Contact DHS

Division of Aging and
Adult Services
PO Box 1437
Slot S-530
Little Rock AR 72203

By Herb Sanderson, Director
Division of Aging & Adult Services

This column appears in the December 2001 edition of Aging Arkansas,
a publication of the Arkansas Aging Foundation and the
DHS Division of Aging and Adult Services

Medicaid home and community based service waivers are the primary tool used to pay for home and community based long-term care services in the United States. Until now it has been difficult to describe where the money goes. Thanks to Carrillo Harrington, Carol O'Shaughnessy, Brian Burwell and other researchers, we now have a clearer picture. The findings might surprise you.

In 1997 almost $7.9 billion were spent on home and community based services (HCBS) under the Medicaid waiver program. While many think the elderly are the largest consumers of home and community based long-term care services, they are not. The overwhelming majority of HCBS money expended is for individuals with mental retardation and developmental disabilities (MR/DD). More than $6 billion, or near 76.7 percent of HCBS funding, was spent on this target group in 1997 (see Chart 1). In year 2000 the same proportion still applied.

The Aged/Disabled population accounted for 21.3 percent, or $1.7 billion of HCBS expenditures in 1997.

The largest numbers of individuals served under HCBS waivers are the Aged/Disabled — 326,615 people (58% of all recipients). However, the amount spent on each Aged/Disabled recipient is low when compared to other waiver populations. The average cost of serving the Aged/Disabled in 1997 was $5,388 compared to $20,067 for Children and $27,859 for the Mental Retardation/Developmentally Disabled cohort.

From 1992 to 1997 national expenditures for waiver services increased by $5.7 billion, with an average annual growth rate of 22 percent. Despite this dramatic increase, HCBS expenditures account for less that a third of overall long-term care costs. As Chart 2 shows, the majority of long-term care dollars are still spent on institutional care.

According to the National Institute on Disability and Rehabilitation Research (NIDRR), Arkansas ranks in the top quadrant of states when it comes to HCBS waiver participants per 1,000 population.

Conversely, Arkansas ranked in the bottom quarter of states in total HCBS waiver expenditures per capita. The top quarter of states spent between $52.59 and $96.22 on a per capita basis. The bottom quarter of states spent between $3.94 and $17.86 per capita.

Arkansas ranked in the bottom quarter of states in terms of HCBS waiver expenditures per recipient. The top quarter spent between $21,391 and $39,226 per participant. The bottom quarter of states spent between $4,156 and $9,690 per participant.

Both nationally and in Arkansas HCBS Medicaid waiver programs remain important ways of serving vulnerable individuals. For the elderly in Arkansas the ElderChoices HCBS waiver has helped reduced the dependence on nursing homes for long-term care services. At the close of the last state fiscal year, Medicaid nursing home utilization had fallen to 13,366 — down from 16,027 the year the ElderChoices waiver was initiated.

Researchers and policy makers will continue to analyze and debate the implications of these statistics. One thing I think we can safely say after 19 years of experience with home and community based care waivers is people prefer to have a choice in how and where they receive long-term care.