Older adults and people with disabilities who need long-term care overwhelmingly prefer to remain at home and in their community. But Medicaid, the primary funder of long-term services and supports, has a lengthy process, sometimes up to 90 days, for establishing eligibility, which inadvertently funnels many families who would prefer home-based care towards nursing homes.
Nursing homes will typically admit an individual pending Medicaid eligibility determination because they are generally able to bear the cost of providing services until they are eventually paid, or even to withstand a total loss if they are never paid. In contrast, agencies that provide home and community- based care (HCBC) typically cannot afford to start services without the certainty of being paid right away. The time period between applying and final approval of Medicaid eligibility can be particularly perilous and stressful for individuals who urgently need long term services and supports but have limited resources. To avoid a nursing home admission, they must either rely on family caregivers or privately pay for home-based services, all the while navigating a complex, fragmented system of providers. Entering a nursing home, which can immediately begin to provide the basic necessities of housing, staffing, care and other services, can be an easier choice.
What States Can Do
This report describes a strategy several states have pursued to fast-track access to Medicaid and other publicly-funded home and community-based services for individuals needing long-term services and supports: presumptive eligibility. Under presumptive eligibility, Medicaid case managers, nurses, or social workers can use basic financial information and screening tools to quickly presume that a low-income individual is eligible for Medicaid and temporarily provide services, even before an official Medicaid determination is made, allowing applicants who appear likely to be eligible for Medicaid to start receiving HCBS services at the moment the need arises. It allows for the home and community-based services providers to start services right away and to be paid right away.
Barriers to Presumptive Eligibility: Is the Financial Risk Overblown?
One of the biggest barriers to state implementation of presumptive eligibility involves the perceived financial risk to the state. While it is true that the state could be on the hook to pay for HCBS services when an individual proves to be ineligible for Medicaid, that risk is relatively low and can be contained. Policymakers should consider several factors, including:
- The potential savings to states from averting unnecessary or premature nursing home care. On average, states can provide care for approximately three individuals at home for the cost of one in a nursing home. For instance, Washington state officials determined that each client in their “fast-track” presumptive eligibility program saves Medicaid an average of $1,964 a month by helping individuals access community services instead of institutional care.
- States can also minimize their financial exposure by laddering Medicaid HCBS presumptive eligibility with state-funded programs. For example, individuals can be covered with state funds through other programs until Medicaid eligibility is confirmed, after which Medicaid can be billed retroactively for any services.
- Section 1115 waivers, named for the applicable section of the Social Security Act, allow states to apply for special flexibility to implement innovative designs or pilot programs in state Medicaid programs. The advantage of operating presumptive eligibility through an 1115 waiver is that the state can negotiate to share the risk with the federal government and claim reimbursements for HCBS services provided to individuals who are eventually determined ineligible for Medicaid.
In the continuing pandemic, presumptive eligibility is a valuable tool to quickly enroll individuals in Medicaid services that can help avoid unnecessary admission to nursing homes, where the spread of the virus has been devastating. The current public health emergency also grants states unparalleled ability to experiment and test new Medicaid strategies and learn from those experiences to make evidence-based decisions. Two important temporary changes that this report explores in detail are 1) expansions in hospital-administered presumptive eligibility underway in ten states, and 2) a novel pilot program in Indiana that diverts unnecessary nursing home placement with expedited eligibility determinations for home and community-based services.
Presumptive eligibility for home and community-based Medicaid services can help level the playing field, empower more consumers to avoid nursing home admission and live more independently. However, presumptive eligibility alone cannot guarantee access to home and community-based services. Other structural and systemic factors must also be addressed, including: caps on Medicaid HCBS waiver slots, lack of HCBS providers and workforce shortages, challenges quickly matching individuals with appropriate social and health service providers that can support the consumer’s goals, and community features such as adequate transportation and housing options.