Medicaid Home and Community-Based Services are Available for Some - Waiting Lists Keep People Waiting

A new analysis by the Kaiser Family Foundation (KFF) shows that about 656,000 people across the country were on state waiting lists for home and community-based services financed through Medicaid waivers.

Home and community-based services (HCBS) allow those who qualify for Medicaid to receive assistance in their home or community rather than in nursing homes.

Medicaid will pay for long-term care services and supports for those with little income and assets. While much of this care is provided through Medicaid-approved nursing homes, Medicaid waivers allow for in-home care services. However, wait lists delay the ability of people to receive desired in-home care.  

KFF says that waiting lists can sometimes overstate the need for services. Not all states screen for Medicaid eligibility before adding people to their lists. The waiting lists can inflate the numbers, including people who may never be eligible for services.

In all years since 2016, over half of the people on waiting lists lived in states that did not screen people on waiting lists for eligibility, the KFF analysis found. This also is a key reason that waiting lists are not comparable across states.

Need for Long-Term Health Care Understated

Waiting lists can also understate need. They reflect the populations a state chooses to serve and the resources it commits to. In many cases, people may need additional services, but because the state doesn't offer them—or doesn't offer them to specific populations, such as people ages 65 and older—they would not appear on a waiting list.

People experience a decline in their health, mobility, and cognitive abilities as they age. Even frailty due to aging can means someone needs help with daily living activities or supervision due to dementia. Traditional health insurance and Medicare, including supplements, pay little or nothing toward most long-term care services. 

While Long-Term Care Insurance will pay for these services, including in-home care, many people ignore the problem until they experience health or aging problems. Often, they are uninsurable when they start thinking about Long-Term Care Insurance - Waiting On Long-Term Care Insurance Can Lead to Decline.

Medicaid Budget Pressured by Long-Term Health Care Expenses

Other people don't obtain coverage since they have little income and assets, and purchasing coverage is not recommended. The pressure on the Medicaid budget is substantial between people ignoring the problem and those with few assets to start with. 

Medicaid spent approximately 138.9 billion U.S. dollars on long-term care services in 2021; according to the Congressional Research Service, 43% of long-term care services are paid for by the Medicaid program.

Several states are considering following the State of Washington's lead in instituting what some call the "LTC Tax." Washington is providing a minimal long-term care benefit ($36,500) funded by a tax on income for everyone age 18 and older who does not own a qualified Long-Term Care Insurance policy.

Much of the tax revenue will help fund the Medicaid program. The $36,500, while helpful, barely touches the costly long-term care services that many people will need, either for in-home care, assisted living, a nursing home, or a memory care facility.

Long-Term Care Costs Increasing

The cost of long-term care services is exploding to increasing demand, inflation, and higher labor costs. The cost will vary depending on where you live - LTC NEWS Cost of Care Calculator.

Experts say one of the advantages of Long-Term Care Insurance is access to quality care, including care at home. Few people want to be in a nursing home, nor do many want to spend their assets to qualify for Medicaid or place the burden of caregiving on their adult children.  

However, for those with little income and assets, the promise of home and community-based services through Medicaid seems like a dream as people wait for home care services to be forced into nursing home care or family caregivers.

For people with a 401(k) and other savings, Long-Term Care Insurance can ensure quality care, asset protection, and time for loved ones to remain family instead of becoming caregivers. 

Most people obtain coverage in their 50s. However, for people who live in states that are considering the LTC Tax, younger people with higher income -- or who expect higher income in the future, are getting LTC Insurance to avoid the tax.

The consequences of long-term health care impact more than just finances. Many American families get burdened dealing with the crisis of a parent getting older. Planning will help reduce this burden.