notes that, in 2005 North Carolina created a new state supplement for residents of assisted living facilities specializing in
Alzheimer's disease and related disorders. Eligible residents may receive a supplement benefit of up to $1,561 for room and board and personal need costs in addition to receiving Medicaid payment for assisted living services provided.
Money Follows the Person
In general, the state is moving toward decreased reliance on institutional long-term care with the implementation of the Money Follows the Person (MFP) program. This five-year federal demonstration program provides flexible funding to help transition Medicaid eligible individuals inappropriately placed in nursing homes back into the community. Funding is provided to develop extensive home and community based services, including housing supports. Additional information can be found on the MFP website.
Pennsylvania General Assembly Legislative Budget and Finance Committee, “State Efforts to Fund Assisted Living Services,” June 2008 report, http://lbfc.legis.state.pa.us/reports/2008/14.PDF, last visited on August 18, 2009.
Connecticut Department of Social Services, Assisted Living Program,
http://www.ct.gov/dss/cwp/view.asp?a=2353&q=391114, last visited on August 18, 2009.
Connecticut Department of Social Services, Money Follows the Person Demonstration, http://www.ct.gov/dss/cwp/view.asp?Q=414524&A=23 45, last visited on August 18, 2009.