- 1 - 

The State of 21st Century 

Long-Term Services 

and Supports: Financing and 

Systems Reform for 

Americans with Disabilities 

National Council on Disability 

December 15, 2005 
National Council on Disability

1331 F Street, NW, Suite 850 

Washington, DC 20004 

The State of 21st Century Long-Term Services and Supports: Financing 

and Systems Reform for Americans with Disabilities 

This report is also available in alternative formats and on the award-winning National Council on 

Disability (NCD) Web site (www.ncd.gov). 

Publication date: December 15, 2005 

202-272-2004 Voice 

202-272-2074 TTY 

202-272-2022 Fax 

The views contained in this report do not necessarily represent those of the Administration as 

this and all NCD documents are not subject to the A-19 executive branch review process. 
 National Council on Disability 

An independent federal agency making recommendations to the President and Congress 

to enhance the quality of life for all Americans with disabilities and their families. 

1331 F Street, NW  Suite 850  Washington, DC 20004 

202-272-2004 Voice  202-272-2074 TTY  202-272-2022 Fax  www.ncd.gov 

1 

Letter of Transmittal 

December 15, 2005 

The President 

The White House 

Washington, DC 20500 

Dear Mr. President: 

The National Council on Disability (NCD) is pleased to present to you our groundbreaking report, The 

State of 21st Century Long-Term Services and Supports: Financing and Systems Reform for Americans 

with Disabilities. 

NCD undertook research for this report because it has grown increasingly concerned about the (a) lack of 

a coherent national long-term services and supports (LTSS) public policy for all people with disabilities; 

(b) fragmented nature of service and support delivery systems, with uneven access and services 

provisions; and (c) LTSS costs of 22 percent or more of state budgets, which are fast becoming 

unsustainable. Additionally, NCD noted in undertaking research for this report that no single federal 

program, federal agency, or congressional committee is charged with the responsibility for the 

management, funding, and oversight of LTSS; however, 23 federal agencies are actively involved in 

LTSS using the NCD definition.

As reflected in this report, NCD believes that America needs a coherent and comprehensive framework 

for its LTSS policies, programs, and funding based on five interrelated assumptions. First, that people 

who are elderly and people with disabilities both desire and deserve choices when seeking assistance with 

daily living that maintains their self-determination and maximum dignity and independence. Second, the 

current financing mechanisms (public and private) will become unsustainable in the near future without 

significant reform. The system must be affordable to all Americans regardless of income levels and must 

consider opportunities to leverage public and private support in new ways without impoverishing 

beneficiaries. Third, there is an opportunity with the changing demographic picture of the United States to 

explore the possibilities of a universal approach to the design and financing of supports that is responsive 

to individuals under the age of 65, as well as Americans over 65 who may or may not have disabilities, 

without sacrificing individual choice and flexibility. Fourth, formal and informal caregiving must be 

sustained, including examination of family needs and workforce recruitment and retention challenges. 

Fifth, the approach to quality must examine consumer direction and control of resources in addition to 

traditional external quality assurance mechanisms. 

NCD stands ready to work with you, members of your Administration, and the leadership in Congress in 

the months and years ahead as you work toward improving our nation’s LTSS system. 

Sincerely, 

Lex Frieden 

Chairperson
2 
3 

National Council on Disability Members and Staff 

Members 

Lex Frieden, Chairperson 

Patricia Pound, First Vice Chairperson 

Glenn Anderson, Ph.D., Second Vice Chairperson 

Milton Aponte, J.D. 

Robert R. Davila, Ph.D. 

Barbara Gillcrist 

Graham Hill 

Joel I. Kahn, Ph.D. 

Young Woo Kang, Ph.D. 

Kathleen Martinez 

Carol Novak 

Anne M. Rader 

Marco Rodriguez 

David Wenzel 

Linda Wetters 

Staff

Ethel D. Briggs, Executive Director 

Jeffrey T. Rosen, General Counsel and Director of Policy 

Julie Carroll, Senior Attorney Advisor 

Joan M. Durocher, Senior Attorney Advisor 

Martin Gould, Ed.D., Director of Research and Technology 

Geraldine Drake Hawkins, Ph.D., Senior Program Analyst 

Allan W. Holland, Chief Financial Officer 

Pamela O’Leary, Sign Language Interpreter 

Mark S. Quigley, Director of Communications 

Mark E. Seifarth, Congressional Liaison 

Brenda Bratton, Executive Assistant 

Stacey S. Brown, Staff Assistant 

Carla Nelson, Secretary 
4 

Acknowledgments 

The National Council on Disability wishes to express its deepest appreciation to Michael Morris 

and Johnette Hartnett of the National Disability Institute NCB Development Corporation for 

developing this groundbreaking report. 
5 

Table of Contents 

Page 

Executive Summary.....................................................................................................................13 

 Introduction..............................................................................................................................13 

 Findings....................................................................................................................................17 

 Recommendations....................................................................................................................29

Chapter 1 ......................................................................................................................................37

The State of 21st Century Long-Term Services and Supports: 

Financing and Systems Reform for Americans with Disabilities 

Chapter 2 ....................................................................................................................................187

Future Market Demand and Understanding Costs of Long-Term 

Services and Supports: Financing and Systems Reform for 

Americans with Disabilities 

Chapter 3 ....................................................................................................................................281

External Advisors and External Policymakers: 

Recommendations for Action 

Chapter 4 ....................................................................................................................................339

Moving Forward: Selected State Strategies for 21st Century 

Long-Term Services and Supports: Financing and Systems Reform 

for Americans with Disabilities 

Chapter 5 ....................................................................................................................................435

Moving Forward: Local and Individual Strategies for 21st Century 

Long-Term Services and Supports: Financing and Systems Reform 

for Americans with Disabilities 

Chapter 6 ....................................................................................................................................489

Recommendations for Incremental and Clean Slate Reform 

References...................................................................................................................................515
6 

Chapter 1: The State of 21st Century Long-Term Services and Supports: 

Financing and Systems Reform for Americans with Disabilities 

Table of Contents 

Page 

Part I 

Picturing the Problem..................................................................................................................41 

Part II 

Charting the Course ...................................................................................................................44 

Part III 

Forecasting the Need....................................................................................................................48 

Part IV 

Dragging Anchor..........................................................................................................................55 

Part V 

Introducing the Captain .............................................................................................................62 

Part VI 

Meeting the Crew.........................................................................................................................74 

Part VII 

Fueling the Engine .......................................................................................................................84 

Part VIII 

Pushing Tugboats.......................................................................................................................106 

Part IX 

Harnessing Favorable Winds....................................................................................................113

Part X 

Gathering Clouds.......................................................................................................................117

Part XI 

Recharting the Course...............................................................................................................125

Appendix 1.A..............................................................................................................................131 

Appendix 1.B..............................................................................................................................132 

Appendix 1.C..............................................................................................................................134 
7 

Appendix 1.D..............................................................................................................................136

Appendix 1.E..............................................................................................................................137

Appendix 1.F ..............................................................................................................................139 

Appendix 1.G..............................................................................................................................157 
8 

Chapter 2: Future Market Demands and Understanding Costs of LongTerm Services and Supports: Financing and Systems Reform for 

Americans with Disabilities 

Table of Contents 

Page

Part I 

Introducing Research Purpose and the Rich Picture Story Line ..........................................191

Part II 

Forecasting the Storm................................................................................................................193 

Part III 

Tracking the Storm....................................................................................................................197 

Part IV 

Lowering the Lifeboats..............................................................................................................216 

Part V 

Approaching the Iceberg...........................................................................................................225 

Part VI 

Reviewing the Passenger Manifest...........................................................................................241

Part VII 

Moving Toward Reform............................................................................................................272 
9 

Chapter 3: External Advisors and External Policymakers: 

Recommendations for Action

Table of Contents 

Page 

Part I 

Introduction................................................................................................................................285 

Part II 

Approaches to Development .....................................................................................................287 

Part III 

Expert Panel Discussion and Recommendations....................................................................321

Part IV 

Conclusion ..................................................................................................................................327

Appendix 3.A .............................................................................................................................331
10 

Chapter 4: Moving Forward: Selected State Strategies for 21st Century 

Long-Term Services and Supports: Financing and Systems Reform for 

Americans with Disabilities 

Table of Contents 

Page 

Part I 

Introduction................................................................................................................................343 

Part II 

Five State Case Studies..............................................................................................................348 

Part III 

Conclusion ..................................................................................................................................429 

Appendix 4.A..............................................................................................................................433 
11 

Chapter 5: Moving Forward: Local and Individual Strategies for 21st 

Century Long-Term Services and Supports: Financing and Systems 

Reform for Americans with Disabilities 

Table of Contents 

Page 

Part I 

Introduction................................................................................................................................439 

Part II 

Conclusion ..................................................................................................................................486 
12 

Chapter 6. Recommendations for Incremental 

and Clean Slate Reform 

Table of Contents 

Page 

Part I 

Introduction to Incremental Reform .......................................................................................493 

Part II 

Moving Forward—Improving the Current LTSS Ship .........................................................494 

Part III 

The New Millennium LTSS Model...........................................................................................508 

Part IV 

Ameriwell—The New Millennium LTSS Model.....................................................................511
13 

Executive Summary 

Introduction 

Long-term services and supports (LTSS) is not only an issue for older Americans but also for 

younger individuals with disabilities, and any LTSS financing and system reform efforts must 

consider both populations. 

The current LTSS system is funded primarily by state and federal programs. More specifically, 

Medicaid is the primary payer of LTSS in this country. Medicaid paid for 45 percent of the $137 

billion this country spent on LTSS in FY 2000. Yet, despite the amount of money that state and 

federal programs are allocating to LTSS, individuals and their families still pay out of pocket for 

nearly one-third of LTSS expenses. 

Although the population of people who have disabilities and people who are elderly has 

indicated a preference for receiving LTSS in home- and community-based settings, a federal 

institutional bias exists. Presently, about 1.6 million people live in nursing homes, group homes, 

and other institutional facilities. At the same time, there are about 2 million to 2.4 million people 

on waiting lists or in need of some type of LTSS. 

Options for LTSS are emerging. Aging and disability advocates are working with the health care 

industry to create a continuum of care, including such services as assisted living, adult day 

services, and home care. Governors have creatively used the Medicaid waiver process to increase 

home- and community-based services for people who are elderly and people with disabilities. 

Although financing is the cornerstone of the LTSS issue, other issues are critical in building an 

adequate, seamless, and effective LTSS system to meet the increasing needs of aging baby 

boomers and the increasing numbers of individuals with disabilities who have LTSS needs. 

These issues include supporting family caregivers, addressing workforce shortages, improving 

the quality of LTSS services, and improving access to transportation and housing. 
14 

Recognizing, in particular, that the impending age wave of baby boomers will significantly 

increase the demand for LTSS in the coming decades, the National Council on Disability was 

interested in researching the issues of LTSS financing and systems reform. This report addresses 

those issues.

The development of long-term services and supports (LTSS) comprehensive policy will define 

the future economic independence of Americans with disabilities. Changing demographic and 

economic trends, here and abroad, will demand that the United States retool its programmatic 

and financial infrastructure to protect and promote individual dignity and independence of all 

Americans with disabilities. The development of sustainable and affordable LTSS public policy 

for the 21st century—funded through a unique combination of individual contributions, 

innovative private sector assistance, and public support—will provide a new security for 

Americans with disabilities to work and live independently. Although 20th century advances 

revolutionized the concept of health care and longevity for many Americans, increasing life 

expectancy by 30 years, they fell short in providing an affordable LTSS public policy for both 

the medical and nonmedical services and supports needed by many working Americans with 

disabilities. The United States is a world leader in extending life and eradicating disease, but it 

has failed to develop an LTSS public policy that truly integrates disability as a natural part of the 

human experience. 

Few Americans think of LTSS for individuals under the age of 65 who are living and working in 

the community with significant disabilities. Many people do not realize that there is no LTSS 

public policy for individuals of moderate to middle income, whether over or under the age of 65. 

Private insurance is available for long-term care that, on average, is capped at a specific dollar 

amount, provides coverage for about three years, and is geared toward services and supports that 

cater to diseases of aging and not the needs of everyday working Americans with disabilities. 

Ninety percent of Americans do not have long-term care insurance, and many do not have the 

financial savings to cover the costs of aging. Few insurance products are available that cover the 

costs of providing services and supports targeted for individuals and families challenged with 

lifelong disabilities under age 65. A recent actuarial study found that Americans at age 45 are 

more likely to become disabled than to die, and yet we continue to insure against loss of life 
15 

rather than against the risk of disability. There are no risk pools or insurance products designed 

to supplement the additional costs associated with living and working with a lifelong disability. 

There is little research or data that accurately captures what this means for planning the financial 

future of an individual born today with a lifelong disability. 

Disability prevalence is rising in the under-age-65 population and, although it has decreased 

slightly for seniors, it will begin to rise sharply as the current senior population of 34 million 

doubles over the next 20 years. Inherently, most Americans think of LTSS as long-term care for 

seniors in nursing homes with severe chronic disabilities. This bias is a holdover from the 1960s, 

when Medicaid and Medicare were first established, and reflects a system of care that is outdated 

and no longer cost-effective. Although the movement today is to provide services and supports in 

the home and community through an array of waivers, more than 50 percent of Medicaid 

resources for LTSS continue to support individuals in nursing facilities or intermediate care 

facilities for the mentally retarded (ICF/MRs). 

In 2001,1

 the United States spent $1.24 trillion (or about $5,500 per person) on personal health 

care services, with 12 percent (or $151.2 billion) spent on LTSS. Although 70 percent of the 53 

million Medicaid beneficiaries are children and mothers, more than half of the $276.1 billion 

spent in 2003 was for populations who are aging (15 percent) and with disabilities (15 percent). 

The predominant disability populations receiving Medicaid LTSS are those with mental 

retardation and developmental disabilities (MR/DD) and low-income seniors who rely on both 

Medicaid and Medicare. Between 9 million and 12 million Americans need help with activities 

of daily living (ADLs) and instrumental activities of daily living (IADLs), and 3.5 million are 

under 65 years of age. The literature also reports that 25 million individuals with chronic severe 

disabilities under age 65 are probably in need of some LTSS, but these individuals are often not 

counted or found eligible because of income or family assets, or they fall outside the realm of 

traditional functional assessments that use ADLs and IADLs as measurements. There is also 

confusion about what definition of disability should be used to assist policymakers in studying 

LTSS needs. Finally, LTSS are not portable and are highly dependent on the fiscal and budgetary 

priorities and obligations of each state. 
16 

In addition, about one-fifth of the U.S. population is uninsured or underinsured, with more than 

18,000 American lives lost each year because of gaps in insurance coverage, at an economic cost 

between $65 billion and $139 billion annually from premature death, preventable disability, early 

retirement, and reduced economic output. Rising double-digit inflation costs for health care 

continue to confound state and federal efforts to reign in overall health and LTSS spending. The 

probability of sustaining future promises to current social policy and its beneficiaries is low if the 

demographics are correct: Fewer workers will mean lower payroll contributions and less money 

available to fund past and future commitments. The research suggests that the problem is beyond 

incremental reform and requires immediate attention. 

A “rich picture” methodology was used to introduce the problem this report addresses. The 

picture captures the current health care and LTSS system. The field of management often uses a 

rich picture systems methodology, that is, “an innovative tool that encapsulates knowledge 

relevant to strategic reform.” For the disability field, the use of the rich picture allows people 

with intellectual impairments and other cognitive challenges to grasp the essence of the research 

through a visual representation and dialogue. The picture and narrative relied on the review of 

primary and secondary research documents; one-on-one open-ended interviews with key 

stakeholders in the disability, long-term care, and health care fields; review of congressional 

records and attendance at a number of hearings; and the convening of a national expert advisory 

panel on LTSS.

The setting for the rich picture is the ocean, with the current LTSS and health care ship heading 

toward an iceberg that represents the barriers and challenges to systems reform. The cast for this 

rich picture provided the substantive descriptions and main body of research and analysis about the 

barriers and challenges of navigating through the current system of LTSS. The presentation of the 

research in this format was purposeful so that the reader and the researcher could begin the voyage 

together with a snapshot of the problem. It was intended that a new picture would emerge as the 

researchers integrated the findings from the other chapters of the research. The final picture is a 

new ship, “AmeriWell,” that is designed to provide LTSS for all Americans regardless of income 

or category of disability through innovative funding from individuals and families, the private 

sector; and the Federal Government. AmeriWell will delink aging and disability populations from 
17 

both Medicaid and Medicare that require LTSS to form a new LTSS program that provides 

services and supports to middle-and low-income Americans with disabilities. 

The purpose of this research is to produce new knowledge and an understanding of current 

experience with and the future need for affordable LTSS for people with disabilities. The 

following findings provide a broad overview of the four areas researched for this report. Chapter 

recommendations are provided here in brief, but a detailed summary is available in chapter 6. All 

footnotes and references can be found in the original text, except where otherwise noted. 

Findings 

1. Little Political or Public Understanding of Current and Future LTSS Needs (Chapter 1) 

A. There is little public or political interest in putting LTSS onto the national agenda, 

although state Medicaid spending represents 22 percent of overall state budgets and is 

fast becoming unsustainable. 

B. Fifty-nine percent of Americans have given little or no thought to the issue of LTSS 

and the costs associated with aging or disability. 

C. Most Americans do not understand the current system of LTSS, how it is funded, or 

who is eligible for services. Many people do not understand that Medicaid is the 

primary provider of LTSS for all populations—both young and old—and that eligibility 

is income sensitive. 

D. The development of affordable LTSS is the missing link in making work a reality for 

many Americans with disabilities. 

2. Fragmentation of Federal System of LTSS (Chapter 1) 

A. There is no single federal program or federal agency charged with the responsibility for 

management, funding, and oversight of LTSS at home and in the community. More 

than 20 federal agencies and almost 200 programs provide a wide range of assistance 

and services to people with disabilities.2

B. There is no single entry point at a community level for individuals with disabilities and 

seniors to learn about and access service and support options. 
18 

C. There are multiple federal programs with varying policy objectives that embrace the 

values of consumer choice and independence in daily living, but there is no 

comprehensive, integrated delivery system that provides portability across states. 

3. Policymakers Continue to Avoid the Hard Questions (Chapter 1) 

A. Twenty years of research and exercises in forecasting future visions for LTSS have 

failed to answer the following questions: What services should be guaranteed to 

individuals unable to provide for themselves? What protections from catastrophic loss, 

financial or otherwise, should be afforded, and, most important, who will pay? How is 

the current LTSS policy working, and does it meet the needs of today’s population with 

disabilities? 

4. Favorable Court Decisions Post-ADA for Future LTSS (Chapter 1) 

A. Positive forces for change began with the passage of the Americans with Disabilities 

Act (ADA) in 1990; they were followed by the Supreme Court decision in Olmstead in 

1999 and the subsequent Administration actions in 2000, and continued to the present. 

They provide a platform to support policy and program changes for a long-term support 

system that embraces consumer choice to live in the least-restrictive environment at 

home and benefit from community participation. 

5. Future of LTSS Formal and Informal Workforce Unclear (Chapter 1) 

A. Population demographic changes because of aging, reduced fertility rates, increased 

women in the workforce, and changing family makeup predict there will be fewer 

unpaid family workers and an increased demand for paid workers. 

B. The role of government in addressing the challenges of the current formal and informal 

workforce is unclear. 

C. The majority of LTSS workers providing paid care are often without health insurance 

and other employee benefits and experience frequent job turnover. 

6. LTSS Policy Not Just for Seniors (Chapter 2) 

A. Most data for LTSS favors individuals age 65 and older with diseases of aging. 

Policymakers and researchers need accurate data to calculate current and future LTSS 
19 

utilization and costs to develop a clear consensus as to who is to be covered by an 

LTSS system and how eligibility will be calculated. 

7. Disability Definitions Need Clarification (Chapter 2) 

A. Disability definitions range from a medical diagnostic approach to a functional 

assessment approach that uses ADLs and IADLs. There is no aggregated data on the 

overall costs and utilization rates using the NCD/AARP definition for LTSS that 

includes transportation, nutrition, and housing. 

B. There are 38 million people under age 65 reporting some level of disability and, of this 

Group, 25 million have a specific chronic disability; however, many of these 

individuals are not eligible for LTSS. 

C. Using the functional definition of disability based on ADLs and IADLs, the estimated 

population in need of LTSS under age 65 ranges from a conservative figure of 3.5 

million to more than 10 million. 

8. Future Demographic Trends Predict That Many Americans of All Income Levels Will 

Need Access to Affordable LTSS (Chapter 2) 

A. Regardless of the definition of the target population, there is clear and undisputable data 

that the number of people over age 65 with ADL and IADL limitations is growing and 

will double by 2030. 

B. Twenty percent of people age 65 and over will require assistance with at least one ADL 

and 50 percent will require assistance by age 85. The number of people in need of 

assistance with two ADLs will grow from 1.8 million to 3.8 million by 2045. 

9. Disability Rates Declining for Seniors and Impact on Future LTSS Utilization and 

Costs Is Unclear (Chapter 2) 

A. The rate of disability has declined in the 65-and-older population, mostly for IADLs. It 

is less clear whether this decline is due to health improvements or environmental 

changes because of increased technology for durable medical equipment, including 

assistive technology. However, the rate of disability for individuals 85 years and older 

is expected to rise as this population triples over the next 30 years. 
20 

10. Disability Rates Rising for Individuals Under Age 65 and Impact on Future LTSS 

Utilization and Costs Is Unclear (Chapter 2) 

A. The rate of disability for individuals under age 65 is rising in diabetes, obesity, and 

mental illness. Little data is available that accurately predicts how this will impact 

future LTSS utilization, costs, and service delivery. 

B. It is unclear what LTSS truly looks like for individuals under age 65 across disabilities 

and specific age groups for those working and living independently. The research 

shows that individuals under age 65 are heterogeneous and have specific needs 

according to gender, age, and type of disability that are quite different from individuals 

over the age of 65. 

11. Individuals Under Age 65 Receive Less Personal Assistance and Are More Likely To 

Be Nonwhite (Chapter 2) 

A. Individuals with two or more ADL limitations and personal assistance needs under the 

age of 65 estimated a shortfall of 16.6 hours of help per week and were more likely to 

be nonwhite, female, and living alone. 

B. Paid personal assistance services go primarily to people 65 and older, and working-age 

people 65 and under rely more on unpaid personal assistance services. 

12. Increased Life Expectancy for People with Lifelong Disabilities and Its Impact on 

LTSS Utilization and Costs Unstudied (Chapter 2) 

A. Individuals with lifelong disabilities, such as Down syndrome, cerebral palsy, and 

mental retardation, are living longer and the impact on utilization of LTSS services and 

future costs is unclear from the current literature. 

B. It is unclear what future services and supports, including access to housing, 

transportation, and nutrition, will be in most demand for people under age 65 with 

lifelong disabilities living and working in the community. 
21 

13. LTSS Needs Among Minority Populations and Impact on Future Utilization and Costs 

Needs Study (Chapter 2) 

A. Black children are 13 percent more likely than white children to have a reported ADL 

limitation. A recent Government Accountability Office study confirmed that the black 

population has higher disability rates and lower lifetime earnings and shorter life 

expectancies than whites. 

B. The issues of poverty, lack of insurance, and continued segregation from affordable and 

consistent health care will increase the future needs and costs for LTSS for minority 

nonwhite populations in the U.S., which are projected to make up 50 percent of the 

American population by 2050. 

14. Growing Prevalence of Mental Illness and Its Impact on Future LTSS Utilization and 

Costs Unknown (Chapter 2) 

A. The prevalence of chronic disease and deaths caused by noncommunicable disease in 

the United States between 1990 and 2020 will increase from 28.1 million to 49.7 

million, an increase of 77 percent. 

B. Mental illness will rank number two after heart disease and replace cancer by 2010 as 

having a greater impact on death and disability. Medicaid is the principal public payer 

for mental health services and represents 36 percent of the $48 billion in spending. It is 

unclear what the future LTSS needs and costs will be for people with mental illness. 

15. Medicaid LTSS Not Designed to Support Growing Need of Middle-Income Population 

(Chapter 2) 

A. The current system of LTSS is designed for low-income individuals and is 

unsustainable under the current system of health care that has expanded Medicaid 

options to provide services and supports to an array of middle-income and uninsured 

individuals. 

B. There are 57 million working-age Americans between 18 and 64 with chronic 

conditions such as diabetes, asthma, or depression, and more than one in five (12.3 

million) live in families that have problems paying medical bills. Many are not eligible 

for LTSS services because they have assets above prescribed limits. 
22 

C. The number of chronically ill people with private insurance who spend more than 5 

percent of their income on out-of-pocket health care costs increased by 50 percent, to 

2.2 million people, in 2003. 

D. The impact on LTSS costs are unclear for 6.6 million individuals with chronic care 

needs who are uninsured and go without needed care (42%), delay care (65%), or fail to 

get needed prescriptions (71%), but they will impact future need and costs without 

timely intervention. 

16. Growth in Medicaid Spending Is Unsustainable (Chapter 2) 

A. Eligibility and service pathways to state Medicaid programs have expanded to meet the 

growing needs of 53 million low-income, middle-income, and uninsured acute care and 

LTSS beneficiaries, and reflect the growing challenges of economic downturns, 

increased health premiums, increased longevity, a low savings rate, and slower wage 

growth. 

B. Twelve percent of $329 billion combined state and federal funds in 2005 was spent on 

LTSS.3

C. Seven million individuals are dually eligible for full Medicare and Medicaid benefits 

and another 1 million receive assistance with copays and deductibles; combined, this 

represents 42 percent of all Medicaid expenditures. 

D. The ability of states to respond to current and future LTSS needs is beyond their 

capacity and resources as long as health care costs continue to rise at double-digit rates. 

17. Two-Thirds of Medicaid Spending for Optional and Not Mandatory Service (Chapter 2) 

A. Two-thirds of Medicaid spending is for population groups and services technically 

defined as optional, and 90 percent of all long-term care Medicaid services are optional. 

It is unclear how vulnerable people with disabilities are, with the majority of their 

services and funding falling under optional categories. 

B. Seventy-five percent of home- and community-based services (HCBS) waivers are for 

people with MR/DD and are used to purchase LTSS. The other 25 percent are used for 

people with physical disabilities and older people. There are three small waiver 

programs that serve individuals with a primary diagnosis of mental illness, accounting 
23 

for 0.2 percent of HCBS waiver expenditures. Further research is needed to explore the 

LTSS needs of the 25 percent population using HCBS. 

18. Medicaid Administrative Costs Need Further Research (Chapter 2) 

A. Research is needed to further determine whether Medicaid administrative costs meet 

the federal basic guidelines that “costs be allowable, reasonable, and allocable for 

reimbursement under Federal awards.”4

19. Many Uninsured Americans Are Working (Chapter 2) 

A. Forty-nine percent of the 45 million uninsured Americans are either self-employed or 

work for companies with fewer than 25 employees. 

B. More than 50 percent of low-income employees of small firms with incomes below 200 

percent of the federal poverty level are uninsured. 

C. More than 2 million health care paraprofessionals report wages below the poverty line, 

do not work full time, and do not receive benefits. 

20. Long-Term Care Insurance Designed Mostly for Seniors and Not Individuals Under 65 

with Disabilities (Chapter 2) 

A. Private LTSS insurance is targeted to individuals age 65 and older and often to specific 

disease categories. One insurance company reported that more than 50 percent of its 

LTSS insurance claims paid are for Alzheimer’s and other forms of dementia. 

21. Risk of Disability Is Higher Than Premature Death at Age 45 (Chapter 2) 

A. The risk of disability is higher than premature death and is higher for older people than 

younger, and females are more likely to become disabled than males. A 45-year-old 

individual earning $50,000 per year and suffering a permanent disability could lose 

$1,000,000 in future earnings. 

B. The public overestimates the help that is available from public disability insurance 

programs—Social Security Disability Insurance (SSDI) and other state-mandated, 

short-term programs. Workers compensation benefits cover only disabilities caused by 

injury or illness arising on the job—only an estimated 4 percent of disabilities. 
24 

22. Congress Needs Research on the Current and Future Utilization and Costs of LTSS for 

Individuals Under Age 65 and Their Informal Workforce (Chapter 2) 

A. Congress needs sufficient data on LTSS costs and utilization for individuals across the 

spectrum of disabilities under age 65 to develop a sustainable and affordable LTSS 

policy. 

B. Congress needs sufficient data that responds to the demographics that predict a decrease 

in the current population of informal caregivers (valued at $200 billion a year) and the 

impact of this trend on the development of a future LTSS workforce. 

C. Research is needed on the different public and private cost-sharing scenarios that focus 

on the under-age-65 population with disabilities and the relationship between public 

financing and private insurance to develop affordable products that insure against future 

risk of developing or being born with a disability. 

23. Changing Global Demographics and Economic Impact on Future LTSS Policy Unclear 

(Chapter 2) 

A. The global economic picture and changing demographics, in addition to the current 

U.S. federal budget deficit, raise new questions about the sustainability of current 

entitlement and social programs and their impact on beneficiaries with disabilities. 

B. Current state and federal budget deficits and funding priorities jeopardize a patchwork 

system of services and supports that do not meet the current needs of the target 

population, let alone those projected into the future. 

24. Role of Caregiving and Workforce Issues in Understanding Future LTSS Costs 

Unclear (Chapter 2) 

A. 44.4 million American caregivers age 18 and over provide unpaid care to an adult age 

18 or older. Six out of 10 of these caregivers work while providing care; most are 

women age 50 years or older. 

B. Jobs for nurses’ aids are expected to grow by 23.8 percent, while the employment of 

personal care and home health aides may grow as much as 58.1 percent between 1998 

and 2008. 
25 

C. It is unclear how many workers (the “gray market”) are hired and supervised by 

consumers who pay for their own care, although the numbers are thought to be 

substantial. 

D. Direct care workers (3.1 million) are in short supply and have nearly a 100 percent 

turnover rate in nursing facilities; home care agencies have annual turnover rates 

between 40 and 60 percent. 

E. Direct care workers have low median hourly wages of $9.20 an hour and one-fifth (far 

more than the national average of 12 to 13 percent) earn incomes below the poverty 

level; 30 to 35 percent of all nursing home and home health aides who are single 

parents receive food stamps. 

25. LTSS Not Portable Across States (Chapter 2) 

A. LTSS are not portable and cannot be moved with an individual from state to state, and 

current LTSS costs are not a customized response to individual needs. 

B. Current costs reflect matching an individual’s circumstances to available services and 

supports, based on federal eligibility criteria, with degrees of consumer choice and 

direction that vary based on the state in which the individual lives. 

C. The fiscal health of each state (and its ability to provide the necessary match to draw 

upon federal Medicaid resources) determines the scope and array of the current LTSS 

system for low-income Americans with disabilities and seniors. 

D. The personal assistance service needs of an individual in California could be similar 

to someone living in Mississippi, and yet the availability of services and funding may 

vary dramatically. 

26. LTSS Public Policy Is Necessary to Increase Positive Employment Outcomes for 

People with Disabilities (Chapter 2) 

A. It is unclear how Americans with lifelong disabilities under age 65 can become selfsufficient and economically independent through work and build careers without 

substantial LTSS reform that allows asset growth and more innovative public-private 

support for LTSS. 
26 

B. It is unclear how Americans with or without disabilities will provide for their own 

health care and LTSS in the future without changes in savings behavior and the 

development of insurance products that protect against the risk of disability. 

27. External Advisor and External Policymaker Findings for LTSS Action Similar to State 

Findings (Chapter 3) 

A. Similar to the state findings, the advisory group encouraged moving any LTSS policy 

discussion away from the current medical status and disability type to a standardized 

assessment process to evaluate functional needs related to ADLs and IADLs. 

B. There is a need to reevaluate financial eligibility criteria and develop an expanded 

benefits menu that organizes service options from a presumption of individual 

preference for remaining at home and in community settings. The panel, without 

describing benefits coverage in detail, recognized that different people have different 

needs. As a result, the benefits coverage based on functional assessment must be 

flexible, individualized, and comprehensive. Nursing home level of care should be 

shifted from an entitlement status to an option of last resort. 

C. The system should offer more consumer choice and direction in determining needs, 

creating a service plan, and directing and managing provider selection and service 

delivery. 

D. The system should provide incentives to support and encourage family caregiving, and 

consider tax incentives to help defray expenses of dependent care for LTSS. 

E. Federal authorities should agree on key outcomes and a measurement system. Shared 

information and data collection and analysis across agencies in multiple settings 

should help improve understanding of cost-effectiveness based on different service 

delivery models. Performance outcomes should focus on wellness, productivity, 

inclusion, and independence. 

F. The cost should be spread across all wage earners over a lifetime as part of a social 

insurance financing framework. Similar to the approach of social security and 

Medicare, individual needs will vary over a life span. 
27 

G. The system should decouple eligibility for benefits from current requirements of 

impoverishment for individuals and families. 

H. The system should provide support and incentives to encourage family support and 

informal caregiving to be balanced with public funding and responsibility. Key 

outcomes should be defined on an individual and systems level that focuses on 

wellness, productivity, inclusion, and independence. 

28. Selected State Strategies for LTSS Are Promising (Washington, Vermont, Minnesota, 

Texas, and Indiana) (Chapter 4) 

A. States have ongoing, intensive, comprehensive planning processes that involve a full 

range of stakeholders—from state officials to providers to advocates and people with 

disabilities themselves—and the commitment and support of the governor and legislature. 

B. Planning includes realistic accounting of the state’s fiscal situation, availability of 

federal money, community partnership building, implementation of cost-limited 

regulatory changes, and benchmark settings to measure results. 

C. States are experimenting with merging, consolidating, and combining nursing home and 

HCBS dollars to better allocate funds according to the needs of people with disabilities 

and developing single-point-of-entry systems at the local level to encourage easier 

access to LTSS. 

D. States are experimenting with global budgeting that allows budgeting practices to 

blend (to some degree) institutional care and HCBS dollars and allows states the 

flexibility to respond to the preferences of people with disabilities to remain at home 

or in the community. 

E. States are broadening HCBS to allow greater numbers of people with disabilities the 

opportunity to direct their own care (for example, hiring, training, and supervising 

their workers). 

29. States Are Living Laboratories for Future LTSS Policy Development (Chapter 4) 

A. The Olmstead decision stimulated executive and legislative review of the current 

system of service delivery, unmet needs of target populations, and where the dollars are 

being expended. 
28 

B. Cross-agency planning is most effective when the consumer stakeholder voice is 

included as part of the process to develop recommendations for systems reform. 

C. Structural changes have involved substantial reorganization to an umbrella department 

for multiple target populations with long-term support and service needs. 

D. Expanded use of Medicaid waivers is common to broaden benefits and LTSS to 

subpopulations. 

E. The most restrictive policy most frequently identified was the Medicaid institutional 

bias. 

F. There remains confusion in the use of language regarding long-term care and LTSS. 

G. All selected states have waiting lists for specific target subpopulations, although states 

may limit services and operate the waiver on less than a statewide basis. 

H. Current budget challenges at a state level have compelled states to reexamine the 

balance between public and private responsibility for LTSS, evaluate approaches to 

target individuals based on an assessment of level of need, and seek to identify 

strategies that encourage coverage of supports through some type of insurance coverage 

and other private sector resource sharing. 

30. Local and Individual Strategies for LTSS Require Fresh, Creative Thinking That 

Reanalyzes the Use of Public and Private Resources (Chapter 5) 

A. There is growing recognition that a fundamental shift in values is occurring as states 

move LTSS to the community and home and out of the institutions. Individuals with 

disabilities are being provided with more choices to live independently. 

B. New housing models with cooperative organizational structures are providing a 

realignment of service and financial relationships at an individual and community level 

and recognize the importance of consumer choice and direction. 

C. New economic models for managing assets include pooled trusts, supportive 

corporations, time banks, and child trust funds, and raise important questions about 

public versus private responsibility to create and manage a social safety net for 

individuals deemed in greatest need of long-term support. 
29 

Recommendations for Incremental and Clean Slate Reform (See Chapter 6 

for full text and implementation lead for each recommendation) 

1. Increase Policymaker Knowledge and Understanding of Public and Private Costs and 

Benefits of LTSS for People with Disabilities Under Age 65 and Their Families 

(Chapter 5) 

A. The lack of data that presents a complete and accurate picture of the costs for LTSS for 

families with children or adults with disabilities was a key finding by NCD researchers. 

Despite multiple studies by the Congressional Budget Office (CBO) and other federally 

sponsored research centers on the costs of long-term care for seniors, the population 

under age 65 with disabilities has not been a priority. The traditional definition of longterm care identified acute care needs as well as nonmedical services and supports for 

seniors. Today’s definition of long-term care has changed to reflect the ongoing growth 

and integration of disability into mainstream culture. LTSS for people 65 years and 

younger is about many nonmedical services and supports, such as personal assistance, 

assistive technology, financial management, housing, transportation, and nutrition. How 

people are assisted in compensating for loss of ADLs will define their future earnings 

potential and economic independence. 

2. Design and Implement a Multifaceted Action Plan of Monitoring and Oversight of 

State Activities to Meet Their ADA Obligations as a Result of the Olmstead Court 

Decision (Chapter 5) 

A. The Olmstead Supreme Court decision in 1999 provides important legal support for 

states’ current efforts to rebalance their LTSS systems toward home- and communitybased settings. The Administration, through an Executive Order and grant activities, has 

taken seriously the Court’s decision and mandated a state planning process to improve 

and expand community-based choices for people with disabilities. More than $200 

million has been awarded by the Centers for Medicare and Medicaid Services (CMS) to 

states on a competitive basis to promote system changes. Despite these efforts, 

litigation continues to expand in class action suits. In more than 25 states, individuals 

with disabilities have been frustrated with the pace of change and the slow movement 

of funding away from nursing homes and institutional settings to communities. 
30 

B. The Office for Civil Rights at the Department of Health and Human Services (HHS) 

and the Justice Department have the responsibility to monitor and oversee Olmstead

state plan implementation. As both agencies have done on numerous occasions in the 

past related to ADA, there is an opportunity to be proactive and design and implement 

an action plan that evaluates individual state efforts to meet the Olmstead community 

imperative mandate. Each state should be rebalancing its financing, reducing the 

number of individuals with disabilities residing in nursing homes, diverting others from 

entering nursing homes, and putting in place the infrastructure for expanded HCBS for 

individuals with disabilities. 

3. Decouple Eligibility for Home- and Community-Based Services Under an HCBS 

Waiver from a Determination of Nursing Home Eligibility (Chapter 5) 

A. It is necessary to remove the institutional bias in the Medicaid program to give 

Medicaid beneficiaries greater choice in how financial assistance is provided to cover a 

range of LTSS. The clear majority of stakeholders recognized the overwhelming 

consumer preference for HCBS. Two complementary options deserve immediate 

attention from Congress and bipartisan support. 

B. The first option is to shift the HCBS program from its current waiver status to a state plan 

requirement. Eligibility would be delinked from nursing home eligibility and states would 

receive an increased federal match under their state cost-sharing agreement for services 

provided in this category as part of their Medicaid reimbursement for authorized 

expenditures. CMS would set guidelines for a functional assessment process and 

minimum threshold of services to be covered, including personal assistance services. 

C. The second complementary option would be that federal funding follows the person 

from a nursing home to a community setting as part of a person-centered plan and selfdirected budget. The Money Follows the Person (MFP) option would continue for a 

three-year period to help support successful community transition. Both options are 

currently part of legislative proposals before Congress. MFP and the Medicaid 

Community Attendant Services and Supports Act (MiCASSA) deserve to be the focus 

of hearings before the end of the year. 
31 

4. Increase Support for Families and Significant Others in Their Role as Informal and 

Unpaid Caregivers for Individuals with Disabilities Over and Under the Age of 65 

(Chapter 5) 

A. Eligibility for LTSS and the scope and intensity of covered services varies significantly 

from state to state. States have considerable discretion in determining who their 

Medicaid programs cover. Despite state variability in criteria for Medicaid eligibility 

and scope of benefits, in all states, individuals with disabilities are dependent on 

informal caregivers, including parents, family members, and significant others. The 

estimated benefit of informal caregiving exceeds $200 billion annually. Services should 

be designed to support, not supplant, the role of the family and actions of informal 

caregivers. Increased support for informal caregiving could be achieved through 

implementation of a complementary set of recommendations. There is a need to address 

the lack of portability from state to state for Medicaid LTSS. 

5. Improve the Supply, Retention, and Performance of Direct Support Workers to Meet 

Increasing Demand (Chapter 5) 

A. As part of the Olmstead guidance, CMS should issue an advisory letter to state 

Medicaid directors directing corrective action to achieve parity of compensation across 

the environments where direct support workers are located. 

B. CMS should continue to fund demonstration projects to allow states to test innovative 

strategies to improve the recruitment, supply, retention, and performance of direct 

support workers. 

C. Funding should be authorized for collaborative demonstration projects between the U.S. 

Departments of Labor and HHS that promote collaboration between community colleges 

and disability-related organizations to develop a high-quality set of competencies to be 

taught in a new support worker certificate program that expands supplies of quality 

workers to meet market demand in home- and community-based settings. 

D. Worker cooperatives should be piloted and tested with the assistance of the Departments 

of Agriculture, Labor, and HHS to explore improved consumer-caretaker relationships. 
32 

6. Mandate Coordination and Collaboration Among Federal Agencies to Align Public 

Policy and Transform Infrastructure to Be Responsive to Consumer Needs and 

Preferences for a Comprehensive System of LTSS (Chapter 5) 

A. Although Medicaid and Medicare dominate the landscape of funding authorities for 

LTSS, NCD researchers documented the complexity and fragmentation of multiple 

systems with different rules of eligibility and lack of information on access to and 

availability of resources. The fragmentation and coordination challenges carry over 

from the executive to the legislative branches of government, in which different 

committees in the Senate have different controlling authority than committees in the 

House of Representatives. Although Program Assessment Rating Tool (PART) reviews 

by the Office of Management and Budget (OMB) are incorporating common 

performance measures across agencies and programs, there is no focus on crossdepartment and agency collaboration. The nature of LTSS requires more than 200 

programs and 20 agencies to improve their coordination of resources at the community 

level, where they will benefit the end-user. No single recommendation can respond to 

this significant challenge. NCD recommends that the appropriate agencies and 

congressional committees implement the following set of recommendations: 

• Hold congressional hearings to evaluate possible options for improvement of 

multiple department collaboration to provide access to information and supports 

and services to meet the long-term needs of people with disabilities under and over 

age 65. 

• Require the Department of Housing and Urban Development (HUD) and HHS to 

document current efforts and future plans to improve and expand the availability of 

affordable, accessible housing that is coordinated with services/supports, when 

needed. Establish an Interagency Council on Meeting the Housing and Service 

Needs of Seniors and Persons with Disabilities.5

 (See chapter 6 for a description of 

the full role of the council.) 

• Add to the PART performance criteria indicators that will evaluate documented 

outcomes from intra-agency and cross-agency collaboration to meet LTSS needs of 

people with disabilities. Consider possible financial incentives for agencies that 
33 

document valued outcomes from LTSS system collaboration. Report annually to 

Congress on individual agency performance in this area. 

• Issue a new Executive Order charging CMS to chair a time-limited workgroup (six 

months) on LTSS that includes representation by HUD, HHS, the Social Security 

Administration (SSA), and the Departments of Education, Labor, Justice, 

Transportation, Treasury, and Agriculture to identify policy barriers and facilitators 

to an improved comprehensive, coordinated system of LTSS for people with 

disabilities under and over age 65 that maximizes interagency collaboration, 

promotes consumer direction, and increases consumer choice and access to 

affordable supports and services in home- and community-based settings. 

7. Improve and Hold States Accountable for Rebalancing Their Systems to Support 

LTSS (Chapter 5) 

A. Study states that are having success with a global budgeting approach to move their 

LTSS system from an institutional bias to be anchored by HCBS and home- and 

community-based supports. 

B. Develop a template in consultation with states to be used to evaluate and measure 

current expenditures for LTSS in institutional versus home- and community-based 

settings. Such a template would be developed jointly by CMS and CBO to allow for 

consistent, comparative benchmarking from year to year within and among states. 

8. Increase Understanding of the Possible Relationship Between an LTSS Insurance 

Product and Publicly Financed LTSS (Chapter 5) 

A. Congressional interest remains high to understand and explore further the possible 

relationship between the current market for long-term care insurance products and a 

reduced dependence on Medicaid and Medicare for long-term support needs. With the 

growing cost of Medicaid and Medicare documented by NCD researchers, there is 

growing interest in forging a new level of partnership with the insurance industry that 

explores both the expansion of product options and the possible cost savings to the public 

system. For people with disabilities under age 65, no such insurance product yet exists, 

and little is known about the risk factors in terms of potential utilization by the target 
34 

population and how to achieve affordable pricing. Even with the adoption of several of 

the other major recommendations proposed in this report, it is unlikely that a revised 

Medicaid program will ever meet the needs of all people who are seeking LTSS. 

B. Conduct a feasibility study of possible new insurance products and options regarding 

relationship to the Medicaid program to evaluate possible strategies to partner an LTSS 

insurance product with supplementary Medicaid coverage for people with disabilities 

under age 65. Consider price, benefit coverage, caps in coverage, and eligibility for 

Medicaid LTSS, and project market demand and needed incentives to share risk among 

stakeholders: the government, the consumer, and the insurance industry. The possible 

collaboration would include the assistant secretary for planning and evaluation (APSE) 

at HHS, CMS, and a private insurer. 

C. Pilot test such a product or products to evaluate cost benefits to all critical stakeholders. 

Such a pilot must recognize that LTSS must be individualized to accommodate the needs 

and desires of the individuals receiving assistance and that the services and supports must 

reflect consumer preference for noninstitutional settings. Such an insurance product must 

achieve several objectives: It must be affordable, flexible, responsive to consumer needs 

and preferences, and sustainable over time with federal oversight.

9. Improve Consumer Understanding, Knowledge, and Skills to Develop a PersonCentered Plan and Self-Direct an Individual Budget (Chapter 5) 

A. The Cash and Counseling Demonstrations and the Independence Plus Waivers have 

produced early positive findings of increased consumer satisfaction with the selfdirection of individual budgets, the selection of support providers, and increased choice 

in development of person-centered plans. Individuals with disabilities and their families 

should be given the opportunity to plan, obtain control, and sustain the services that are 

best for them in preferred home- and community-based settings. For people with 

disabilities who have been given few choices in the past regarding services and 

supports and service delivery options, consumer self-direction requires information, 

education, and training to build the critical skills needed to make informed decisions. 
35 

B. Access to information about service options, streamlined procedures for determining 

eligibility for various public benefits, and new infrastructure will need to be developed 

to assist with programmatic and financial management. 

C. Recommendations that recognize the principles of individual self-direction and 

responsibility for prudent and effective management of public resources are critical to 

the development of the LTSS system of the future. 

D. The system should continue to provide competitive grants that establish Aging and 

Disability Resource Centers (ADRCs) in all 50 states that provide one-stop access to 

information and individualized advice on long-term support options, as well as 

streamlined eligibility determinations for all publicly funded programs. 

E. The system should establish, with funding from CMS, a National Resource Center on 

Consumer Self-Direction that identifies and disseminates best practice information on 

person-centered plan development, self-directed management of individual budgets, 

and examples of multiple funders combining funds within an individual budget to 

achieve common negotiated performance objectives. 

F. The system should require states, as part of their HCBS waiver implementation, to 

provide education and training to eligible Medicaid beneficiaries on effective and 

meaningful participation in person-centered planning, management of individual 

budgets, and negotiation with service and support providers. 

G. The system should establish a cross-agency workgroup that involves CMS, the 

Administration on Aging (AOA), SSA, the Administration on Developmental 

Disabilities, HUD, the Office of Special Education and Rehabilitative Services at the 

Department of Education, and the Department of Labor to accelerate options for states 

to bundle and/or braid public funds within a self-directed individual budget with 

streamlined and accelerated eligibility procedures. 

10. Continue to Educate People with Disabilities, Their Families, and Other Critical 

Stakeholders About LTSS Challenges in Public Policy and Practice and Document 

Further Consumer Needs, Costs, and Preferences for a Comprehensive, Accessible, 

and Affordable System (Chapter 5) 
36 

A. This report documents the current crisis and the impending “perfect storm.” It is a 

complex and confusing picture, not easy to grasp and even more difficult to change as 

we move forward. NCD must continue to put the spotlight on the critical set of 

challenges that in the next 20 years may touch more than half the population of our 

country. For people with unmet LTSS needs today, NCD must continue the public 

education process through outreach activities and direct discussion with the disability 

community and policymakers. 

B. A series of audio conferences and a national summit of key leaders and stakeholders 

should be held to continue to document the findings and build consensus on possible 

policy and practical solutions. 

Recommendations for Clean Slate Reform: Year 2049 (See Chapter 6 for 

full text and implementation leads and future model) 

1. AmeriWell is a Prefunded, Mandatory, Long-Term Services and Support Model That 

Provides All Americans of Any Age with Coverage from Birth Based on Criteria of 

Risk and Functioning, and Not Category of Disability (Chapter 6) 

A. AmeriWell delinks LTSS from Medicaid and Medicare, creating its own governing 

agency, regulations, oversight, and congressional committee. 

B. The contributions of individuals and families, the private sector, and the Federal 

Government fund AmeriWell. A “penny pool” is established through private stock 

transactions to supplement LTSS costs for impoverished and vulnerable Americans 

previously served under Medicaid and Medicare. 

C. Medicaid remains a primary safety net for mothers and children. Medicare continues to 

provide its health and acute care and limited home services to individuals 65 and older 

who are not Medicaid eligible or on SSDI. 
37 

Chapter 1 

The State of 21st Century Long-Term Services and 

Supports: Financing and Systems Reform for 

Americans with Disabilities 
38 
39 

Table of Contents 

Chapter 1 

Page 

Part I 

Picturing the Problem..................................................................................................................41 

Part II 

Charting the Course ....................................................................................................................44 

Part III 

Forecasting the Need....................................................................................................................48 

Part IV 

Dragging Anchor..........................................................................................................................55 

Part V 

Introducing the Captain .............................................................................................................62 

Part VI 

Meeting the Crew.........................................................................................................................74 

Part VII 

Fueling the Engine .......................................................................................................................84 

Part VIII 

Pushing Tugboats.......................................................................................................................106 

Part IX 

Harnessing Favorable Winds....................................................................................................113 

Part X 

Gathering Clouds.......................................................................................................................117 

Part XI 

Recharting the Course...............................................................................................................125 

Appendix 1.A..............................................................................................................................131 

Appendix 1.B..............................................................................................................................132 
40 

Appendix 1.C..............................................................................................................................134 

Appendix 1.D..............................................................................................................................136 

Appendix 1.E..............................................................................................................................137 

Appendix 1.F ..............................................................................................................................139 

Appendix 1.G..............................................................................................................................157 
41 

Part I 

Picturing the Problem 

The “rich picture” methodology for presentation of the state of long-term services and supports 

financing and systems reform research. 

Some people say that a picture is worth a thousand words. The field of management often uses a 

“rich picture” systems methodology, “an innovative tool that encapsulates knowledge relevant to 

strategic reform.”6, 7, 8, 9 It is often described in the management literature as a “soft systems 

methodology” for linking hard and soft facts in a cartoon-like representation to illustrate a 

complex problem simply and clearly. The following research is presented using the rich picture 

methodology to capture the current long-term care and long-term services and supports (LTSS) 

crisis. The picture and narrative rely on expert research from the past and present, as well as on 

one-on-one open-ended interviews with key stakeholders in the fields of disability, long-term 

care, and health care.

The setting for the rich picture is the ocean, with the current LTSS ship heading toward an iceberg 

that represents the barriers and challenges to systems reform. The “cast” for this rich picture will 

provide the substantive descriptions and body of research and analysis about the barriers and 

challenges of navigating through the current system of LTSS. The presentation of the research is 

purposeful, so that the reader and the researcher can begin the voyage together with a snapshot of 

the problem. 

The purpose of this research is to produce new knowledge and understanding of current 

experience with and future need for affordable LTSS for people with disabilities. This research 

on the State of LTSS Financing and Systems Reform is the first part in a five-part series that will 

tell the story of the current LTSS system to set the stage for the exploration of future market 

demands and current gaps in supply; to explore promising state practices and challenges; and to 

picture what the 21st century’s comprehensive, consumer-responsive system might look like and 

make policy recommendations. 
42 

The research is based on five assumptions. First, people with disabilities, whether young or old, 

desire and deserve choices when seeking assistance with daily living that maintains their selfdetermination and maximum dignity and independence. Second, the current financing 

mechanisms (public and private) will become unsustainable in the near future without significant 

reform. The system must be affordable to all Americans regardless of income levels and must 

consider opportunities to leverage public and private support in new ways without impoverishing 

beneficiaries. Third, there is an opportunity with the changing demographic picture of the United 

States to explore the possibilities of a universal approach to the design and financing of services 

and supports that is responsive to individuals under the age of 65, as well as seniors with 

disabilities, without sacrificing individual choice and flexibility. Fourth, formal and informal 

caregiving must be sustained, examining family needs and workforce recruitment and retention 

challenges. Fifth, the approach to quality must examine consumer direction and control of 

resources in addition to traditional external quality assurance mechanisms. 
43 
44 

Part II 

Charting the Course 

An overview of the context for systems reform and the challenges inherent in navigating the 

current waters for people with disabilities and seniors. 

Historians will remember the last half of the 20th century for its legacy of public policy in 

health care, education, disability, and civil rights. It will fill the archives of history as to how a 

young country, barely 200 years old, grappled with developing and implementing equitable 

and just policy for all its citizens. Although the flurry of disability policy has waxed and waned 

with the political, economic, and social changes of the greatest century in history, it 

nevertheless started a critical dialogue about the rights and responsibilities of all people, of all 

abilities, toward each other. 

The United States enters the 21st century with 35 million people over 65 years of age in 

relatively good health with independent lifestyles and less than 5 percent in skilled nursing 

homes. Not bad outcomes for a young country when one considers that, historically, only 2 to 3 

percent of the world’s population has ever lived beyond 65 years of age. In less than a century, 

life expectancy in the United States has increased by 30 years. This phenomenon has also 

increased the life span of people with lifelong disabilities, such as Down syndrome and mental 

retardation. The increase in longevity is attributed to advances in technology, sanitation, 

education, health care, and the environment, coupled with an abundance of social and fiscal 

policy that has provided the first-ever experiment for how a democracy ought to work for its 

citizens of all abilities. 

Over the second half of the 20th century, health care legislation evolved to help working 

Americans meet the rising costs associated with health care and living longer. The initial 

Medicare legislation was designed to insure seniors for acute care needs and short-term 

rehabilitation, and Medicaid was to provide health care for poor women, children, and people 

with disabilities. For people with chronic, long-term care needs, the nursing home became the 

primary option for care. In the 1960s, there was no companion legislation developed alongside 

Medicare and Medicaid that addressed the needs of LTSS. The civil rights debate was in full 
45 

swing, but the debate about the rights of people with disabilities to services and supports outside 

a state hospital was in its infant stage. The education movement to integrate people with 

disabilities into the mainstream classroom was a decade away. It was assumed that families 

would provide the supports and services and housing for their own family members with lifelong 

disabilities; if they could not, the alternative was a nursing home or a state institution. 

It was not surprising that the 1960s Medicaid legislation covered institutional care and 

considered it the right response for seniors and people with disabilities with long-term needs. 

The movement to close state hospitals, ironically, began before the Medicare and Medicaid 

reform in the 1960s. Deinstitutionalization was viewed by some as an ethical and moral 

imperative indicative of the changing philosophy of care and civil rights for people with 

disabilities. However, others saw it as an opportunity to reduce state costs and take advantage of 

the new federal legislation that would provide states with resources for institutional care such as 

group homes, intermediate care facilities, and nursing homes. 

Today, most Americans, whether with a lifelong disability or a short-term chronic illness, want 

to receive LTSS in their homes and their communities. In the early 1800s, the first health 

caregivers were women from local benevolent societies and churches who visited the sick and 

the indigent in their homes. In the early 1900s, hospitals and state institutions for people with 

mental retardation grew, and caregiving, although still very much home based, was provided by 

professionals like nurses, nursing assistants, and social workers. Today, the majority of formal 

and informal (paid and unpaid) caregivers who provide LTSS are still women. Since 1981, 

Medicaid policy revisited the home- and community-based notion of caring by offering waivers 

to states that allow federal-state Medicaid dollars to be spent on optional services rather than just 

on institutional and home health care. However, the use of waivers is optional and varies 

dramatically from state to state, and waivers serve less than 1 million low-income people 

needing LTSS. 

It is estimated that between 9 and 12 million people over the age of 18 (459,000 under age 18) 

need LTSS for everyday self-care needs such as dressing, eating, toileting, shopping, paying 

bills, or taking medication. Demographers predict that the senior population of 35 million will 

double by 2030 and, although disability rates have declined for this age group, will begin to 
46 

climb as the category of the oldest of the old, 85 years and above, increases. The functional as 

well as chronic and acute care needs of people under 65 years of age are growing at a faster rate 

than for those over 65 years of age, in part because of improved medical technology, increased 

life expectancy, increase in asthma, higher prevalence of diabetes and obesity, and deterioration 

in a number of self-reported health statistics.10 Eighty percent of adults receive LTSS in the 

community in which they live, although 64.3 percent of the Medicaid dollars support caregiving 

for people in nursing homes and other facilities. 

The United States spent about $1.24 trillion on all U.S. personal health care services in 2001, 

with 12.2 percent (or $151.2 billion) spent on LTSS.11 Medicaid was the major source of 

funding, followed by personal out-of-pocket pay, Medicare, private long-term care insurance, 

and a small group of other federal programs. The Congressional Budget Office predicts that the 

need for services and supports will only grow and that more than half of Americans will need 

LTSS at some point in their lives. The good news is that the need will be sporadic for most and 

long term for but a few. The bad news is that the current system is designed for low-income 

individuals who are nursing home eligible. There are many people with disabilities, young and 

old, who will never meet the stringent income and functioning requirements for care under the 

current system. It is ironic that poverty has become the criterion for receipt of LTSS when the 

United States spends about $5,500 per person on health care, 50 percent more than any other 

nation in the world. 

Financial eligibility criteria for receipt of LTSS through Medicaid require that individuals have 

extremely low assets and income to receive services. Although demographers and economists 

have forecast the current crisis, few Americans have saved enough to support any serious longterm care needs. More than 50 percent of Americans have no access to company pension plans,12

and only about 10 percent have long-term care policies. As many as 45 million Americans have 

no health insurance. Thirty-four percent of people with disabilities have incomes below $25,000 

a year, and more than 60 percent are asset poor (have only enough money to survive for three 

months at the federal poverty rate). More than 22 percent of Americans are unbanked, which 

means they are not saving or investing for future long-term care needs. 
47 

Economists are exploring how the increased longevity and decreased fertility rates will ultimately 

affect overall the productivity rates of the American workforce and the ability of the American 

taxpayer to sustain current financing for the delivery of the current long-term care system. 

Although there is much debate about the economic health of a variety of our current entitlement 

programs, there is agreement that there is a growing imbalance between what the Federal 

Government will collect in future benefits and what it has promised to pay. Before the new 

prescription drug legislation of 2004, Comptroller General David Walker of the Government 

Accountability Office (GAO) said that GAO simulations for the year 2040 demonstrated that, 

without reform, federal income taxes could rise drastically and the nation could see a 50 percent 

reduction in current spending.13 Actuaries are challenged to provide insurance companies with 

lifetime cost projections for people with severe and chronic disabilities who are living longer. 

Insurance companies are nervous about predicting future costs for long-term care as health care 

costs continue to rise and the profile of the typical senior continues to change. 

Although today’s delivery and design of LTSS are guided by a philosophy that is consumer 

directed and noninstitutional, the funding mechanisms are rooted in policy that is 40 years old 

and that favors “episodic responses to chronic and acute care needs rather than nonspecific 

causes related to old age or as a result of a lifelong disability.”14 Regardless of one’s philosophy 

or biases, the current system is fast becoming financially unsustainable. Even the generous 

federal waivers that make it possible for about 1 million Americans to receive services outside a 

skilled nursing home come without financial guarantees and are dependent on the fiscal health of 

each state. It is highly unlikely that states will be able to sustain many of these innovative 

programs without significant reform in the near future. The current health care system needs a 

“companion” system of services and supports that provides a constellation of consumer-driven 

options that are supportive, rehabilitative, medical, and affordable and ensures that people with 

disabilities and seniors have dignity and independence. The future of LTSS is the gateway to a 

new industry that has the potential to provide a menu of services that not only maintain or sustain 

activities of daily living (ADLs) as in the past, but also promote quality aging and healthier 

lifestyles for all people with disabilities. 
48 

Part III 

Forecasting the Need 

A snapshot of public perceptions creating the barriers and challenges to setting the course for 

long-term services and supports reform. 

Confusion and Misperceptions 

Many Americans (59%) report giving “very little thought” or “no thought at all” to the issue of 

long-term care (LTC), and one-third believe that, if they do need LTC services, Medicare or 

Medicaid will pay the bill.15 The National Endowment for Financial Education sponsored a think 

tank on the issues of LTC and concluded that many Americans are experiencing a “disconnect” 

from planning for the realities of LTC.16 A national study on LTC insurance found consumers 

confused about exactly what is meant by LTC—some thought it was an entitlement, others a 

personal responsibility, and still others were unsure whether it was about housing, services, or 

both.17 The study found that 25 percent of those surveyed believed that Medicare or Medicaid 

would pay for LTC; 34 percent reported that they would never need LTC insurance; and 68 

percent reported they would purchase it in the future when and if needed.18 

A survey by the National Governors Association (NGA) found that 85 percent of Americans 

over the age of 45 have no public or private insurance protection against the cost of LTC, and 

states must adopt innovative strategies to encourage citizens to plan to finance their own LTC 

needs. The survey found that many people have the following common misperceptions about 

Medicare coverage for LTC costs: 

• Unaware that Medicare covers only 100 days of skilled nursing care following a hospital 

discharge and does not contain a long-term component providing for extended 

community or intuitional care 

• Widespread lack of awareness regarding the high costs associated with LTC 

• Wariness about paying LTC insurance premiums to cover services that may not be 

needed for decades 
49 

• Unaffordable LTC insurance premiums for lower-middle-income people 

• Lack of knowledge about the availability of other LTC financing vehicles such as reverse 

mortgages 

• Limited options for lower-middle-income people to avoid spending down into Medicaid 

• Lack of stigma or consequences for individuals choosing to spend down to Medicaid19

Attitudes and Preferences 

A survey of participants in a four-state Robert Wood Johnson Foundation partnership for the 

LTC insurance demonstration project measured attitudes of the participants about purchasing 

LTC insurance. The evaluation reported that individuals who did not have family members to 

count on for LTSS and who believed in self-reliance rather than government involvement were 

more likely to purchase an LTC insurance policy.20 Most participants were married, college 

educated, healthy, and had incomes between $50,000 and $100,000 and assets over $100,000.21

According to the Administration on Aging (AOA) Profile of Older Americans 2000,22 only 14 

percent of family households with a head of household 65 years and older earned incomes 

between $50,000 and $74,000. Married seniors far outrank their single or never-married and 

divorced or separated colleagues. Only 4 percent of single or never-married individuals and 8 

percent of the divorced or separated are age 65 or older.23 So attitudes about self-reliance versus 

government involvement for married well-off seniors are probably quite different than the 

attitudes of 32 million seniors reporting a median working income of $14,425, with 34 percent 

reporting a working income of less than $10,000 and 23 percent reporting $25,000 or more.24

Postelection Views 

America’s Health Insurance Plan (AHIP) reported its 2004 postelection survey findings 

regarding health care issues of 1,000 people who voted in the 2004 presidential election and 

found that 8 out of 10 people considered health care to be very important but ranked issues of 

values, Iraq, the economy, and terrorism before health care. Affordability of health care was 

considered important by 67 percent of respondents, and 27 percent were concerned about 

providing insurance coverage for more of the uninsured. Almost half reported that the health 
50 

care system has features that work well and features that need significant changes. Eighty-three 

percent of voters were satisfied with their health insurance coverage, while only 15 percent 

were dissatisfied.25

Finally, the Kaiser Family Foundation/Harvard School of Public Health Survey, January 2005, 

reported its findings on the Health Care Agenda for the New Congress. The most important 

issues or problems the President and Congress should deal with were the war in Iraq (27%), the 

economy (17%), and health care (10%). The Democrats listed health care as number three of five 

top priorities, and the Republicans ranked health care as number four out of five top priorities. 

Lack of Political and Public Will 

The brief review above indicates that the issue of health care, not to mention the issue of LTSS, 

is not on the public or political radar. There is a disconnect from what people think and believe 

and what is actually happening in the states and, to some extent, what is happing on the federal 

level. This could be attributed to the fact that the LTC system is designed for low-income 

recipients, and surveys and polls reflect the views and perceptions of middle- and upper-income 

populations. However, with less than 10 percent of the American population purchasing LTC 

insurance, there is a question of how Americans are actually planning for their aging years. Even 

the large volume of research on the topic of LTC and LTSS reflects a high level of interest and 

importance by policy leaders, national think tanks, and major federal agencies. The 

misperceptions about the role of public programs in providing LTC for the average American are 

serious because they reflect a lack of planning and understanding of the issue. The lack of public 

and political will should be of great concern to policymakers advocating for people with 

disabilities and seniors in light of projected federal budget cuts for programs that many believe 

are growing at unsustainable rates, such as Social Security, Medicaid, and Medicare. 

Durenberger (2003) writes that the LTC debate “lacks a strong wedge” because, unlike Social 

Security and its monthly check, there is no frequent reminder of the need for LTSS in everyday 

life. Most Americans believe that LTC “signifies an unstoppable decline that ends in death.”26

Many are in denial that LTC is connected to their financial security and should, in fact, be a part 

of their retirement portfolio. What salient issue will create the wedge is unclear, although the 
51 

suggestion to link it to financial security is excellent and should be parlayed into retirement 

planning for every American. 

In addition, Durenberger suggests clarity about what is important and what is urgent to include in 

the LTC debate. On the urgent side, he recommends the issue of reimbursement and the 

increased Medicaid matching rates that pushed many states into deficit. The Kaiser Commission 

on Medicaid and the Uninsured confirmed that 50 states and the District of Columbia 

implemented Medicaid cost-containment strategies for FY 2003 and FY 2004 and announced 

plans to make cuts in their Medicaid programs by limiting eligibility, cutting benefits, or 

restructuring prescription drug payment and coverage.27 State budget-cutters are reported as 

particularly targeting nursing home reimbursement rates, with Illinois implementing a 5.9 

percent reduction in its nursing home reimbursement rates, and the Kansas Legislature reducing 

its nursing home budget by $8.9 million.28 On the important side of the debate, Durenberger 

recommends discussion of financing reform, systemic change, consumer-directed care, and 

housing. Although these are the issues most frequently researched, he suggests that they are not 

as critical to states’ current crises and immediate functions.29 Durenberger explains that the 

integration of the urgent and the important issues must be part of the wider national dialogue. 

The wisdom in this advice is obvious: If the current policy structure for LTSS is breaking the 

bank for states, alternative strategies must be introduced on a national level to supplement the 

states in meeting the demands of their aging populations. Although some states are moving 

forward with their own Medicaid reform, it is unclear what the outcomes will be. A case in point 

is the recent announcement by Governor Jeb Bush of Florida that his administration is proposing 

a transformation of the state’s $14 billion Medicaid program that serves 2.1 million vulnerable, 

disabled, and elderly Floridians. Medicaid spending since 1999 has increased 112 percent and, if 

reform is not made, there is a fear that it will collapse under its own weight.30 The reform efforts 

are defined as a patient-centered vision with three components: basic care, catastrophic care, and 

flexible spending. 

Robyn Stone (2003) reinforces Durenberger’s proposition about the important issues when she 

writes that consumer choice has become the “mantra” of many policymakers, but is a “vacuous” 

promise at best in the absence of knowledge about options to make informed choices about LTC 
52 

options.31 She asserts that communicating about public benefits requires money and a marketing 

strategy. Unfortunately, as seen in the welfare reform of the late 1990s, the lack of marketing 

information initially caused a significant drop in the benefit rolls for people receiving food 

stamps, Medicaid, and other programs because of the lack of knowledge or understanding of the 

rules and policies associated with the new law. 

Joanne Silberner, a health policy correspondent for National Public Radio, writes that the 

problem with the current debate about health care and LTC is that it is an “endless debate” and is 

not newsworthy, and that the lack of media coverage is due to the lack of anything new 

happening. She compares the LTC issue with Medicare:

“Paul Kleyman, the editor of Aging Today, is quite passionate about issues of aging and LTC. He 

once complained to me that ‘the zookeepers in politics keep shouting that we have to worry 

about the pachyderm Medicare before we cover LTC.’ The editors at NPR concur. Medicare is a 

topic that we can cover because it is an issue with clear political agendas. LTC however, is more 

muddied, and it is not a pachyderm. So the media covers a budget fight, policy changes, 

bankruptcies, and scandals involving LTC.”32

New Language and Definitions 

The challenge for the architects of the 21st century’s LTSS system is not just about public 

perception and lack of media coverage but about language and actions. The current 

Administration’s assertive actions following the 1999 Supreme Court Olmstead decision has 

asked states to develop and implement plans for less-restrictive community options in care 

settings of the consumer’s choice.33, 34 The disability rights movement has spearheaded the rights 

of people with disabilities to live in the least-restrictive environment and has expanded the 

domain of membership in what was once perceived as an LTC system for people on social 

welfare and the old and frail. 35, 36 

The use of people-first language, the dropping of the “care” from long term, and services defined 

as “consumer directed” or “consumer centered” reflect a movement toward a more universal 

language and acceptance of the evolution of how we think about the multigenerational aspects of 
53 

Why We Die Premature Deaths 

 30% genetic predispositions 

 14% social circumstances 

 5% environmental exposures 

 40% behavioral patterns 

 10% shortfalls in medical care 

 Longman, 2004, p. 99

aging, disability supports, and services. Kane describes the transition of these slogans into 

policy, such as the Medicaid home- and community-based waivers, which use client-employed 

workers; or the Cash and Counseling Demonstrations, during which the Medicaid benefit is 

cashed out for those who opt for a monetary, although discounted, benefit.37, 38 

Several models designed by the leaders of the self-determination movement for people with 

developmental disabilities demonstrated promising outcomes with consumer-driven budgets, 

which are now being tested across the age span in a few states.39, 40 The next generation of 

individuals with disabilities and older Americans will benefit because of the sharing and 

borrowing of language and policy across the aging spectrum and disability world that preceded 

current reform efforts. 

The definition of LTSS covers a daunting range of issues, needs, and services. The 

Congressional Record Service defines LTC as “a wide range of supportive and health services 

for persons who have lost the capacity for self-care due to illness or frailty.”41 LTSS include 

much more than health care and is composed of a variety of services and supports essential to 

maintain quality of life with maximum dignity and independence for individuals with disabilities 

and individuals over and under 65 years of age. Services and supports include housing, 

transportation, nutrition, technology, personal assistance, and other social supports to maintain 

independent living. 

Health Outcomes—Another Reason for Reform 

Most LTSS are nonmedical and, when combined with 

the financing mechanisms that favor acute care and 

institutional care, it is like trying to fit a circle in a 

square. An examination of health outcomes for the 

current system may provide a rationale for why a new 

financing and delivery system is needed. 

A recent study produced by researchers from the 

Robert Wood Johnson Foundation surveyed decades of studies as far back as 1970 as to why 
54 

people die premature deaths. The study found that 64 percent of premature deaths are due to 

nonmedical environmental or social or behavioral inputs.42 This is not surprising when one 

realizes that the focus of health policy over the past 40 years has not been on prevention or 

services and supports that could help people with disabilities maintain quality lives or help 

people with chronic illnesses stabilize conditions. Currently, only 3 percent of total health care 

expenditures in the United States are spent on well care, including preventive care.43 Although 

the United States spends 50 percent more than 29 other countries in the developed world for 

health care, its health indicators—such as infant mortality and life expectancy—do not reflect 

this. Although the United States surpasses all other countries in its spending (13 percent of its 

gross domestic product), 20 percent of Americans remain uninsured for health care services and 

90 percent are uninsured for LTC insurance.44

The LTSS debate may be seen as a political nonstarter when referenced by the media only in the 

context of disability and aging, but it underscores the unpreparedness of the current system to 

handle the biggest demographic challenge in the history of its young country. A textbook 

commonly used in health policy graduate courses concludes in its chapter on LTC that the 

subject is largely ignored for several reasons: a focus on the “cure rather than the care” in 

medicine today; the view of LTC as a low-status service within the health care system; the lack 

of sustainable and affordable financing mechanisms; and the psychological challenges of coping 

with a disability at the end of life—all these reasons perpetuate denial and lack of decision 

making about the problem.45
55 

June 1867 

My view you know is that the ultimate destination 

of all nursing is the nursing of the sick in their 

own homes... I look to the abolition of all 

hospitals .. but no use to talk about the year 2000. 

Florence Nightingale 

(See Footnote 56) 

Part IV 

Dragging Anchor

An overview of the role of history in the evolution of today’s understanding and future 

forecasting of long-term services and supports financing and systems reform. 

History as Prologue 

In the 20th century, the United States Congress 

tried six times to pass national health care, but 

failed. A critical reason given for this failure was 

the lack of consensus that health care should be a 

right for all citizens in a free society, subsidized 

in part by the Federal Government. Nineteenthcentury Americans fiercely embraced the idea of individualism and the belief that the working 

and middle classes never took money not earned. The only exception to this revered ideology 

was the military half-pensions that began during the Revolutionary War. The sentiment of the 

19th century Victorian middleclass was unwavering, holding steadfast to the belief that 

“American greatness depended at the very least on idle and working-class Americans not 

accepting benefits they had not earned.”46 However, our 19th century forefathers did develop 

the concept of the truly needy and took on the responsibility (state and local) for funding the 

first poorhouses and institutions. The strong characteristic of individualism prevailed, however, 

and today’s social policy reflects the belief that poverty is an individual problem and not the 

result of an economic system.47 Unlike Western Europe, Canada, and Japan, the United States 

has never embraced the concept of universal entitlements and is last with respect to its public 

share of total health care expenditures when compared with other industrialized countries 

(45.4% public and 54.6% private), Canada (69.4% public and 30.6% private), and Japan 

(79.5% public and 20.5% private).48 

George Lundberg, MD, an editor of the Journal of the American Medical Association for 17 

years, wrote that the failure of recent health reform efforts was based on an erroneous 
56 

assumption that the American public would accept one level of health care across the board any 

more than it has accepted one mode of transportation or housing or fashion.49 

The current system of health care was designed more than 40 years ago and was the United States’ 

second major attempt since the passage of Social Security in 1935 in providing income security for 

its working seniors, poor mothers and children, and people with disabilities. Health reform efforts 

over the last several years have been described as “incremental” and reflective of the overall public 

and political opinion (see part III of this chapter) of the insured. However, what is notably absent 

from the current debate is reliable research that spells out the needs and perceptions about the 

current LTSS from the uninsured, underinsured, and people with disabilities. 

The dilemma is that American public policy, although based on social movements and general 

premises of reason and knowledge, has become homogenized and does not truly represent the 

needs of those who are marginalized, such as the poor and people with disabilities.50, 51 This 

“dilemma of difference”52 is found in traditions that lean heavily on universal imperatives that 

dictate what society ought to do, resulting in public policy that is “value neutral.” 53 Richard 

Bringewatt, president and chief executive officer of the National Chronic Care Consortium, 

describes the challenge this way: “ The focus needs to be shifted from the needs of provider 

systems that were established in 1965 to the needs of tomorrow. There is no health policy in this 

country today—only budget policy.”54 The Consortium for Citizens with Disabilities—a national 

coalition of organizations working together to advocate for national public policy that ensures 

the self-determination, independence, participation, empowerment, integration, and inclusion of 

children and adults with disabilities in all aspects of society—is even clearer with its opposition 

to any Medicaid reform efforts that threaten the services and guarantees currently available under 

law to people with disabilities.55 The consortium and many of its members know that the 

dilemma of juxtaposing budget policy over social policy is that it ignores the human element 

and, in this case, people with disabilities and the primary purpose of the policy in the first place. 

Should the costs of providing personal assistance for a working mother who needs help in getting 

from her bed to her wheelchair every day take precedence over her need to provide for her 

family and manage her life? The dilemma of difference is that it sets aside an issue such as LTSS 

as belonging to “the other” and therefore reduces the sense of obligation or responsibility of the 
57 

majority. This dilemma is also seen in the multitude of research articles reviewed for this report 

about the financing of LTSS reform. The “beneficiary story”—how changes in funding would 

affect people with disabilities and their everyday lives over time—is noticeably absent from 

almost all analyses. Without this information, policymakers and the public are only privy to half 

the story: the monetary side of the policy and not the human side about the impact of the policy 

on the lives of millions of Americans with disabilities. 

Forecasting a future system of reform requires a look back at the patterns and trends that paved 

the way to today’s philosophy of caring and delivery of services and supports. The American 

system of health care has two distinct histories. The first, from the 1700s to the early 1900s, was 

based on a model for caring that was mostly a charity model, delivered by churches and 

benevolent groups and subsidized by local communities and state governments.56 Charity care 

was mostly nonmedical care given to the sick and indigent by volunteers and nurses in the home 

and the poorhouses. The second history began in the 1900s and is the for-profit health care 

model we have today, which is highly professionalized and focused more on cure and treatment 

than on care. 

The following two sections will provide a sketch of the evolution of American culture and its 

impact and implications for navigating the current state of LTSS system reform for people with 

disabilities with the hope of “dragging anchor” and moving the dialogue for reform forward. 

Evolution of American Culture and Its Philosophy of Caring—1800s 

The underwriting of human life began in the United States in the 1830s as the first life insurance 

policy was written, signaling a major shift in American values. Never before had America found 

it necessary to insure a person’s life in the event of death. Mortality was high in the early 19th 

century (about 42 years) and the concept of life insurance buffered the frequency of death by 

providing financial security for young families left behind. In the 1860s, the average marriage 

lasted 15 years before one partner died. Today, by contrast, it is not uncommon for a married 

couple to celebrate a 60th wedding anniversary. 
58 

In the 1850s, Charles Darwin introduced the theory of evolution that forever changed the Puritan 

tradition. Scientific discoveries promoted new ways of thinking, such as the germ theory, 

sparking religious debate. If germs caused disease, what was the role of the Divine? Two 

thousand years of western thought on immortality and the afterlife were suddenly under attack. 

As with the evolution in the sciences, philosophy was experiencing similar challenges. 

Metaphysics and moral philosophy were shunned as knowledge of opinion and not knowledge of 

fact. A new breed of thinkers, weary of their European experience of superstition, bigotry, 

religious persecution, and barbarism, emerged with the skepticism of the ancients and the 

optimism of the newfound sciences.57 The Enlightenment fathers, as they called themselves, 

ironically produced many of the same philosophies they had crossed the ocean to leave behind. 

Immanuel Kant described his age as the “Age of Enlightenment, but not an enlightened age.”58

The religious and social values of 19th century America began to change dramatically as 

religious clauses were dropped from wills that for centuries had been the measure of a man’s 

character as well as his financial worth. As this change occurred, the familiar Victorian deathbed 

scene with its personal attending clerics all but disappeared as the once-public hour of death 

became private.59 The tradition of burying the dead from home changed as the local 

cabinetmaker was asked to open up his parlor and assume the responsibilities for the care and 

burying of the deceased. By the 1890s, the death-care industry was born.60 

The first hospitals were primarily of a “religious and charitable nature” and provided care for the 

sick rather than medical cures.61 The growth in biomedical science and technology between 1870 

and 1920 altered the purpose of the early hospitals and the type of services rendered. A new 

medical profession of trained professionals emerged and the number of hospitals grew from 178 

in 1873 to more than 4,300 in 1909.62 In the 1840s, a few state mental hospitals were opened and 

championed by an extraordinary advocate for people with mental illness, Dorothea Dix, who was 

successful in garnering state support.63, 64 At this time, mental illness was considered treatable, 

and “moral treatment” consisted of work, education, and recreation.65 It was not long before the 

populations and expenditures grew and the standards of care declined. Institutions became 

warehouses and one of America’s worst legacies. It is important to note that the first institutions 

were often built in the country and away from mainstream activities. Originally, this was done to 
59 

create a serene environment. However, similar to the placement of the early cemeteries away 

from mainstream cities, this created a stigma, that the people in institutions should be hidden and 

feared. Unfortunately, this stigma prevails to this day about many people with disabilities, even 

those not in institutions. 

Although institutional care was gaining popularity during this time, 80 percent of Americans, 

whether ill, aged, or dying, were cared for in their homes, in contrast to today, when more than 

80 percent die in institutions.66 The shift from home care to institutional care during the 1800s 

did mean new jobs with the growth of new industries and the emphasis on professional care. 

However, charity care survived well into the early part of the 1900s, predominately for health 

care. Insurance for health care was introduced in 1929, although it did not really take hold until 

the 1940s, when Blue Cross Insurance was introduced as a method to help pay for the support 

of hospitals.67

Early Settlement and Pauper Laws 

In colonial America, the early settlement and pauper laws were adopted to confine the movement 

of the poor and indigent from one town to neighboring communities, and it was considered 

illegal for people to move from one town to another without express permission of the town 

fathers.68 These laws dated back to the 1500s and were inherited from our European ancestors.69

Local laws favored towns regarding the wandering poor and people with mental illness or, as 

they were called then, the “mentally deficient.” It was not uncommon for local overseers of the 

poor to try to remove people who were “crippled, feeble, and mentally deficient” from the town 

budgets by marrying them off or removing them from the town under some technicality 

regarding their inheritance or the town’s settlement laws. It became increasingly difficult to 

monitor settlement and pauper laws as the population considered “mentally ill and mentally 

defective” grew. 

The problem of housing for the poor and people with disabilities was addressed with the 

establishment of poorhouses or almshouses, and legislation allowed towns to tax citizens to 

build, purchase, or hire a house of correction or workhouse in which to confine and set their poor 

to work.70 For example, by 1834, in the state of Vermont, the first institution for the “relief of the 
60 

insane” was initiated with a $10,000 grant from woman in New Hampshire, and the Vermont 

legislature, in an unprecedented gesture, appropriated $2,000 annually for fives years to help 

with the costs. The Vermont Asylum of the Insane (known today as the Brattleboro Retreat) was 

opened in 1836. It was not until 1921, however, that Vermont enacted laws in favor of the 

“crippled and handicapped,” almost 100 years after it provided funding for a state asylum for 

mental illness. It was not until 1884 that the state assumed total support for “mentally defective 

paupers” regardless of residency; by 1891, it had opened the Vermont State Asylum in 

Waterbury for the “insane.”71 

20th Century—From Charity Care to For-Profit Care 

By the 1950s, a new for-profit system of health care had evolved as a result of advances in 

sanitation, specialization of medicine, and the further development of medical research, 

including discoveries such as insulin, antibiotics, and anesthesia.72 Federal legislation responded 

to the problems of employment for people with disabilities as early as the 1920s with the passage 

of the Federal Rehabilitation Act. The growth in the medical sciences, coupled with this 

legislation, encouraged the development of rehabilitation medicine for people with physical 

disabilities and influenced the quality of life immensely. In addition, the field of psychiatry grew 

and new medications for the treatment of people with mental illness advanced and precipitated 

the long overdue deinstitutionalization movement that began in the 1950s. The need for health 

insurance grew because of several of the following factors: as a response to poverty and the 

aftermath of the Great Depression in the 1930s; as a response to a collective bargaining 

agreement of the Federal Government that limited wage increases to workers but not fringe 

benefits during World War II; as a response to the passage of the Hill-Burton Act in 1946 that 

supplied funds to underwrite new hospital construction; and as a response to the passage of 

Medicare in 1965.73 

The evolution of care from the home to the almshouse to the state mental hospital to the private 

nursing home and now back to the home and community has one underlying theme: that is, 

historically, Americans have provided for the care of their family, loved ones, and the poor with 

disabilities. Primary resource documents on what the early charity care looked like were beyond 

the scope of this study. However, it is clear that the care was primarily comfort care with little or 
61 

no medical oversight, and the first professionals on the scene, as early as the 1830s, were the 

visiting nurses or, as they are known today, the Visiting Nurse Association.74 However, the 

legacy of the state hospital continues today, with 60,000 people remaining in state mental 

institutions, compared with 559,000 in 1955.75, 76 

As this brief review demonstrates, a new landscape for democracy emerged during this period in 

American history. The discovery of electricity; the inventions of the telegraph, photography, and 

the steam engine; the building of American railroads; and the opening of public schools, coupled 

with the religious and social revolutions, provided the foundation for Americans to negotiate 

their future responsibilities and commitments to each other. However, for people with 

disabilities, there was little negotiating about rights or access to much of this new landscape. 

From the opening of the first state hospital in the 1840s, it would take over a century before the 

dialogue about the rights of people with disabilities to live, work, and be educated would begin. 

America would continue to sort out its human obligations, and accompanying fiscal 

responsibilities at the federal and state level, in creating a democracy and social contract that 

included people with disabilities. 
62 

Part V 

Introducing the Captain 

An introduction to people with disabilities, the consumer-directors of the long-term services and 

supports system voyage. 

Meet Mary 

Mary is 42 years old, recently widowed, and living in a small rural town in the South. Mary has 

cerebral palsy and has been in a wheelchair most of her life. Her husband was her primary 

caregiver and helped with daily activities such as dressing and cooking, and he dropped her off 

at work every day. Mary works in a day care center 

35 hours a week. She depended on her husband’s 

health insurance but will no longer receive it now 

that he has died. She owns a home but has little 

equity and savings of about $10,000. Her husband 

worked construction and had a small pension plan 

that provides her with $250 a month. Without her 

husband’s income and health insurance, she may be forced to sell the house. Mary now needs to 

hire a personal assistant but is unsure how she will pay for the services. She has never received 

public benefits and does not know what is available. Someone told her she may receive a Social 

Security Survivor benefit, but she is not sure. Although she has had cerebral palsy since she was 

very young, she has always been independent. Mary did apply for LTC insurance because she 

has no family or relatives but was denied at age 40. 

People Using Long-Term Services and Supports 

Demographers predict that the 34 million Americans 65 years of age and older will double over 

the next half of the century. The breakdown of that increase is found in table 1.1 and describes 

the growth of three age groups and includes individuals in institutions.77, 78 It is estimated that 

this growth will impose significant pressure on federal and state budgets that fund Medicaid, 

because as individuals age, the prevalence of disability is expected to rise.79 Among those 85 

years and older, 21 percent were in nursing homes, and another 49 percent were community 

residents with LTC needs.80 

Table 1.1. Growth in Aging Population

Age FY 2000 FY 2050 

65-74 18 million 35 million 

75-85 12 million 26 million 

85 + 4 million 28 million 
63 

Over Age 65 

It is estimated that between 9 and 12 million people over the age of 18 receive LTSS for 

everyday self-care needs.81, 82, 83 Six million people over the age of 65 receive services and 

supports, with 4.5 million receiving these services and supports in their home and 1.5 million 

receiving them in a skilled nursing facility. Overall, 60 percent of seniors rely exclusively on 

unpaid caregivers (spouse and children) and 7 percent rely exclusively on paid services. 

Research is showing a slight decline in disability in the population over 65 years of age, which 

is attributed to an overall healthier aging population.84 Stone predicts, however, that the decline 

in disability in people 65 and older will be overshadowed by the dramatic increase in the 

85-plus population.85

Under Age 65 

Currently, there are 3.4 million people under age 65 receiving services and supports in their 

home or community and another 0.16 million in nursing homes and other facilities.85 Overall, 

nearly three-quarters of the people living in the 

community rely exclusively on unpaid caregivers 

and only 6 percent rely exclusively on paid 

services. The functional as well as chronic and 

acute care needs of people under age 65 are 

growing at a faster rate than for those over age 65, 

in part because of improved medical technology, 

increased life expectancy, increase in asthma, 

higher prevalence of diabetes and obesity, and 

deterioration in self-reported health statistics.86

Table 1.2. Long-Term Services and 

Supports (LTSS) for Seniors with 

Disabilities Age 65+ 

• 6 million seniors need LTSS 

• 4.5 million receive LTSS in home and 

community 

• 1.5 million receive LTSS in skilled nursing 

facility 

• 60% rely on unpaid caregivers 

• 7% rely on paid LTSS 
64 

Entrance Requirements 

Entrance into the world of LTSS is based on the functional and financial profile of an individual. 

The functioning capacity of an individual to maintain independence is measured by assessing a 

person’s need for assistance with activities of daily living (ADLs) and/or instrumental activities 

of daily living (IADLs). 

ADLs includes bathing, eating, dressing, toileting, mobility, and transferring from a bed to a 

chair. IADLs are tasks necessary for independent community living and include money 

management, shopping, light housework, telephoning, cooking, reading, writing, taking 

medications, and accessing transportation.87, 88, 89, 90 In addition to the ADLs and IADLs, LTSS 

include a medical component that provides monitoring and routine help for chronic disease; a 

rehabilitative component that provides 

maintenance or stabilization of a lifelong 

condition; and a supportive component that 

provides companionship, social support, 

comfort care, and symptom management for 

people struggling with chronic disease.91 LTSS 

cover chronic illnesses (arthritis, cancer, heart 

disease, emphysema, Alzheimer’s disease, 

cystic fibrosis); impairments (blindness, 

hearing loss, paralysis); developmental 

disabilities (cerebral palsy, genetic or congenital defects, seizure disorders); and injuries 

(paralysis from head and spinal cord injuries and burns).92

Of the 12 million Americans reporting LTC needs using ADLs and IADLs as a benchmark, 57 

percent were over the age of 65, 40 percent were under 65 years of age, and 3 percent were 

children.93 The prevalence of functional limitations among people under age 65 (N=229 million) 

was 2 percent for community residents and 0.1 percent for nursing home residents.94 For people 

over age 65 (N=34 million), 12 percent were community residents and 5 percent were nursing 

home residents reporting functional limitations.95 Functional limitations increase with age, and 

21 percent of individuals 85 years old and older were in nursing homes, compared with 5.4 

Table 1.3. Long-Term Services and 

Supports (LTSS) for People Under Age 65 

with Disabilities

• 3.4 million < 65 need LTSS 

• 3.2 million receive LTSS in home and 

community 

• 0.16 million in nursing homes and 

intermediate care facilities 

• 75% rely exclusively on unpaid caregiving 

• 6% rely exclusively on paid services.
65 

percent between the ages of 75 and 84.96 Nationally, patients in nursing facilities averaged 3.89 

ADL limitations. Virginia reported a high of 4.33 ADL limitations and Illinois a low of 3.32 

ADL limitations.97 The Urban Institute Long-Term Care Chart Book 2001 reports that, of the 51 

million children ages 5 through 17 in 1994, less than 1 percent were likely to need some type of 

long-term assistance.98 

Challenges of Using ADLs and IADLs 

Many individuals with a disability may be able to function without performing most IADLs, but 

they probably could not get through a day without performing most ADLs. In addition to the 

functional and instrumental ADL measurement, cognitive functioning and dementia are also 

measured but often difficult to assess.99, 100 Some individuals with Alzheimer’s may have no 

ADL dependency, but they cannot function independently.101 The literature reports that there are 

probably many people with cognitive limitations that go unidentified because of the complexity 

of measuring various types of cognitive impairments.102, 103

Unemployment and ADLs and IADLs 

Economists are studying why there seems to be a decline in employment since the Americans 

with Disabilities Act (ADA) was passed in 1990. They report that people who are unable to work 

are 10 times as likely as the rest of the disability population to need assistance with ADLs, and 5 

times as likely to need help with IADLs.104 In 1980, only 4 percent of wage-earning adults 

needed help with ADLs, compared with 5.2 percent by 1996.105 The decline in working capacity 

and/or the need for increased assistance with ADLs and IADLs is another variable for 

consideration for demographers predicting the future costs of LTSS needs. 

Recipients of Supplemental Security Income and Social Security 

Disability Insurance 

The Social Security Administration (SSA) administers two income maintenance programs that 

provide cash benefits based on disability or blindness: Social Security Disability Insurance 

(SSDI) and Supplemental Security Income (SSI). These programs pay cash benefits to 
66 

individuals who are unable to work for a year or more because of a disability. The SSI programs 

include asset and resource limits as part of their eligibility requirements to receive Social 

Security maintenance payments. A large percentage of people using LTSS are receiving SSDI 

and SSI. 

SSI maintenance programs provide payments for total disability, not partial or short-term 

disabilities. The definition of disability under Social Security may be different from other 

programs. According to a recent GAO report, the definition of disability under both of these 

programs is the same. 

An individual must have a medically determinable physical or mental impairment 

that (1) has lasted or is expected to last at least 1 year or to result in death and 

(2) prevents the individual from engaging in substantial gainful activity (SGA).106

Moreover, the definition specifies that for a person to be determined to be 

disabled, the impairment must be of such severity that the person not only is 

unable to do his or her previous work but, considering his or her age, education, 

and work experience, is unable to do any other kind of substantial work that exists 

in the national economy.107

For most people, the medical requirements for disability payments are the same under SSI and 

SSDI, and the same process determines a person’s disability. While eligibility for SSDI is based 

on prior work under Social Security, SSI disability payments are made on the basis of financial 

need. It is important to note that eligibility for other government benefits can affect the amount 

of an individual’s Social Security benefits. Some people have to pay federal income taxes on 

their Social Security benefits. This usually happens only if their total income is high. For people 

accessing tax credits for LTSS, the impact of income on the receipt of federal benefits can be 

troublesome.108 In general, benefits will continue as long as an individual is considered disabled; 

cases are reviewed periodically to see if recipients are still disabled. 

Social Security Disability Insurance 

In 1956, Title II109 of the Social Security Act established the SSDI program, which authorized a 

program of federal disability insurance benefits for workers who have contributed to the Social 

Security Trust Fund and have become disabled (or blind) before retirement age. These 

contributions are the Federal Insurance Contributions Act (FICA) social security tax paid on 
67 

their earnings or those of their spouses or parents. Spouses with disabilities and dependent 

children of fully insured workers (often referred to as the primary beneficiary) also are eligible 

for disability benefits upon the retirement, disability, or death of the primary beneficiary.110, 111

After becoming disabled, individuals have a waiting period of five months before receiving cash 

benefits. In addition to cash assistance, SSDI beneficiaries receive Medicare coverage after they 

have received cash benefits for 24 months. Beneficiaries’ SSDI benefits convert to Social 

Security retirement benefits when beneficiaries reach the currently approved retirement age. 

To qualify for Social Security disability benefits, an individual must have worked long enough 

and recently enough under Social Security. Individuals may earn up to a maximum of four work 

credits per year. The amount of earnings required for a credit increases each year as general 

wage levels rise. Family members who qualify for benefits on an individual’s work record do not 

need work credits. 

The number of work credits needed for disability benefits depends on an individual’s age when 

he or she becomes disabled. Generally one needs 40 credits, 20 of which were earned in the 

last 10 years, ending with the year one becomes disabled. Younger workers may qualify with 

fewer credits. 

SSDI Recipients 

According to the 2004 Catalog of Federal Domestic Assistance (CFDA),112 it is estimated that 

for FY 2004 an average of 7,664,000 disabled workers and their dependents will receive monthly 

cash benefits. During FY 2005, the number receiving benefits is expected to increase to 

7,996,000. Researchers report a 67 percent rise in the SSDI rolls during the 1990s. In 2000, the 

program provided cash and medical benefits to 5 million working-age (18–64) adults with 

impairments, one-fifth to individuals who also receive SSI cash benefits, and Medicare after a 

24-month waiting period.113 Early findings attribute the growth in this population to a correlation 

between relaxed eligibility criteria in the 1980s and an increase in program generosity for lowwage workers.114 It is also reported that the SSI rolls have increased over this same time period. 

It is unclear how these trends will affect the LTSS system’s sustainability, but it is clear that a 
68 

rise in these populations, in addition to the convergence of the baby boomers and a rise in the 85-

plus population, will require serious actuarial evaluation. 

Supplemental Security Income Program 

In 1974, Title XVI115 of the Social Security Act established the SSI program, a federally 

administered cash assistance program for individuals who are older, blind, or disabled and meet a 

financial needs test (income and resource limitations).116, 117

The SSI program operates in the 50 states, the District of Columbia, and the Northern Mariana 

Islands. The program also covers blind or disabled children of military parents stationed abroad 

and certain students studying outside the United States for a period of not more than one year. 

The Federal Government funds SSI from general tax revenues. The basic SSI amount is the same 

nationwide. However, many states add money to the basic benefit. Some states pay benefits to 

some individuals to supplement their federal benefits. Some of these states have arranged with 

SSA to combine their supplementary payment with the federal payment into one monthly check. 

Other states manage their own programs and make their payments separately. 

Unlike the SSDI program, SSI has no prior work requirements and no waiting period for cash 

or medical benefits. Eligible SSI applicants generally begin receiving cash benefits 

immediately upon entitlement and, in most cases, receipt of cash benefits makes them eligible 

for Medicaid benefits.118

SSI Recipients 

According to the 2004 CFDA,119 in FY 2003, an average of 6,553,000 people per month were 

federal SSI recipients. It is estimated that in FY 2004, an average of 6,711,000 recipients 

received monthly cash benefits. During FY 2005, the average number receiving payments is 

estimated to be 6,867,000 per month. These totals and estimates do not include people who 

receive only state supplementary payments, some of which are administered by the SSA for the 

states as part of the SSI program. 
69 

Social Security Reform 

There are currently 3.3 workers for each Social Security beneficiary; however, by 2031, it is 

estimated that there will only be 2.2 workers for each beneficiary.120 The future financial stability 

of the Social Security benefits program is a major challenge for future policymaking regarding 

the design of the LTSS system. 

The current political focus on a partial privatization of Social Security for younger workers raises 

important questions that require research demonstrating the impact of reform on the various 

populations currently receiving benefits. How would reform preserve current resources 

supporting the most vulnerable beneficiaries who cannot contribute to the system? How would 

reform impact the stability of the SSI and SSDI programs? Would recipients be dependent on 

market fluctuations or would privatization not affect the SSI and SSDI programs?121 The sections 

below will describe the maze of beneficiaries needing LTSS and the challenges inherent in 

communicating this information accurately and compellingly to the policymakers. 

Chronic Illness and the Need for Long-Term Services and Supports 

People with chronic illnesses are also in need of LTSS reform. About 57 million working-age 

Americans live with chronic conditions such as diabetes, asthma, or depression and, in 2003, one 

out five people (or 2.3 million) had trouble paying medical bills.122 Of the 35 million people on 

the original Medicare plan (5 million are on Medicare+Choice), 87 percent have one or more 

chronic conditions, 65 percent have multiple chronic conditions, and one-third have one or more 

chronic conditions that are considered serious.123 Chronic illness is defined as an “illness, 

functional limitation, or cognitive impairment that lasts (or is expected to last) at least one year; 

limits what a person can do, and requires ongoing care.”124 

The National Academy of Social Insurance found that Medicare coverage for chronic illness is 

lacking in its coverage for a variety of functional and maintenance rehabilitative services, 

including coverage for durable medical equipment supports that usually are only covered if used 

primarily in the home.125 In addition, beneficiaries reported that it is often difficult to find 

physicians who can address functional and cognitive issues and that more education about 
70 

self-management supports, evidenced-based protocols, health assessments, and telephone followup calls is needed.126 

Chronic impairment is measured by the number of ADLs and IADLs a person needs, whereas 

eligibility for SSI and SSDI for people under age 65 is based on the ability or lack of ability to 

work on specific jobs. Menton reported that, “the major social security reasons for disability 

entitlement younger than age 65 are not obesity and asthma but (in 2000) job impairments 

caused by chronic psychiatric problems (27.4%), muscoskeletal problems (28.7%), and heart 

disease (10.8%).127

Dual Eligibility—Recipients of Both Medicaid and Medicare 

Also requiring LTSS are the 7 million “dual eligibles” who qualify for both Medicare and 

Medicaid services.128 Sixteen percent of Medicare beneficiaries are dually eligible, and 4.9 

million are older than 65 years of age and represent 30 percent of the spending for the Medicare 

population. Thirteen percent are under the age of 65 with a disability. Seventeen percent of the 

Medicaid population is dually eligible and, in FY 2000, represented 43 percent of the total 

Medicaid service spending of $168.1 billion.129 The largest category of Medicaid spending for 

dual eligibles includes LTC, including nursing facilities, home- and community-based services 

(HCBS), institutions for individuals with metal retardation, and other LTC services.130 Medicare 

spending for dual eligibles is limited to primary and acute care services. The dually eligible 

population is the most fragile of all the groups discussed in this section; they are 

disproportionately poor, over age 85, nonwhite, female, and unmarried, with multiple functional 

and cognitive impairments, and represent almost half of all Medicare beneficiaries with 

Alzheimer’s disease.131

Mental Retardation and Developmental Disabilities Population 

In 2002, there was an estimated population of 4,556,966 people with mental retardation and 

developmental disabilities (MR/DD). Sixty-one percent of this population lives with a family 

caregiver, 15 percent with a spouse, 14 percent in their own household, and 10 percent in 

supervised residential settings.132 Total public spending for MR/DD services in the United States 
71 

in 2002 was $34.64 billion. There is an array of LTSS, including the following: family support 

services for people with MR/DD, such as programs and resources to support cash subsidy 

payments, respite care, family counseling, architectural adaptation of the home, in-home training, 

sibling support programs, education, and behavior management services; and supported 

employment, supported living, and personal assistance designed to increase individual choice 

and control over service delivery.133

One Size Does Not Fit All 

Most people do not understand the dollar cost associated with living with a disability. The “costs 

of entry” for working, learning, living, and fully participating in life are higher than the 

comparable unit costs for people without disabilities.134 Research has examined the economic 

costs of mental retardation, cerebral palsy, hearing loss, and vision impairment and found that 

“productivity losses make up the largest fraction of overall costs, accounting for 72 to 83 percent 

of costs, and direct medical and non-medical costs account for the rest.”135 

According to Stephen Mendelsohn, people working with a mobility impairment, blindness, or 

deafness have tremendous add-on costs for transportation and assistive and communication 

technology.136 Whether they need an accessible vehicle with a lift or one fitted with adaptive 

driving controls, materials in Braille or synthetic speech or large-print output to access a 

computer, or a TTY for communicating over the voice telephone, the associated costs are higher 

than for people without disabilities.137 

In the area of services, a “sign-language interpreter, the reader, the attendant service provider, the 

computer trainer with specialized knowledge of the interface between complex networked 

systems and access technology must be found and paid for.”138 Many health policymakers may 

not be familiar with the nonmedical supports and services that are unique to people with 

disabilities and the add-on costs that are incurred to live normal lives. 

Researchers found that access and experience with various services for adults in community 

settings does vary depending on the type of disability, age, and gender for people age 18 to 35 

versus those age 36 and older.139 In a controlled study between people with one or more 
72 

substantial functional limitations who do not meet the criteria of having a developmental 

disability and people with developmental disabilities, those with developmental disabilities had 

poorer outcomes and were more likely to “receive, need or be waiting for supports or 

services.”140 The study also found age differences between the two groups when divided 

according to age, with those age 36 and older having “more needs for assistance with specific 

skills, and more trouble getting around outside of their homes, and having received more services 

and supports related to health care needs.”141

Younger adults with disabilities were more likely to need or participate in employment 

programs, social skills and communication supports, mental health services, and generic 

transportation options that the older adults.142 This study also looked at gender and important 

differences were noted. Women were more likely to need assistance with IADLs and tended to 

have more needs for LTC and assistance, transportation, and health care. Men with disabilities 

were more likely to be in the workforce and have independent travel options. This study 

illustrates the importance of understating the subpopulations of people under age 65 and the 

variation in their needs according to a number of variables, such as age, gender, and category of 

disability. It is clear that “one size does not fit all” in providing services and supports to people 

with disabilities. 

A Kaiser Family Survey found that 66 percent of people with a disability who were uninsured 

postponed care and 60 percent skipped doses of needed medication and that this was common 

behavior for people under 65 years of age. For people receiving both Medicaid and Medicare, 

38 percent postponed care and 32 percent skipped doses of needed medication. For people with 

a disability on Medicare only, 60 percent postponed care and 58 percent skipped doses of 

needed medication.143

It is clear that the target audience for LTSS is not homogeneous and varies in age, gender, 

ethnicity, and category of disability and use of federal programs. Reform efforts need to develop 

clarity and consensus about how to define future services and supports considering the changing 

demographics, different eligibility criteria, rising need, and political urgency.
73 

Back to Mary 

The current system of LTC has little room to accommodate a circumstance like Mary’s. She can 

either keep working and try to live on the $1,100 plus $250 a month she gets and pay for a 

personal assistant and try to keep her house, or she could seek to be determined disabled under 

SSDI’s rules. To support her case, she would have to reduce her work hours so that her income 

would be less than $810 a month. If she applied for SSDI, she would have to wait two years for 

Medicare. If she is determined disabled by SSDI, she may qualify for a home- and communitybased waiver (if there is one in her state and there isn’t a waiting list) under Medicaid and for 

Medicaid coverage if her income is at or below 300 percent of SSI (this applies in most states). If 

Mary applied for SSI, she would have to divest herself of all assets except for $2,000 and, if she 

were found eligible, she would receive Medicaid immediately. 

Right now, her only access to either Medicare or Medicaid is to meet disability requirements set 

by SSI/SSDI. And eligibility for those programs doesn’t necessarily mean she will be able to get 

a personal assistant, but they at least open up the possibility of getting one and having health 

insurance. Mary may have no choice but to quit her job and apply for SSI or SSDI. 
74 

Part VI 

Meeting the Crew 

An introduction to the navigators of the long-term care ship and their role as providers and 

consumers of services and supports. 

Caregiver Crew 

Half of all Americans in their 50s will need LTSS in their lifetime and, by 2010, 50 percent of 

the workforce (people in their 40s and 50s) will be involved in caring for an older parent or 

family member with a disability.144 This responsibility is already costing employers an estimated 

$1,000 to $2,500 per employee in reduced productivity, lost work time, time off, and stressrelated absences.145 A MetLife analysis estimated aggregated costs of caregiving employees to 

employers nationwide ranged between $11.4 billion per year and $29 billion per year.146 Stone 

reports that 50 percent of people with disabilities and older Americans who lack a family 

member network live in nursing homes, compared with 7 percent of the same population with 

families.147 It is estimated that Americans provide 120 million hours of unpaid care to elders with 

functional disabilities living in community settings.148 Sixty-seven percent of elders rely solely 

on unpaid help; 86 percent of elders with the greatest risk of nursing home placement (three plus 

ADLs) live with family members and receive about 60 hours of family care per week, 

supplemented by 14 hours of paid assistance.149 Women give 75 percent of the caregiving; 31 

percent are in the labor force; 66.6 percent work full time, and they provide 18 hours of care a 

week and are, on average, 60 years old. Two-thirds of the women with paying jobs report 

conflict between their jobs and caregiving.150 

Lechner,151 in one of the few studies examining racial and ethnic differences among AfricanAmerican working caregivers, found less support from supervisors and less flexible policies 

regarding family concerns than experienced by white caregivers. Neal and Wagner152 reported a 

slightly higher prevalence of caregiving among African-Americans and Hispanic families 

compared with Caucasian families. 
75 

Demographers predict that more women will have less time to provide the traditional caregiving 

as workplace pressures continue to grow. Many employee benefit programs include education 

about elder care, but they need updating and expansion to include the multigenerational aspects 

of providing more comprehensive life care for employees with caregiving responsibilities for 

individuals with disabilities. 

Also, on the LTSS ship is the workforce that provides care in the nursing homes, intermediate 

care facilities for the mentally retarded (ICF/MRs), group homes, supported living, individual 

homes and apartments, and assisted living arrangements throughout the country. In the next 10 

years, 5.3 million health care workers will be needed—3.1 million to fill new jobs and 2.2 

million to replace people who have left the workforce.153

In FY 2002, family members provided “informal” residential care to 2.79 million of the 4.56 

million people with developmental disabilities in the United States, representing six times the 

number of people served by the formal out-of-home residential care system (460,455).

Formal and informal caregiving, paid and unpaid, are essential elements of the current system of 

LTSS for individuals with disabilities across the age span. Caregivers provide a range of activities 

with the time expended, ranging from a few hours per week to more than 40 hours per week. The 

demand on the caregiver will vary by individual situation and relationships.154 The value of people 

who care for adult family members or friends and were not paid has been estimated between $200 

billion and $257 billion annually.155 In results of a new study released by the National Alliance for 

Caregivers, an estimated 44.4 million American caregivers (21% of the adult population) age 18 or 

older are providing unpaid care to an adult age 18 or older.156 It further estimates that 22.9 million 

households are affected by the presence of an unpaid caregiver—that represents 21 percent of all 

U.S. households.157 In defining the relationship between caregiver and care recipient, 83 percent 

were identified as related by family or marriage.158

Several key distinctions emerged from looking at caregivers for individuals 50 and older and 

caregivers for individuals 18 to 49 years old. 
76 

• Caregivers who help someone 50 or older tend to be older than caregivers who help 

someone between the ages of 18 and 49 (mean age 47 years versus 41 years). The 

average (mean) age of a younger care recipient (18–49) is 33 years and the average 

(mean) age of a care recipient age 50 or older is 75 years. 

• Two in three (66%) of caregivers who help someone between the ages of 18 and 49 years 

are employed full or part time, compared with 57 percent of caregivers who help 

someone age 50 or older. 

• Caregivers who help someone 50 or older tend to be better educated and earn higher 

incomes than those helping recipients between 18 and 49. For example, 37 percent of 

those caring for people 50 and older have a college degree, compared with 26 percent of 

those helping 18- to 49-year-old recipients; and 44 percent helping the older set make 

$50,000 or more, whereas only 35 percent of caregivers helping those 18 to 49 do so. 

• While caregivers who care for someone 50 or older tend to be helping their mothers 

(34%), grandmothers (11%), or fathers (10%), those helping someone 18 to 49 are much 

more likely to be caring for an adult child (27%), a sibling (15%), or a nonrelative (25%). 

• Caregivers of younger care recipients (18 to 49) most commonly report mental illness or 

depression as the biggest problem or illness for the person they care for (23%). On the 

other hand, caregivers of older care recipients (50 and older) most commonly report the 

main problem or illness as aging (15%), cancer (9%), diabetes (9%), Alzheimer’s (8%), 

and heart disease (9%). 

• Caregivers of younger care recipients (18 to 49) are more likely to report being primary 

caregivers (70%) than caregivers of older care recipients 50 and older (54%), and tend to 

be living with the recipient (33%) more often than caregivers helping recipients 50 and 

older (22%). In fact, only 38 percent of those helping 18- to 49-year-old recipients report 

the presence of some other type of unpaid help, whereas 65 percent of those helping 

recipients 50 and older have done so. 

• One in three (33%) caregivers of younger care recipients (18 to 49) report assisting the 

person they care for with at least one ADL, whereas more than half (55%) of caregivers 
77 

helping older recipients do so. Instead, caregivers of people 18 to 49 are more likely 

performing IADLs, especially helping manage finances (79%) and transportation (77%). 

• While nearly half (46%) of caregivers helping someone 50 or older not in a nursing home 

receive some type of paid help, only 23 percent of those caring for 18- to 49-year-old 

recipients have done so. 

• Caregivers who help younger care recipients provide an average of $205 per month 

financial support. Caregivers who help older care recipients provide an average of $197 

per month. Caregivers of younger care recipients are more likely to report financial 

hardship (25% rate 4 or 5 on a 5-point scale) than caregivers of older care recipients (9%) 

and to report having requested information about how to get financial help for the 

recipient (35% versus 22%).159

Appendixes 1.A and 1.B highlight some further distinctions between caregivers for younger 

versus older adults with disabilities. 

Regardless of the age of the caregiver and the age of the recipient of assistance, 67 percent of 

caregivers reported needing assistance with one or more of the following challenges: finding 

time for myself (35%), managing emotional and physical stress (29%), and balancing work and 

family responsibilities (29%).160 Almost half the caregivers reported spending more than 8 hours 

per week helping the relative or friend for whom they provide assistance and almost one in five 

report providing 40 or more hours of assistance.161

Services provided weekly as a caregiver, in priority order or frequency, include transportation, 

shopping, housework, managing finances, preparing meals, arranging services, dressing, bathing, 

toileting, and feeding.162 These findings reaffirm conclusions by other studies conducted by the 

Federal Government and private researchers during the past 10 years: 

• Family caregivers provide approximately 80 percent of all LTSS for family members and 

friends across the life span.163
78 

• Out-of-pocket medical expenses for a family with a family member with a disability or 

chronic condition who needs help with ADLs are more than 2.5 times greater than for a 

family without a member with a disability (11.2% of income compared with 4.1%).164 

• Over the period of caregiving, family members providing intense personal care can lose 

as much as $659,000 in wages, pensions, and Social Security.165

• Respite care, one of the most frequently requested family support service, has been shown 

to help sustain family stability, avoid out-of-home placements, and reduce the likelihood of 

abuse and neglect. However, respite care remains in short supply for all age groups.166

• An assessment of family caregiver strengths, needs, and preferences constitutes the 

foundation for developing appropriate and quality LTSS.167, 168

As a key human resource to navigate the ship in the future, family caregiving is an essential part 

of the system of LTSS. However, from a philosophical and financial perspective, there is little 

agreement on how best to divide responsibility between the public and private sectors, between 

families and government. 

As a starting point, the National Alliance for Caregiving sets out several defining principles to 

develop an appropriate balancing of interests: 

Public policy must not assume that family members can always provide assistance 

for a frail elder or person with disabilities. Public policy also must not assume that 

the availability of family members or others to provide uncompensated assistance 

is the criterion to be used to allocate long-term support resources. An assessment 

of family caregiver strengths and needs must be a part of a more comprehensive 

assessment of need for the individual and family.169

Workforce Challenges 

Between 2002 and 2012, the Bureau of Labor Statistics projects employment growth in demand 

nationally for direct care workers at more than double (33.8%) the projected growth in overall 

employment nationally (14.8%).170 Based on a 2003 survey of state Medicaid agencies, 35 states 

continue to consider workforce issues in the delivery of long-term services a serious issue.171 The 

shortage of qualified, reliable direct care/support workers has a direct impact on the health and 

safety of individuals with disabilities in need of assistance with ADLs. But it also has a direct 
79 

impact on the health and well-being of family caregivers who must take on added 

responsibilities, much of which require training and support they do not have.172

Unfortunately, workforce challenges are expected to get worse as the baby boom generation ages 

and places more demands on the LTSS system.173

At the national level, two major initiatives, one public and one privately funded, have started to 

respond to challenges of workforce recruitment and retention. In 2003, the U.S. Department of 

Health and Human Services (HHS) awarded demonstration projects to five states to pilot and 

evaluate a range of activities, including making health insurance coverage available to direct care 

workers and creating training and mentoring programs to improve worker skills.174 At the end of 

2003, the Robert Wood Johnson Foundation funded coalitions in an additional five states to 

implement policy and practice changes to improve the ability to attract and retain high-quality 

direct care workers in home and community settings.175

At a state level, a recent trend in public policy is to tie outcomes related to certain quality 

measures to increased reimbursement for long-term service providers. The ability to tie outcomes 

effectively to reimbursement will depend on states’ development of the necessary data and 

evaluation systems to collect and analyze required data to verify that the intended outcomes have 

been achieved.176

For the past three years, challenges with budget shortfalls at the state level have resulted in 

reductions, termination, or delays in a number of direct care workforce initiatives to improve 

wages and benefits as well as education and training programs.177 It is premature to evaluate 

findings from either the national or state initiatives described. In a paper prepared for the 

American Association of Homes and Services for the Aging and HHS, which described 

approaches to be considered in modeling the future supply and demand for LTC workers, 

Holzer points out that economists generally believe that market forces tend to eliminate 

shortages in the labor market over time. If wages and benefits are free to adjust, worker 

shortages should lead to higher compensation levels in a given market, which should then add 

to the supply of labor in that field and result in easing the shortage.178 However, typical free 

market forces are constrained by the dominance of Medicare and Medicaid as the majority 
80 

funders of LTSS. Both public financing systems will continue to be pressured to reduce costs 

based on their rate of growth, growing demand for services, and the larger picture of budget 

deficits at the federal and state level. 

Federal Decision-Making Crew 

Paid and unpaid caregivers are most affected by the federal decision-making crew. Authority for 

decision making in the executive and legislative branches of the Federal Government is 

dispersed among many key stakeholders with a complicated chain of command. 

The critical question of who will lead future policy development requires an analysis of who is 

authorized at a federal level with decision-making authority. Such an analysis reveals that there 

is no single federal agency charged with the development of a comprehensive and coordinated 

system of LTSS. The evolution of public policy regarding LTSS does not rest with a single 

congressional committee in the House or Senate. The navigators for the ship at the federal level 

in the executive and legislative branches of government face a daunting challenge to pull the 

pieces together across entitlements and discretionary authority and multiple jurisdictions. The 

tables in Appendix 1.G divide current programs and services that are relevant to the discussion of 

future policy development into nine major areas of life domains: federal health care, social and 

in-home supports, income maintenance, housing, transportation, nutrition, technology, civil 

rights, and caregiver support. The lines of authority and oversight in the Senate are not the same 

as those in the House of Representatives. There are five full committees in the Senate with 

distinct authorization and oversight responsibilities for specific programs, services, and benefits. 

In addition, there is a separate budget and appropriations process with additional full committees 

with specific responsibilities on the House and Senate sides. Within the executive branch of 

government, there are a dozen agencies within six departments charged with responsibility for 

the implementation of the identified specific programs, services, and benefits. 

Executive Order 13217, issued by President George W. Bush in 2001, directs all the relevant 

federal agencies to evaluate their policies, programs, and regulations to determine whether any 

changes are needed to improve the availability of community-based services for individuals with 

disabilities. There have been two published reports on federal agency actions to date.179
81 

Under a new initiative of the Office of Management and Budget, a Program Assessment Rating 

Tool (PART) has been created to evaluate whether federal programs are effective and well 

managed across all federal agencies.180 A shortcoming of PART, identified in the recent report of 

the President’s Committee for People with Intellectual Disabilities (PCPID), is that PART “does 

not conduct an assessment across agencies and programs.”181 A specific program may score well 

as currently configured and yet not be effectively collaborating with other federal programs and 

agencies or organizations outside the Federal Government.182 PCPID calls for an “enriched 

PART to create a new culture of measurement and accountability that raises expectations for 

policymakers, service providers, parents, and individuals with disabilities” and guides 

government to respond more efficiently and effectively to the demands of the target population 

for improved personal and economic freedom.183

The crew reflect the complex set of relationships among formal and informal caregivers and 

multiple decision makers with specific designated roles and responsibilities spread through the 

executive and legislative branches of the Federal Government. Competing interests seek to 

protect and preserve their share of federal expenditures as demand continues to grow for 

affordable health care as well as LTSS for a changing American population. 

State Crews 

The states are the engines that drive the delivery and financing of health care and LTSS in this 

country. Their fiscal health determines how much flexibility and innovation they have to fuel 

their health care system. Most states want to create a more balanced delivery system of LTSS to 

meet the rising demands of their aging populations with and without disabilities and have used 

the federal-state Medicaid home- and community-based waivers for this purpose. Wiener reports 

that two important outcomes of the waiver demonstrations have been the consumer-directed 

home care movement and the use of nonmedical residential settings, such as assisted living and 

adult family homes.184 

A number of states (18 in 2003) offer a tax deduction or credit to their residents who purchase 

LTC insurance. However, only 10 percent of Americans currently have LTC insurance, and a 

2002 survey found that substantial increases in premiums and rate stability continue to challenge 
82 

further expansion and marketing to middle- and lower-income Americans.185 A few states have 

developed public-private partnerships for people who have purchased LTC insurance and still 

need assistance after exhausting their coverage and savings options to come under the state’s 

Medicaid coverage. Participation in the federal Medicaid LTC insurance partnership program is 

considered low.186 Early results suggest that of the 181,600 policies approved since 1993, 88 

people (0.5 percent) received Medicaid coverage for their LTC needs and a total of $2.8 million 

in assets are protected for people in California, Connecticut, and Indiana. Over half of the 

purchasers, in a survey of California and Connecticut, had assets of greater than $350,000; in 

Indiana, 60 percent of purchasers had assets greater than $350,000. Contrast this with 20 percent 

of purchasers in California and Connecticut who have assets of less than $100,000 (excluding the 

home). It is clear that this opportunity has traction for people with substantial assets. But there is 

concern that a federal-state policy such as Medicaid designed to provide health coverage to lowincome mothers and children should help nonpoor Americans protect their assets. 

The National Conference of State Legislatures (NCSL) reports that Medicaid accounts for 20 

percent of all state spending, and the largest single source of public funding for LTSS grew by 

more than 13 percent between FY 2001 and FY 2002,187 with the National Governors 

Association (NGA) reporting a 9.3 percent growth in FY 2003.188 The report found that states 

cut, froze, or provided only small increases for nursing home reimbursement rates, and froze new 

admissions to home care programs. 

The NGA reports that the cost of LTC is rising and that, by 2030, institutional health care is 

expected to cost $200,000 a year compared with $57,000 in 2004 for a semi-private room. Average 

home health care costs today are $20,000 a year; by 2030, they are projected to rise to $75,000.189 

In light of state budget gaps totaling $78 billion for state FY 2004, the Center on Budget and 

Policy Priority reported that Medicaid, State Children’s Health Insurance Program (SCHIP), and 

other health care enrollment reductions would affect an estimated 1.2 to 1.6 million low-income 

people, half of whom are children and half of whom are parents, seniors, people with disabilities, 

childless adults, and immigrants.190 Thirty-four states report adopting such cuts. 
83 

However, NCSL reports that states, despite their troubled economies, declining tax revenues, and 

expanding Medicaid costs, are making progress on LTC.191 Many states report implementing 

pilot programs and, with the help of federal systems, change grants have made some progress at 

restructuring LTC and have begun to craft improved access to LTSS.192
84 

The growth rate on Medicaid is rapidly reaching 

its breaking point. While the federal fiscal relief 

package that ended in June was a welcome 

reprieve for states, it was only a temporary 

band-aid for a much more serious ailment. 

Ray Scheppach 

NGA Executive Director 2005

Part VII 

Fueling the Engine 

An examination of the key federal programs (entitlements and other discretional funding sources 

that are means and nonmeans tested) that provide the fuel for the current system of long-term 

services and supports. 

Even the most seasoned professional may be 

surprised to learn the number of federal programs 

that make up the constellation of LTSS, their 

budgetary priorities, and their rules and 

regulations. At the federal and state levels, there 

are many networks that provide and fund an array 

of services and supports for people with mild to severe disabilities, with mild to severe chronic 

illness, and who are young and old, male or female, rich and poor, and ethnically diverse. 

Currently, the LTSS system is fragmented in its approach to service provision and oversight, 

budgetary priorities, and, most important, issues related to quality of life from the perspective of 

the individual requiring services and support. Since older adults and individuals with disabilities 

receive services through separate networks, it is critical to understand not only the demographics 

but also what consumers of LTSS need in order to have a reasonable quality of life. This section 

of the report provides a clear picture of the current federal experience in providing these services 

to individuals who require support. 

The working definition of LTSS introduced earlier in this report includes a variety of services 

and supports essential to maintain quality of life with maximum dignity and independence for 

individuals who are elderly (age 65 and older) and individuals with disabilities. Services and 

supports include housing, transportation, nutrition, technology, personal assistance, and other 

social supports to maintain independent living. 

The federal legislative and regulatory involvement includes Medicaid, Medicare, Medicaid 

Home- and Community-Based Waivers, the Department of Housing and Urban Development 

(HUD) generic and elderly- and disability-specific programs that underwrite housing and 
85 

supportive services, independent living services under the Rehabilitation Act, programs funded 

under the Older Americans Act, nutrition programs, and transportation programs relevant to 

either or both populations, as well as the Community Services Block Grant and other social 

services programs administered by HHS and relevant to the target population. 

Each of the identified federal programs attempts to address quality-of-life domains. Quality-oflife domains are defined in terms of what a person requires to live life in a holistic manner and 

thus should be viewed as integrative in nature. In developing the quality-of-life domains, the 

research team considered what a person requiring assistance with daily activities would need to 

remain independent and maintain the ability to live in the least restrictive environment. These 

quality-of-life domains include the following: 

• health care; 

• social support, personal assistance, and home care; 

• housing; 

• transportation; 

• nutrition; 

• technology; and 

• caregiver support. 

The tables in Appendix 1.F provide an overview of specific federal programs authorized in each 

of the seven defined quality-of-life domains. For each program, information is provided on the 

legislative authority, the responsible administrating agency, the targeted eligibility group, and the 

scope of services that may be provided. In addition, each program authority has been reviewed to 

identify (1) the extent of consumer direction and control of service delivery and (2) the direct 

consumer involvement in quality oversight, the approach to federal-state partnerships, the 

promotion of systems change activities, funding patterns over a three-year period, and any shift 

toward universal design to meet the needs of individuals with disabilities across a wide age span. 
86 

The review and analysis of 23 programs across the seven quality-of-life domains reveals a 

patchwork approach that began in 1965 with the establishment of the Medicaid and Medicare 

programs. Over the past 40 years, LTSS policy was added on as optional services to Medicaid 

policy. States began to allow services and supports funded through Medicaid to be provided in 

the home and community to eligible individuals.193

Unlike the majority of programs profiled and analyzed in the other quality-of-life domains, an 

entitlement program guarantees eligible individuals a specified level of benefits. Congress must 

appropriate funds sufficient to cover the costs associated with entitlement benefits and services. 

The other profiled programs must survive the annual appropriations process and the struggle for 

limited dollars available for all domestic spending. 

Medicaid and Medicare 

Medicaid Program 

Medicaid represents a federally supported, state-administered, means-tested entitlement program 

that is financed by the state and Federal Government and is the nation’s major public financing 

program for providing health and long-term coverage to low-income people.194 Medicaid LTC 

services are generally offered through the Medicaid state plan and/or an HCBS waiver. The 

Medicaid state plan is the document that states submit to the Federal Government for approval 

that describes the eligibility groups and covered services. State plan services must be available 

statewide to all Medicaid enrollees who qualify for the service. Within federal guidelines, states 

set their own income and asset eligibility criteria for Medicaid. Federal assistance is provided to 

states for coverage of specific groups of people and benefits through federal matching payments 

based on the state’s per capita income.195, 196, 197

Within broad national guidelines established by federal statutes, regulations, and policies, each state: 

• establishes its own eligibility standards; 

• determines the type, amount, duration, and scope of services; 

• sets the rate of payment for services; and 
87 

• administers its own program.198

While states generally have discretion in determining which groups their Medicaid programs will 

cover, including the financial criteria for eligibility, to be eligible for federal funds, states are 

required to provide Medicaid coverage for certain individuals to include the following: 

• low-income people who are over age 65; 

• blind or disabled; 

• members of families with dependent children; 

• low-income children and pregnant women; 

• recipients of SSI in most states; 

• certain Medicare beneficiaries; and 

• in many states, medically needy individuals.199

As with the eligibility criteria, states have considerable flexibility within their plans; however, 

there are mandatory requirements if federal matching funds are to be received. A state’s 

Medicaid program must offer medical assistance for certain basic services to most categorically 

needy populations such as “home health care for persons eligible for skilled nursing services.”200

States may also use federal matching funds to provide optional services to include the following: 

• Diagnostic services 

• Clinic services 

• ICF/MRs 

• Prescribed drugs and prosthetic devices 

• Optometrist services and eyeglasses 

• Nursing facility services for children under age 21 

• Personal care 
88 

• Transportation services 

• Rehabilitation and physical therapy services 

• HCBS201

While Section 1902(a) (23) of the Social Security Act establishes the right of Medicaid 

beneficiaries to choose their own provider,202 consumer direction beyond this provision varies 

considerably. 

Medicaid LTC expenditures in FY 2002 equaled $82.1 billion, approximately 34 percent of total 

Medicaid expenditures, which equaled $243.5 billion for 39 million enrollees. Medicaid LTC 

expenditures in FY 2003 equaled $83.8 billion, approximately 32 percent of total Medicaid 

expenditures, which equaled $259.6 billion for approximately 41.9 million enrollees. Financial 

assistance to states ranged from $2.4 million to $28.2 billion with an average of $3.3 billion.203, 204

Medicaid Home- and Community-Based Services Waiver Program 

In addition to the Medicaid state plan, states have the option, upon federal approval, to provide 

HCBS for Medicaid-eligible people who might otherwise be institutionalized. HCBS may be 

offered as a supplement to, or instead of, optional services available through the state plan. 

Section 1915(c), which authorizes HCBS waivers, was added to Title XIX of the Social Security 

Act by P.L. 97-35, the Omnibus Budget Reconciliation Act of 1981, to encourage the provision 

of cost-effective services to Medicaid recipients in noninstitutional settings. Before P.L. 97-35, 

the Medicaid program provided little coverage for LTC services in a noninstitutional setting, but 

offered full or partial coverage for such care in an institution. In an effort to address these 

concerns, Section 2176 of P.L. 97-35 was enacted, adding Section 1915(c) to the Act.205, 206

The HCBS waiver program affords states the flexibility to develop and implement creative 

alternatives to institutionalizing Medicaid-eligible individuals. The program recognizes that 

many individuals at risk of institutionalization can be cared for in their homes and communities, 

preserving their independence and ties to family and friends, at a cost no higher than that of 

institutional care. 
89 

Two primary criteria determine eligibility for 1915(c) waiver programs: financial eligibility for 

Medicaid and functional eligibility for the services provided, which is generally tied to eligibility 

for institutional care. Recipients of waiver services must meet both criteria.207

Before the creation of the HCBS waiver program, financial eligibility requirements for Medicaid 

were less stringent for institutional services than for home-based services, which made it easier 

for people to enter institutions than to receive care in the home. The waiver program helped to 

correct this institutional bias by allowing states to set financial eligibility limits for income that 

were as much as 300 percent of the federal SSI benefits, generally the same level used for a 

nursing facility. The functional eligibility criteria for waiver services vary widely from state to 

state and vary by waiver target population within a given state. Currently, there are 285 waivers 

nationwide serving 900,000 individuals with disabilities. The service mix includes case 

management, personal care, environmental adaptations, habilitation, transportation, assisted 

living services, and respite care.208

Forty-nine states now have HCBS programs under §1915(c) of the Social Security Act, the 

HCBS waiver program. (Arizona offers its HCBS program under a §1115 waiver.) These and 

other programs allow states to target specific population groups and limit the number of 

participants to control costs. Individuals with developmental disabilities or mental retardation 

constitute 38 percent of waiver program participants and 75 percent of expenditures. The elderly 

and people with physical disabilities account for 62 percent of participants and 25 percent of 

program expenditures.209

Table 1.4. Medicaid HCBS Waivers by Population210

Population Number of States 

Elderly/people with disabilities 49 

Mental retardation/developmental disabilities 46 

Technology-dependent children 17 

HIV/AIDS 17 

Brain injury 15 

Mental illness 3 
90 

Medicare Programs (Part A and Part B) 

Medicare provides the foundation for our nation’s financing of health care for older Americans. 

Authorized by Congress in 1965 as Title XVIII of the Social Security Act, Medicare is a federal 

health insurance program for eligible elderly people or eligible people with disabilities.211

Known in 1965 as Health Insurance for the Aged and Disabled, Medicare generally covers 

individuals age 65 and over to complement the retirement, survivors, and disability insurance 

benefits under Title II of the Social Security Act.212 

Traditionally, Medicare has consisted of Part A, Hospital Insurance (HI), which reimburses 

hospitals and other covered entities of the program, and Part B, Supplementary Medical 

Insurance, which provides supplemental medical insurance benefits. The Balanced Budget Act 

(BBA) of 1997 (P.L. 105-33) established Part C, the Medicare+Choice program, which expanded 

beneficiaries’ options for participation in private sector health care plans.213 Since 2004, the 

Supplementary Medical Insurance component has included Medicare Part B and Part D. Part B 

pays for physician, outpatient hospital, home health, and other services for the aged and disabled; 

and Part D will initially provide access to prescription drug discount cards and transitional 

assistance to low-income beneficiaries. In 2006 and later, Part D will provide subsidized access 

to drug insurance coverage on a voluntary basis for all beneficiaries and premium and costsharing subsidies for low-income enrollees.214

Medicare Part A—Hospital Insurance Component 

Individuals eligible for Medicare Part A include people who are age 65 or over and eligible for 

Social Security or Railroad retirement benefits; people who have been eligible for Social 

Security or railroad retirement disability benefits for at least 24 months; and/or workers who are 

insured and have end-stage renal disease (ESRD), as well as their spouses and children. 

The Medicare HI component covers the following services: 

• inpatient hospital care—initial deductible required if admitted, in addition to copayments 

for stays beyond 60 days; 
91 

• skilled nursing care—if the care follows within 30 days of a hospital stay of 3 days or 

more and is considered medically necessary, limited to 100 days; 

• home health agency—covers the first 100 visits only after a 3-day hospital stay or a 

skilled nursing facility stay. There is no copayment or deductible for home health under 

Part A; and 

• hospice care—provided to terminally ill patients with life expectancies of 6 months or 

less. No deductible to be paid by enrollee, but there is coinsurance for prescriptions and 

inpatient respite care.215

Medicare Part A is financed mainly through a mandatory payroll tax at a tax rate of 1.45 percent 

of earnings, paid by each employee, and matched by the employer. People who are selfemployed pay at a rate of 2.90 percent. According to the Centers for Medicare and Medicaid 

Services (CMS), additional funding sources for Part A include the following: 

• a portion of the income taxes levied on Social Security benefits paid to high-income 

beneficiaries; 

• premiums from certain people who are not otherwise eligible and choose to enroll 

voluntarily; 

• reimbursements from the general fund of the U.S. Treasury for the cost of providing HI 

coverage to people of certain ages who retired when the program began and were unable 

to earn sufficient quarters of coverage; 

• interest earnings on its invested assets; and 

• other small miscellaneous income sources.216

In 2003, according to CMS, 40.9 million people utilized Part A of Medicare, including 34.9 million 

people age 65 and over and 6 million individuals with disabilities. It is estimated that in 2004, there 

will be 41.6 million enrollees (35.3 aged and 6.4 disabled), and by 2010, 46.3 million.217, 218
92 

Medicare Part B—Supplementary Medical Insurance Component 

Individuals age 65 and older, and all people entitled to coverage under Part A or the HI 

component of Medicare, are eligible for enrollment in Part B of Medicare, also known as 

Supplementary Medical Insurance, on a voluntary basis by payment of a monthly premium. 

Services provided under Medicare Part B must be deemed medically necessary or prescribed as 

preventive by a physician. Services that are not covered by Medicare include nursing care that is 

long term, custodial care, dentures and dental care, eyeglasses, hearing aids, and most 

prescription drugs. Services that are covered include the following: 

• physicians’ and surgeons’ services (including some authorized services rendered by 

chiropractors, podiatrists, dentists, and optometrists); 

• emergency department or outpatient clinic, including same-day surgery and ambulance 

services; 

• home health not covered under Part A; 

• laboratory tests, X-rays, and other diagnostic radiology services, and certain preventive 

care screening tests; 

• ambulatory surgical center services in a Medicare-approved facility; 

• most physical and occupational therapy and speech pathology services; 

• comprehensive outpatient rehabilitation facility services, mental health care prescribed by 

physician; 

• radiation therapy, renal dialysis, and some organ and bone marrow transplants; 

• approved durable medical equipment for home use; and 

• drugs and biologicals that cannot be self-administered.219

Financing for Part B of Medicare includes premium payments paid by enrollees ($66.60 in 2004) 

in combination with funds from the general fund of the U.S. Treasury.220 According to CMS, 

beneficiary premiums cover only 25 percent of expenditures, making the general fund from the 

U.S. Treasury the largest source of funding for Medicare Part B. Supplementary Medical 
93 

Insurance benefits in 2003 served 38.5 million (33.1 million aged and 5.3 million disabled). It 

was estimated that, in 2004, there would be 40 million enrollees, and by 2010, 43 million.221

Medicaid and Medicare 

Combined, the federal-state Medicaid and federal Medicare programs provide states with more 

than 50 percent of their LTSS funding. Originally, the programs had different goals, different 

target audiences, and different funding mechanisms with no provision for home- and 

community-based LTSS. As we have read in previous sections of this report, just understanding 

what the different eligibility criteria for services and supports are for the various populations 

requesting them is pretty complex. When we look at what actually is mandated under Medicaid 

and Medicare, we realize that today’s LTSS programs are add-ons and are funded primarily 

(outside of institutional care) as optional services. The rising need for LTSS caused by the 

changing demographics over the past decade has not been acknowledged by Congress as an issue 

that needed to be addressed. States have been challenged to find creative ways to provide 

services and supports through the use of federal waivers. In a way, the granting of waiver 

authority was a little like giving states a credit card to buy LTSS that were not yet budgeted for, 

either on the state or federal level. 

States are at a crossroads and cannot continue to meet the LTSS needs of their citizens without 

federal assistance. The dually eligible population—the most fragile of all the populations and the 

most in need of services and supports—is consuming an inordinate amount of Medicare and 

Medicaid dollars. In a December 2004 letter to Congress and the Administration, the NGA wrote 

that it was “unacceptable” that Medicaid costs were growing at a rate of 12 percent per year and 

averaging 22 percent of state budgets. The letter cited two main causes of this growth: a 33 

percent increase in caseloads over the past four years and LTC costs. Medicaid currently 

finances 70 percent of all care for nursing home residents.222

It should be no surprise to policymakers that the baby boomers are getting older and will have an 

increasing need for services and supports to remain independent. And it is old news that people 

with disabilities have always needed access to services and supports to compensate for their 

disabilities so they can live fully engaged lives. 
94 

Other Quality-of-Life Domains 

Out of the quality-of-life domains identified social support, personal assistance, and home care 

are possibly the most important for individuals requiring LTSS. Unfortunately, these are also the 

most fragmented domains and perhaps the most underfunded, depending on how one measures 

and defines them relative to specific programs. Independent Living State Grants, Centers for 

Independent Living, Special Programs for the Aging, the Senior Companion Program, the 

Medicaid HCBS waiver program, and the Social Services Block Grant are the six related federal 

programs associated with this quality-of-life domain. 

Appendix 1.F, table 2 highlights the fact that no fewer than five federal agencies are responsible 

for the programs that attempt to mediate these important domains. Additionally, eligibility 

criteria vary tremendously by age, disability, and income. Only two of the programs are designed 

to support both frail elders and individuals with disabilities. 

The degree of consumer direction is difficult to identify because the majority of these federally 

funded programs have delegated decision making to the local level. The variance relative to the 

scope of services is just as difficult to measure because of the same issues but does vary from 

support of the operation of Independent Living Centers to implementation and coordination of 

social services and home health through Medicaid state plan options and waivers. 

Eligibility criteria vary for each program but are most variable with respect to the Medicaid and 

HCBS waiver programs that exist in those states. The states have discretion with respect to 

eligibility and the services that are provided. 

Housing 

Of the quality-of-life domains analyzed, none is more underfunded than affordable and 

accessible housing. According to HUD’s latest Worst Case Housing Needs Report, people with 

disabilities make up at least 25 percent223 (estimated by HUD as 1.1 million to 1.4 million 

people) of the households with worst-case housing needs in the United States.224 Some of these 

individuals are actually homeless and without housing of any kind. An Urban Institute study on 
95 

homelessness indicates that of the 800,000 people who are homeless on any given night, 46 

percent of adults have some type of disability.225

HUD and the U.S. Department of Agriculture (USDA) are the two federal agencies identified 

that administer federal-related programs that address the housing needs of the elderly and adults 

with disabilities. Nine programs are administered by HUD and one by USDA. Appendix 1.F, 

table 4 highlights the relevant federal housing programs. 

Across the nation, the reconfigurations relative to accessible and affordable housing initiatives 

that are under way at the state level, in general, include two primary efforts: (1) developing more 

state and local programs that help keep people who are disabled, frail, or cognitively impaired at 

home; and (2) community-based residential alternatives for people who are elderly and disabled 

who can no longer manage at home but do not need the 24-hour subacute care/skilled nursing 

environment provided in nursing homes. To make these institutional alternatives available to 

people with low incomes, states use a variety of state- and Medicaid-funded approaches to 

deliver home-based and residential services. 

Nationally, on average, a person with a disability receiving SSI benefits would be priced out of 

the private housing market because he or she would need to pay over 105 percent of the monthly 

SSI check to rent a modest one-bedroom unit at the published HUD Fair Market Rent. Without 

housing assistance, through some type of government-funded direct support to the individual or 

subsidized housing to a developer, low-income individuals who are aging and/or disabled will 

not find an affordable place to live.226 Without some type of housing assistance—such as 

government-funded subsidized housing—low-income people with disabilities and frail elders are 

unable to afford decent and safe housing of their choice in the community. 

In the past 30 years, states have continued to evolve their approach to housing and related 

services for people with disabilities. In general, states have moved away from an institutional 

model of segregated facilities that tie together housing and service needs to a variety of smaller 

community-based living options. To varying degrees, these community living alternatives are 

intended to provide more choices and independence for the targeted populations. With the 

authorization by Congress in 1981 of the Medicaid HCBS waiver, there have been new options 
96 

for states to consider in supporting community integration. However, despite these increases, 

Medicaid payment policy does not cover housing or meal costs in a home- or community-based 

setting, although Medicaid does factor these costs into payments for nursing homes. In recent 

years, people with disabilities and individuals who are aging have been consistent in articulating 

essential principles to frame housing choices and related services to meet their needs. People 

with disabilities have pushed to separate housing choices that are affordable and accessible from 

the provision of LTSS. 

Federal and state housing programs can target households with incomes up to 50–60 percent of 

the median income, or even higher in some cases. Although government housing agencies are 

producing new “affordable” housing every year, in many instances, this new supply of housing is 

not affordable to people with SSI incomes. This is true because most federal and state programs 

help pay for the one-time cost of developing the housing (e.g., the cost of 

acquisition/rehabilitation or new construction of housing) but do not fund the ongoing cost of 

operating the housing (e.g., insurance, maintenance/repairs, reserves, property management 

costs, utilities, etc.). 

To make “affordable housing” truly affordable to people with disabilities and frail elders, an 

ongoing rent subsidy or operating subsidy is needed to ensure that all of the operating costs can 

be covered. 

Of the quality-of-life domains of the long-term support system identified, housing appears to be 

the least fragmented; however, access remains a problem. While most of the federal-related 

programs are funded by HUD, they are underfunded, the eligibility criteria are restrictive, and 

consumer choice and control are limited. The trend toward shifting institutional care to homeand community-based support and services will not be realized if housing is not considered a 

priority area relative to LTSS for people with disabilities. 

Transportation 

Appendix 1.F, table 5 highlights the important transportation programs. The ability to access 

transportation is critical to living a full life. Having access to transportation is one of the quality-
97 

of-life domains that enable individuals requiring LTSS to maintain their independence and 

dignity; that is, for many it represents the vehicle to participation. For instance, transportation is 

the key to connecting individuals to the services and supports they need, such as visiting family 

and friends and participating in community activities (social, recreation, and community 

participation); taking care of their health needs, such as doctor and hospital visits, as well as the 

ability to purchase needed medical supplies, including prescriptions; securing and maintaining 

employment; advancing their educational goals and careers (attending school and educational 

advancement institutions); and providing for their nutritional and routine needs, such as the 

ability to access shopping centers. 

The Department of Transportation funds programs that focus on the specific transportation needs 

of transportation-disadvantaged populations. The programs include the Job Access and Reverse 

Commute Grants, which are aimed at connecting low-income individuals to employment and 

support services; the Capital Assistance Program, which provides financial assistance to 

nonprofit organizations for meeting the transportation needs of elderly people and people with 

disabilities; and the United We Ride State Coordination Grants, which assist states that want to 

strengthen or jump-start efforts to coordinate human service transportation. 

According to a recent GAO report on the transportation-disadvantaged populations,227 there are 

62 federal programs that can fund transportation services for certain transportationdisadvantaged populations, which include some elderly people, people with disabilities, or lowincome people who have transportation needs, such as the ability to provide their own 

transportation, or who have difficulty accessing conventional public transportation. Most of these 

programs are administered by four federal agencies: the Departments of Transportation, HHS, 

Labor, and Education. Programs that can fund incidental transportation services include health 

and medical programs or job-training programs. For example, the Medicaid program 

(administered by HHS) spent an estimated $976.2 million on transportation in FY 2001. The 

Community Transportation Association of America (CTAA)228 identified several programs that 

provide transportation for the target audience, including Workforce Investment Act programs 

(administered by the Department of Labor), and Vocational Rehabilitation Grants (administered 

by the Department of Education).229
98 

Although it appears that numerous federal programs exist to assist the transportationdisadvantaged population, research conducted by the GAO relative to these programs concluded 

that fragmentation and lack of coordination within supporting agencies continue to be a 

challenge; therefore, there is a need to coordinate the transportation services offered by these 

federal programs to provide “improved customer service and substantial cost savings.”230 Efforts 

toward coordinating transportation services were identified and addressed in 1986 through the 

creation of the Coordinating Council on Human Services Transportation by the Department of 

Transportation and HHS, which was renamed the Coordinating Council on Access and Mobility 

in 1998. In January 2004, the Departments of Labor and Education joined the council. The 

council was charged with coordinating and addressing issues of transportation access and 

mobility in their respective programs.231 

One significant effort of this council was the launch of the United We Ride initiative in 

December 2003. The United We Ride program represents a five-part transportation coordination 

initiative developed by the four federal agencies.232 This initiative moves to improve federal 

leadership and commitment “by establishing coordination as a priority and providing some 

dedicated financial support and proactive technical assistance.”233

The members of this council and its mandate were further enhanced through Executive Order 

13330 on Human Service Transportation Coordination, issued by President Bush on February 24, 

2004, “to enhance access to transportation to improve mobility, employment opportunities, and 

access to community services for persons who are transportation-disadvantaged.” The order 

established the Interagency Transportation Coordinating Council on Access and Mobility within 

the Department of Transportation, which expands the members of the 1998 council. The 

membership of this council now includes secretaries from the Departments of “Transportation, 

Health and Human Services, Education, Labor, Veterans Affairs, Agriculture, Housing and 

Urban Development, and the Interior, the Attorney General and the Commissioner of Social 

Security and such other federal officials as the Chairperson of the Council may designate.”234

According to the language of the Executive Order, it was issued based on the following findings 

and principles:
99 

(a) A strong America depends on citizens who are productive and who actively participate in 

the life of their communities. 

(b) Transportation plays a critical role in providing access to employment, medical and health 

care, education, and other community services and amenities. The importance of this role is 

underscored by the variety of transportation programs that have been created in conjunction 

with health and human service programs, and by the significant Federal investment in 

accessible public transportation systems throughout the Nation. 

(c) These transportation resources, however, are often difficult for citizens to understand and 

access, and are more costly than necessary due to inconsistent and unnecessary Federal and 

State program rules and restrictions. 

(d) A broad range of Federal program funding allows for the purchase or provision of 

transportation services and resources for persons who are transportation-disadvantaged. Yet, 

in too many communities, these services and resources are fragmented, unused, or altogether 

unavailable. 

(e) Federally assisted community transportation services should be seamless, comprehensive, 

and accessible to those who rely on them for their lives and livelihoods. For persons with 

mobility limitations related to advanced age, persons with disabilities, and persons struggling 

for self-sufficiency, transportation within and between our communities should be as 

available and affordable as possible. 

(f) The development, implementation, and maintenance of responsive, comprehensive, 

coordinated community transportation systems is essential for persons with disabilities, 

persons with low incomes, and older adults who rely on such transportation to fully 

participate in their communities.235

Nutrition 

Nutrition, like housing and transportation, represents another essential LTSS that the elderly and 

people with disabilities require to maintain quality of life and to help them maintain independent 

living. At the beginning of the 20th century, life expectancy was less than 50 years—at that time 

individuals did not face things such as chronic long-term illness or the need for special care that 

can come from aging into one’s 70s, 80s, and even 90s. However, by 1950, with the advent of 
100 

provisions such as better nutrition, clean water, pasteurized food, and refrigeration, life 

expectancy had increased to 63 years.236 

According to a USDA report to Congress,237 the investment in nutrition assistance in the United 

States has been a critical tool in fighting undernutrition and related health problems. It is well 

established that good nutrition is fundamental to proper growth, development, health, and 

performance. Diet is widely recognized as a central component of health promotion and disease 

prevention. Scientific evidence increasingly supports the fact that good nutrition is essential to 

health, self-sufficiency, and quality of life.238, 239 

People with disabilities and special health care needs frequently have nutrition problems, 

including growth alterations, metabolic disorders, poor feeding skills, medication-nutrient 

interactions, and partial or total dependence on enteral or parenteral nutrition. Poor health habits, 

limited access to services, and long-term use of multiple medications are considered risk factors 

for additional health problems.240

There are three main federal-related nutrition programs that address the nutritional needs of the 

elderly and individuals with disabilities: the Elderly Nutrition Program (HHS), and the Senior 

Farmers’ Market Nutrition Program and Food Stamps Program (Department of Agriculture). 

The relationships among appropriate nutrition services, positive health outcomes, and reduced 

health care costs for older adults and individuals with disabilities continue to be established.241, 242

Good nutritional status and personal well-being benefit both the individual and society: Health is 

improved, dependence is decreased, hospitalization stays and time required to recuperate from 

illness are reduced, and utilization of health care resources is contained.243, 244, 245 While food is 

sustenance required by every living being to survive, access to proper nutrition remains a 

substantial problem for the elderly and people with disabilities. Many of these individuals have 

low incomes and do not receive enough in retirement or disability benefits to meet all of their 

expenses and to purchase healthy and nutritious meals. 
101 

Assistive Technology 

LTC encompasses a broad range of services and supports that the elderly and individuals with 

disabilities require to maintain a long-term quality of life. Assistive technology (AT), like health 

care and social support services, can play an important part in helping individuals to maintain 

their independence by improving access and coordination. AT represents any item, piece of 

equipment, or product system—whether acquired commercially off the shelf, modified, or 

customized—that is used to increase, maintain, or improve the functional capabilities of 

individuals with disabilities.246

AT can be as simple as a walker to make moving around easier or an amplification device to 

make sounds easier to hear (for example, talking on the telephone or watching television). It 

could also include a magnifying glass that helps someone who has poor vision read the 

newspaper, or a small motor scooter that makes it possible to travel over distances that are too far 

to walk. In short, anything that helps the elderly and people with disabilities continue to 

participate in daily activities is considered AT. 

AT services also include things like home modification, such as architectural changes and 

permanent installation of equipment. Architectural changes can include adding ramps and other 

structures to enter, move about in, or exit the home; widening doorways; retrofitting a bathroom; 

and lowering countertops and making other modifications to an eating area or kitchen. 

Other examples of AT include large-screen computer monitors and remote control devices to operate 

lamps, radios, and other appliances. AT devices can assist most people—of all ages—to be more 

functional and independent; they can make the difference between dependence and independence.247

The Assistive Technology Act (ATA) of 1998, reauthorized with amendments in 2004, is a 

federal program that acknowledges and addresses the benefits of providing AT to enable 

individuals with disabilities to participate in society. 
102 

The ATA has three main purposes: to sustain and strengthen the capacity of states to address the 

AT needs of people with disabilities; to support investment in technology across federal 

agencies; and to support microloan programs for the purchase of AT devices or services.248

For the elderly and individuals with disabilities, AT may make the difference between being able 

to live independently and having to get long-term nursing or home health care. AT for both 

target groups is critical to the ability to perform simple ADLs, such as bathing and going to the 

bathroom, as well as more complex tasks, such as using a computer. 

According to the executive summary from the NCD report Federal Policy Barriers to Assistive 

Technology,

249 individuals of all ages can benefit from AT; however, the benefit for individuals 

with disabilities “changes the most ordinary of daily activities from impossible to possible. In an 

ideal climate, no person with a disability should be denied the opportunity to obtain assistive 

technology and transfer its inherent potential into viable, life-fulfilling endeavors.” Furthermore, 

in its concluding remarks, the NCD report states that “it is clear that the current patchwork of 

federal policies has barriers and gaps, leaving many people with disabilities without the benefits 

of assistive technology.” 

Currently, no single private insurance plan or public program will pay for all types of AT; 

however, Medicare will cover up to a percentage of the cost of AT for items that are traditionally 

considered “medical and/or medically needy.” However, the need for LTC often extends well 

beyond the “medically needy” period; therefore, these LTSS would not be covered. Some staterun Medicaid programs may cover AT, and seniors eligible to receive veterans benefits may be 

able to purchase needed AT through this program.250 

In 2000, money was appropriated for Title III of the Assistive Technology Act of 1998 (P.L. 

105-394) authorizing the Alternative Financing Program (AFP), which is designed to assist states 

in establishing or maintaining alternative financing projects to increase access to AT for 

individuals with disabilities. This program allows individuals with disabilities and their family 

members to access a funding alternative to public assistance programs to purchase AT devices 

and services.251 
103 

Existing funding sources for the acquisition of AT devices and services do not meet the needs of 

all individuals with disabilities of all ages. These individuals may encounter barriers to obtaining 

AT devices because they either do not quality for services from these systems or are unable to 

obtain payment for their particular piece of equipment. Some states have attempted to reduce or 

eliminate these barriers through the establishment of an AFP. Unfortunately, these programs are 

underfunded and not every state has one. According to the Rehabilitation Engineering and 

Assistive Technology Society of North America (RESNA) Alternative Financing Technical 

Assistance Project, FY 2003 grantees only include 23 states and three territories.252

Caregiver Support 

While some federal and state programs exist to provide LTSS to the elderly and individuals 

with disabilities, most long-term support is provided in the United States by family members or 

other informal caregivers. These caregivers include spouses, adult children, and other relatives 

or friends. 

The HHS report Delivering on the Promise253 states that recent studies confirm that the 

majority of direct care (about 64 percent) to people with disabilities is provided by families, 

friends, and neighbors. This same report cites that 95 percent of the elderly who need assistance 

have family members involved in their care. This report concurs with other studies that state 

that these caregivers receive little, if any, direct assistance and often “face tremendous financial 

and emotional pressures.” Finally, the inadequacy of caregiver supports, such as respite care, 

“poses significant challenges to community integration for individuals with disabilities and 

their families.” Evidence does suggest that the provision of supportive services “can diminish 

caregiver burden, permit caregivers to remain in the workforce, and enable people with 

disabilities [this can also apply to the elderly] to remain in community settings.” 

It is clear, then, that because caregivers play such an important role, services that sustain a 

caregiver’s role and maintain his or her emotional and physical health are an important 

component of any HCBS system.254 Respite care is one program option that may provide the 

support needs that caregivers require. Respite care represents “short-term supervision, assistance, 
104 

and care provided due to the temporary absence or need for relief of recipient’s primary 

caregivers. This may include overnight, in-home or out-of-home services.”255 

The National Family Caregiver Support Program (NFCSP), the federal-related program that 

addresses the quality of life domain of caregiver support, recognizes the role of families in 

providing LTSS. 

The NFCSP calls for all states to work in partnership with Area Agencies on Aging, as well as local 

community service providers, to provide the following five basic services for family caregivers: 

• information to caregivers about available services; 

• assistance to caregivers in gaining access to supportive services; 

• individual counseling, organization of support groups, and caregiving training to assist 

caregivers in making decisions and solving problems related to their caregiver roles; 

• respite care to enable caregivers to be temporarily relieved from their caregiver 

responsibilities; and 

• supplemental services on a limited basis, to complement the care provided by 

caregivers.256

Respite care is also an allowable service under the HCBS waivers and is included in a majority 

of state waivers to targeted eligible individuals.257 Policymakers have traditionally designed 

Medicaid benefits based upon specific eligibility criteria defining needs of individuals. Both inhome and out-of-home respite services introduce additional complexities from a policy 

perspective as they require an assessment of family need. 

Conclusion 

Changing demands and expectations of individuals with disabilities and families continue to 

pressure states to reevaluate their approach to deliver consumer-responsive services and supports. 

Regardless of the identified quality-of-life domain and analysis of the current menu of federally 

supported services, there was a lack of choices for the targeted audience to effectively respond to 
105 

growing demand. There is a level of complexity that leaves consumers and professionals 

bewildered by the rules and procedures to determine eligibility for specific supports and services. 

States are developing client assessment instruments to assess a person’s ability to perform ADLs 

(eating, bathing, dressing, mobility, and toileting); cognitive and emotional status; social, housing, 

and environmental circumstances; and nutrition and family/friend support networks. Several states 

also use this instrument to determine qualifications for (and to help a client choose from) a menu of 

program options, including Medicaid waiver and state plan services, state-funded services, and 

Social Services Block Grant programs.258 

States also reported efforts to make their delivery systems more efficient and user friendly by 

establishing single-entry-point systems or no-wrong-door systems to help eliminate the 

confusion consumers have about choices for LTSS.259 

Thirty-one states and the District of Columbia have implemented single-entry-point systems, 

which combine information and referral, client assessment, eligibility determination, care plan 

development, authorization, and quality assurance in one entity at the local level. Some of these 

systems also coordinate with the client’s physician or hospital discharge planner to facilitate 

movement among services and settings.260 

These new state efforts build upon a no-wrong-door philosophy. Regardless of which agency one 

may access to seek assistance, that agency is prepared to provide information and connect the 

individual to needed services and supports. Despite these efforts at systems reform, at a community 

level, there remains great confusion among consumers and government agencies about who should 

supply which services, whether some services even exist, and who may be eligible. As one 

commenter explained before the Federal Commission on Affordable Housing and Health Needs for 

Seniors in the 21st Century, “The current ‘crazy-quilt’ tapestry of services and shelter options 

make it difficult to fully grasp their complexities, let alone try to access them.”261
106 

Part VIII 

Pushing Tugboats 

An overview of promising practices that are moving the current system toward reform. 

Many state demonstration projects for LTC, which are funded in part by federal and private 

foundation funds, are responsible for the current innovations occurring in states for people with 

disabilities and senior Americans. Initiatives such as the Real Choice Systems Change (RCSC) 

grants from CMS are facilitating demonstrations and compliance with Olmstead, greater alliance 

among the aging and disability communities, and a “lifespan” approach to policy change. Cash 

and Counseling and Independence Plus consumer-directed care and caregiving programs that 

allow greater autonomy for people with disabilities (of any age) to direct the hire and choice of 

personal caregivers, single-point-of-entry programs to create more effective access to services, 

and affordable assisted living and housing options for low-income seniors (such as NCB 

Development Corporation’s and the Robert Wood Johnson Foundation’s Coming Home 

Program) are all pushing forward the possibilities of new thinking.262

As the second Administration of President George W. Bush begins to unveil its priorities, 

multiple demonstration initiatives launched in the first term continue to support state efforts to 

expand consumer choices to live independently at home and in community settings coordinated 

with needed services. Appendix 1.C highlights four initiatives that are the “tugboats” pushing 

forward state changes in service delivery, financing, administration, consumer direction, and 

quality oversight. 

Cash and Counseling Demonstrations 

The Cash and Counseling Demonstrations are offering states the opportunity to experiment and 

innovate with cost-effective choices between institutional and community-based systems. 

The Cash and Counseling Demonstrations jointly funded by the AOA and the Office of 

Planning and Evaluation at HHS builds on an initial partnership that began in 1996 with the 

Robert Wood Johnson Foundation to pilot and evaluate consumer-directed models for long-
107 

term supports in three states: Arkansas, Florida, and New Jersey (see Appendix 1.D). Under 

these demonstrations, each state provided beneficiaries with disabilities with a flexible 

monthly allowance to pay for personal care services according to a budget developed by the 

individual and approved by the state. The individual hired, supervised, and managed the 

services provided by direct care workers that include family members. Appendix 1.D describes 

the primary features of each state’s demonstrations. 

Based on a comparison with a control group of individuals who received services through a 

traditional agency-based provider, participants in the demonstration (1) were more satisfied with 

the services they received; (2) reported a higher quality of life; (3) had fewer unmet needs for 

personal care; (4) received more paid care (especially adults under age 65); and (5) did not have 

more adverse events or health problems.263

Based on preliminary positive findings, HHS awarded on a competitive basis new Cash and 

Counseling Demonstration projects in 11 states in October 2004.264 

The Cash and Counseling Demonstrations are not without criticism from some members of the 

disability community. In testimony before the House Energy and Commerce Committee, Bob 

Williams, co-director of Advancing Independence—a forum that promotes responsible changes 

to Medicare and Medicaid needed to enhance the health and independence of Americans with 

disabilities of all ages—articulated a number of specific concerns, including the following: 

• The notion that self-directed individual budgets is an approach that everyone can or 

wants to use: It might not work well for someone without a natural support network to 

turn to that can help manage the relationships with service providers and resulting costs. 

• The methods for calculating individual budgets must be fair and reflect changing levels 

of need over time. 

• The need for consumer education and individual assistance in assessment of needs, the 

creation and management of an individual budget, and the management of service 

provider relationships.265
108 

Establishment of Aging and Disability Resource Centers 

During the past two years, FY 2003 and FY 2004, CMS teamed up with the AOA to create onestop Aging and Disability Resource Centers (ADRCs) to assist individuals and families learn 

about and access LTSS. CMS and AOA funded on a competitive basis projects in 23 states to 

design, pilot, and evaluate a more coordinated approach to LTSS through a single point of entry. 

The pilot projects are now building on the earlier experience that began in the late 1990s in 

Wisconsin. The centers in Wisconsin serve as clearinghouses for information about LTC and 

LTSS options and eligibility. As an information clearinghouse, the ADRC offers advice and 

assistance to individuals with disabilities across the age spectrum as well as to physicians, 

hospital discharge planners, and other professionals who work with older people or people with 

disabilities. Services offered through the single entry point can be grouped into six major areas: 

• Information and Assistance. Provide information to the general public about services, 

resources, and programs in areas such as disability and LTC-related services and living 

arrangements, health and behavioral health, adult protective services, employment and 

training for people with disabilities, home maintenance, nutrition, and family care. 

Resource center staff will provide help to connect people with those services and to also 

apply for SSI, Food Stamps, and Medicaid as needed. 

• LTC Options Counseling. Offer consultation and advice about the options available to 

meet an individual’s LTC needs. This consultation will include discussion of the factors 

to consider when making LTC decisions. Resource centers will offer pre-admission 

consultation to all individuals with LTC needs entering nursing facilities, communitybased residential facilities, adult family homes, and residential care apartment complexes 

to provide objective information about the cost-effective options available to them. This 

service is also available to other people with LTC needs who request it. 

• Benefits Counseling. Provide accurate and current information on private and 

government benefits and programs. This includes assisting individuals when they run into 

problems with Medicare, Social Security, or other benefits. 
109 

• Emergency Response. The resource center will ensure that people are connected with 

someone who will respond to urgent situations that might put someone at risk, such as a 

sudden loss of a caregiver. 

• Prevention and Early Intervention. Promote effective prevention efforts to keep people 

healthy and independent. In collaboration with public and private health and social 

service partners in the community, the resource center will offer both information and 

intervention activities that focus on reducing the risk of disabilities. This may include a 

program to review medications or nutrition, home safety review to prevent falls, or 

appropriate fitness programs for older people or people with disabilities. 

• Access to the Family Care Benefit. For people who request it, resource centers will 

administer the LTC Functional Screen to assess the individual’s level of need for 

services and eligibility for the Family Care benefit. The Wisconsin Family Care benefit 

combines HCBS waiver funds with non-state waiver-only funds. Once the individual’s 

level of need is determined, the resource center will provide advice about the options 

available to him or her: to enroll in Family Care or a different case management system 

(if available), to stay in the Medicaid fee-for-service system (if eligible), or to privately 

pay for services.266 

It is too early to determine the impact of the ADRC demonstrations on the target populations. 

AOA and CMS will evaluate whether the Resource Centers increase informed decision making 

and consumer satisfaction with access to needed LTSS in the most integrated setting. Over a 

three-year period, each of the pilot states is expected to have at least one operating center that 

demonstrates improvements in the state’s ability to manage public resources, monitor program 

quality and costs, and improve assessment of need and effective coordination of services to limit 

unnecessary use of high-cost options, including nursing facilities. 

Real Choice Systems Change Grants 

As part of the President’s New Freedom Initiative (NFI), funds competitively awarded to states 

during the past four years are intended to be catalysts for systems change to enable people of all 

ages with a disability to (1) live in the most integrated community setting suited to their needs; 
110 

(2) have meaningful choices about their living arrangements; and (3) exercise more control over 

the services they receive.267 The four rounds of competition have challenged states to focus on 

specific areas of intervention to help rebalance funding toward expanded community choices, 

improve consumer participation and direction, monitor quality, and build better links between 

housing and services. CMS has awarded more than 200 grants and over $200 million, with the 

typical grant period extending for three years and the majority of states having at least one 

award.268 Findings from the Second Annual Report on Grantee Activities include relevant 

activities that are laying the foundation for LTSS reform. In the area of consumer direction, 

grantees in 41 states are incorporating principles of consumer direction in service delivery 

through changes in administrative rules and regulations, and training and education for 

consumers, families, and providers. Grantees in 22 states have successfully transitioned a total of 

1,214 individuals with disabilities from institutional to community settings. The state budgeting 

and reimbursement grantees in 38 states are developing changes to their long-term support 

systems that adapt individualized budgeting, strategies to allow dollars to follow a person from 

institutional settings to the community, and new payment rates and reimbursement methods. The 

workforce recruitment and quality grantees in 39 states have initiatives to increase wages and 

benefits, have training to improve skills and development of career ladders, and are testing new 

recruitment strategies. The quality assurance grantees in 25 states are implementing initiatives to 

redefine quality measures, adding a consumer focus to monitoring activities, and developing data 

systems for quality monitoring.269 Appendix 1.E provides an overview of all 50 states with 

initiatives to improve access to LTSS.270 

The current findings of the Research Triangle Institute Report for CMS recognize the limitations 

of the data analyzed, which primarily comes from grantee self-reporting. As grantees continue to 

design and implement multiple systems change strategies made possible by federal RCSC 

funding during the next four years, new understanding and knowledge will become available to 

shape future decisions about the structure and design of consumer-responsive LTSS. An 

additional new round of competitive funding for states in the summer of 2005 will invite states to 

propose further activities to support comprehensive systems reform. 
111 

Independence Plus Initiative 

Independence Plus was first announced in May 2002 to encourage individual or family direction 

of supports and services that keep people in the community through the development and 

direction of individualized budgets.271 In August 2004, California became the sixth state 

approved by CMS under the Independence Plus program. It is expected to benefit more than 

60,000 Californians with disabilities who will be allowed to direct their own personal care 

services rather than have their care designed by a home health agency.272 Under the 

Independence Plus waiver, consumers and families will be involved in planning all aspects of 

service delivery of personal assistance services, including but not limited to the hiring, direction, 

and appraisal of service providers. According to Mark McLellan, administrator of CMS, 

“Allowing persons with disabilities and their families to engage in self-direction is a high priority 

for the Bush Administration and my agency.”273

The Independence Plus waiver approach to self-direction is a part of the Bush Administration’s 

efforts to expand funding resources for LTSS at home and in community settings. State and 

federal expenditures have increased under HCBS waivers from $13.9 billion in FY 2001 to an 

estimated $20.7 billion in FY 2004. Between 2001 and 2004, a total of $68.7 billion will be spent 

to support HCBS waivers.274

Each of the eight states with approved Independence Plus waivers has targeted a specific group 

of eligible individuals with disabilities, such as adults with physical disabilities, individuals with 

a developmental disability, or individuals with disabilities who are over age 65. The scope of 

services offered also varies in scope, from personal assistance services in California to personal 

care services, respite services, and other services needed to maintain independent lives in South 

Carolina. All participating states will require individualized budgets directed with the assistance 

of a service coordinator and a fiscal intermediary to help with financial management services.275

It is too early to evaluate the impact of these design elements on the targeted beneficiaries or the 

larger state systems. 
112 

Conclusion 

The combination of these four initiatives provides both financial and philosophical support to a 

long-term service system that needs to be reframed and transformed with active participation of 

people with disabilities and their families. In an August 2004 letter to state Medicaid directors, 

CMS reaffirmed its support for states in the implementation of the principles of Money Follows 

the Person. CMS explains that the term as follows: 

Money Follows the Person refers to a system of flexible financing for long-term 

services and supports that enables available funds to move with the individual to 

the most appropriate and preferred setting as the individual’s needs and 

preferences change. It is a market-based approach that gives individuals more 

choice over the location and type of services they receive. A system in which 

Money Follows the Person is also one that can incorporate the philosophy or selfdirection and individual control in state policies and programs.276

CMS, through these four important initiatives and letters of policy guidance, is pulling the 

ship forward to allow people to have expanded choice and control of the services and 

supports they need. 
113 

Part IX 

Harnessing Favorable Winds 

An overview of selected, important legislative and executive branch activities. 

Americans with Disabilities Act 

The new paradigm of disability maintains that disability is an “interaction between 

characteristics (e.g., conditions or impairments, functional status or personal and social qualities) 

of an individual and characteristics of the natural, built, cultural, and social environments.”277

Favorable winds from the legislative, judicial, and executive branches of the Federal 

Government in the past 15 years have embraced this new paradigm. 

The passage of ADA in 1990278 and of its predecessor, the Rehabilitation Act of 1973,279

reflect a basic shift in public understanding of disability and its meaning in the broader society. 

Both laws have embraced community integration as an essential core concept, although ADA 

changed the basic terminology of the Rehabilitation Act and broadened the goal of community 

integration of people with disabilities to extend to all facets of life, not merely federally 

assisted programs.280

Although much of the public attention and research inquiry regarding ADA has attempted to 

evaluate the impact of ADA civil rights protections regarding business practices and employment 

discrimination,281 the purpose of ADA is far broader. For individuals with disabilities, the ADA 

preamble states the following: 

The nation’s proper goals regarding individuals with disabilities are to assure 

equality of opportunity, full participation, independent living, and economic 

self-sufficiency.282

Title II of ADA, which applies to publicly operated and funded programs and services, provides 

the framework for community integration and movement away from separate and segregated 

services. “No qualified individual with a disability shall by reason of such disability, be excluded 

from participation in or denied the benefits of the services, programs, or activities of a public 
114 

entity, or be the subject of discrimination by any such entity.”283 The Department of Justice 

regulations implementing this provision require that “a public entity shall administer services, 

programs, and activities in the most integrated setting appropriate to the needs of qualified 

individuals with disabilities.”284

According to the preamble to these implementing regulations, the “most integrated setting” 

means “a setting that enables individuals with disabilities to interact with non-disabled persons to 

the fullest extent possible.”285 

The Olmstead Decision 

Nine years later, the favorable winds (or new momentum) for redirecting the ship (or current 

system of LTC entitlements and other federal funding sources) that could embrace community 

inclusion and integration principles resulted from the U.S. Supreme Court decision in Olmstead 

v. L.C. and the interpretation of Title II of ADA. The Olmstead decision affirmed the right of 

people with disabilities to choose how to live their lives and have greater control over their daily 

activities in the most integrated settings.286 The Supreme Court made it clear that it is a violation 

of ADA for states to discriminate against people with disabilities by providing services in 

institutions when the individual could be served more appropriately in a community-based 

setting.287 The Supreme Court stated that “Unjustified isolation . . . is properly regarded as 

discrimination based on disability.”288 It observed that (1) “institutional placement of persons 

who can handle and benefit from community settings perpetuates unwarranted assumptions that 

persons so isolated are incapable or unworthy of participating in community life,” and (2) 

“confinement in an institution severely diminishes the everyday life activities of individuals, 

including family relations, social contacts, work options, economic independence, educational 

advancement, and cultural enrichment.” 

Under ADA, states are obliged to: 

make reasonable modifications in policies, practices, or procedures when the 

modifications are necessary to avoid discrimination on the basis of disability, 

unless the public entity can demonstrate that making the modifications would 

fundamentally alter the nature of the service, program or activity.289 
115 

The Supreme Court indicated that the test as to whether a modification entails “fundamental 

alteration” of a program takes into account three factors: the cost of providing services to the 

individual in the most integrated setting appropriate; the resources available to the state; and how 

the provision of services affects the ability of the state to meet the needs of others with disabilities. 

New Freedom Initiative 

Favorable winds picked up greater force with the February 2001 announcement by President 

George W. Bush of a comprehensive set of proposals called the New Freedom Initiative (NFI) to 

reduce barriers to full community integration for people with disabilities.290 The initiative, which 

is designed to help ensure that Americans with disabilities participate more fully in the life of 

their communities, states the following: 

Americans with disabilities should have every freedom to pursue careers, 

integrate into the workforce, and participate as full members in the economic 

marketplace. The New Freedom Initiative will help tear down barriers to the 

workplace, and help promote full access and integration.291

With the NFI, President Bush continued the policy direction started by his father when he signed 

ADA into law. The initiative continues to support the coordinated activities of the Federal 

Government and state governments to remove barriers that impede opportunities for community 

participation. The NFI represents an important step in working to ensure that all Americans with 

disabilities have the opportunity to learn and develop skills, engage in productive work, and 

choose where to live and participate in community life.292

As part of the NFI, on June 18, 2001, President Bush issued Executive Order 13217, 

“Community Based Alternatives for Individuals with Disabilities.” The Executive Order directs 

six federal agencies—including the Departments of Justice, Education, and Labor, as well as 

HHS, HUD, and the SSA—to evaluate their policies, programs, and regulations to determine 

whether any should be revised or modified to improve the availability of community-based 

services for people with disabilities. In that order, the President emphasized that unjustified 

isolation or segregation of qualified individuals with disabilities in institutions is a form of 

prohibited discrimination, that the United States is committed to community-based alternatives 
116 

for individuals with disabilities, and that the United States seeks to ensure that America’s 

community-based programs effectively foster independence and participation in the community 

for Americans with disabilities.293

The order also charged the Federal Government with providing assistance to states and localities 

to swiftly implement the Olmstead decision. In response, federal agencies have undertaken 

several initiatives, including clarifying federal statutes and regulations to assist in the transition 

of institutionalized individuals into more integrated settings and increasing federal funding for 

programs and projects aimed at expanding opportunities for community living. In March 2002, 

the Bush Administration issued its first report, “Delivering on the Promise: A Compilation of 

Individual Federal Agency Reports of Actions To Eliminate Barriers and Promote Community 

Integration.” The report identifies more than 400 steps to removing barriers and improving 

community integration.294 In 2004, a second progress report was issued that further updates 

federal agency efforts to promote community integration.295

The current Administration, through a series of letters from the CMS to states, has enjoined 

states to develop and implement plans for less restrictive community options for LTSS that 

respect consumer choice.296 The majority of states have both Olmstead plans and cross-agency 

and stakeholder workgroups to focus on policy development, capacity building, and systems 

change to steer the ship to promote consumer choice and direction. 
117 

Part X 

Gathering Clouds 

An overview of recent judicial decisions that are challenging long-term services and supports 

reform efforts. 

Despite these favorable winds, the past six years have seen a growing number of court cases 

concerning access to LTSS at home and in community settings for individuals with 

disabilities.297 Individuals with disabilities and their families have grown increasingly impatient 

at the pace of change. The Supreme Court in its Olmstead decision set a general standard for 

state behavior in the future. If a state had “a comprehensive, effectively working plan for placing 

qualified persons with mental disabilities in less restrictive settings and a waiting list moved at a 

reasonable pace,” then there would be no effective claim for a violation of Title II of ADA.298

However, the Court did not elaborate what constituted a “reasonable pace” or an “effectively 

working plan.” The Olmstead “community integration” imperative set a new expectation that a 

state rebalance its allocation of public resources away from institutional services in nursing 

facilities to a new mix of HCBS. In the past 40 years, public expenditure of a majority of federal 

dollars in the Medicaid program has paid for institutional services.299 Under Medicaid law, there 

is an entitlement to institutional services that must be included in a state’s Medicaid program.300

There is no similar entitlement for home and community LTSS.301 Under Section 1915(c) of the 

Social Security Act, a state has the option of offering community services as an alternative to 

institutional eligibility criteria.302 However, a state may select the services, define their scope, 

and target a specific group of Medicaid beneficiaries under an HCBS waiver.303

For the past 10 years, Medicaid expenditures for home- and community-based LTSS have grown 

rapidly. Between 1990 and 2003, HCBS waiver expenditures increased more than tenfold to 

$18.6 billion.304 In 1990, home and community services represented just over 10 percent of 

Medicaid long-term service expenditures. In 2003, the share of HCBS funding had grown to 33 

percent of Medicaid long-term service funding.305

Several significant factors lie behind the storm clouds of increased litigation. Multiple research 

studies have documented the interest of people with disabilities across the age span to remain in 
118 

their own homes and communities rather than more restrictive nursing facilities or institutional 

settings.306 The majority of states have long waiting lists for multiple HCBS waiver programs, 

despite the state authority to limit the number of people who participate in the waivers.307 Federal 

monitoring and enforcement of the Olmstead “community integration” imperative has yet to 

become a priority of the Department of Justice Civil Rights Division. No complaint has been 

filed or settlement reached with a state that challenges “the reasonable pace” of implementation 

of a state’s plan to expand home and community support and service options. 

However, protecting the rights of institutionalized people with disabilities continues to remain a 

priority for the Civil Rights Division of the Department of Justice.308 In August 2004, the Justice 

Department found California in violation of Title II of ADA by failing to provide services in the 

most integrated setting.309 The findings resulted from an investigation of Laguna Honda Hospital 

and Rehabilitation Center in San Francisco. Laguna Honda is one of the largest publicly operated 

nursing homes in the country, with an average daily census of 1,041 residents. For a nursing 

home, Laguna Honda serves an unusually high number of residents under the age of 55—

approximately 22 percent of the total residents. This segment of the population tripled from 1990 

to 2000 and continues to increase. 

The Justice Department found evidence that California had failed to ensure that residents had 

meaningful access to community alternatives. Instead, the investigation concluded that 

nursing home placements were authorized without requiring assessments to evaluate the 

appropriateness of HCBS. Individuals in the nursing facility were also not informed later of 

available community options. 

The Justice Department as part of the Laguna Honda investigation did examine the California 

Olmstead plan to expand community options. The Justice Department concluded the following: 

The plan lacks data regarding institutionalized persons with benchmarks and 

timetables for diverting and transitioning current nursing facility residents into 

community settings.310 

Appendix 1.E lays out the Justice Department’s detailed remedial measures to be implemented 

by California as a response to cited violations of ADA. Remedial measures focus on changes to 
119 

the assessment process for revised policies and procedures to enable the target group to make 

fully informed decisions, community capacity to provide services in more integrated 

environments, and appropriate training for case managers and care coordinators.311 The proposed 

remedial measures and approach to the analysis of a state’s Olmstead plan with requirements of 

benchmarks and timelines offer considerations for future Justice Department intervention on a 

systematic basis across all states. 

In addition to federal action, as of October 2004, legal action on behalf of individuals with 

disabilities had been filed in 25 states.312 The challenges to state policies can be grouped into two 

broad categories: 

• Access to Medicaid Home and Community Services. The majority of these cases 

involve individuals with disabilities who want but cannot obtain HCBS. Challenges relate 

to both individuals with disabilities on waiting lists for services and individuals with 

disabilities who are currently in nursing or other LTC facilities. 

• Limitations on Availability or HCBS Comparable to Services Offered in More 

Restrictive Settings. The majority of these cases challenge state policies that affect the 

scope and quality of Medicaid services in the home or community setting. Several cases 

have challenged the adequacy of payments or rate setting for coverage of specific 

community-based services that create an unfavorable balance toward availability in 

institutional rather than community settings. 

Recent decisions are mixed from across the federal circuits as different fact situations and legal 

theories seek to extend and define the Supreme Court’s Olmstead decision. Three cases illustrate 

the storm clouds ahead as individuals with disabilities seek to clarify and extend judicial 

interpretation of the Olmstead “community integration” imperative. 
120 

New Types of Medicaid Service Are Not Required for Those Seeking 

Home Care: 

Rodriguez v. City of New York (1999) 

In Rodriguez v. City of New York,313 a class of Medicaid-eligible individuals with mental 

disabilities sought to have the city include “safety-monitoring” services along with other 

personal care services in its Medicaid personal care program. The individuals claimed that 

without safety-monitoring services they would be unable to continue living in their homes and 

would require institutionalization.314

The Second Circuit denied relief, ruling that Olmstead reaffirms that ADA does not require a 

state to offer a new type of Medicaid service.315 The court relied on a footnote in Olmstead, 

which provided that “States must adhere to ADA’s nondiscrimination requirement with regard to 

the services they in fact provide.”316 Plaintiffs were requesting new services, as New York does 

not provide safety monitoring to individuals with physical or mental disabilities.317 

Notably, however, nothing in this footnote or in the court’s discussion of the fundamental 

alteration defense states that new services would never be required to comply with ADA. In fact, 

the court’s discussion of the defense makes clear that the only factors to be considered in 

determining what constitutes a fundamental alteration are the cost of providing integrated 

services, the resources available, and the needs of others.318 The language cited in Rodriguez

appears simply to reflect the court’s clarification that ADA does not create an entitlement to a 

specific “standard of care,” but instead requires that once a state chooses to provide services, it 

must not discriminate by providing those services in an unnecessarily segregated setting. 
121 

Institutionalization Is Not a Prerequisite for Individuals to Be Covered by 

Title II: Reducing Benefits to Those Outside of Institutional Settings While 

Maintaining Benefits to Those in Institutional Settings: Fisher v. Oklahoma 

Health Care Authority (2003) 

In Fisher v. Oklahoma Health Care Authority,

319 the Tenth Circuit was presented with the 

question of whether institutionalization is a prerequisite for the application of Olmstead. Here, 

the Tenth Circuit interpreted Olmstead to allow people with disabilities who, by reason of a 

change in state policy, stand imperiled with segregation to challenge that state policy under 

ADA’s integration regulation without first submitting to institutionalization.320 The Fisher 

holding’s importance to the greater community of people with disabilities cannot be stressed 

enough. After Fisher, individuals with disabilities living in community settings were protected 

from state efforts to institutionalize or, in some cases, reinstitutionalize them. The case 

prohibits a state from presenting individuals with a Hobson’s choice between remaining in the 

community under dangerous constraints or entering state-supported institutions to gain access 

to needed services. 

Oklahoma, through the Oklahoma Health Care Authority (OHCA), provided prescription drug 

benefits to Advantage Program participants in the community as well as residents in institutional 

settings.321 In September 2002, OHCA notified participants that it would impose a cap of five 

prescriptions per month on Advantage participants, effective October 1, 2002.322 The state, 

meanwhile, continued to provide unlimited prescriptions to patients in nursing facilities.323 

The Tenth Circuit interpreted Olmstead and ADA’s integration regulation to cover those living 

in community settings. To act the other way would present Medicaid recipients with another 

choice. They could choose to live in the community but accept benefits that were not comparable 

to those with similar conditions living in institutions or they could enter an institution and 

receive complete care but forgo the benefit of living in the outside community.324 

Like so many other Olmstead cases, the Tenth Circuit also explored the “fundamental 

alteration” language used by the Supreme Court. Oklahoma defended the five-prescription cap 
122 

in two ways: (1) the HCBS waiver program is optional, and (2) “[g]iven . . . the State financial 

crisis,” Oklahoma’s move to reduce an optional program rather than eliminate it altogether is 

reasonable, a fiscal crisis fundamental alteration defense.”325 The Tenth Circuit expeditiously 

rejected the first defense, noting that, under Title II of ADA, “a state may not amend optional 

programs in such a way as to violate the integration mandate.”326 The Tenth Circuit articulated 

a boundary to a state’s use of the fundamental alteration defense, noting that the fact that a 

program is optional does not allow the defense to be successful. Instead, noted the court, the 

fact that a program is optional and subject to state-proposed changes does not automatically 

constitute a fundamental alteration in the state’s services and programs and limit a state’s 

liability under Title II of ADA.327 

While not rejecting the fiscal crisis fundamental alteration defense, the Tenth Circuit stated that 

courts will scrutinize state actions that impede integration rather than deferring to reasonable 

state judgments. “The fact that Oklahoma has a fiscal problem, by itself, does not lead to an 

automatic conclusion that preservation of unlimited medically necessary prescription benefits for 

participants in the Advantage program will result in a fundamental alteration.”328 Fisher further 

clarifies the lines initially drawn by the Ninth Circuit in Townsend by defining that “fiscal 

decisions” does not mean the courts will defer to state judgments any time the state acts and 

defends its action by asserting fiscal crisis. 

Access to Quality Care in Community Settings: Ball v. Biedess (2004) 

In Ball v. Biedess,

329 Medicaid recipients receiving home-based care alleged that the Arizona 

Health Care Cost Containment System (AHCCCS) was supplying an insufficient number of 

home care workers for HCBS beneficiaries. The plaintiffs charged that under the federal 

Medicaid Law and ADA, the AHCCCS administration is required to make home and personal 

attendant services available in a scope and amount necessary to allow individuals receiving 

Medicaid services to live in the community. The failure to provide an adequate number of home 

care workers threatened to force these individuals, in their desire for adequate medical care, into 

nursing facilities. 
123 

The District Court ruled that the AHCCCS program failed to ensure that recipients of HCBS 

received the prescribed services. The court ordered AHCCCS to make extensive reforms to 

ensure that it “provide[s] each individual who qualifies for its services with those services for 

which the individual qualifies without gaps in service.”330 

The court, citing the public health regulations, stated that agencies must make payments to 

home and personal attendant service workers that are sufficient to “to enlist enough providers 

so that services under the plan are available to recipients at least to the extent that those 

services are available to the general population.”331 AHCCCS, the court ordered, must 

establish payment rates and enlist a sufficient number of providers to ensure that Medicaid 

recipients who are qualified to receive community-based care receive quality of care and have 

access to such care.332

The ruling, like that in Fisher, represents a victory for Medicaid recipients in community-based 

settings. The courts are consistently prohibiting states from presenting those in community-based 

care settings with a Hobson’s choice of remaining in the community with limited services or 

receiving a full array of supports and services only in restrictive institutional settings. 

“Institutionalization is not a viable choice,” wrote the Ball court, “for patients who qualify for 

AHCCCS programs but do not receive the services to which they are entitled.”333 Recipients of 

Medicaid services must not be forced, through state funding decisions or state inaction, to choose 

between inadequate access to needed LTSS in the community and institutionalization. 

Budget problems will continue to serve as the leading defense used by states for slowing the 

pace of systems reform and rebalancing public expenditures to support a more comprehensive 

set of choices for individuals with disabilities to live at home and in community settings with 

needed LTSS. 

Current judicial decisions represent a glimpse of divergent views of analysis regarding the future 

balancing of interests between state discretion in fashioning the LTSS system with public resources 

and consumer expectations for expanded choices to benefit from services in the least restrictive 

environment. The slow pace of comprehensive reform continues to bring judicial intervention. 
124 

Over a dozen states have agreed to court settlements that will accelerate the development of 

community supports and choices for targeted classes of individuals with disabilities.334 
125 

Part XI 

Recharting the Course 

A final checklist of challenges and forecast summary for navigating the rough waters of reform. 

Archeologists discovered the tomb of the “boy king” Tutankhamun in Egypt’s 

romantic Valley of the Kings in 1922, 3,000 years after his death.335 Some say it 

was the richest discovery in the history of mankind, uncovering five burial 

chambers and more than 5,000 works of art. The Untold Story describes the 

intrigue of professional archeologists and their relentless passion for uncovering 

antiquity. It is rumored that the major benefactor for the project died shortly after 

illegally entering one of the burial chambers not yet sanctioned by the Egyptian 

government. However, there was little information uncovered about Tutankhamen 

except for a lonely quote found on the last shrine [chamber] surrounding his 

great sarcophagus, “I have seen yesterday; I know tomorrow.”336

Archeologists spent their whole careers digging for the tomb of Tutankhamun 

and, in the end, the prize was the world’s grandest collection of rare objects of 

art. The King Tut exhibit was shown around the world and eventually ended up in 

an Egyptian museum, where deterioration rapidly set in due to inadequate 

preservation. The significance of the find was major in the world of archeology 

but left many unanswered questions as to who the 15-year-old boy-king was as a 

person and a ruler. 

Concluding Thoughts 

As the nation drags anchor and moves forward on this voyage that will rechart the delivery and 

financing of LTSS, it is important to think about what archeologists interested in aging and 

disability might find 1,000 years from now if they were to visit the first decade of the 21st 

century. What policies would they find that reflected how a country only a few hundred years old 

responded to its growing population with disabilities and extended life span? What values and 

beliefs would these policies reveal about the democracy? 

The current crisis in health care and LTSS is at a crossroads. How Americans respond to the 

critical issues facing millions of its seniors and young people with disabilities will determine the 

health of the nation for generations to come. The picture presented today identifies little public or 

political interest in putting these issues onto the national agenda. It is, however, first on the 

agenda of every state budget committee. At 22 percent of the budget, the rising costs of health 
126 

care and LTSS are no longer sustainable. This fiscal crisis will cause rough waters for the LTSS 

voyage and for the identified captain and crew. 

This review found that the current federal experience provides a complex picture over time of 

response to a growing segment of the population in need of LTSS to maintain their dignity and 

independence in daily living. Depending on where you live, your age, your economic status, and 

the nature of your disability, you will face different options and levels of response to home- and 

community-based needs. 

There is no single federal program or federal agency charged with responsibility for 

management, funding, and oversight of LTSS at home and in the community. There is no single 

entry point at a community level for individuals with disabilities and seniors to learn about and 

access service and support options. There are multiple federal programs with varying policy 

objectives that embrace the values of consumer choice and independence in daily living, but 

there is no comprehensive, integrated delivery system. There are also differences in service 

philosophy and administration between programs for individuals with disabilities under age 65 

and those for seniors. 

The tugboats are full of young people and seniors with disabilities who continue to push forward 

with the need for consumer direction and control and more responsibility for managing support 

options and caregivers. There remains significant disagreement about the elements of a 

comprehensive LTSS system, the relationship between the medical model as the dominant 

paradigm versus a social empowerment model of consumer choice and control, and how to 

balance family caregiving with public responsibility for long-term supports. 

This chapter on current federal experience provides a rationale for rethinking current public 

policy regarding LTSS. Disability is a natural part of the human experience over time. At some 

point, many Americans will need assistance with such activities as dressing, bathing, eating, and 

daily living. The current system of entitlement provides maximum assistance with daily living 

and personal assistance in the most restrictive environments, skilled nursing facilities. Integrated 

delivery systems that build on a presumption of support at home and in the community must be 

built through the design and development of consistent policy goals across all federal agencies. 
127 

The captains are left with a final checklist of challenges and a brief summary of forecasts for 

navigating the rough waters of reform. 

Checklist of Challenges 

• Financial. Runaway costs of state Medicaid spending and impact on people and children 

with disabilities. 

• Policy. Lack of coherent public policy that people with disabilities should have access to 

LTSS to maintain lifestyle and independence. 

• Political. Unwillingness of Congress to put the issue of LTSS on the national agenda, 

although the issue is very high on state agendas because of rising costs. 

• Public Perception. Low interest in and understanding of the urgency and importance to 

all Americans of the current growing crisis in the need for LTSS. 

• Federal System. Fragmented across agencies, with no single agency managing or 

coordinating reform. 

• State Systems. Fragmented delivery systems with uneven access and service provisions 

depending on the state’s fiscal health. 

• Workforce. Role of government in addressing the challenges of the current workforce of 

caregivers, both formal and informal. 

• Legislation. Current system of LTC is unbalanced toward institutional and restrictive 

environments. 

• Demographic Shifts. The impact of extended life expectancies, decreased fertility rates, 

and more women in the workforce, along with rising disability rates for those age 65 and 

under. 

• Needs. More consumer direction and control and understanding of what LTSS are needed 

for people across disabilities, gender, age, and ethnic background. 
128 

Forecast Summary 

Forecast: Ask the Hard Questions 

William Scanlon writes that most exercises in forecasting visions for LTSS policy do not address 

the following hard questions about goals and outcomes: What services should be guaranteed to 

individuals unable to provide for themselves? What protections from catastrophic loss, financial 

or otherwise, should be afforded? Most important, who will pay for these protections?337

Forecast: Don’t Forget the Beneficiaries 

Robert Schalock suggests a three-part test to evaluate future policy development that focuses on 

the following: 

• The individual beneficiary and the impact of any changes in eligibility, funding, and 

services delivery on their lives related to independence, productivity, community, and 

personal well-being. 

• The service delivery level, and any changes in service delivery patterns and the 

conversion of the system away from programs and toward individuals that allows for 

personal control and individual choice and is truly based on the type and intensity of 

individualized needed supports. 

• The societal level and its ability to integrate disability policy, funding, and outcomesbased evaluation with equality of opportunity, full participation, independent living, and 

economic self-sufficiency.338

Forecast: Prepare to Navigate Choppy Waters and Difficult Storms 

The 2004 NCD report Consumer-Directed Health Care: How Well Does It Work? identified five 

factors that stand in the way of change in policy and practice to expand consumer choice and 

participation in an LTSS system for the future: 

• Beware of the institutional bias of Medicaid in the use of HCBS waivers that require 

states to demonstrate cost neutrality with a comparison of costs to institutional care. 
129 

• Expect to find an underpaid, shrinking labor force that is unable to keep up with growing 

demand. 

• Recognize that the increasing share of total budget costs now averages 22 percent of state 

budgets. 

• Look out for consumer and caregiver education and skill-building programs needed by 

beneficiaries to develop the skills to set goals and take responsibility for managing 

budgets and service delivery. 

• Do not expect to see common definitions in research that has effectively evaluated 

outcome and cost data for consumer-directed services. 339

Forecast: Look for the Favorable Winds 

Positive forces for change began with the passage of ADA in 1990, followed by the Supreme 

Court’s Olmstead decision in 1999 and the subsequent Administration actions from 2000 to the 

present. These forces provide a platform to support policy and program changes for a long-term 

support system that embraces consumer choice to live in the least restrictive environment at 

home and benefit from community participation. Look also for new court decisions pushing the 

states to accelerate systems change. 

Forecast: Keep the Deliberations Fair 

Estes and Linkins suggest that the approach to LTSS in the United States for beneficiaries and 

family caregivers must be one that is “socially just, that promotes gender, ethnic, intergenerational, 

and class justice through a system that is accessible, affordable, and universal.”340

Words for Safe Travel 

Rheinhold Niebuhr, a Protestant theologian, wrote about the “social gospel” movement in the early 

part of the 20th century and reminded Americans that designing just policy cannot be done from 

some esoteric ethic that may or may not apply to a certain group of people and that Americans 

must first and foremost agree on what it means to be human and what it means to be just.341
130 
131 

Appendix 1.A 

Comparing Caregiver Characteristics by Age of Recipient

Recipients 18–49 Recipients 50 or Older 

Average recipient age 33 75 

Relationship Adult child, sibling, or nonrelative Mother, grandmother, or father 

Problems/Illnesses Mental illness, depression, or emotional 

problems financial problems 

Aging, Alzheimer’s, cancer, diabetes, 

heart disease, mobility, blindness 

Average caregiver age 41 47 

Demographics Working Retired, married 

Support Primary caregivers feel financial 

hardships 

Receive more funding 

Provide three or more activities of daily 

living 

Base: 1,247 caregivers in the United States.

Source: Caregiving in the United States, National Alliance for Caregiving, and American Association of Retired 

Persons, 2004. 
132 

Appendix 1.B 

Demographic Profile of Caregivers by Age of Recipient 

Total 

Caregivers of recipients 

18–49 

Caregivers of recipients 

50+ 

Total 100% 20% 79% 

Gender 

Male 39% 44% 37% 

Female 61 56 63 

Race of Caregiver 

White 73% 69% 74% 

African American 12 16 11 

Hispanic 10 11 10 

Asian American 4 4 4 

Age of Caregiver 

Under 35 years old 26% 42% 22% 

35–49 32 30 33 

50–64 30 19 32 

65 or older 13 9 13 

Mean (years) 46 yrs 41 yrs 47 yrs 

Marital status 

Married/living with partner 62% 53% 63% 

Single, never married 18 22 17 

Separated/divorced 14 17 14 

Widowed 6 7 6 

Education attainment 

High school or less 34% 41% 33% 

Some college 27 3 26 

Technical school 3 2 3 

College graduate 22 18 23 
133 

Total 

Caregivers of recipients 

18–49 

Caregivers of recipients 

50+ 

Graduate school + 13 8 14 

Current employment 

Employed full time 48% 54% 47% 

Employed part time 11 12 10 

Not employed 41 33 43 

Household income 

<$30K 25% 32% 22% 

$30K–$50K 26 27 25 

$50K–$75K 18 19 18 

$75K–$100K 9 9 9 

$100K + 15 7 17 

Source: National Alliance for Caregiving and AARP. (2004) Caregiving in the U.S. Available at: 

www.caregiving.org/04finalreport.pdf. 
134 

Appendix 1.C 

Federal Demonstrations 

Long-Term Services and Support: Reform Strategies 

Initiative Funders Focus Evaluation 

Cash and 

Counseling 

Administration on Aging, 

Robert Wood Johnson Foundation, 

Office of Planning and Evaluation, 

and 

APSE at the Department of Health 

and Human Services 

$25 million 

2004–2006 

www.cashandcounseling.org 

Individuals of various ages 

and disabilities direct their 

own supportive services and 

hire their own care managers 

with an individualized 

budget. 

Eleven new states funded in 

October 2004 that follow 

pilots in Florida, New Jersey, 

and Arkansas. 

New states are Alabama, 

Iowa, Kentucky, Michigan, 

Minnesota, New Mexico, 

Pennsylvania, Rhode Island, 

Vermont, Washington, and 

West Virginia. 

Independent evaluation 

will study costs, 

consumer satisfaction, 

access to home-based 

services, and qualityof-life changes. 

Aging and 

Disability 

Resource Centers 

(ADRCs) 

Administration on Aging and 

Centers for Medicare and 

Medicaid Services (CMS) 

$19 million 

2003–2006 

www.adrc.org 

Create a single, coordinated 

system of information and 

access for all people seeking 

long-term support to enhance 

individual choice and 

informed decision making. 

The 23 states funded are 

Louisiana, Maine, Maryland, 

Massachusetts, Minnesota, 

Montana, New Hampshire, 

New Jersey, Pennsylvania, 

Rhode Island, South 

Carolina, West Virginia, 

Arkansas, Alaska, California, 

Florida, Georgia, Illinois, 

Indiana, Iowa, New Mexico, 

North Carolina, and 

Wisconsin. 

Will evaluate whether 

the Resource Centers 

increase informed 

decision making, 

meaningful choice, and 

access to long-term 

services and supports in 

the most integrated 

setting. 

Real Choice 

Systems Change 

Grants 

CMS 

$200 million 

2001–2007 

www.hcbs.org 

States are funded to build 

infrastructure and pursue 

policy changes that result in 

“effective and enduring 

improvements in community 

long-term support systems.” 

Focus on sustainable 

system changes 

concerning the 

approach to service 

delivery, exercise of 

meaningful choices 
135 

Long-Term Services and Support: Reform Strategies 

Initiative Funders Focus Evaluation 

There have been four rounds 

of funding that states have 

competed for that target 

specific theme areas, such as 

integrating long-term 

supports with accessible 

affordable housing, 

improving and expanding 

personal assistance services 

that are consumer directed, 

and enhancing quality 

management systems. 

Other grants focus on 

comprehensive system 

reform efforts. 

with expanded support 

options to live in the 

most integrated setting 

appropriate, 

rebalancing of funding 

to expand community 

living preferences and 

priorities, and nursing 

home diversion and 

transition. 

All states have one or 

more grants. 

Independence 

Plus 

Waiver 

Demonstration 

CMS 

www.cms.hhs.gov/ 

independenceplus 

States are funded through the 

HCBS waiver authority to 

offer individualized budgets 

and consumer self-direction. 

Nine states have been 

approved: 

California, New Hampshire, 

Louisiana, South Carolina, 

Maryland, Florida, North 

Carolina, Connecticut, and 

Delaware 

Focus on cost savings, 

consumer satisfaction 

and outcomes, and 

other benefits of 

consumer direction. 

Source: Author’s compilation.
136 

Appendix 1.D 

Overview of Cash and Counseling Demonstrations 

Arkansas New Jersey Florida 

State program name Independent Choices Personal Preference Consumer-Directed Care 

Implementation date December 1998 November 1999 May 2000 

Authority for personal 

assistance services 

Medicaid state plan: 

personal care option 

Medicaid state plan: 

personal care option 

Section 1915(c) HCBS 

waivers 

Populations served Elderly and adults with a 

physical disability 

Elderly and adults with a 

physical disability 

Elderly, adults with a 

physical disability, and 

children with a 

developmental disability 

Territory covered Statewide Statewide Central and South Florida: 

Elderly and adults with a 

physical disability 

Statewide: Children and 

adults with developmental 

disabilities 

Average monthly cash 

allotment 

$350 $1,300 $300 

Formula for determining 

cash allotment 

A rate corresponding to an 

individual’s assessed 

number of hours of 

personal care reduced 

between 0% and 30% to 

account for actual number 

of hours service used 

versus projected use. 

Amount based on the 

numbers of hours in the 

individual’s previous 

personal care assessment 

multiplied by the state’s 

hourly rates for personal 

care. 

Individual’s historic 

Medicaid HCBS waiver 

expenditures reduced 

between 8% and 17% to 

account for actual use of 

services versus projected 

use. 

Final caseload (for 

evaluation) 

2,008 people 1,762 people 2,820 people 

Source: University of Maryland, Center on Aging, Cash and Counseling At-a-Glance, at 

www.hhp.umd.edu/AGING/CCDemo/ataglance.html, accessed June 2005. 
137 

Appendix 1.E 

50 States, the District of Columbia, and 

U.S. Territories with Initiatives to Improve Access to 

Long-Term Care Services 

State 

Integrated 

LTC 

Systems 

Streamlined 

Eligibility 

Determinations 

Expanded 

Eligibility 

Nursing Facility 

Resident 

Transition* 

Informed 

Consumer 

Choice Other** 

Alabama x x x x 

Alaska x x x x 

Arkansas x x x x x 

California x x x 

Colorado x x x x x 

Connecticut x x x 

Delaware x x x x x 

District of Columbia x x x x x x 

Florida x x x x 

Georgia x x x 

Guam x x x x 

Hawaii x x x x 

Idaho x x x x x 

Illinois x x x x x 

Indiana x x x x 

Iowa x x x 

Kansas x x x 

Kentucky x x x 

Louisiana x x x x x x 

Maine x 

Maryland x x 

Massachusetts x x x x x x 

Michigan x x x x x 

Minnesota x x x x 

Mississippi x x 
138 

State 

Integrated 

LTC 

Systems 

Streamlined 

Eligibility 

Determinations 

Expanded 

Eligibility 

Nursing Facility 

Resident 

Transition* 

Informed 

Consumer 

Choice Other** 

Missouri x x x x x 

Montana x x 

Nebraska x x x 

Nevada x x x 

New Hampshire x x x x x 

New Jersey x x x 

New York x 

North Carolina x x x x 

North Dakota x 

No. Mariana Islands x x 

Ohio x x x 

Oklahoma x x x x x 

Oregon x 

Pennsylvania x x x x x x 

Rhode Island x x x x 

South Carolina x x x x 

Tennessee x x x x x 

Texas x x x x 

Utah x x x x 

Vermont x x x x x x 

Virginia x x 

Washington x x x x x 

West Virginia x x x x x 

Wisconsin x x x x x x 

Wyoming x x x x x 

Total 32 20 16 43 45 38 

*NFT transition and diversion activities encompass a range of activities, including increasing housing availability 

and accessibility, developing peer support networks, and developing outreach materials and conducting outreach. 

**This category includes the areas of community education, housing, home modifications, assistive technology, and 

transportation. 

Source: HCBS, www.hcbs.org, accessed June 2005.
139 

Appendix 1.F 

Federal Tables 

Table 1. Federal Health Care Programs

Domains and Programs 

Year 

Authorized 

Responsible 

Agency 

Eligibility 

Scope Of 

Service 

Consumer 

Directed 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

Innovation 

Medicare Part A 

Social Security Act Amendments of 1965, Title XVIII, Part A 

Centers for Medicare and Medicaid Services (CMS) 

Age, qualified disability 

Hospital insurance for elderly and disabled who qualify, shortterm acute care, skilled nursing care, home health, hospice care. 

No No Yes Direct 

Payments 

No 

Medicare Part B 

Social Security Act Amendments of 1965, Title XVIII, Part B 

CMS Age, qualified 

disability 

Supplemental health insurance, home health, outpatient rehabilitation services, physical, speech and occupational therapy. 

Varies Varies Yes Direct 

Payments 

No 
140 

Domains and Programs 

Year 

Authorized 

Responsible 

Agency 

Eligibility 

Scope Of 

Service 

Consumer 

Directed 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

Innovation 

Durable medical equipment at home. 

Medicare Part D 

Social Security Act Amendments of 2003 

CMS Age, qualified 

disability 

Prescription drugs. 

No No No Direct 

benefit 

No 

Medicaid Social Security 

Act, Title XIX, 1965 

CMS Means/ 

disability 

Skilled nursing, home health, case management, personal care, rehabilitation. 

Varies Mix Yes Federal/ 

state cost share: entitlement 

No 

Source: Catalog of Federal Domestic Assistance. General Services Administration, Office of Governmentwide Policy, Office of AcquisitFederal Assistance Publication Division. www.cfda.gov, accessed June 2005. 
141 

Table 2. Federal Social Support, Personal Assistance Services, and Home Care Programs

Domains And Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope of Service 

Consumer 

Directed 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

i

Independent Living State Grants 

Rehabilitation Act 1973 Title VII 

Department of Education (DOE), Office of Assistant Secretary for Special Education and Rehabilitative Services 

Disability Support operation 

of statewide independent living councils (SILCs) 

N/A Yes Yes Formula 

Grants 

Ye

Centers for Independent Living 

Rehabilitation Act 1973 Title VII 

DOE, Office of Assistant Secretary for Special Education and Rehabilitative Services 

Disability Establishment and 

operation of CILs or SILCs 

Yes Yes Yes Competitive Grants Ye
142 

Domains And Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope of Service 

Consumer 

Directed 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

i

Special Programs for the Aging 

Title III, Part B 1965 

Administration on Aging (AOA)/Department of Health and Human Services (HHS) 

Age (60+) Implementation 

and coordination of communitybased supportive services 

No Varies Yes Formula 

Grants 

Va

Senior Companion Program 

Domestic Volunteer Service Act 1973 

Federal Agency Corporation for National and Community Service 

Senior Companions (60+); adults served (21+); one or more activity of daily living (ADL) limitation and at risk for institutionalization 

Engaging people (60+) and providing supportive services to disabled adults 

Varies Yes Yes Matching 

Grants 

No 

Medicaid HCBS Waiver 

Omnibus Reconciliation Act (OBRA) Section 2176 1981 

CMS Means test, state 

variation medically needy, and waivers specific to a target population (elderly, mental retardation, physical disabilities, brain injury) 

Respite care, personal care, habilitation, environmental adaptations, assistive technology, service coordination 

Varies Varies Yes State/ 

federal cost share 

Ye
143 

Domains And Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope of Service 

Consumer 

Directed 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

i

Social Services Block Grant 

Social Security Act, Title XX, OBRA 1981 

Administration for Children and Families, HHS 

Means tested, lowincome individuals and families 

Grants to states for support of social services programs 

Varies No Yes Formula 

Grants 

No 

Source: Catalog of Federal Domestic Assistance. General Services Administration, Office of Governmentwide Policy, Office of AcquisitioFederal Assistance Publication Division. www.cfda.gov, accessed June 2005. 
144 

Table 3. Federal Income Maintenance Support Programs 

Domains and Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope of Service 

Consumer 

Direction 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

Innovation or 

Systems Change 

Social Security 

Social Security Act of 1935 

Social Security Administration (SSA) 

Retired workers (62+) 

Replace lost earnings due to retirement 

Yes N/A No Direct 

payments with unrestricted use 

No FY 

$33FY $34FY $3520032,20032,20033,

Supplemental Security Income (SSI) 

Social Security Act of 1935, Title XVI 

SSA Means 

test, 65+, or qualified disabled 

Ensure minimum level of income 

Yes N/A Some 

states supplement 

Direct payments—nonrestricted 

No FY 

$32FY $34FY $382006,52006,72006,8
145 

Domains and Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope of Service 

Consumer 

Direction 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

Innovation or 

Systems Change 

Social Security Disability Insurance (SSDI) 

Social Security Act of 1935, Title II 

SSA Qualified 

disabled workers under full retirement age 

Ensure minimum level of income 

Yes N/A Yes Direct 

payments—nonrestricted 

No FY 

$69FY $76FY $812007,32007,62007,9

Source: Catalog of Federal Domestic Assistance. General Services Administration, Office of Governmentwide Policy, Office of Acquiand Federal Assistance Publication Division. www.cfda.gov, accessed June 2005. 
146 

Table 4. Federal Housing Programs

Domains And Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope Of Service 

Consumer 

Direction 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

Innovation Or 

Systems Change 

Housing and Urban Development (HUD) 811 

2000 HUD Disability/18+ 

/means test 

Supportive housing for people with disabilities, group homes, apartments, cooperatives 

No No Local Formula and 

competitive grants for local nonprofit sponsors 

No 

HUD 202 1959 HUD 62+/means test Supportive 

housing for people who are aging, congregate living 

No No Local Formula and 

competitive grants for local nonprofit sponsors 

No 
147 

Domains And Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope Of Service 

Consumer 

Direction 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

Innovation Or 

Systems Change 

HOME 1990 HUD Means test 

individuals and families 

Grants to state/cities for affordable housing development and rehabilitation 

No No Yes Block grants to 

state and large MSAs 80/20 funding mix 

Yes 

Community Development Block Grant (CDBG) 

1974 HUD Means test 

individuals and families 

Grants to state/cities for housing and community development 

No No Yes Block grant to 

state and large MSAs 

No 
148 

Domains And Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope Of Service 

Consumer 

Direction 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

Innovation Or 

Systems Change 

HOPE VI 1995 HUD Means test 

eligible for public housing 

Affordable redevelopment of public housing 

No No Yes Grants to public 

housing authorities 

Yes 

Housing Opportunities for Persons with AIDS (HOPWA) 

1992 HUD Means test for 

people living with HIV/AIDS

Supportive housing/services for people with AIDS and coresident family members 

No No Yes Grants to states Yes 

Continuum of Care Program (COC): Supportive Housing Program, Shelter Plus Care, Single-Room Occupancy (competitive) and Emergency Shelter Grants (ESG) (noncompetitive)

1996 HUD Homeless 

individuals and others eligible for transitional housing services

Development of housing and supportive services for homeless individuals and families 

No No Yes Grants to states Yes 
149 

Domains And Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope Of Service 

Consumer 

Direction 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

Innovation Or 

Systems Change 

Section 8 Housing Choice Voucher Program 

1975 HUD Means test Rental assistance 

to low-income families, elderly, and people with disabilities 

Yes No Yes Grants to states 

and local housing agencies 

No 

Family SelfSufficiency (FSS) Program 

1990 HUD Families who 

receive assistance under the housing choice voucher program are eligible to participate in the FSS program. 

Encourages communities to develop local strategies to help assisted families obtain employment that will lead to economic independence and self-sufficiency. 

Yes Yes Yes No specific 

funding is provided by HUD. Public Housing Authorities (PHAs) that administer a FSS program will provide opportunities for families participating in the housing choice voucher program to also receive assistance under the FSS program 

Yes 
150 

Domains And Programs 

Year Authorized 

Responsible 

Agency 

Eligibility 

Scope Of Service 

Consumer 

Direction 

ConsumerPerspective 

Quality 

State/ Local 

Partners 

Financing 

Mechanism 

Innovation Or 

Systems Change 

Section 502 Rural Housing Service 

1949 U.S. 

Department of Agriculture (USDA) 

Means test for individuals and families at low incomes 

Direct and guaranteed loans to build, buy, or improve applicant’s permanent residence 

Yes No Yes Formula No 

Source: Catalog of Federal Domestic Assistance. General Services Administration, Office of Governmentwide Policy, Office of AcquisitioFederal Assistance Publication Division. www.cfda.gov, accessed June 2005. 
151 

Table 5. Federal Transportation Programs

Domains and Programs

Year Authorized

Responsible Agency

Eligibility 

Scope of Service

Consumer 

Direction

ConsumerPerspective Quality 

State/ Local 

Partners

Financing 

Mechanism 

Innovation Or 

Systems Change

Capital Assistance Program for Elderly Persons and Persons with Disabilities Section 5310 

1975 Federal Transit 

Administration (FTA)/ Department of Transportation (DOT) 

Elderly/ disabled 

Provide efficient and coordinated specialized transport 

No No Yes Formula grants No 

Job Access Reverse Commute Section 5311 

1999 FTA/ 

DOT 

Welfare recipients Low-income people 

To develop transportation services to connect to employment and support services 

No No Yes Project grants Yes 
152 

Domains and Programs

Year Authorized

Responsible Agency

Eligibility 

Scope of Service

Consumer 

Direction

ConsumerPerspective Quality 

State/ Local 

Partners

Financing 

Mechanism 

Innovation Or 

Systems Change

United We Ride State Coordination Grants 

2004 FTA/ 

DOT 

Transportationdisadvantaged (individuals with low incomes, older adults, people with disabilities) 

To assist states that want to strengthen or jump start efforts to coordinate human service transportation 

No Yes Yes State grants Yes 

Source: Catalog of Federal Domestic Assistance. General Services Administration, Office of Governmentwide Policy, Office of AcquisitiFederal Assistance Publication Division. www.cfda.gov, accessed June 2005. 
153 

Table 6. Federal Nutrition Programs

Domains and Programs

Year Authorized

Responsible 

Agency

Eligibility 

Scope Of Service

Consumer 

Direction

ConsumerPerspective 

Quality 

State/ Local 

Partners

Financing 

Mechanism 

Innovation Or 

Systems Change

Title III Part C Nutrition Services Elderly Nutrition Program (ENP) 

Older Americans Act 1965 

Administration on Aging (AOA) /Department of Health and Human Services (HHS) 

60+ and spouse and coresident disabled 

Support to states for nutrition services congregate or in home 

No Yes Yes Formula/ 

matching 85% federal/15% nonfederal 

No 
154 

Domains and Programs

Year Authorized

Responsible 

Agency

Eligibility 

Scope Of Service

Consumer 

Direction

ConsumerPerspective 

Quality 

State/ Local 

Partners

Financing 

Mechanism 

Innovation Or 

Systems Change

Senior Farmers’ Market Nutrition Program (SFMNP) 

2002 USDA 60+/ means 

tested 

Support to states for low-income elders to buy fresh food at farmers’ markets and roadside stands 

Yes No Yes Grants to 

states 

Yes 

Food Stamps Reauthorization Act 

2002 USDA 60+ or SSI 

disabled, means tested 

Nutrition-related assistance 

Yes Yes Yes Grants to 

states 

Yes 

Source: Catalog of Federal Domestic Assistance. General Services Administration, Office of Governmentwide Policy, Office of AcquisitiFederal Assistance Publication Division. www.cfda.gov, accessed June 2005. 
155 

Table 7. Federal Assistive Technology Programs

Domains and Programs

Year Authorized

Responsible 

Agency

Eligibility 

Scope of Service

Consumer 

Direction

ConsumerPerspective 

Quality 

State/ Local 

Partners

Financing 

Mechanism 

Innovation Or 

Systems Change

Assistive Technology Act of 1998 

1998, reauthorized 2004 

The Office of the Assistant Secretary for Special Education and Rehabilitative Services Department of Education 

Individuals with disabilities 

States may provide assistance to statewide community-based organizations or directly to individuals with disabilities of all ages 

No Yes Yes Project grants 

(discretionary) Project grants (contracts) 

No 

Source: Catalog of Federal Domestic Assistance. General Services Administration, Office of Governmentwide Policy, Office of AcquisitFederal Assistance Publication Division. www.cfda.gov, accessed June 2005. 
156 

Table 8. Federal Caregiver Support Programs

Domains and Programs

Year Authorized

Responsible 

Agency

Eligibility 

Scope of Service

Consumer 

Direction

ConsumerPerspective 

Quality 

State/ Local 

Partners

Financing 

Mechanism 

Innovation Or 

Systems Change

National Family Caregiver Support 

Older Americans Act, as amended, Title III, Part E and VI, Part C. 

Administration on Aging 

Family caregivers, grandparents, and older individuals who are relative caregivers 

Information and referral, respite, training 

Varies Varies Yes Formula 

grants 75% federal and 25% nonfederal 

Yes 

Source: Catalog of Federal Domestic Assistance. General Services Administration, Office of Governmentwide Policy, Office of AcqRegulatory and Federal Assistance Publication Division. www.cfda.gov, accessed June 2005. 
157 

APPENDIX 1.G 

Congressional Oversight of Federal Programs 

Federal Health Care Programs

Senate House of Representat

Program Name Purpose 

Act* Original Act or 

most recent 

Congressional 

activity Committee Subcommittee Committee Subcom

Medicare (Part A) (Medicare Hospital Insurance) 

To provide hospital insurance protection for covered services to people age 65 or above, to certain disabled people, and to individuals with chronic renal disease. 

Social Security Act Amendments of 1965, Title XVIII, Part A, P.L. 89-97 

Committee on Finance 

(1) Health Care, (2) Social Security and Family Protection 

Committee on Ways and Means 

(1) HealthSocial Sec

Medicare (Part B) (Medicare Supplementary Medical Insurance) 

To provide medical insurance protection for covered services to people age 65 or over, to certain disabled people, and to individuals with end-stage renal disease who elect this coverage. 

Social Security Act Amendments of 1965, Title XVIII, Part B, P.L. 89-97 

Committee on Finance 

(1) Health Care, (2) Social Security and Family Protection 

Committee on Ways and Means 

(1) HealthSocial Sec

Medicare (Part D) Under Part D of the 

Social Security Act, the Medicare program includes a voluntary prescription drug benefit. Beneficiaries entitled to Part A and enrolled in Part B, enrollees in Medicare Advantage private fee-for-service plans, and enrollees in 

Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P. L. No. 108-173, 117 Stat. 2066, codified at 42 U.S.C. sec. 1395w-101) 

Committee on Finance 

(1) Health Care, (2) Social Security and Family Protection 

Committee on Ways and Means 

(1) HealthSocial Sec
158 

Senate House of Representat

Program Name Purpose 

Act* Original Act or 

most recent 

Congressional 

activity Committee Subcommittee Committee Subcom

Medicare Savings Account Plans will be eligible for the prescription drug benefit. The prescription drug benefit is available to eligible individuals beginning January 1, 2006. 

Medicaid To provide financial 

assistance to states for payments of medical assistance on behalf of cash assistance recipients, children, pregnant women, and the aged who meet income and resource requirements, and other categorically eligible groups. In certain states that elect to provide such coverage, medically needy people, who, except for income and resources, would be eligible for cash assistance, may be eligible for medical assistance payments under this program. Financial assistance is provided to states to pay for Medicare premiums, 

Medicaid Act (Aug. 14, 1935, ch. 531, Title XIX, as added July 30, 1965, P.L. 89-97, Title I, § 121(a), 79 Stat. 343) 

Committee on Finance 

(1) Health Care, (2) Social Security and Family Protection 

(1) Committee on Ways and Means (2) Committee on Energy and Commerce 

Ways and (1) HealthSocial SecEnergy anCommerceSubcommHealth 
159 

Senate House of Representat

Program Name Purpose 

Act* Original Act or 

most recent 

Congressional 

activity Committee Subcommittee Committee Subcom

copayments, and deductibles of qualified Medicare beneficiaries meeting certain income requirements. More limited financial assistance is available for certain Medicare beneficiaries with higher incomes. 

Medicaid, Homeand CommunityBased Services (HCBS) Waiver 

Program gives states flexibility to design programs to meet the specific needs of defined groups. States may create programs to serve the elderly, people with physical disabilities, developmental disabilities, mental retardation, or mental illness. States may also target programs by specific illness or condition as well as people with acquired or traumatic brain injury. States can make homeand community-based services available to individuals who would otherwise qualify for Medicaid only if they 

Social Security Act (Aug. 14, 1935, c. 531, Title XIX, § 1915, as added and amended Aug. 13, 1981, P.L. 97-35, Title XXI, §§ 2175(b), 2176, 2177(a)), Medicare and Medicaid Amendments of 1981 (P.L. 97-35, Title XXI, Aug. 13, 1981, 95 Stat. 783) (codified at 42 U.S.C. sec. 1396n) 

Committee on Finance 

(1) Health Care, (2) Social Security and Family Protection 

(1) Committee on Ways and Means, (2) Committee on Energy and Commerce 

Ways and (1) HealthSocial SecEnergy anCommerceSubcommHealth 
160 

Senate House of Representat

Program Name Purpose 

Act* Original Act or 

most recent 

Congressional 

activity Committee Subcommittee Committee Subcom

were in an institutional setting. States may offer a variety of services to participants under an HCBS waiver program and are not limited to the number of services that can be provided. States may use an HCBS waiver program to provide a combination of both traditional medical services as well as nonmedical services. There are no specific services that must be offered in an HCBS waiver program. There is no limit on the number of services that can be offered under a single waiver program as long as the waiver retains costneutrality and the services are necessary to avoid institutionalization. 
161 

Social Support, Personal Assistance Services, Home Care

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomIndependent Living State Grants 

To assist states in maximizing the leadership, empowerment, independence, and productivity of individuals with disabilities, and the integration and full inclusion of individuals with disabilities into the mainstream American society, by providing financial assistance for providing, expanding, and improving the provision of independent living services. 

Rehabilitation Act of 1973, as amended, Title VII, Chapter 1, Part B, 29 U.S.C. 796a-796e-3. 

Committee on Health, Education, Labor, and Pensions 

Varies Committee on 

Education and the Workforce 

Varies 

Centers for Independent Living 

The program awards grants to locally run nonprofit agencies that are operated by individuals with disabilities and that offer independent living services that include (1) information and referral, (2) independent living skills training, (3) peer counseling, and (4) individual and systems advocacy. 

Rehabilitation Act of 1973, as amended, Title VII, Chapter 1, Part B, 29 U.S.C. 796a-796e-3. 

Committee on Health, Education, Labor, and Pensions 

Varies Committee on 

Education and the Workforce 

Varies 

Special Programs Grants are made to any Older Americans Act Committee Varies (1) Committee Varies 
162 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcomfor the Aging: Discretionary Projects 

public or nonprofit private agency, organization, or institution. These funds may be used to (1) demonstrate new methods and practices to improve the quality and effectiveness of programs and services, (2) evaluate existing programs and services, and (3) conduct applied research and analysis to improve access to and delivery of services to train professionals in the field. 

of 1965, P.L. 89-73, July 14, 1965, 79 Stat. 218, codified at42 U.S.C. sec. 3001 

on Health, Education, Labor, and Pensions 

on Education and the Workforce, (2) Energy and Commerce 

Special Programs for the Aging: Grants for Supportive Services and Senior Centers 

Funds are awarded to states to develop and strengthen comprehensive and coordinated service delivery systems through designated state Agencies on Aging and area Agencies on Aging. In addition to supportive nutrition services, these may be used to support other services, including renovation, acquisition and alteration, and construction of multipurpose senior centers. The objective of these services and centers is to maximize the 

Older Americans Act of 1965, P.L. 89-73, July 14, 1965, 79 Stat. 218, codified at 42 U.S.C. sec. 3001 

Committee on Health, Education, Labor, and Pensions 

Varies (1) Committee 

on Education and the Workforce, (2) Energy and Commerce 

Varies 
163 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

informal support provided to older Americans to enable them to remain in their homes and communities. Providing transportation services, in-home services, and caregiver support services, this program ensures that elders receive the services they need to remain independent. 

Senior Companion Program 

The program provides stipends, transportation, physical examinations, insurance, and meals for their volunteers. Assignment of Senior Companions to adults may occur in residential and nonresidential facilities and in their own homes. 

Domestic Volunteer Service Act of 1973 (Volunteers in Service to America) (VISTA) (P.L. 93-113, Oct. 1, 1973, 87 Stat. 394) (codified at 42 U.S.C. sec. 4950) 

Committee on Health, Education, Labor, and Pensions 

Varies Committee on 

Education and the Workforce 

Varies 

Medicaid Homeand CommunityBased Services (HCBS) Waiver 

Program gives states flexibility to design programs to meet the specific needs of defined groups. States may create programs to serve the elderly, people with physical disabilities, developmental disabilities, mental retardation or mental 

Social Security Act (Aug. 14, 1935, c. 531, Title XIX, § 1915, as added and amended Aug. 13, 1981, P.L. 97-35, Title XXI, §§ 2175(b), 2176, 2177(a)), Medicare and Medicaid Amendments of 1981 

Committee on Finance 

(1) Health Care, (2) Social Security and Family Protection 

(1) Committee on Ways and Means, (2) Committee on Energy and Commerce 

Ways and (1) HealthSocial SecEnergy anCommerceSubcommHealth 
164 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

illness. States may also target programs by specific illness or condition as well as people with acquired or traumatic brain injury. States can make homeand community-based services available to individuals who would otherwise qualify for Medicaid only if they were in an institutional setting. States may offer a variety of services to participants under an HCBS waiver program and are not limited to the number of services that can be provided. States may use an HCBS waiver program to provide a combination of both traditional medical services as well as nonmedical services. There are no specific services that must be offered in an HCBS waiver program. 

(P.L. 97-35, Title XXI, Aug. 13, 1981, 95 Stat. 783) (codified at 42 U.S.C. sec. 1396n) 

Social Services Block Grant 

 Social Security Act, 

Title XX, as amended; Omnibus Budget Reconciliation Act of 

Varies Varies Varies Varies 
165 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

1981 (P.L. 97-35) (codified at 42 U.S.C. sec. 1397 et seq.) 

Social Security Enables each state, as far 

as practicable under the conditions in such state, to furnish financial assistance to aged needy individuals. The Social Security Act authorizes to be appropriated for each fiscal year a sum sufficient to carry out the purposes of the social security program. The money made available under the Social Security Act is used for making payments to states that have submitted plans for old-age assistance and had them approved by the Secretary of Health and Human Services. 

Social Security Act (Old Age Pension Act) (Aug. 14, 1935, ch. 531, 49 Stat. 620) (codified at 42 U.S.C. sec. 301 et seq.) 

Committee on Finance 

(1) Health Care, (2) Social Security 

Committee on Ways and Means 

(1) HealthSocial Sec
166 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomSupplemental Security Income 

Establishes a national program to provide Supplemental Security Income to individuals who have attained age 65 or are blind or disabled. 

Social Security Act, (Old Age Pension Act) (Aug. 14, 1935, ch. 531, title XVI, Sec. 1601), as added P.L. 92-603, title III, Sec. 301, Oct. 30, 1972, 86 Stat. 1465 (codified at 42 U.S.C. sec. 1601 et seq.) 

Committee on Finance 

(1) Health Care, (2) Social Security 

Committee on Ways and Means 

(1) HealthSocial Sec

Social Security Disability Insurance 

To replace part of the earnings lost because of a physical or mental impairment, or a combination of impairments, severe enough to prevent a person from working. 

Social Security Act of 1935, Title II, as amended; (P.L. 96-265) (codified at 42 U.S.C. sec. 402, 416, 420-25) 

Committee on Finance 

(1) Health Care, (2) Social Security 

Committee on Ways and Means 

(1) HealthSocial Sec
167 

Federal Housing Programs 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomSection 811 The Section 811 program 

allows people with disabilities to live as independently as possible in the community by increasing the supply of rental housing with the availability of supportive services. The program also provides project rental assistance, which covers the difference between the HUDapproved operating costs of the project and the tenants’ contribution toward rent. 

Cranston-Gonzalez National Affordable Housing Act (NAHA) (P.L. 101-625, Nov. 28, 1990, 104 Stat. 4079) (codified at 42 U.S.C. sec. 8013) 

Committee on Banking, Housing, and Urban Affairs 

Subcommittee on Housing and Transportation 

Committee on Financial Services 

Housing aCommunitOpportuniSubcomm

Section 202 The Section 202 program 

helps expand the supply of affordable housing with supportive services for the elderly. It provides very low-income elderly with options that allow them to live independently but in an environment that provides support activities such as cleaning, cooking, transportation, etc. 

Housing Act of 1959 (P.L. 86-372, Sept. 23, 1959, 73 Stat. 654) (codified at 12 U.S.C. sec. 1701q) 

Committee on Banking, Housing, and Urban Affairs 

Subcommittee on Housing and Transportation 

Committee on Financial Services 

Housing aCommunitOpportuniSubcomm

HOME Investment 

HOME provides formula grants to states and 

Cranston-Gonzalez National Affordable 

Committee on Banking, 

Subcommittee on Housing and 

Committee on Financial 

Housing aCommunit
168 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomPartnerships Program 

localities that communities use—often in partnership with local nonprofit groups—to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income people. 

Housing Act (NAHA), Title II (P.L. 101-625, Nov. 28, 1990, 104 Stat. 4079) (codified at 42 U.S.C. sec. 12721) 

Housing, and Urban Affairs 

Transportation Services Opportuni

Subcomm

Community Development Block Grant (CDBG) Programs 

To develop viable urban communities, by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for people of low and moderate income. 

Housing and Community Development Act of 1974, Title I, (P.L. 93-383, Aug. 22, 1974, 88 Stat. 633) (codified at 42 U.S.C. sec. 5301 et seq.) 

Committee on Banking, Housing, and Urban Affairs 

Subcommittee on Housing and Transportation 

Committee on Financial Services 

Housing aCommunitOpportuniSubcomm

Homeownership and Opportunity for People Everywhere (HOPE) VI 

Revitalization grants enable PHAs to improve the living environment for public housing residents of severely distressed public housing projects through the demolition, substantial rehabilitation, reconfiguration, and/or replacement of severely distressed units; revitalize the sites on which severely distressed public 

Quality Housing and Work Responsibility Act of 1998 (P.L. 105-276, Title V, Oct. 21, 1998, 112 Stat. 2518)(codified at 42 U.S.C. sec. 1437c-1, 1437z-1 et. seq., 

1437w, 1437bbb-1 et seq.) see also, HOPE 

VI Program Reauthorization and Small Community 

Committee on Banking, Housing, and Urban Affairs 

Subcommittee on Housing and Transportation 

Committee on Financial Services 

Housing aCommunitOpportuniSubcomm
169 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

housing projects are located and contribute to the improvement of the surrounding neighborhood; lessen isolation and reduce the concentration of lowincome families; build sustainable mixed-income communities; and provide well-coordinated, resultsbased community and supportive services that directly complement housing redevelopment and that help residents to achieve self-sufficiency, young people to obtain educational excellence, and the community to secure a desirable quality of life. HOPE VI Demolition Grants enable PHAs to fund the demolition of severely distressed public housing units, the relocation of affected residents, and the provision of supportive services to relocated residents. 

Mainstreet Rejuvenation and Housing Act of 2003 (P.L. 108-186, Title IV, Dec. 16, 2003, 117 Stat. 2693) 

Housing Opportunities for Persons with AIDS (HOPWA) 

The HOPWA Program was established to address the specific needs of people living with 

AIDS Housing Opportunity Act (Housing Opportunities for 

Committee on Banking, Housing, and Urban 

Subcommittee on Housing and Transportation 

Committee on Financial Services 

Housing aCommunitOpportuniSubcomm
170 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

HIV/AIDS and their families. HOPWA makes grants to local communities, states, and nonprofit organizations for projects that benefit low-income people medically diagnosed with HIV/AIDS and their families. HOPWA funding provides housing assistance and related supportive services as part of HUD’s Consolidated Planning initiative that works in partnership with communities and neighborhoods in managing federal funds appropriated to HIV/AIDS programs. HOPWA grantees are encouraged to develop community-wide strategies and form partnerships with area nonprofit organizations. 

People with AIDS Act of 1991) (HOPWA) (P.L. 101-625, Title VIII, Subtitle D, Nov. 28, 1990, 104 Stat. 4375) (as codified at 42 

U.S.C. sec. 12901 et. seq.) 

Affairs 

Supportive Housing Program 

The Program is designed to promote the development of supportive housing and supportive services to assist homeless people in the transition from 

McKinney-Vento Homeless Assistance Act (Stewart B. McKinney Homeless Assistance Act) (McKinney Act) (P.L. 100-77, July 22, 

Committee on Banking, Housing, and Urban Affairs 

Subcommittee on Housing and Transportation 

Committee on Financial Services 

Housing aCommunitOpportuniSubcomm
171 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

homelessness and to enable them to live as independently as possible. Program funds may be used to provide: (1) transitional housing within a 24-month period as well as up to 6 months of follow-up services to former residents to assist their adjustment to independent living; (2) permanent housing provided in conjunction with appropriate supportive services designed to maximize the ability of people with disabilities to live as independently as possible; (3) supportive housing that is, or is part of, a particularly innovative project for, or alternative method of, meeting the immediate and long-term needs of homeless individuals and families; (4) supportive services for homeless individuals not provided in conjunction with supportive housing, and (5) safe havens for homeless individuals with 

1987, 101 Stat. 482) (codified at 42 U.S.C. 

sec. 11301 et. seq.) 
172 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

serious mental illness currently residing on the streets who may not yet be ready for supportive services. 

Section 8 Housing Choice Voucher Program 

To aid very low-income families in obtaining decent, safe, and sanitary rental housing. For Welfare-to-Work rental vouchers, families must also meet special welfareto-work criteria. Section 502 of the Public Housing Reform Act states that a purpose of the legislation is “consolidating the voucher and certificate programs for rental assistance under Section 8 of the United States Housing Act of 1937 (the USHA) into a single market-driven program that will assist in making tenant-based rental assistance more successful at helping lowincome families obtain affordable housing and will increase housing choice for low-income families.” 

Housing Act of 1937, Section 8(o), (as amended, 42 U.S.C. 1437(o)) 

Committee on Banking, Housing, and Urban Affairs 

Subcommittee on Housing and Transportation 

Committee on Financial Services 

Housing aCommunitOpportuniSubcomm
173 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomSection 502 Rural Housing Service 

To assist very low, lowincome, and moderateincome households to obtain modest, decent, safe, and sanitary housing for use as a permanent residence in rural areas. 

Housing Act of 1949, Title V, Section 502, as amended, P.L. 89-117, 42 U.S.C. 1471 et seq.; P.L. 92-310 (codified at 42 U.S.C. sec. 1472 et seq.) 

Committee on Banking, Housing, and Urban Affairs 

Subcommittee on Housing and Transportation 

Committee on Financial Services 

Housing aCommunitOpportuniSubcomm
174 

Federal Transportation Programs 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomCapital Assistance Program for Elderly Persons and Persons with Disabilities 

To provide financial assistance in meeting the transportation needs of elderly people and people with disabilities where public transportation services are unavailable, insufficient, or inappropriate. The Section 5310 program is designed to supplement FTA’s other capital assistance programs by funding transportation projects for elderly people and people with disabilities in all areas: urbanized, small urban, and rural. 

(P.L. 103-272, § 1(d), July 5, 1994, 108 Stat. 807, and amended P.L. 105-178, Title III, § 3013(a), June 9, 1998, 112 Stat. 359) (codified at 49 U.S.C. sec. 5310) 

(1) Committee on Commerce, Science, and Transportation, (2) Committee on Environment and Public Works 

(1) Commerce, Science, and Transportation–Surface Transportation and Merchant Marine Subcommittee, (2) Environment and Public Works—Transportation and Infrastructure Subcommittee 

Committee on Transportation and Infrastructure 

Highwaysand PipelinSubcomm
175 

Federal Nutrition Programs 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomElderly Nutrition Program (ENP) 

Elderly Nutrition Program provides grants to support nutrition services to older people throughout the country. The Elderly Nutrition Program provides for congregate and homedelivered meals. These meals and other nutrition services are provided in a variety of settings, such as senior centers, schools, and in individual homes. Meals served under the program must provide at least one-third of the daily recommended dietary allowances established by the Food and Nutrition Board of the National Academies’ Institute of Medicine. 

Older Americans Act Amendments of 1992, Title III, Grants for State and Community Programs on Aging (P.L. 102-375, Sept. 23, 1992, 106 Stat. 1195) (codified at 42 U.S.C. sec. 3030p). Older Americans Act of 1965 (P.L. 89-73, July 14, 1965, 79 Stat. 218). 

Health, Education, Labor, and Pensions Committee 

Aging Subcommittee 

(1) Energy and Commerce Committee, (2) Education and the Workforce Committee 

(1) Energy CommerceSubcommSelect EduSubcomm

Senior Farmers’ Market Nutrition Program (SFMNP) 

SFMNP awards grants to states, United States Territories, and federally recognized Indian tribal governments to provide low-income seniors with coupons that can be exchanged for eligible foods at farmers’ markets, roadside stands, and 

Farm Security and Rural Investment Act of 2002, sec. 4402, (Farm Bill, 2002) (P.L. 107- 171, May 13, 2002, 116 Stat. 134) (codified at 7 U.S.C. sec. 3007) 

Committee on Agriculture, Nutrition, and Forestry 

Research, Nutrition, and General Legislation Subcommittee 

Committee on Agriculture 

DepartmenOperationOversight, Nutrition, Forestry Subcomm
176 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

community-supported agriculture programs. The grant funds may be used only to support the costs of the foods that are provided under the SFMNP; no administrative funding is available. The purposes of the SFMNP are to (1) provide resources in the form of fresh, nutritious, unprepared, locally grown fruits, vegetables, and herbs from farmers’ markets, roadside stands and community-supported agriculture programs to low-income seniors, (2) increase the domestic consumption of agricultural commodities by expanding or aiding in the expansion of domestic farmers’ markets, roadside stands, and community-support agriculture programs, and (3) develop or aid in the development of new and additional farmers’ markets, roadside stands, and community-support agriculture programs. 
177 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomCommunity Food Projects (Food Stamps) 

To support the development of community food projects designed to meet the food needs of low-income people; increase the selfreliance of communities in providing for their own needs; and promote comprehensive responses to local food, farm, and nutrition issues. 

Food Stamp Act of 1977 (Food Stamp Act of 1964), Section 25 (P.L. 88-525, Aug. 31, 1964, 78 Stat. 703) (codified as amended at 7 U.S.C. sec. 2034), amended by Federal Agriculture Improvement and Reform Act of 1996 (FAIRA), Section 401, (P.L. 104-127, Apr. 4, 1996, 110 Stat. 888) (7 U.S.C. sec. 2033-34). 

Committee on Agriculture, Nutrition, and Forestry 

Research, Nutrition, and General Legislation Subcommittee 

Committee on Agriculture 

DepartmenOperationOversight, Nutrition, Forestry Subcomm
178 

Federal Assistive Technology Programs 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomAssistive Technology Act (ATA) of 1998 

To provide grants to states to support capacity building and advocacy activities, designed to assist the states in maintaining permanent comprehensive, consumer-responsive statewide programs of technology-related assistance for individuals with disabilities of all ages. Revises ATA state grant programs to direct the Secretary of Education to make AT grants to states to maintain comprehensive statewide programs designed to (1) maximize the ability of individuals with disabilities, and their family members, guardians, advocates, and authorized representatives, to obtain AT; and (2) increase access to AT. Requires states to use portions of AT grant funds for (1) state-level activities, including state financing system activities (which may include loan 

Assistive Technology Act of 1998 (P.L. 108-364, Dec. 25, 2004) (Codified as amended at 29 U.S.C. sec. 3001 et seq.) 

Committee on Health, Education, Labor, and Pensions 

Employment, Safety, and Training Subcommittee 

Committee on Education and the Workforce 

Workforce ProtectionSubcomm
179 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

programs) to increase access to and funding for AT devices and services, as well as for programs for device reutilization, device loan, and device demonstration and information; and (2) state leadership activities, including training and technical assistance, public-awareness activities, and coordination and collaboration. 

Caregiver Support/Respite Care 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

National Family Caregiver Support Program (NFCSP) 

The NFCSP calls for the states, working in partnership with Area Agencies on Aging and local community-service providers, and tribes to provide a continuum of caregiver services, including information, assistance, individual counseling, support groups, training, respite, and supplemental 

Older Americans Act Amendments of 2000, section 316, (P.L. 106-501, Nov. 13, 2000, 114 Stat. 2226) (codified at 42 U.S.C. 

sec. 3030s, 3030s-1, 3030s-2, 3030s-11, 3030s-12) 

Committee on Health, Education, Labor, and Pensions 

Aging Subcommittee 

Committee on Education and the Workforce 

PostsecondEducationTraining aLong LearSubcomm
180 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

services. These caregiver support services are available to adult family members or other individuals who are informal providers of inhome and community care to older people. Caregiver support services are also available to grandparents or older individuals who are relative caregivers for a child, age 18 and under. Priority consideration for services is to be given to people in greatest social and economic need, with particular attention to low-income older individuals, and older individuals providing care and support to people 18 and under with mental retardation and related developmental disabilities. 
181 

Civil Rights Protections 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomAmericans with Disabilities Act (ADA) 

ADA prohibits discrimination on the basis of disability in employment, state and local government, public accommodations, commercial facilities, transportation, and telecommunications. It also applies to the United States Congress. To be protected by ADA, one must have a disability or have a relationship or association with an individual with a disability. An individual with a disability is defined by ADA as a person who has a physical or mental impairment that substantially limits one or more major life activities, a person who has a history or record of such an impairment, or a person who is perceived by others as having such an impairment. ADA does not specifically name all of the impairments that are covered. 

Americans with Disabilities Act of 1990 (ADA) (P.L. 101-336, July 26, 1990, 104 Stat. 327) (codified at 42 U.S.C. sec. 12101-12117, 12131-12134, 12141-12150, 12161-12165, 12181-12189; 47 U.S.C. sec. 225) 

Senate Committee on Health, Education, Labor, and Pensions, and Senate Committee on the Judiciary 

Various (1) Committee 

on the Judiciary, (2) Committee on Education and the Workforce 

Subcommthe Consti
182 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee SubcomCivil Rights of Institutionalized Persons Act (CRIPA) 

CRIPA authorizes actions for redress in cases involving deprivations of rights of institutionalized people secured or protected by the Constitution or laws of the United States. CRIPA is used by the Department of Justice to bring actions on behalf of those living in public nursing homes, facilities for those with cognitive disabilities, and psychiatric hospitals. The Civil Rights Division pursues cases under CRIPA, where public nursing homes or other public institutions have neglected or abused residents entrusted to their care, or have failed to meet residents’ constitutional or federal statutory right to adequate care and services. These cases generally involve an extensive investigation of the conditions and practices at the facility, efforts to remedy the offending practices, and, where necessary, the filing of a CRIPA action. 

Civil Rights of Institutionalized Persons Act (CRIPA) (P.L. 96-247, May 23, 1980, 94 Stat. 349) (codified at 42 U.S.C. sec. 1997-1997j) 

Senate Committee on the Judiciary 

Various Committee on 

the Judiciary 

Subcommthe Consti
183 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

Resolution of CRIPA suits generally include reaching a written agreement with the jurisdiction that provides for remedial relief in each one of the areas in which the institution failed to meet the needs of the residents. 

Rehabilitation Act (Section 504) 

The Rehabilitation Act prohibits discrimination on the basis of disability in programs conducted by federal agencies, in programs receiving federal financial assistance, in federal employment, and in the employment practices of federal contractors. The standards for determining employment discrimination under the Rehabilitation Act are the same as those used in title I of the Americans with Disabilities Act. Section 504 states that “no qualified individual with a disability in the United States shall be excluded from, denied the benefits of, or be subjected to discrimination under” any 

Rehabilitation Act of 1973 (P.L. 93-112, Sept. 26, 1973, 87 Stat. 355) (codified as amended at 29 U.S.C. sec. 794) 

(1) Committee on Health, Education, Labor, and Pensions, (2) Committee on Finance 

Various (1) Committee 

on Education and the Workforce, (2) Committee on Ways and Means 

Subcommthe Consti
184 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

program or activity that either receives federal financial assistance or is conducted by any executive agency or the United States Postal Service. Each federal agency has its own set of Section 504 regulations that apply to its own programs. Agencies that provide federal financial assistance also have Section 504 regulations covering entities that receive federal aid. Each agency is responsible for enforcing its own regulations. Section 504 may also be enforced through private lawsuits. 

Fair Housing Act (FHA) 

The FHA, as amended in 1988, prohibits housing discrimination on the basis of race, color, religion, sex, disability, familial status, and national origin. Its coverage includes private housing, housing that receives federal financial assistance, and state and local government housing. It is unlawful to discriminate in any aspect 

Fair Housing Act (P.L. 90-284, Title VIII, Apr. 11, 1968, 82 Stat. 81) (codified at 42 U.S.C. sec. 3601-3619) 

Committee on Finance 

Various (1) House 

Financial Services Referral, (2) Committee on Ways and Means, (3) House Judiciary

(1) Subcomon HousinCommunitOpportuniSubcommthe Consti
185 

Senate House of Representat

Program Name Purpose Act* Original Act Committee Subcommittee Committee Subcom

of selling or renting housing or to deny a dwelling to a buyer or renter because of the disability of that individual, an individual associated with the buyer or renter, or an individual who intends to live in the residence. The FHA requires owners of housing facilities to make reasonable exceptions in their policies and operations to afford people with disabilities equal housing opportunities. The FHA also requires landlords to allow tenants with disabilities to make reasonable access-related modifications to their private living space, as well as to common use spaces. (The landlord is not required to pay for the changes.) The Act further requires that new multifamily housing with four or more units be designed and built to allow access for people with disabilities. 
186 
187 

Chapter 2 

Future Market Demand and Understanding 

Costs of Long-Term Services and Supports: 

Financing and Systems Reform for 

Americans with Disabilities 
188 
189 

Table of Contents 

Chapter 2 

Page

Part I 

Introducing Research Purpose and the Rich Picture Story Line ..........................................191 

Part II 

Forecasting the Storm................................................................................................................193 

Part III 

Tracking the Storm....................................................................................................................197 

Part IV 

Lowering the Lifeboats..............................................................................................................216 

Part V 

Approaching the Iceberg...........................................................................................................225 

Part VI 

Reviewing the Passenger Manifest...........................................................................................241

Part VII 

Moving Toward Reform............................................................................................................272 
190 
191 

Part I 

Introducing Research Purpose and the Rich Picture Story Line 

Long-Term Services and Support Financing and Systems Reform

Purpose 

The purpose of chapter 2 is to explore and understand the future market demand and costs of longterm services and supports (LTSS) for individuals with disabilities through a review and analysis 

of the literature and in-depth case studies of six individuals to better understand the current 

experience with and future need for affordable LTSS nationwide for Americans with disabilities. 

Rich Picture Story Line342

The setting for chapter 2 is the LTSS ship heading toward the iceberg in the waters of reform. 

The iceberg represents barriers to reform; the state of the economy; state and federal deficits; 

rising health care costs; workforce shortages; increasing numbers of uninsured; low national 

savings; and increased longevity of all Americans. The setting in part II is an overview of the 

storm clouds: multidimensional financial and attitudinal challenges that compete for the attention 

of even the most skilled navigators. In part III, the consumer-directors chart their way through 

the demographic challenges and trends of the current and future LTSS system. The setting in part 

IV is the LTSS ship with its consumer-directors talking with other Medicaid beneficiaries about 

the rising costs. The waves are taking their toll, and it becomes evident that some passengers 

must be lowered onto lifeboats and given passage to safer waters. In part V, the ship will come 

face to face with the financial barriers to reform and lower its lifeboats yet again before hitting 

the iceberg. In part VI, six consumer-directors will introduce themselves and provide information 

about their journey and what they think their lives will look like in 2030. In part VII, the 

consumer-directors will summarize their findings and prepare for their final voyage into the 

waters of reform. 
192 

Research Questions 

The Government Accountability Office (GAO) states 

clearly in its “21st Century Challenges: Reexamining the 

Federal Base of Government” that current fiscal policies in 

place today are economically unsustainable over the long 

term without unprecedented changes in tax and/or spending 

policies.343 The report identifies emerging forces that are carving out a new position for the 

United States in the world today. Several of these forces—long-term fiscal imbalance, increasing 

global interdependence, changing economy, demographic shifts, science and technology 

advances, and quality-of-life trends—will directly impact the current and future viability of 

LTSS for Americans with disabilities. In addition, the report poses a set of 21st century questions 

intended to guide Congress in addressing current fiscal demands as well as future fiscal 

challenges in fine-tuning current and future public policy that covers discretionary spending, 

mandatory spending (including entitlements), and tax policies.344

This chapter will probe answers to the following questions: 

• Who needs LTSS? 

• How is the population projected to change over the next 25 years? 

• What are the pathways for eligibility for LTSS and have they changed? 

• Who is meeting the LTSS demands and financing them? 

• What do we know about LTSS costs today and in the future? 

Defining differences between needs, 

wants, affordability, and sustainability is 

fundamental to rethinking the design of 

our current health care system. 

GAO-05-325SP
193 

Part II 

Forecasting the Storm 

Overview of the Problem 

The United States is a nation at risk at it enters the 21st century with unsustainable social and 

fiscal policy to support its aging and disability population. Despite two centuries of economic 

progress, it is still without a sustainable internal infrastructure for the delivery of affordable 

health care and LTSS for all Americans.345, 346, 347 Because of the intersection of many 

demographic changes over the next century—such as increased longevity; low fertility rates; 

changing patterns of marriage, divorce, and participation in the labor force and immigration; 

lower national savings; rising state deficits and health care costs—there is great concern about 

the future of LTSS for Americans with disabilities. 348, 349, 350

The director of the Congressional Budget Office (CBO), in testimony on Social Security reform 

before the Committee on the Budget, U.S. House of Representatives, on February 9, 2005, 

testified that “a major achievement of reform is to resolve uncertainty about the future and that 

uncertainty is an economic cost in its most fundamental form . . . and the sooner the uncertainty 

is resolved the better served future beneficiaries will be.”351 The director stated that the key 

uncertainty stems from a central policy question: To what extent should Social Security 

programs in the 21st century resemble the program in the 20th century? The Consortium for 

Citizens with Disabilities responded that Congress should request a beneficiary impact statement 

for every major component of any serious proposal and that, when evaluating any program that 

affects millions of individuals of all ages, it is essential for policymakers to look beyond the 

budgetary change to understand the actual impact on people’s daily lives.352 

There are 38 million Americans under age 65 reporting some level of disability353 and, of this 

group, 25 million (11 percent of the nonelderly population) have a specific chronic disability.354

Fifty-three percent have private insurance, 20 percent are covered under Medicaid, 15 percent 

are uninsured, and 12 percent have Medicare and other types of insurance.355 There are 8.1 

million Americans with disabilities on Medicaid and another 6 million on Medicare who are 
194 

under age 65.356 The Medicaid beneficiaries with disabilities are substantially more impaired 

than other individuals with disabilities. About 50 percent have a physical impairment, one-fourth 

have some limitation in performing activities of daily living (ADLs), and 40 percent have severe 

mental symptoms or disorders.357 

Most of the research on aging defines a person as needing LTSS if he or she requires another 

person’s help with one or more ADLs or instrumental activities of daily living (IADLs). Using 

this definition, there are 9.5 million people with LTSS needs, and 36 percent (3.56 million) are 

nonelderly, including residents of nursing home and intermediate care facilities for the mentally 

retarded (ICF/MRs).358 

The comptroller general of the GAO has called for a “fundamental reexamination” of America’s 

spending and tax priorities because of the mounting long-term fiscal challenges primarily caused 

by known demographic trends and growing health care costs.359 A national forum of leading 

experts convened to explore the gap in public understanding of the nature and magnitude of the 

long-term fiscal challenge and to examine strategies for marketing the problem to the public to 

begin the dialogue about solutions. The problem was described as “too big to be solved by 

economic growth, or making modest changes to existing spending and tax policy.”360 The 

seriousness of the problem is reflected in the growing imbalance between discretionary and 

mandatory spending. In 1964, two-thirds (67 percent) of total federal spending was discretionary; 

in FY 2004, this share had shrunk to about 39 percent.361 

Key barriers identified at the national forum were similar to the barriers identified in chapter 1 of 

this report: gaining public and political will; lack of consensus among leaders on the nature, 

extent, and timing of the nation’s fiscal problem; lack of possible solutions; and lack of public 

understanding of the problem.362 This phenomenon is perplexing: Despite years of national 

symposiums, thousands of published research studies, and millions of dollars spent on the 

economics of America’s troubled social and fiscal policy, we are still without reform. 363

Testimony on the crisis in long-term care (LTC) spending was heard on April 19, 2005, before 

the Subcommittee on Health of the House Committee on Ways and Means, U.S. House of 

Representatives. Noticeably absent was research about the service and support needs and 
195 

challenges of people with disabilities who are under the age of 65. Congress and the American 

public still think only of aging when they discuss issues of LTSS. Even the research is scarce on 

the prevalence and demographics of people using LTSS under age 65. As the current debate 

heats up, it will be imperative that disability research is developed that provides comprehensive 

data on what it costs to live with a lifelong disability. 

The current system of LTSS is based on policy and purpose written 40 years ago for low-income 

Americans on public assistance, children, the elderly, and people with disabilities. Although 

Medicaid and Medicare have made many improvements over the past four decades, their 

fundamental purposes were not designed to meet the needs of the current aging and disability 

demographics. Today, less than 20 percent of people on Medicaid are on welfare; 30 percent of 

the population includes the elderly and people with disabilities, and the other 70 percent includes 

mostly children and families who need health insurance.364 Despite legislation that allows states 

to shift services and supports from the nursing home to the community, Medicaid continues to 

spend 64.3 percent ($73.1 billion) for care in nursing facilities and ICF/MRs, mainly for people 

with disabilities.365 Medicaid spending has gone from 8 percent of state budgets in 1985 to 22 

percent in 2003.366 Seven million people with disabilities receive both Medicaid and Medicare 

(dual eligible) and account for 42 percent of all state Medicaid spending.367 

Although Americans make more money than the rest of the world, they spend more.368 Many 

people with disabilities and seniors who are not eligible for public benefits are not financially 

prepared to pay for the costs of LTSS (only 7% have annual incomes of $50,000 or more).369, 370A 

private room in a nursing home in 2003 was $66,000 on average and a home health aide averaged 

$18 per hour. People with disabilities under age 65 are poorer and have less work history than 

today’s retired seniors (35% have incomes hovering around the federal poverty level). Individuals 

with disabilities on Supplemental Security Income (SSI) who are working (more than 323,000) are 

challenged by disincentives in the policy that discourage earnings and prevent the development of 

assets that could provide resources to pay a fair share of the costs for LTSS.371 

Few Americans with lifelong impairments purchase LTC insurance because of the cost and the 

reluctance of the insurance industry to underwrite high-risk populations.372, 373 Yet, a few major 
196 

investment houses are marketing financial planning products for special needs populations, 

which appeal to parents challenged with providing for the long-term future of a child with a 

lifelong disability. Ten percent of Americans have purchased LTC insurance, but for people with 

disabilities, many of the standard policies cater more to medical rehabilitation and less to the 

nonspecific needs of those who have a chronic illness or long-term impairment. Under the 

current system, it is unclear how families and communities plan to support a child born today 

with a lifelong disability that will require extraordinary costs. 

The trend to drop employer-based health care is growing as annual health care premiums continue 

to rise.374 The Institute of Medicine estimates that 18,000 lives are lost each year because of gaps 

in insurance coverage at an economic cost between $65 billion and $139 billion annually from 

premature death, preventable disability, early retirement, and reduced economic output.375 

The shrinking workforce, both paid and unpaid, providing the majority of LTSS is unstable, 

underpaid, and untrained.376 The family unit that provides the majority of unpaid care today 

(women in their 50s) will change in the future.377 More women are opting out of motherhood and 

remaining single or divorced.378

America must construct a new system for individuals who need LTSS to go to school, to work, 

or to be retired at home. Most important, it needs a system that will promote independence and 

self-sufficiency in an affordable and dignified way. 
197 

Part III 

Tracking the Storm 

Demographic Trends in Long-Term Services and Supports 

Defining Long-Term Services and Supports 

The 21st century LTSS policy is guided by a strong federal and state commitment toward homeand community-based services (HCBS) and is an important milestone for people with 

disabilities. The shifting of costs from institutional spending to community-based service 

spending is providing the infrastructure and capacity for people with disabilities to work, go to 

school, and live independently. The evolution of the current system of LTSS requires a definition 

that identifies the scope and depth of services needed that is inclusive of people with disabilities 

under the age of 65.379 

The NCD supports a broad definition of LTSS that reflects the essential needs for maintaining 

a quality of life with maximum dignity and independence. Housing, transportation, nutrition, 

technology, personal assistance, and other social supports are included in the NCD definition 

of LTSS.380

The AARP definition of long-terms services and supports provides a good overview of the 

breadth and depth of what a long-term services and support policy means today: 

LTSS refers to a wide range of in-home, community-based, and institutional 

services and programs that are designed to help individuals of all ages with 

physical or mental impairments who have lost or never acquired the ability to 

function independently. LTSS include assistance with performing self-care 

activities and household tasks, habilitation and rehabilitation, adult day services, 

case management, social services, assistive technology, job modification, and 

some medical care. LTSS are provided in a variety of settings, including at home, 

in assisted living and other supportive housing settings, and in nursing homes.381 

The AARP Policy Book explains that people with disabilities prefer to use the phrase “long-term 

services and supports” rather than “long-term care” because of possible implications concerning 

dependence or paternalism. The movement to provide services and supports in the community 
198 

rather than in an institution is the result largely of the work of disability advocates who have 

worked for decades to control the direction of their services and supports outside the traditional 

facility or institution. Federal and state legislation and the Supreme Court have responded with a 

flurry of demonstration projects and decisions that have favored noninstitutional living. 

However, federal and state Medicaid spending for LTSS continues to favor institutional care 

(nursing facilities and ICF/MRs), with the balance spent on HCBS.382 

The Congressional Research Service (CRS) found that different disability groups have focused 

on different aspects of consumer-directed LTSS to fit their individual needs, including the use of 

individual budgets and other self-empowering strategies for managing and directing their own 

services and supports.383 The CRS reported that 

Individuals with physical disabilities and who are aging have generally focused 

on personal care services. For individuals with developmental disabilities, 

consumer direction has been referred to as “self-determination” and has often 

included other long-term care services in addition to personal care services, such 

as respite and adult day care. For individuals with serious and persistent mental 

illness, opportunities for consumers to direct their own services have not been as 

prevalent, although there is a growing interest in consumer empowerment, peersupport services, and peer participation in treatment.384

No research found estimated overall costs for an individual with a lifelong impairment based on 

the definitions used here for LTSS. The productivity losses, societal costs, direct medical and 

nonmedical utilization rates, housing, and living expenses for a person living with a lifelong 

disability are important statistical data that when aggregated would help build a true economic 

picture for policy and budget discussion. There are studies that have looked at prevalence and 

mortality rates of particular categories of disability but have not included other relevant variables 

about what it takes for a family to raise a child with a severe chronic lifelong disability.385

The importance of introducing a new definition for LTSS is that it will describe to policymakers 

and budget directors the unique issues and economic profile of living with a disability under the 

age of 65. The current focus on LTC for people over 65 was underscored in an April 2004 paper 

from the CBO on “Financing Long-Term Care for the Elderly.” One page was dedicated to 

“nonelderly people.” The study found that, in general, people younger than 65 use LTC services 
199 

for different reasons than people over 65 years of age, referring to mental illness, mental 

retardation, and neurological conditions.386 The CBO paper does report that Medicaid is the 

largest funder for LTC for impaired people under the age of 65 and that, since 1992, the program 

has grown 4.8 percent annually. The CBO report is directed to Congress and provides little 

information about the LTSS needs of people with disabilities under the age of 65, other than that 

they are mostly Medicaid dependent. It is clear that Congress would need more information 

about the 14 million Americans under age 65 on Medicaid and Medicare to better understand the 

demographics, costs, and service needs of those receiving LTSS through public programs who 

are working, going to school, living at home, or retired. New LTSS policy must include not only 

the aging cohort of Americans with disabilities but also the under-65 cohort. 

When actuaries prepare assumptions about the future, they look at a number of factors. The 

actual future income and expenditures for a new system of LTSS will depend on many factors, 

including the size and characteristics of the population receiving benefits, the size and level of 

benefit amounts, and the number of workers and their earnings. None of the proposals for 

reforming the current LTSS system provided assumptions about future costs (see chapter 3) that 

included the full array of factors, such as the following: birthrates, death rates, immigration, 

marriage and divorce rates, retirement-age patterns, disability incidence and termination rates, 

production gains, wage increases, medical and nonmedical costs, inflation, and many other 

demographic, economic, and program-specific factors.387 

Even demographic data about the nonelderly users of LTSS who are living in institutions 

(including group homes) is not readily available, because the various surveys used to collect this 

data do not encompass all institutional settings.388 The Disability Supplement to the National 

Health Interview Survey (NHIS-D) is a household survey of nonelderly community dwellers and 

does not include group homes that in 2004 represented about 7 percent of the population with 

mental retardation and developmental disabilities (MR/DD). The National Long-Term Care 

Survey (NLTCS) draws from Medicare enrollment files and community and institutional 

residents, and the researchers found that “no such population-based survey exists for the nonelderly using long-term services and supports and no combination of existing surveys can be said 

with confidence to provide a similarly comprehensive view of the non-elderly.”389 One survey 
200 

did collect data in 1987—the National Medical Expenditure Survey, Institutional Population 

Component—and, at the time, did include nursing homes, ICF/MRs, and licensed personal care 

homes for residents of all ages.390 However, its successor survey in 1996—the Medicaid 

Expenditure Panel Survey (MEPS)—restricted data collection to nursing homes only. The 

authors estimated that about 416,000, or 0.4 million people (MR/DD and mentally ill in state 

mental institutions, residential facilities, government general hospitals, private hospitals, and VA 

medical centers), are left out of national surveys of nonelderly recipients of LTSS. This 

population is not always reflected in the national figures used to represent the number of people 

under 65 years of age needing services and supports. 

Table 2.1 combines two national survey data sets to compare community-based service use and 

nursing home use for individuals under 65 years of age with nonusers of community service. 

Females are more likely to receive community-based services and be in nursing homes than 

males in the general public; 4.8 percent of community-based service users are widowed, 

compared with 10.3 percent of nursing home residents and 1.8 percent of nonusers; individuals 

receiving both community-based services and nursing home services were 50 percent more likely 

to have an education of less than 12 years; and community-based users had twice the poverty rate 

of nonusers.391 There was no single data set to provide national estimates for elderly and 

nonelderly LTC users in both community and institutional settings.392
201 

Table 2.1. Demographics of Long-Term Service and Supports, Community-Based Users 

and Nonusers393

Characteristics 

Nonusers of 

Community Services 

Community-Based 

Services Use <65 

Nursing Home 

Residents <65 

Population (Thousands) 155,200 (97.8%) 3,364 (2.1%) 138 (0.1%) 

Mean Age (Years) 38 45 51 

Gender 

Female 

Male 

50.8 

49.2 

57.6 

42.4 

51.0 

49.0 

Race 

White 

Black 

Other 

83.2 

12.0 

04.9 

77.0 

19.0 

04.0 

76.1 

19.2 

04.7 

Marital Status 

Married 

Widowed 

Never Married 

Separated/Divorced 

65.9 

01.8 

22.0 

10.2 

57.3 

04.8 

29.2 

18.4 

16.4 

10.3 

46.3 

27.0 

Education 

Less Than 12 Years 

12 Years 

Greater Than 12 Years 

Missing 

15.3 

37.1 

46.9 

0.70 

34.3 

39.4 

23.5 

02.7 

42.0 

23.8 

16.9 

16.4 

Poverty 10.2 26.0 N/A 

Level of IADL/ADL 

Disability 

IADL Only 

1-2 Adls 

3-6 ADLS 

N/A 

N/A 

N/A 

55.9 

26.7 

17.4 

07.7 

14.5 

75.5 

Functional Limitations 

Lower Body Only 

Upper Body Only 

Upper And Lower Body 

Neither 

05.1 

00.8 

01.5 

92.2 

33.3 

1.6 

38.1 

26.2 

N/A 

N/A 

N/A 

N/A 

Use of Mobility Equipment 00.8 25.0 13.0 

Use of Wheelchair 00.1 12.7 65.2 

Difficulty Seeing 01.6 17.4 30.2 

Difficulty Hearing 03.5 11.3 12.8 

Difficulty Communication 00.3 11.6 16.6 

Difficulty Understanding 00.4 09.8 12.0 

Mental Retardation 00.1 11.6 N/A 

N/A = not available.
202 

People Who Use Long-Term Services and Supports 

The development of public policy for LTSS requires finding a common ground for defining 

eligibility. The review of the literature found definitions for disability that identify function 

(ADLs, IADLs), chronic illness, children with chronic illness, census data on perceived 

disability, and work disability. The accepted definitions of eligibility are the two major ones, 

provided by Medicaid and SSI, which are used most often in the literature and are the gateway to 

services and supports for millions of Americans with disabilities. 

Seventy-eight percent (5.6 million) of people with disabilities in FY 2000 enrolled in Medicaid 

through SSI; the remaining 22 percent (8.1 million) were categorized as “other” (some on 

Medicare). It is estimated that about 25 million Americans under the age of 65 with chronic 

disabilities need some help with ADLs394 but often do not meet the criteria of total disability 

required by Social Security until their conditions are in the advanced stage.395 Examples include 

people with HIV and multiple sclerosis. The CRS data estimates that 3.4 million people with 

disabilities under age 65 receive an array of LTSS (mostly in their homes and unpaid), but this 

varies depending on each state’s fiscal capacity or changing economic condition. 

Emerging Demographics of Long-Term Service and Support Use 

Trends for chronic disease and disabilities are showing increases. The prevalence of chronic 

disease and deaths caused by noncommunicable disease in the United States between 1990 and 

2020 will increase from 28.1 million to 49.7 million, an increase of 77 percent. Overall heart 

disease, in terms of both death and disability, will be greater than any other illness. Cancer will 

rank second. By the year 2010, mental illness, namely unipolar major depression, will have a 

greater impact on death and disability than cancer.396 Medicaid has become the principal public 

payer of mental health services at 36 percent, with Medicare spending 22 percent, and state and 

local governments spending 35 percent with another 7 percent coming from the Federal 

Government, totaling $48 billion.397 The most common chronic disability conditions relate to 

mental health, mental retardation, cognitive impairment, and learning disability. 
203 

The impacts of these trends and further analyses have varied predictions for prevalence and 

future health care costs. However, the challenge inherent in consolidating the medical and 

nonmedical needs for LTSS into population characteristics with cost estimates differs based on 

criteria and the definition of disability used. The following definitions and estimates of disability 

prevalence are good examples of how complex and confusing this can be. 

Use of ADLs and IADLs in Measuring Functional Ability 

The definitions used in describing the ability of individuals to function independently in the 

community are ADLs and IADLs. ADLs include a person’s ability to perform the following 

functions: bathing, dressing, eating, toileting, getting in or out of bed or a chair, and getting around 

inside the home. IADLs include preparing meals, going outside the home, managing money, using 

the telephone, taking prescription medications, and doing housework.398 For people with 

intellectual impairments, the ADL and IADL criteria do not always accurately represent their 

functioning capacity. Further research is being done on expanding criteria to better serve people 

with intellectual impairments. The estimate of community-based LTSS, among the nonelderly is 

2.1 percent (over 3.4 million) receiving assistance with ADL or IADL tasks. 

The likelihood of needing help with ADLs rises with age. It is estimated that, by age 65, 10 to 20 

percent of individuals will require assistance with at least one or more ADL and that, by age 85, 50 

percent will require assistance.399 Demographers predict a dramatic impact on the prevalence of 

disability and use of LTSS in the coming decades. People who need help with at least two ADLs 

will increase from 1.8 million (1996–2000) to 3.8 million (2045–-2049). The number of nursing 

home residents and residents in alternative living facilities over age 65 will increase from 2 million 

in 2000 to 2.6 million in 2020 and 4.5 million in 2050. The number of home-based services users 

will increase from 5.4 million in 2000 to 7.2 million in 2020 to 10.5 million in 2050.400

The research concludes that disability has declined in the over-65 population for those who 

reported needing help with IADLs. The decline represented a 3.9 percentage point decline in 

elderly people receiving help from someone with ADLs and IADLs and a 1.4 percentage point 

increase in elderly people who managed ADLs in the community with assistive devices 

only.401 The study also found a 3.7 percentage point drop in help with money management 
204 

between 1984 and 1989, when Social Security direct deposit became the norm, raising the 

question of whether IADL declines reflect improvements in health or improvements in the 

physical environment. Researchers suggest that the overall decline may be driven by 

environmental and not health-related changes. Increases in technology and greater availability 

of services and durable medical equipment, including assistive technology, are thought to have 

contributed to the decline. The mean number of IADLs for which people with disabilities 

received assistance declined over the 15-year study, but the mean number of ADLs for which 

assistance was received increased for people with disabilities living in institutions and in the 

community. If the IADL rate continues to decline, researchers will study the relationship 

among savings in Medicare, Medicaid, and LTSS.402

Definitions of disability in the literature vary from ICD-9 Codes to subjective criteria, such as a 

child’s ability to play. The scope of the population with disabilities was not consistent; for 

example, parameters such as age range, setting of services, and service types used to segment 

and measure the population. In addition to the use of ADLs and IADLs, four additional 

definitions are listed in table 2.2. 
205 

Table 2.2. Disability Definitions 

Disability 

Categories 

Disability 

Definitions Demographics 

Functional403 Limits in or inability to perform a variety of 

physical activity, serious sensory impairment 

(e.g., unable to read a newspaper, even with 

glasses), serious symptoms of mental illness, 

long-term care needs, use of an assistive 

device (e.g., wheelchair), developmental 

delay in a child that is identified by a 

physician, and inability to perform ageappropriate functions. 

47.6 million Americans 

6.1 million children 

25.7 million working-age adults 

15.8 million elderly 

Work404 Limitations or the inability to work as a 

result of a physical, mental, or emotional 

health condition. 

16.9 million working-age adults 

(18-64 years of age) 

Perceived405 Individuals who reported that they 

considered themselves to have a disability or 

were considered by others to have a 

disability. 

19 million Americans 

2 million children 

11.1 adults (18-63 years of age) 

6 million elderly 

Public Program 

Recipients Under 

Age 65406

Includes people covered by government 

funding programs, Special Education or 

Early Intervention Services, and/or disability 

pensions. 

13.8 million individuals 

4.7 million children 

9.1 million adults age 18-64 

65 and older not included in this 

definition 

A study from the Research Institute and Training Center on Community Living at the University 

of Minnesota examined the service use by and needs of adults with functional limitations (FLs) 

or intellectual disabilities/developmental disabilities (ID/DD) between the ages of 18–35 and 

35–64. The researchers found that people with ID/DD have substantially more limitations in 

ADLs, learning, communication, self-direction, and economic self-sufficiency compared with 

people with FLs only. Women with ID/DD 35 years and older were more likely to have 

economic problems than women under age 35 with FLs only. Gender differences were found in 

the two populations—more males were found in both age categories with ID/DD and more 

females were found in the FL category age 35 and older. This study has important policy 

implications because it suggests that, within different categories of disability, there are different 
206 

service needs that get overlooked, and that a more careful study of the gender and age 

differences between groups may be needed. 

Another challenge for individuals with disabilities under the age of 65 with personal assistance 

needs is receiving the necessary hours of support. A recent study estimated the shortfall in hours 

of help and adverse consequences and found that individuals who needed help with two or more 

of the five basic ADLs had a shortfall of 16.6 hours of help per week compared with those whose 

needs are met.407 Those with unmet needs were more likely to be nonwhite, to be female, and to 

live alone. The shortfall in hours as a percentage of needed hours is twice as great for people 

who live alone. Both groups in the study found those who live with someone and those who live 

alone experienced adverse consequences in 29 out of the 34 measures tested, including weight 

loss, dehydration, falls, burns, and dissatisfaction with the help received. People who live alone 

and have unmet needs are 10 times as likely to go hungry, 20 times more likely to miss a meal, 

and 5 times as likely to lose weight.408

Personal assistance services (PAS) are provided to about 13.2 million noninstitutionalized adults, 

representing an average of 31.4 hours of PAS each week.409 Of these, 3.2 million people received 

an average of 17.6 hours of paid help, and 11.7 million received an average of 30.7 hours of 

unpaid help. This study found that older people are likely to receive paid PAS and that workingage people rely more on unpaid PAS. 

The policy implications of these studies suggest that future LTSS policy should consider the 

number of working individuals under age 65, their specific needs for PAS, and the impact that 

adequate and consistent PAS might have on future earnings and long-term employment for 

working-age individuals with disabilities. 

Children and the Need for Long-Term Services and Supports 

A report by the U.S. Department of Health and Human Services (HHS), “Children with Severe 

Chronic Conditions on Medicaid,” used 360 disease-specific codes (ICD-9 Codes) to define 

children with physical and mental health disabilities.410 In addition to the diagnosis codes, the 
207 

criteria for disability included hospital utilization criteria. Physical disability utilization criteria 

included the following: 

• 3 or more hospital admissions; 

• 20 or more days of inpatient hospital care; 

• total outpatient payment of $5,000 or more; and 

• total payment of $20,000 or more. 

Mental health disability criteria included the following: 

• 30 days or more of inpatient hospital care with any of the primary psychiatric diagnoses; 

and 

• outpatient payments of $5,000 or more for any of the primary psychiatric diagnoses.411

A 1995 summary by the Assistant Secretary for Planning and Evaluation (ASPE) identified 

4,536,300 American children with disabilities. This report defined disability as difficulty with 

certain functions or abilities (e.g., playing) because of a physical or mental health impairment.412

This summary also stated that determining the prevalence of disability was difficult due to varied 

definitions; however, it reported that 4,536,300 children in the United States had a disability and 

that 98 percent lived in the community and 2 percent (91,800) lived in institutions; 1,200 

children lived in nursing homes; and 1,100 lived in homes for individuals with physical 

disabilities. Another 29,500 children were in facilities for the mentally ill, and 60,000 were in 

MR/DD facilities.413 The report did note that there are 148,000 children in correctional facilities, 

on whom data on disability was not available. 

Of the 51 American million children ages 5 through 17 in 1994, less than 1 percent were likely to 

need LTSS; 1.3 percent had problems with mobility; 5.5 percent with communication; 10.6 

percent with learning; 12.3 percent needed help with one or more ADLs; and 0.9 percent were 

likely to need LTSS for self-care. Fifty-nine percent of people with MR/DD are under the age of 

17; 38 percent are between 17 and 64 years of age; and 3 percent are over the age of 65.414
208 

The leading causes of disability in children reported in the 1995 ASPE summary were learning 

disabilities (1,372,200), speech disorders (1,096,000), MR/DD (720,500), mental illness 

(462,800), and respiratory conditions such as asthma (362,200). 415

People Over Age 65 

In 1999, people 65 years or older numbered 34.5 million. This represents 12.7 percent of the 

U.S. population, about one in every eight Americans. The number of older Americans has 

increased 3.3 million (10.6) percent since 1990, compared with an increase of 9.1 percent for 

the under-65 population. 416

Since 1900, the percentage of Americans over 65 has tripled, and the number has increased 11 

times, from 3.1 million to 34.5 million.417 A child born in 1998 could expect to live 76.7 years, 

about 29 years longer than a child born in 1900. The major part of this increase is due to reduced 

death rates for children and young adults. Two million people turned 65 in 1999 (5,422 per day). 

In the same year, 1.8 million people 65 years of age or older died, resulting in a net increase of 

200,000 (558) per day.418 Life expectancy in the United States rose dramatically in the 20th 

century from about 47 years in 1900 to about 73 years for males and 79 years for females in 

1999. This increase is mainly due to improvements in environmental factors, such as sanitation, 

and the discovery of antibiotics.419

By 2030, there will be about 70 million Americans over the age of 65. People over 65 

represented 13 percent of the population in 1999; this percentage will grow to 20 percent by 

2030. Minority populations are projected to represent 25.4 percent of the elderly population in 

2030, up from 16.1 percent in 1999.420 

In 1998, the majority (67%) of the elderly was noninstitutionalized and lived in a family setting. 

Approximately 10.8 million (80%) of older men and 10.7 million (58%) of older women lived in 

families. The proportion living with a family decreased with age. Forty-five percent of those over 

85 years lived in a family setting. About 13 percent of older people (7% men, 17% women) were 

not living with a spouse but were living with children, siblings, or other relatives. About 3 

percent of men and 2 percent of women (718,000) of the older population lived with 
209 

nonrelatives.421 A small number (1.47 million, 4.3%) of the over-65 population lived in nursing 

homes in 1997, and the percentage increased dramatically with age, ranging from 1.1 percent for 

people 65–74 years to 4.5 percent for people 75–84 years and 19 percent for people over the age 

of 85.422

In 1999, 16.1 percent of people over age 65 were minorities: 8.1 percent were African American, 

2.3 percent were Asian, and less than 1 percent were American Indian or Native Alaskan. 

Hispanic origins represented 5.3 percent of the older population.423 

In 1999, about half (52%) of people over age 65 lived in nine states: California had over 3.6 

million; Florida, 2.7 million; New York, 2.4 million; Texas, 2 million; and Pennsylvania, 1.9 

million. Ohio, Illinois, Michigan, and New Jersey each had over 1 million.424 

In 1999, people over 65 constituted 14 percent or more of the total population in 10 states: Florida, 

18.1 percent; Pennsylvania, 15.8 percent; Rhode Island, 15.6 percent; West Virginia, 15.1 percent; 

Iowa, 14.9 percent; North Dakota, 14.6 percent; South Dakota, 14.4 percent; Connecticut, 14.3 

percent; Arkansas, 14.2 percent; and Maine, 14 percent. In 11 states, the over-65 population 

increased by 17 percent or more between 1990 and 1999: Nevada, 61 percent; Alaska, 55 percent; 

Arizona, 31 percent; Hawaii, 30 percent; Colorado, Utah, and New Mexico, 23 percent; Delaware, 

21 percent; South Carolina and North Carolina, 19 percent; and Texas, 17 percent.425

Table 2.3. Population Projections Five-Year Age Groups426

Age group July 2004 July 2030 

65–69 years 9,928,000 19,844,000 

70–74 years 8,375,000 17,878,000 

75–79 years 7,432,000 14,029,000 

80–84 years 5,432,000 9,638,000 

85–89 years 2,954,000 5,077,000 

90–94 years 1,351,000 2,457,000 

95–99 years 425,000 1,015,000 

100 years and older 88,000 381,000 
210 

Twenty percent of people 65 and older (about 6 million) need some level of LTSS. The mean age 

is 80.5 years and the person is most likely to be a widowed white female. Forty percent who are 

living in the community are cognitively impaired, with Alzheimer’s disease, mental retardation 

(7%), or senility, or have ADL needs. Forty percent living in the community have informal care, 

25.1 percent have both informal and formal care, 4.6 percent have formal care, and 29.6 percent 

have care in an institution.427

The next few decades will bring an unprecedented increase in the size of the elderly population. 

Major factors to consider in predicting the impact of the aging population follow: 

• The aging U.S. population, in particular the growth in the proportion of the people age 85 

and over, will place increasing demands on our fragmented LTC system. The demands 

are uncertain. 

• LTC will continue to be a woman’s issue. 

• The LTC population will become more ethnically diverse. 

• Aging is not geographically uniform. 

• Americans are unprepared to pay for LTC.428

Chronic Care Demographics 

About 57 million working-age Americans, 18–64 years old, live with chronic disease conditions 

such as diabetes, asthma, or depression. In 2003, more than one in five (12.3 million) people 

with chronic diseases lived in families that had problems paying medical bills.429

Chronic diseases—such as cardiovascular disease (primarily heart disease and stroke), cancer, 

and diabetes—are among the most prevalent, costly, and preventable of all health problems. 

Seven of every 10 Americans who die each year (more than 1.7 million people) die of a chronic 

disease. Chronic disabling conditions cause major limitations in activity for more than 1 in every 

10 Americans (25 million people).430
211 

Eight of the top 10 causes of death in the United States in 1997 were due to chronic diseases: 

heart disease (31.4%), cancer (23.3%), stroke (6.9%), chronic obstructive pulmonary disease 

(4.7%), pneumonia/flu (3.7%), diabetes (2.7%), kidney disease (1.1%), chronic liver disease 

(1.1%).431 Only unintentional injury (4.1%) and suicide (1.3%) are not related to chronic disease.

The main contribution to chronic disease is exposure to risk factors, such as tobacco use, 

unhealthful diets, lack of physical activity, and alcohol use. 432

Estimates of chronic disease costs include the following: 

• More than 90 million Americans have a chronic illness. 

• Chronic diseases account for 70 percent of all deaths in the United States. 

• Medical costs of people with chronic diseases account for more than 75 percent of the 

nation’s $1.4 trillion medical care costs. 

• Chronic diseases account for one-third of the years of life lost before age 65. 

• The direct and indirect costs of diabetes are nearly $132 billion a year. 

• Arthritis annually results in estimated medical care costs of more than $22 billion and 

estimated total costs (medical and lost productivity) of almost $82 billion. 

• The estimated direct and indirect costs associated with smoking exceed $75 billion 

annually. 

• In 2001, approximately $300 billion was spent on all cardiovascular diseases. Over $129 

billion in lost productivity was due to cardiovascular disease. 

• Direct medical costs associated with physical inactivity were nearly $76.6 billion in 

2000.433

Despite annual spending of over $500 billion, half of the people with chronic illnesses do not 

receive appropriate care: 

• 27% of individuals with hypertension (high blood pressure) are adequately treated; 
212 

• 50% of diabetics have controlled blood sugar, lipid, and blood pressure levels; 

• 35% of eligible people with atrial fibrillation receive anticoagulation; 

• 25% of people with depression are receiving adequate treatment; 

• 44% of people with heart failure who experience a hospital stay are readmitted with the 

same problem within six months;434

• 50% of the elderly fail to receive pneumococcal vaccine; and 

• 50% of heart attack victims fail to receive beta-blockers.435

A large study examined 439 indicators of 30 chronic diseases (6,712 people) in the United 

States. Findings showed that people received only 54.9 percent of scientifically indicated care. 

The study concluded that the “defect rate” in the quality of American health care is 

approximately 45 percent. Recommendations of the study were to clarify national goals for 

improvement, change the care delivery processes/systems, change the organizations that deliver 

care, and change the environment of professional medical practice.436 

Another rationale for unmanaged chronic care was found in a study of 6.6 million uninsured 

people living with chronic conditions, with almost half reporting problems paying medical bills. Of 

the chronically ill with medical bill problems, 42 percent went without needed care, 65 percent 

delayed care, and 71 percent failed to get needed prescription drugs, all due to cost concerns.437

Between 2001 and 2003, the proportion of low-income chronically ill people with private 

insurance who spent more than 5 percent of their income on out-of-pocket health care costs grew 

from 28 percent to 42 percent, a 50 percent increase to 2.2 million people. 438

Inequalities in income and education underlie many health disparities in the United States. They 

are intrinsically related and often serve as a proxy for each other. In general, population groups 

that suffer the worst health status and chronic disease morbidity/mortality are those that have the 

highest poverty rates and the least education. In 1996, the total number of whites below the 

poverty level was 12 percent, compared with African Americans (28 percent) and Hispanics 

(29 percent). 439 
213 

According to a Kaiser Family Foundation survey in 2003, people with disabilities use the health 

care system frequently, with more than half (57%) having seen a physician four or more times in 

six months and 18 percent reporting two or more visits to the emergency room in the past six 

months.440 While only 15 percent of the survey respondents say they have no regular doctor, one 

in four reports having trouble finding a doctor who understands his or her disability. When it 

comes to finding a doctor who accepts their insurance, 17 percent of the sample reported having 

had such problems, with higher rates reported by those covered by Medicaid.441 Seventeen 

percent of those with a mental disability said the cost of mental health services is a serious 

problem for them. Prescription drug costs affected 32 percent of the respondents, and 36 percent 

of those taking prescription drugs admitted having skipped doses of the drug, split pills, or gone 

without filling a prescription. Twenty-one percent of the people who use equipment to manage 

their disability say they have serious difficulties paying for it.442 Those with disabilities were less 

likely than the general population to receive preventive services and they received those services 

considerably less frequently than is generally recommended. Less than half of all female 

respondents reported having a mammogram in the past year, and only about a third of all men 

reported having a prostate examination. Only 41 percent reported having a dental examination in 

the past year.443 

Racial and Ethnic Disparities 

Healthy People 2010 cites race and ethnicity differences as a factor in chronic disease mortality 

and morbidity. The U.S. infant mortality rate is down, but the infant death rate among African 

Americans is still more than double that of whites. Heart disease rates are 40 percent higher for 

African Americans than for whites. The death rate for all cancers is 30 percent higher for African 

Americans compared with whites; for prostate cancer, it is more than double than for whites. The 

death rate from HIV/AIDS for African Americans is more than seven times than that for whites. 

Hispanics living in the United States are twice as likely to die from diabetes than non-Hispanic 

whites. Although constituting only 11 percent of the total population in 1996, Hispanics 

accounted for 20 percent of the new cases of tuberculosis. Puerto Ricans have a low infant birthweight rate that is 50 percent higher than that for whites. Hispanics also have higher rates of high 

blood pressure and obesity than non-Hispanic whites.444
214 

By 2050, people of color are expected to make up nearly half of the U.S. population.445 A study 

analyzed data on 419,843 children 17 years and younger from 1979 to 2000 and found 22,758 

with disabilities living in the community.446 Disparities in the prevalence of ADL difficulties 

caused by chronic conditions or disability in the black and white non-Hispanic population were 

found to increase over time. Black children had higher prevalence rates in disability, due in part 

to differences in poverty status. The prevalence of difficulty with ADLs for white children 

increased over time to 47 percent—or 40.7 per 1,000 to 59.7 per 1,000 children in the 

population. For black children, the prevalence increased 77 percent—or 37.9 per 1,000 to 67.1 

per 1,000 children in the population. Black children were 13 percent more likely than white 

children to have a reported activity limitation. 

The prevalence of disability caused by chronic conditions has increased markedly for both black 

and white children. In the past, white children were in the mild chronic category. Researchers 

believe that the higher rates of disability are due, in part, to the increased exposure to poverty, 

racial disparities, lack of education, social opportunities, restricted access to care, increased 

exposure to environmental causes of disability, poor nutrition, and poor quality health care. 

The death rate for 13 to 15 leading causes of death are higher and life expectancy is lower for 

black Americans than for white Americans. Asthma prevalence rates are higher for blacks, and 

there are more premature births and deaths in infancy. 

The Kaiser Family Foundation reported nonelderly uninsured rates by race and ethnicity in 2003: 

13 percent white; 20 percent Asian/Pacific Islander; 21 percent black; 28 percent American 

Indian and Native Alaskan; other, 1.8 percent; and 34 percent Latino.447

Combined, 36 percent of the 53 million Americans with disabilities are black and Latino (U.S. 

Census Bureau 2000). A recent GAO studied confirmed that the black population has higher 

disability rates, lower lifetime earnings, and shorter life expectancy than whites.448 Sixteen 

percent of workers who are black die before the age of 62. Twenty-seventy percent of the Social 

Security Disability Insurance (SSDI) benefits are for the black and Latino population. The study 

found that people of color are receiving more public benefits over a lifetime then they contribute 

in payroll taxes. 449
215 

The demographic profile of individuals receiving both Medicaid and Medicare (7 million dual 

eligibles) shows that 4 million dual eligibles are mostly nonwhite widowed women over the age 

of 65 with multiple chronic disabilities. The dual eligible population is a major factor in the 

current problem, as it represents about 14 percent of the Medicaid population. In FY 2000, of the 

total Medicaid service spending of $168.1 billion, $70.8 billion or 42 percent was attributed to 

dual eligibles in payment for Medicaid covered benefits and in deductibles and coinsurance for 

Medicare services.450 

Summary 

If not addressed, the issues of poverty, lack of insurance, and continued segregation from 

affordable and consistent health care will increase the future needs and costs for LTSS. The 

increase in disability and prevalence in young black and white children cannot be ignored as we 

seek to design LTSS policy for the future. Despite disagreement among researchers, 

policymakers, and the consumer populations as to appropriate methods to define and determine 

which person with a disability has unmet needs, there is a common understanding that the 

number of people in need is growing at a rate that is far beyond current capacity of federal 

programs to respond. 

The next section will provide an overview of the current pathways to LTSS for people with 

disabilities and the change in purpose, services, eligibility, and costs. 
216 

Part IV 

Lowering the Lifeboats 

Medicaid’s expanding purposes, pathways, services, and costs for people with disabilities. 

The grandfather of LTSS is Medicaid,451 whose original purpose was to provide health care and 

nursing home care to very low-income families with dependent children, poor elderly, and 

disabled individuals.452 The concept of LTC was not developed in the early years of Medicaid, 

and nursing home care represented the narrow scope of what it meant to age in America in the 

1960s. Today, there are many additions to the original federal Medicaid purpose that reflect the 

growing trend for beneficiaries to receive services and supports in the home and the community 

and less in the nursing home. In FY 2003, 53.0 million Americans were enrolled in Medicaid, 

including 24.8 million children and 13.6 million aged, blind, or disabled individuals.453 Total 

Medicaid assistance payments for FY 2002, not including administration, were “$246.3 billion 

and the four largest categories were: nursing facilities–19.3% of the total; inpatient services 

(general and mental hospitals)–14.3%; prepaid health care (capitation payments–managed care 

organizations)–13.3%; and prescription drugs–9.5%.”454

The relevance and purpose of LTSS for Americans with disabilities has never been more important 

as the United States addresses its current social and fiscal obligation to meet the growing demands 

of an increased disability and aging population over the next century. The concept of LTSS for 

people with disabilities has evolved over the past 40 years as the expectations and image of people 

with disabilities has changed. Clearly, in order to work, people with lifelong impairments need 

access to affordable nonmedical supports and services, as well as ongoing reliable and affordable 

health care. For aging Americans with disabilities, the same holds true—all need affordable 

supports and services and health care to maintain dignity and independence. 

State Medicaid programs receive their funding from federal Medicaid funds that are not capped 

and rise to meet state Medicaid spending. The match from federal Medicaid depends on a state’s 

per capita income—the higher the income, the lower the match. Nationally, the federal match 

pays for roughly 57 percent of total Medicaid spending.455 Geography plays an important role in 
217 

the uneven distribution of services and supports, because poorer states often have fewer 

resources to spend, larger populations of seniors to serve, and higher disability rates.456 The 

menu of services under Medicaid is listed in state plans. Mandatory services are services that all 

states opting to have a Medicaid program must provide to all of their citizens. Optional services 

are additional and states can limit the number of enrollees and services. 457, 458

Mandatory Medicaid services that all states must cover include the following: hospital care 

(inpatient and outpatient); physician services; laboratory and X-ray services; family planning 

services; health center and rural health clinic services; nurse midwife and nurse practitioner 

services; early and periodic screening, diagnostic, and treatment (EPSDT) services and 

immunizations for children under age 21; nursing home care; and home health services for those 

eligible for nursing home care.459

Optional services that states may choose to cover include the following: basic medical and 

health care services (including prescribed drugs);460 services that support people with disabilities 

to live in their communities, such as personal care services (37 states offer personal care, 2003); 

rehabilitative and or clinic services (29 states offer rehabilitative services, 2003); case 

management services (49 states, 2003); and small group homes that operate as intermediate care 

facilities for persons with mental retardation and developmental disabilities for 15 or fewer 

residents; aides, therapies, and related professional services.461 Services involving short- or longterm institutional stays include inpatient psychiatric hospital services for children and young 

people under age 21; nursing facility services for children and young people under age 21; 

ICF/MRs with more than 15 residents; inpatient hospital services for people age 65 or older with 

mental illness in institutions for mental diseases (IMDs); and nursing facility services for people 

age 65 or older with mental illness in IMDs.462

Medicaid’s purpose and scope and pathways to services grew and by the 1980s there were 

more than 50 distinct population groups wanting to become eligible in states programs.463

Many new eligibility pathways were added to the Medicaid statute, including coverage of 

higher income children and pregnant women as well as other elderly and disabled 

individuals.464 Most recently, the Medicaid statute allowed states to extend benefits to women 
218 

with breast or cervical cancer, uninsured individuals with tuberculosis, immigrants (with 

certain conditions), and certain other working individuals with disabilities.465 Today, more than 

one-third of Medicaid beneficiaries participate in new pathways added since the 1980s; the 

introduction of HCBS waivers and other programs has allowed for insurance coverage of 

vulnerable populations not previously eligible.466 

In a 2005 report to the National Governors Association (NGA), researchers from Health 

Management Associates report that Medicaid’s $300 billion program ($134 billion is for LTC 

programs)467 has mushroomed into a constellation of several programs that include the following: 

• an insurance program for low-income, uninsured children and some parents and pregnant 

women; 

• a program of chronic care and LTC for people with disabilities, mental illness, and lowincome elderly; 

• a supplement to Medicare for low-income seniors and people with disabilities, and a 

support for those awaiting qualification for Medicare on the basis of permanent disability; 

and 

• a source of funding for safety nets for hospitals and community health centers that serve a 

disproportionate share (DHS) of the uninsured. 468 

The report made the distinction that two-thirds of Medicaid spending is for population groups and 

services technically defined as optional and 90 percent of all LTC Medicaid services today fall 

under the optional category.469 States are making cuts to many of the optional services as they 

struggle with the addition of 8.4 million beneficiaries and a one-third increase in program spending 

between 2000 and 2003.470 In 2003, 49 states and the District of Columbia implemented Medicaid 

cuts, according to the Kaiser Commission on Medicaid and the Uninsured, and 32 states revisited 

their initial cuts and made more. Cost-containment measures implemented included the following: 

37 states reduced or froze provider payments to hospitals and nursing homes; 45 states 

implemented prescription drug cost controls; 27 states report that they cut or restricted Medicaid 

eligibility; 25 states reduced benefits; and 17 states increased copayments.471 
219 

The Kaiser Commission Report added that a number of states were planning further cuts to their 

LTC spending and medically needy programs (allows individuals to “spend down” to qualify by 

reducing medical expenses from income) and that any cuts could affect access to health care for 

people with disabilities who rely mainly on Medicaid for a number of important services.472

Reform proposals over the past few years have suggested federal caps for Medicaid spending 

that would eventually phase out optional services; these services would either be institutionalized 

by the states, and the costs absorbed, or they would no longer be offered due to lack of funds. 

Any cuts to the current menu of optional benefits would erode services and supports that are the 

lifeline for millions of low-income people with disabilities. 473, 474

Low-income people with disabilities have benefited from the growing purpose of Medicaid 

and continue to enter the program through a complex mix of mandatory and optional 

pathways for eligibility.475 

The following highlights of the mandatory and optional pathways that are specific to people with 

disabilities under Medicaid provide an overview of the programs, the states involved, and, in 

some instances, the costs. 

Mandatory 

• Supplemental Security Income (SSI): This is a means-tested cash assistance, 

mandatory program for aged, blind, and disabled individuals whose incomes are less 

than 74 percent of the federal poverty level. One exception is the “209(b) option that 

allows states (about 11 states in 2004) to set eligibility standards that are more 

restrictive than current SSI standards,” using SSI income, resource, and disability 

standards in place on January 2, 1972. Individuals who qualify for SSDI may also qualify 

for Medicaid.476

• Qualified Medicare Beneficiary (QMB): This applies to certain low-income individuals 

(<100% of poverty) who have disabilities as defined under SSI and who are eligible for 

Medicare cost-sharing expenses paid by Medicaid. Medicaid pays Medicare Part B 

premiums, deductibles, and coinsurance for Medicare-covered benefits but no Medicaid 
220 

benefits unless individuals qualify for Medicaid through other eligibility pathways (e.g., 

via SSI, medically needy, or the special income rule.) 

• Specified Low-Income Beneficiary: This applies to individuals who are eligible for 

Medicare cost-sharing and whose incomes are less than 100–120 percent of poverty.

Medicaid pays Medicare Part B premium. 

Optional477

• State Supplemental Payment (SSP) benefits with state-only dollars on a monthly basis 

help cover items such as food, shelter, clothing utilities, and other daily necessities. SSI 

applicants must be allowed to deduct medical expenses from their income when 

determining financial eligibly for Medicaid. This is sometimes referred to as “spend 

down” and is critical to working people with disabilities. (In October 2001, 21 states 

reported providing this coverage to people with disabilities and 3 states provided this 

coverage only to people who are blind.)478

• Omnibus Budget Reconciliation Act of 1986 offered states an option for covering 

people whose income exceeds SSI or 209(b) levels up to 100 percent of the federal 

poverty level. In 2003, 20 states and the District of Columbia used this option. 

• Special income rule, the “300 percent” rule, allows states to extend Medicaid to certain 

individuals with incomes too high to qualify for SSI, but who are eligible for nursing 

facility or other institutional care. The Miller Trust allows applicants under this rule to 

place income in excess of the special income level into a trust, making the state the 

beneficiary after death. 

• Medically Needy Program extends Medicaid coverage beyond the aged and people with 

disabilities to families with children who do not meet the applicable income (or resource) 

requirements for other eligibility pathways. States may set their medically need monthly 

limits for a family of a given size at any level up to 133 1/3 percent of the former AFDC 

(now TANF) program standard. (In FY 2003, 35 states and the District of Columbia had 

medically needy programs, and 33 of these programs were extended to people age 65 and 

older and people with disabilities.) 
221 

• Rules for working people with disabilities on SSI are linked to an individual’s ability to 

work and earn income and “engage in substantial gainful activity” (SGA). A person is 

considered able to engage in SGA if his or her earnings exceed $830 per month for 2005; 

$1,380 for people who are blind. Under a waiver called 1619(a), SSI law permits states 

that extend Medicaid to SSI working recipients to receive Medicaid even when they are 

working above the SGA level. As an individual’s earnings increase, his or her cash 

benefits are gradually reduced through a special income disregard formula.479 

• Ticket to Work and Work Incentives Improvement Act of 1999 (TWIIA) allows states to 

raise their Medicaid income and asset limits for individuals with disabilities who work. 

States may require that working individuals with disabilities “buy-in” to the Medicaid 

program by sharing in the costs of their coverage. Medicaid buy-in allows states to 

expand Medicaid coverage to working individuals with disabilities between the ages of 

16 and 34, with incomes and resources as defined by the state, and allows states to 

impose premiums and other cost-sharing on individuals who qualify (in 2002, 25 

states).480 Under TWIIA, the medical improvement group option targets individuals with 

cyclical or periodic disabilities who are working at the federal minimum wage at least 40 

hours a month or who meet other definitions approved by HHS. Three states currently 

participate in this option: Connecticut, Indiana, and Missouri.481 

• Katie Beckett Option allows children to stay in their homes who would otherwise be 

institutionalized, and parents’ income are not attributed (21 states have this option). Tax 

Equity and Fiscal Responsibility Act 1982. 

• Home- and Community-Based Service Waivers allow states, through a waiver process, 

to provide at-risk individuals with services at home (49 states use HCBS waivers, 

introduced in 1981 and currently serving almost 1 million Americans.) The federal HCBS 

waiver authorized by Congress in 1981 is the principal Medicaid program that 

underwrites LTSS for the MR/DD population in the United States. 

Federal spending for HCBS grew for MR/DD from $1.2 billion in 1982 to $7.2 billion in 

2002. The average state ICF/MR cost in 2002 was $134,619 per resident per year, 

compared with the HCBS cost per participant of $35,215.482 The waiver provides the 

financing mechanism for states to expand their menu of community supports that 
222 

promote economic independence and self-sufficiency for people with MR/DD. State data 

revealed that by 2002 all states but Mississippi were spending more for community 

services than for institutional services.483

In 2002, national spending for MR/DD was $34.6 billion, and combined individual and 

family support spending of $4.4 billion constituted 13 percent of nationwide funding; 53 

percent was allotted for supported living and personal assistance; 32 percent for family 

support, and the remaining 15 percent funded supported employment activities.484 

For FY 2003, HCBS increased 9.3 percent from $16.9 billion to $18.6 billion.485 Threefourths of HCBS waivers (nearly $14.0 billion) are used to purchase LTSS for people 

with MR/DD.486

The other 25 percent of waiver expenditures were for people with physical disabilities 

and older people and totaled $4.2 billion in FY 2003: Brain injuries accounted for $163 

million (a 59% increased from FY 2002); HIV or AIDS and technology-dependent or 

medically fragile people accounted for an additional 0.9 percent of all waiver spending 

(about $167 million in FY 2003). There were three small waiver programs, which served 

individuals with a primary diagnosis of mental illness, accounting for 0.2 percent of 

HCBS waiver expenditures.487

• Family Support Services for MR/DD consist of any community-based services 

administered or financed by the state MR/DD agency that provide “vouchers, direct 

cash payments to families, reimbursement, or direct payments to service providers 

which the state agency identified as family support.”488 Examples of family supports 

are “cash subsidy payments, respite care, family counseling, architectural adaptation of 

the home, in-home training, sibling support programs, education and behavior 

management services, and the purchase of specialized equipment.”489 All 50 states 

reported a family support initiative in 2002 (the District of Columbia did not provide a 

family support initiative). 

• Supported Employment began in the early 1980s as long-term support for workers with 

developmental disabilities to enhance and supplement the states’ vocational rehabilitation 

services already in place. Supported employment refers to “small business enterprise, 
223 

work crews, enclaves within industry and individual job placements.”490 The research in 

this field overwhelmingly shows that people with developmental disabilities want paid 

jobs in the community. In 2002, 24 percent of all vocational and day program participants 

in the United States worked in supported or competitive employment and the other 76 

percent received services in sheltered employment, day activity, or day habilitation 

programs. States spent $662,768,320 in 2002 on supported employment for 112,417 

MR/DD participants.491

HCBS waiver spending for supported employment grew since the Balanced Budget Act 

of 1997 removed the requirement that HCBS-supported employment participants be 

previously institutionalized. 

• Supported Living for MR/DD is “housing in which individuals with MR/DD choose 

to live and ownership is by someone other than the support provider and the 

individual has an individualized support plan.” Forty-seven states reported providing 

supported living services to 95,223 individuals in 2002, at a cost of $2.0 billion. The 

national average for supported living was $20,643, with a range of $2,196 in 

Mississippi to $124,544 in Oklahoma.492

• Personal Assistance is “support provided to people living in their own homes financed 

by either state funds or federal/state Medicaid funds and defined by the state as 

‘personal assistance.’”493 

In 2002, for MR/DD, 22 states had initiatives with combined supported living and personal 

assistance spending of $2.3 billion, which constituted 7 percent of the total MR/DD 

spending. Expenditure data ranged from $844 in West Virginia to $89,354 in Oklahoma, 

with a national average of $14,146.494 The Federal Government has encouraged supported 

living through legislation: The Medicaid Community Supported Living Arrangement 

(CSLA) legislation enacted in 1990 endorsed supported living principles and provided 

funding for eight states to establish statewide supported living initiatives. 

Medicaid spending for acute care and LTC combined in 2002 was $91,889 billion for the 

blind/disabled category compared with $51,733 billion for the aged, $31,247 billion for children, 

$23,493 billion for adults, and $4,282 billion for foster care children.495 Spending for the aged 
224 

was higher in two service categories compared with the same two service categories for the 

blind/disabled: (1) LTSS spending for the aged was $35,242 billion versus $29,554 billion for 

the blind/disabled; (2) nursing facility services spending for the aged was $30,002 billion versus 

$8,770 billion for the blind/disabled. Personal support services were higher for the 

blind/disabled—$8,262 billion compared with $3,505 billion for the aged.496 The aged and 

blind/disabled categories combined represent 15 percent of the total Medicaid population. 

Summary 

The growth of eligibility pathways for Medicaid beneficiaries with disabilities and the rising 

costs reflect the intense needs of its major beneficiaries: people with mental retardation and 

developmental disabilities. Reform efforts to date have been incremental and represent the path 

of least resistance. As the country ages and more people enter Medicaid, it is unclear how the 

current fiscal safety net for the MR/DD population can be sustained by states that will be 

addressing the additional costs of prescription drug benefits as well.497

The changes to the Medicaid program have become the path of least resistance for incremental 

reform. Part V will describe the many challenges in forecasting future demographic trends and 

gaps in services and supports.
225 

Public solutions that focus on limiting 

public obligation for LTC financing do 

our nation a disservice. 

Dr. Judy Feder, April, 19, 2005

Testimony U.S. Congress on LTC 

Part V 

Approaching the Iceberg 

Economic and financial challenges to reform. 

Global Challenges 

The current agenda for 21st century Americans with disabilities must include a clear examination 

of how aging (both at home and abroad) will affect the economic well-being of people with 

disabilities to live fully independent and meaningful 

lives. A 2005 report by McKinsey & Company found 

that aging will cause a global wealth shortfall over the 

next two decades and that growth in household 

financial wealth will slow by more than two-thirds 

(from 4.5 percent historically to 1.3 percent going 

forward), with the United States the largest source of the global shortfall ($19 trillion) because of 

its dominant share of global wealth.498 Left unchecked, this trend “could significantly reduce 

future economic and health care needs of aging populations.”499 

The staff at the International Monetary Fund in January 2004 reported that the growing 

imbalance between what the U.S. Government has promised to pay in future benefits and its 

expected revenues would require “an immediate and permanent 60 percent hike in the federal 

income tax, or a 50 percent cut in Social Security and Medicare benefits.”500 Many federal 

reports confirm the growing fiscal insolvency of these programs, using different economic 

models and projections of costs, and all agree that the current growth is unsustainable.501, 502

America is also highly dependent on foreign capital and is currently importing far more goods 

and services than it is exporting; it is becoming more indebted to foreign countries.503 Western 

Europe and Japan are aging more rapidly than the United States and may need additional capital 

to finance their own growing deficits. The growing global debt due to the war on terror and other 

factors combined with the rising costs for health care and the growing number of seniors without 
226 

sufficient retirement income to cover their LTC responsibilities place major pressure on current 

federal programs like Medicaid. 

In his forward to Jeffrey Sachs’ book The End of Poverty—Economic Possibilities for Our Time, 

Bono wrote that America “can be the generation that no longer accepts that an accident of 

latitude determines whether a child lives or dies—but will we be that generation?” Sachs’ 

premise is that we can end poverty in the world in this generation if we choose, and he lays out 

an extraordinary plan to do so. America has its own poverty right now and, although it is much 

unlike the extreme poverty Bono and Sachs talk about, these Americans are in need of their own 

champions and a plan. People with disabilities are the poorest of the poor—among working 

adults, “nearly 40% of people with disabilities have family incomes less than 200% of poverty 

compared to 22% of the non-disabled.”504

As discussed in chapter 1, the United States is a noncontender in the life expectancy race 

compared with other countries that spend much less per capita. The World Health Organization’s 

(WHO) Disability-Adjusted Life Expectancy measure is used to examine health data in every 

nation in the world, starting with life expectancy then subtracting years of ill health after 

weighting the level and duration of each disability.505 In the 2000 survey, the United States came 

in 24th for life expectancy at 70 years. The survey found that Americans die earlier and spend 

more time disabled than people in most other industrialized countries. One WHO executive said 

that “portions of our population are very poor and suffer from the poor health more characteristic 

of a poor developing country rather than a rich industrialized one.”506

The disparities in health outcomes and disability are increasing for Americans under age 65 

because of poverty, rising rates of obesity and diabetes, and increased longevity for individuals 

with lifelong disabilities, such as Down syndrome and mental retardation. The disparity in 

poverty rates is evident among seniors: 8.3 percent of whites live in poverty compared with 22.7 

percent of black seniors and 20.4 percent of Hispanic seniors. The highest poverty rate (58.8%) 

is experienced by older Latino women who live alone.507 

Healthy People 2010 estimated that direct medical and indirect annual costs associated with 

disability are more than $300 billion, or 4 percent of the gross domestic product (GDP). This 
227 

total cost includes $160 billion in medical care expenditures (1994 dollars) and lost productivity 

approaching $155 billion.508 

Federal Roles in Financing LTSS 

Medicare and Medicaid programs are the fastest growing entitlement programs and together 

account for 62.5 percent of the $151.2 billion spent on LTSS in 2001.509 Medicaid’s federal share 

as a percentage of GDP will grow from today’s 1.5 percent to 2.6 percent in 2035 and 4.8 

percent in 2080.510 Medicare’s federal share will triple as a share of GDP from 2.7 percent to 7.5 

percent by 2035 and reach 13.8 percent in 2080. Social Security spending will grow as a federal 

share of the GDP from 4.3 percent today to 6.3 percent in 2035 and will reach 6.4 percent in 

2080. Combined, all three programs are projected to double by 2035.511 If the current federal 

health and retirement programs continue to grow at these rates, by 2040 federal revenues will be 

adequate to pay little more than interest on the federal debt.512 By 2010, the share of the 

population age 65 and older will begin to climb, with profound implications: Social Security and 

Medicare (the Hospital Insurance portion) are pay-as-you-go programs—as the ratio of workers 

to retirees declines, so will the income for these programs.513

The GAO report also found that the prevalence of disability will go up, although it has had a 

steady decline over the past 16 years (it was noted earlier that the reasons may be environmental 

rather then health-related.) In 2000, one in five adults had unmet needs for LTSS. That need is 

expected to double by 2020. 

States do not have the fiscal capacity to assume the primary role for their aging and disability 

populations without significant federal participation. The following data describes how integral 

the federal role is in partnership with states to finance current LTSS: 

• Of the $1.24 trillion spent on all U.S. personal health care services in 2001, $151.2 

billion (12 percent) was spent on LTSS.514

• Total Medicaid Spending for acute care and LTSS in 2003 was $276.1 billion and 

exceeded net outlays for Medicare.515 The federal share for Medicaid in 2003 was $161.0. 
228 

• Total spending for LTSS was $150.2 billion in 2001; Medicaid financed 48 percent, or 

$73.1 billion, of the federal share, with 64.3 percent covering care in nursing facilities 

and ICF/MRs and the balance spent on HCBS. The national average Medicaid nursing 

home payment is $97 per day or $2,942 per month. There is variation by state; for 

example, Florida has an average monthly Medicaid nursing home cost of $3,496 

compared with Iowa’s average monthly cost of $2,275. The average U.S. annual cost of 

assisted living is $28,548.516

• Medicare financed 18.0 percent, or $33 billion, of total LTC expenditures in 2003, with 

54 percent for skilled nursing facility care and the balance for home health care.517 

• Families and individuals financed 20 percent, or $38 billion, of out-of-pocket 

expenditures in 2003, mostly for nursing home care (82%).518 In the early 1960s, nearly 

half of health care spending was financed by individuals, with the rest provided by public 

programs and health insurance.519 By 2002, individual out-of-pocket spending at the 

point of service was estimated to be 14 percent.520

• Donated care represented 36 percent of LTSS care in 2004, at a cost estimated between 

$103 and $218 billion.521 Using the $218 billion estimate, this represented approximately 

$24,000 per senior. 

• Private LTC insurance represented 9.6 percent ($16 billion) of all U.S. spending on 

LTC insurance in 2003, with 52 percent for nursing home care and the balance for home 

health care.522

• Other federal programs provided 5.9 percent, or $151.2 billion, for 2001 and included 

the Older Americans Act and the Social Services Block Grant (SSBG) program (Title XX 

of the Social Security Act), both of which fund a variety of community-based services. In 

2001, the Older Americans Act was amended to authorize the National Family Caregiver 

Support Program (NFCSP), which offers assistance to family caregivers of the frail 

elderly. Some states supplement SSI to help low-income individuals pay for HCBS or to 

reside in nonmedical residential settings such as board and care homes. Certain programs 

under the Rehabilitation Act of 1973 provide a range of supportive services to people 

with disabilities. The Department of Veteran Affairs (VA) provides a wide range of LTC 
229 

services to the nation’s veterans that include nursing home, domiciliary, home health 

care, and assistance to caregivers. Tax benefits for LTC include a limited deduction for 

LTC expenses and insurance premiums, tax-exempt insurance benefits, and the 

dependent care tax credit.523

GAO, in “21st Century Challenges: Reexamining the Base of the Federal Government,” 

provided policymakers and government agencies with a compendium of areas considered ripe for 

review and reexamination, along with a framework for evaluating and identifying the issues and 

solutions. Question 4 of the GAO framework concerns affordability and cost-effectiveness. If we 

inserted LTSS into the formula, this is how the questions would look:524

• Are LTSS affordable and financially sustainable over the long term, given known cost 

trends, risks, and future fiscal imbalances? 

• Is LTSS using the most cost-effective or net beneficial approaches when compared to 

other tools and program designs? 

• What would be the likely consequences of eliminating the program, policy, function, or 

activity? 

• What would be the likely implications if its total funding is cut by 25 percent? 

It is clear from the research that the current funding mechanisms to support LTSS (primarily 

coming from Medicaid) are exceeding states’ capacity and still not providing many of the 

services needed for a growing younger and older population that is not MR/DD or on Medicaid. 

In addition to the patchwork system of publicly financed LTSS, private LTC insurance is an 

alternative financing strategy. 

Medicaid and Private Insurance 

The sources for individual health care coverage for the elderly and people with disabilities are 

Medicare, Medicaid, and private insurance. All health care coverage plans have certain covered 

services and gaps in coverage. The type of health care coverage determines access to the kind of 
230 

care and services and supports people with a disability over and under age 65 receive. Each 

health care coverage plan covers different services and different populations. 

Medicaid provides coverage for most medical services, mental health care, LTC, and 

prescription drugs. The single benefit used by the largest number of Medicaid recipients is 

prescription drugs. In FY 2002, 24.4 million Medicaid beneficiaries used this benefit, followed 

by physician services, which were used by 22.1 million recipients.525 (The prescription drug 

benefit will shift to Medicare in 2006, and it is unclear what the impact of this change will be for 

people with disabilities, particularly those receiving both Medicare and Medicaid.)526 

Fourteen percent of the U.S. population (40.8 million) used Medicaid and the State Children’s 

Health Insurance Program (SCHIP) in 2001 as their primary source of health insurance.527

Enrollees are described as “heterogeneous” in terms of the duration of their enrollment and the 

extent to which they rely on Medicaid and SCHIP as their sole source of coverage. 

The CRS described three distinct groups using Medicaid and SCHIP in 2001:528 

• 18.8 million relied solely on both Medicaid and SCHIP for the entire year; 69 percent 

were children under age 19 and none were aged. 

• 12.3 million used both Medicaid and SCHIP for part of the year and were uninsured for 

two-thirds of the months they spent without Medicaid/SCHIP. Job-based health insurance 

covered nearly all of the remaining months; 1.8 million experienced a loss of job-based 

coverage during the year, and 61 percent were linked to policyholders (spouse or parent) 

who experienced substantial disruption in their employment and insurance status. An 

additional 14 percent were linked to policyholders who were employed but experienced a 

drop in wages.529

• 9.7 million never relied solely on Medicaid during the year and had other sources of 

coverage; under 23 percent were children, but nearly half (46%) were aged. 530 

The report highlights the common theme of poverty across these three groups, as well as 

differences by race. Thomas Shapiro found that two out of every five American families do not 
231 

have enough money to live at the poverty line for three months and defines this phenomenon as 

being “asset poor.”531 Fifty-four percent of black families are asset poor compared with 26 

percent of white families. It is estimated that only 7 percent of American seniors have enough 

resources for one year of nursing home care, 532 and that cost of care is 20 percent higher in 

urban areas than in rural areas. In New York, California, and Massachusetts, the cost of urban 

care was found to be 40 percent higher than in nonurban areas.533 

The demographics of the Medicaid insured population, when broken into the three categories 

above, suggest a high vulnerability to rising health care costs and dependence on family 

members (69% of 12.8 million children) for coverage. The growth in spending and enrollment is 

due in part to downturns in the economy; the increase in health premiums (in 2001, job-based 

health insurance premiums increased by 10.9% while workers’ earnings and overall inflation 

increased by less than half that amount); and the availability of expanded covered under public 

programs like Medicaid/SCHIP.534 

The Economic and Social Research Institute found that nearly 49 percent of the uninsured are 

either self-employed or work at firms with fewer than 25 workers or for companies with fewer 

than 10 employees, of which only 52 percent offer insurance.535 Over 50 percent of low-income 

employees of small firms with incomes below 200 percent of the federal poverty level are 

uninsured.536 A 1999 report of the President’s Advisory Commission, “Consumer Protection and 

Quality in the Health Care Industry,” found that 600,000 of the 2 million health care 

paraprofessionals (nursing aides, home health aides, and home care aides) do not work full time 

and receive benefits and report wages below the poverty line.537 (For an in-depth review, see 

“Supply and Demand Puzzle” in this section.) 

Private Insurance 

Over 6 million Americans own LTC insurance (about 10% of the U.S. population) and 50 

percent of the claims paid are for Alzheimer’s and other forms of dementia.538 Genworth 

Financials (which provides LTC to 15 million customers in 22 countries) reports that cognitive 

claims since 1993 have increased 35 percent and that the annual dollar amount paid out has 

experienced a twelvefold increase, reaching approximately $120 million for cognitive care 
232 

claims in 2003.539 The allocation of cognitive claims was noted as moving from nursing homes 

to home health care and assisted living facilities. 

Thomas Stinson, CEO of Genworth Financials, has more than 30 years of experience in the LTC 

insurance business. In his testimony before Congress, he reported that the average age of people 

buying LTC insurance has shifted dramatically from postretirement to preretirement—from age 

69 to age 59.540 Ten percent of those age 65 and older entering nursing homes will be there for 

five years or more, with average costs for 2004 at $179 per day; assisted living facilities cost $79 

per day; and certified home care is about $20 per hour. The top 13 companies providing LTC 

insurance had paid out $8 billion in claims through 2002 and offer policies to individuals ranging 

in age from 18 to 99; they provide a $50 to $600 per day benefit.541 Stinson confirmed what 

many studies have reported (see chapter 1, public opinion): that many Americans underestimate 

the financial risks involved with aging and do not understand the limits of Medicare. The focus 

of Stinson’s testimony to Congress was on the aging population and not the specific needs of 

people with disabilities under the age of 65. However, the fact that 50 percent of LTC policies 

are covering cognitive claims suggests that more research is needed on the type of insurance 

coverage required by people under age 65.

State Partnerships for Long-Term Care and Medicaid 

The National Association of Health Underwriters (NAHU) was represented at the April 19, 

2005, hearing of the U.S. House of Representatives Ways and Means Committee on Long-Term 

Care; association representatives testified that 8 out of 10 people in America are not insured for 

the catastrophic expense of nursing home care (currently estimated at $70,000 annually).542 Janet 

Trautwein of NAHU testified that the LTC partnership programs currently being offered in 

several states provide incentives for individuals who purchase private insurance and exhaust their 

benefits provided by the LTC insurance partnership policy to receive Medicaid as the payer for 

their LTC expenses. Policyholders are allowed to keep personal assets equal to the benefits paid 

by the original LTC policy. Mark Meiners also testified at this hearing that the partnership 

program can save Medicaid costs and that projected potential savings by 2017–2020 would 

produce a 7 percentage point decline in Medicaid’s share of the LTC bill.543 Current savings are 

in the range of $8 to $10 million.544
233 

Disability Insurance 

The lack of disability insurance was described as the “missing piece in the financial security 

puzzle” for Americans with disabilities and is an indication that the public underestimates the 

risk of having a disability.545 The Task Force for the Disability Chart Book found the following: 

• The risk of a disability during a worker’s career is significant, as are the consequences to 

the individual and family financial security. (The increase in SSDI beneficiaries confirms 

this first finding.)546, 547 

• The risk of disability is higher than premature death and is higher for older people than 

younger people, and females are more likely to become disabled than males. The 

majority of disabilities are caused by illnesses and not serious accidents (p. 4). 

• Females have the highest risk of disability at age 35, at 29 percent, compared with a 20 

percent risk for males (p. 7). 

• The financial risk of disability is great and stops income and prevents retirement savings. 

A 45-year-old, currently earning $50,000 per year and suffering a permanent disability, 

could lose $1,000,000 in future earnings (p. 13). 

• The public may overestimate the help that is available from public disability insurance 

programs (SSDI and other state-mandated, short-term programs provide a safety net but 

do not ensure financial security). Workers compensation benefits cover only disabilities 

caused by injury or illness arising on the job—only an estimated 4 percent of long-term 

disabilities. The SSDI definition for disability excludes many workers who qualify for 

private disability benefits (p. 29).548

Supply and Demand Puzzle 

The issues of identification of current and projected future costs of an LTSS system are further 

complicated by the role of informal caregiving. There are no agreed-upon definitions for 

caregivers for the elderly and people with disabilities, especially when they are family and 

friends. Little consensus exists among the states about the recognition of families as a central 

component of the LTC system, such as in state statutes, in other state policies, or in the provision 
234 

of other home- and community-based care programs and services. Providing explicit support to 

family and friends of frail elders represents a paradigm shift. Viewing the family caregiver as a 

“consumer” or “client” is a relatively new concept for many state agencies.549

Many policymakers and states disagree about whether family and informal caregivers should 

be considered clients or consumers in the LTC system and whether they should have access to 

their own support services.550 Yet, according to the Kaiser Family Foundation Survey, only 8 

percent of people with disabilities turn to professional sources for assistance, such as home 

health aides and personal assistants. Two-thirds rely on family members and friends as an 

important source of support.551

According the National Alliance for Caregiving and AARP, 44.4 million American caregivers 

age 18 and older provide unpaid care to an adult age 18 or older. Six out of 10 of those 

caregivers either work or have worked while providing care. Eighty-three percent are caring for a 

relative. Most of the caregivers (69%) are women. Most of the people receiving caregiving are 

women (65%) who are widowed (42%). Most care recipients are 50 years old or older (80%) and 

live in their own home. The typical caregiver is a 46-year-old woman who has at least some 

college experience and provides unpaid care to a widowed woman age 50 or older.552 

The middle-aged women who currently provide much of the care, both formally and informally, 

will decrease in relative number, creating a situation in which the demand for LTC workers 

could substantially outstrip the supply.553

The most frequently reported unmet needs for caregivers are finding time for themselves (35%), 

managing emotional and physical stress (29%), and balancing work and family responsibilities 

(29%). To cope, 73 percent of caregivers say praying helps them with the caregiving stress, 61 

percent talk with or seek advice from friends and relatives, and 44 percent say they read about 

caregiving in books.554

Family members and other informal caregivers, such as friends and neighbors, are the backbone 

of the LTC system, providing largely unpaid assistance to loved ones with chronic illnesses and 

disabilities. Without question, the economic value of family care is staggering. In 1998, HHS 
235 

estimated that replacing donated LTC services for seniors with professional care would cost 

between $50 billion and $103 billion. Another recent analysis estimated the value of informal 

care of impaired people of all ages in 1997—measuring it as forgone wages of the caregiver—at 

$196 billion.555 At an estimated value of $257 billion nationally (in 2000 dollars), informal 

caregiving greatly surpasses the costs associated with home health care ($32 billion) and nursing 

home care ($92 billion).556

The Older Americans Act of 2000 authorized NFCSP as a national program with the following 

support to caregivers: 

• information to caregivers about available services; 

• assistance to caregivers in gaining access to supportive services; 

• individual counseling, support groups, and caregiving training to assist caregivers in 

making decisions and solving problems related to their role; 

• respite care to temporarily relieve caregivers from their responsibilities; and 

• supplemental services, on a limited basis, to complement care provided by caregivers.557

While this legislation offers new resources for caregivers, more research is needed to learn more 

about the programs that some states have designed and their impact and cost savings. 

While caregiving by family and friends is ancient, it is not fully understood. The term 

“caregiver” needs to be defined. Caregiver prevalence studies should use the same definitions 

and parameters to gather better information. Issues such as caregiver training, caregiver burden 

and stress, negative impact on the physical health of caregivers, services they provide, and the 

economic impact of caregiving, especially the impact on work, need to be understood.558

Outcomes and costs for caregiving and quality measures for the safety and health of the care 

recipient would address the value and gaps in caregiving. 
236 

Workforce Shortage and Recruitment and Retention Challenges 

The demand for LTSS is growing. The cost is growing. The supply of paid workers, skilled and 

unskilled, to respond to the market demand is declining. The challenge for policymakers is not 

only to focus on workforce shortages and related costs of education, training, wages, and benefits 

but also to solve the puzzle of the role and relationship of informal caregiving to paid providers. 

Who is going to meet the growing demand for providing services and supports as informal 

caregiving decreases? 

The workforce shortage is both a supply and demand problem. As the aging of the baby boom 

generation increases seniors’ share of the population from 12.6 percent in 2000 to 20.5 percent in 

2040, the demand for LTC services is virtually certain to increase. The population’s aging will 

also cause a decline in the share of the population that is of a working age. In 2000, the ratio of 

people of working age to people of retirement age was 4.7. In 2040, the ratio is forecast to fall to 

2.6.559 There will be a shortage of workers and taxpayers, along with an increasing demand for 

health care services. It is not simply a supply-and-demand issue. Other issues affect the shortage, 

such as wages and the job itself. 

As with most health care professions, there is a shortage of nurses and home care workers for 

LTC. As of 2002, the health care workforce included nearly 2.2 million registered nurses (RNs), 

about 700,000 licensed practical nurses (LPNs), and about 3.1 million paraprofessional workers, 

including nurse home health, personal care aides, and home care aides. The Health Resources 

and Services Administration forecast projects that the demand for RNs and LPNs in nursing 

homes will increase by 44.2 percent and 47.9 percent, respectively, between 2000 and 2020. The 

demand for RNs and LPNs in home health agencies is expected to increase by 43.8 percent and 

53.8 percent, respectively, during the same period. According to the Bureau of Labor Statistics 

(BLS), jobs for nurses aides are also expected to grow by 23.8 percent, while the employment of 

personal care and home health aides could grow at a much more rapid rate of 58.1 percent 

between 1998 and 2008.560 These statistics do not count the “gray market”—workers hired and 

supervised by consumers who pay for their own care, whose numbers are thought to be 

substantial.561 This sector of paraprofessionals in the home—the home care worker—is 
237 

consistently in BLS estimates of the top 20 fastest and largest job growth occupations. Over a 

half million new home care jobs will be created by 2012.562 

This shortage in workers is occurring as the baby boomers age and the incidence of chronic 

disease is on the rise. The basic argument is that the aging of the baby boomers over the next few 

decades, along with improvements in longevity generated by medical advances, will cause a 

dramatic increase in the elderly population requiring LTC.563 Government estimates suggest that 

the number of people using paid LTC services—in a nursing facility, alternative residential care 

facility such as assisted living, or at home—could nearly double, increasing from 15 million in 

2000 to 27 million in 2050.564 In the future, the labor force, on the whole, will not be growing as 

fast as either the LTC population or the population at greatest risk of needing LTC (i.e., people 

age 85 or older).565

Economists generally believe that market forces tend to eliminate shortages in the labor market 

(or elsewhere), especially with the passage of time. If wages and benefits are free to adjust, 

worker shortages in the short term should lead to higher compensation levels in a given market, 

which then should attract workers to that field and thereby ease the shortage. However, a number 

of factors might limit the speed of any such adjustment.566 Factors may include competition for 

these workers, content of the job, conditions of work, and the ability to increase wages. 

In particular, the shortage in direct care workers (paraprofessionals, nursing assistants, personal 

and home care aides, and home health aides) will have the greatest impact on community and 

home-based LTSS. The profile of the direct care worker is a woman who is 37 to 41 years old. 

Slightly over half of the direct care workers are white and non-Hispanic. About one-third are 

African American and the rest are Hispanic or other ethnicities. One-fourth of direct care 

workers are unmarried and living with children, compared with 11 percent of the total U.S. 

workforce. Two-fifths (41%) have completed their formal education with a high school diploma 

or general education diploma (GED). Another 38 percent have attended college.567

There is a shortage of direct care workers. Direct care work is unattractive in the LTC and health 

care sectors, and in the overall workforce, for many reasons. The content of the job and conditions 

of work may be one factor. In particular, care for the elderly may not be considered appropriate or 
238 

appealing work for other potential labor pools, such as less-skilled men, and stressful work 

conditions might limit other potential candidates as well.568 Another indicator is the high staff 

turnover in the LTC sector. Studies have found that the turnover rate in nursing facilities is nearly 

100 percent for nursing aides. Home care agencies have annual turnover rates between 40 percent 

and 60 percent.569 Possible explanations for the high turnover rates among nursing personnel in the 

LTC sector include relatively low wages, limited or no benefits, and greater physical and emotional 

exertion than is required in many other jobs in the health care sector.570

The wages are low. In 2003, the median hourly wage for all direct care workers was $9.20, 

significantly less than the median wage of $13.53 for all U.S. workers. Almost a fifth of direct 

care workers—far more than the national average of 12 percent to 13 percent—earn incomes 

below the poverty level, and 30 to 35 percent of all nursing home and home health aides who are 

single parents receive food stamps.571 The financial ability for this sector to generate higher 

wages and benefits will be limited by the constraints on third-party payers, such as Medicaid and 

Medicare, which are and will continue to be pressured to reduce costs under the weight of a 

growing retirement population.572 

There is little access to health benefits for the direct care worker, because the work is part time or 

the worker is self-employed. Home health aides average 29.2 hours per week, and nursing aides, 

orderlies, and attendants average 32 hours.573 Because the work is part time, the worker often has 

to patch together a few jobs to make ends meet. In 1999, one-third (32.1%) of home care aides 

and one-fourth (25.2%) of certified nursing assistants in nursing homes had no health insurance, 

compared with one-sixth (16%) of all U.S. workers.574

The elasticity of the labor supply reflects the responsiveness of workers in any sector to the 

wages offered in that sector. A fairly elastic labor supply indicates that workers will respond in 

large numbers to higher wages.575 Again, wages will not be the only factor that affects the 

transition of workers to LTC. If the willingness of people to work in LTSS depends heavily on 

the extent to which they enjoy providing care to the elderly; or if less-skilled men and other 

demographic groups (such as youth or the near-elderly) are not amenable to providing such work 
239 

or view it as less prestigious or as a low-status occupation, the elasticity of the labor market for 

this sector will be relatively low.576 

The following are other variables that shift the labor supply and that vary from state to state: 

• Labor market demographics: This includes the population from which the LTC workers 

is typically drawn. The share of the population composed of less-educated (with a high 

school diploma or less) middle-aged women and/or immigrants. 

• Unemployment rate: The local unemployment rate should also affect the relative supply 

to the LTC industry, as it reflects the amount of competition available from other lowwage occupations. 

• Low-wage worker policies: Polices to improve the wages and benefits of low-wage 

workers overall should have some positive effects on the labor supply to the LTC sector. 

These policies might include state minimum wages above the national level, federal and 

state-earned income tax credits, or a generous SCHIP. 

• Long-term support worker policies: Regulations might limit the supply of workers by 

imposing training or other requirements that make it harder to generate LTC workers. 

On the other hand, innovative recruitment or training programs could have more 

positive effects. 

• Wages and employment in competing occupations/industries: Wages in competing 

sectors, such as hospitality and child care, are important for determining the potential 

willingness of workers to enter the long-term services sector from these other sectors.577 

The issues for direct care workers and the labor supply must be understood on the national, state, 

and local levels. Among the top issues to be addressed are salary, full-time work, and benefits, 

balanced with long-term service funding for Medicare and Medicaid. For the success of 

consumer-directed programs and other Medicaid waiver programs, the workforce issues and 

shortages need to be resolved. 
240 

Summary 

The documented growing demand for LTSS in the home and community raise new questions for 

researchers and policymakers about current costs and projected future costs for the under- and 

over-65 populations with disabilities. The cost conundrum is further exacerbated by four 

important factors. 

First, insufficient data is available on LTSS costs for individuals across the spectrum of 

disabilities under age 65. Second, there is insufficient data on the costs of responding to a 

decreasing population of informal caregivers and the development of an appropriately trained 

and paid workforce. Third, there is a lack of agreement on the role and responsibility of the 

government versus individuals and families to cover the costs of current and future LTSS needs. 

Without research to explore different public and private cost-sharing scenarios, particularly for 

the under-65 population with disabilities, it would be difficult to explore the relationship of 

public financing and private insurance. 

The fourth and final factor transcends the specific challenges of development of a responsive 

LTSS system for the targeted population. The global economic picture and changing 

demographics, in addition to the current federal budget deficit, raise questions about the political 

will to maintain current entitlements, let alone craft a new system. 
241 

Part VI 

Reviewing the Passenger Manifest 

Case studies of the costs and services and supports for six individuals with disabilities: 2005–2030.

There is no better way to identify the reality of the environment we are attempting to research 

than by referring to the human element. The following case studies present information about the 

lives of six individuals with disabilities, with information on services accessed and costs (when 

available) associated with their needs on an annual basis and projected 25 years out. Four of the 

cases present information on physical and cognitive disabilities. Given the predictions regarding 

an aging population, one case is based on a chronic medical condition (diabetes) and another on 

Alzheimer’s. No two case studies were completed in the same state. 

Crystal’s Story 

General Description 

Crystal is a one-year-old girl living with her single, 20-year-old mother, Ruth, in Vermont. 

Crystal was born prematurely at 27 weeks. Crystal and her mother had home health nurse visits 

because she was at high risk due to prematurity. Crystal’s mother and nurse had noticed that 

Crystal was not developing motor skills normally and had a preference for one side. She was 

diagnosed with cerebral palsy (CP) at six months. She is now being evaluated for seizures 

because she has periods of staring. 

Crystal is tiny and below normal for weight and height. She is withdrawn and quiet most of the 

time, although she smiles at Ruth. Crystal’s left arm muscles are stiff (spastic) and she does not 

sit up on her own. She tries to roll over in one direction, although she does not crawl. Crystal 

coos and makes noises, is bottle-fed, and does well with pureed baby food. She is gaining weight 

and, like all babies, likes being in her carriage and going for rides. 

Crystal and Ruth live in a rented mobile home in rural southern Vermont. The town they live in 

is 40 minutes from the nearest hospital or city. Ruth worked as a waitress during her pregnancy. 

She has not returned to work since Crystal was born because of Crystal’s medical problems and 
242 

not having adequate day care. Ruth and Crystal are now on public assistance. Ruth’s mother, 

Jean, lives in the same area and works full time as a secretary for a cement company. She visits 

Ruth frequently. Crystal’s father is not involved with the family. 

Diagnosis and Level of Functioning 

CP is a developmental disability that appears early in life, manifested by difficult control of 

movement and posture. With a relationship to the central nervous system and damage to parts of 

the brain, it may occur before, during, or after delivery.578 There are four types of CP. Spastic 

CP, in which the muscles are stiff and permanently contracted, affects 70–80 percent of 

individuals with CP. Doctors often describe the type of spastic CP an individual has based on 

which limbs are affected (e.g., both legs, one side, or all four limbs).579

It is a challenge to assess Crystal’s level of growth and development because of her prematurity, 

although her type of CP seems to be located on the left side of her body. She can grasp and reach 

with her right hand and is being evaluated for seizures and mental retardation. About 45 percent 

of children with CP have epilepsy. Seventy percent of people with CP have other disabilities, 

including mental retardation.580 Crystal is too young to be evaluated for ADLs or IADLs. 

Present Services and Costs 

The home health nurse referred Ruth and Crystal to FIT, the Family, Infant and Toddler 

Program. FIT is Vermont’s response to the Individuals with Disability Education Act (IDEA), 

which requires states to have a program or services to assess and support children with special 

health needs and delays in development to reach their full potential. FIT is a family-centered 

system of early intervention for children from birth to three years who have or may have special 

health needs and/or delays in development. After age three, the local school system is 

responsible for the coordination and delivery of supportive and educational services through an 

Individual Education Plan (IEP). 

FIT did the original assessment and referrals for Crystal. Because Ruth has no private insurance, 

all the costs are assumed by the state of Vermont. If Crystal were eligible for SSI and received 

Medicaid, some of the cost would be incurred by the Medicaid connection to SSI, which is both 

federal and state funded. They arranged for Crystal to be seen and followed by a developmental 
243 

pediatrician who has a monthly Vermont Children with Special Needs clinic in the nearby city. 

Through FIT, the early childhood educator has developed with Ruth, Jean, and other 

professionals an IEP for Crystal. Crystal has been assigned a case manager through FIT to help 

Ruth with access and coordination of services. Crystal has physical therapy twice a week for 

muscle and joint flexibility and development. She has an occupational therapist who does play 

therapy and fine motor coordination with Crystal. A dietitian visits with Ruth to talk about 

nutrition and food planning, because children with CP burn more calories. An early education 

and parenting specialist works with Ruth, Jean, and Crystal on parenting and bonding with a 

child with special needs. 

A social worker is working with Ruth on her financial and housing situation. The mobile home is 

not handicap-accessible and the town she lives in does not have a special education department 

in its school system. They are discussing moving into a more accessible home and considering 

moving to the city, where more services are available and there is a school with a special 

education department. If Ruth does not move to the city, Crystal will be transported daily to the 

city school, which is 40 minutes each way. 

The social worker and parenting specialist are concerned about Ruth. She is often overwhelmed 

with the care of Crystal and her own lack of social contacts. Her friends do not visit her anymore, 

and she can only go out when Jean can come over and babysit. 

Transportation is becoming an issue because Ruth’s car is old and she does not have the money 

to buy a new one. She uses the Red Cross for transportation for medical visits for Crystal. This is 

a service the Red Cross provides for rural families in southern Vermont. 

Ruth is now on public assistance for income through the Office of Economic Services and 

Vermont Health Access Program (VHAP) for health coverage (Medicaid). She receives a 

supplemental payment from the state and food stamps. With the help of the social worker, she is 

looking for funding for a special stroller and chair for Crystal. She may have access to a Payer of 

Last Resort Pool, which is available through FIT. The state of Vermont has reorganized its 

agencies for people with disabilities into one department, the Department of Aging and 

Independent Living, to better coordinate and administer services to the elderly and individuals 
244 

with disabilities. (Crystal would be eligible also for an SSI payment and Medicaid through that 

eligibility, and Ruth would continue to be covered under the public assistance program.) 

Annual Costs 

Public Assistance: 

Temporary Assistance to Needy Families $ 6,420 (2004 dollars)581

State Subsidy Payment to Family $ 2,802 (2002 dollars)582

State Flexible Family Funding $ 1,122 (2004 dollars)583

Food Stamps $ 2,400 (2004 dollars)584 

Personal health care costs 

(average personal health costs) 

$10,437 (1993 dollars)585

Supplemental Security Income $ 4,032 (estimated child payment)586

Future Services and Costs 

In 2030, Crystal will be 27 years old. Crystal’s history has been a difficult one. Her mother, 

Ruth, left her at the age of six. Ruth said she just couldn’t take it anymore. They had never 

moved out of the mobile home and Crystal had been traveling almost two hours back and forth 

from a special education program in the city. She had no friends locally and was very isolated, 

just like her mother, Ruth. Jean, Crystal’s grandmother, became the parent and guardian for 

Crystal. They continued to live in rural Vermont and traveled to the school and other services. 

Jean was better able to cope with Crystal’s care, and they developed a very loving relationship. 

Crystal graduated from high school, but never found employment and had continued to live with 

her now aging grandmother. They took care of each other. They had refused any services for 

people with disabilities. They had had no contact with the Department of Aging and Independent 

Living since Crystal finished high school. When Crystal was 25, Jean could no longer care for 

herself or Crystal. Jean contacted the Center for Independent Living for help. 

Crystal has been assigned a case manager from the Department of Aging and Independent Living. 

Because she can no longer live with her grandmother, Crystal has agreed to go into a small group 

home in the city to transition her to more independence and the possibility of employment. 
245 

Crystal is able to do all of her ADLs in an adaptive environment. She can walk with a leg brace 

and cane with some difficulty. She now has a motorized wheelchair.587 She has the potential to 

assume her IADLs with adequate training. When she lived with her grandmother, Jean managed 

the money and shopping. 

Crystal had a full evaluation by the Center for Independent Living. She is receiving 

psychological counseling. Crystal is withdrawn, has low self-esteem, and is moderately 

depressed. She was rejected by her mother, had no friends due to her rural isolation, and misses 

her grandmother. She had been evaluated for mental retardation as a child and was found to have 

normal intelligence. She did finish high school but did not receive any vocational training or 

further education. 

Crystal’s plan for independence is full employment, her own apartment, and case management. 

Crystal agrees with the plan but is not sure she can do it. Her present services through an HCBS 

waiver include vocational training, psychological counseling, group living, socializing activities 

at the Center for Independent Living, and IADL training. She visits her grandmother every week. 

She receives SSI from SSA and medical insurance through VHAP (Medicaid). 

Annual Costs 

Supplemental Security Income $ 6,624 (2003 dollars)588

VHAP (Medicaid) 

(average personal health costs) 

$10,437 (1993 dollars)589

Group Housing $40,000 (2004 dollars)590

(estimated national average) 

HCBS Waiver $35,215 (2003 dollars)591

Case Summary 

Crystal’s story represents a number of themes, including a child with disabilities born in a rural 

setting, a family caregiver system, the availability and fragmentation of state services, and 

consumer direction. The rural setting led to financial difficulties and isolation. While the FIT 

program did provide home visits, for the majority of Crystal’s life, the rural setting meant 
246 

transportation issues, employment issues for the mother, lack of availability of day care and 

school services, and social isolation from schoolmates and other social services. The state 

provided intense, family-oriented services and support for the first three years of Crystal’s life, 

but as she grew older, Crystal fell between the cracks and received no services for a period of 

time. However, at 27, she was able to reconnect to support services provided by the state. The 

support of her family was mixed. Her mother was overwhelmed and left, and a loving 

grandmother assumed her care. However, her grandmother continued the social isolation and, 

therefore, Crystal has been delayed reaching full independence. The level of consumer direction 

is not clear. Did Crystal prefer social isolation with her grandmother or did she not fully 

understand her choices? The costs have clearly increased as Crystal has moved from family care 

to more independent living. 

Robert’s Story 

General Description 

A Wisconsin resident, Robert, is a 45-year-old man with schizophrenia complicated by a 

developmental disability. The voices that he hears constantly and responds to verbally are poorly 

controlled by medication. He has an average IQ. He is overweight with poor posture, is not 

secure on his feet, and has a history of numerous broken arms. Although he often looks unkempt, 

his clothes are clean, his hygiene is good, and he is nonviolent. Robert appears shy and 

withdrawn when he is fighting the voices and has limited eye contact and slurred speech that he 

can correct if he is asked to speak more clearly. 

Robert was diagnosed with behavioral issues, developmental issues, and emotional disturbance 

when he was in elementary school. He was placed in a school for emotionally disturbed children, 

attended public high school with the support of a special needs department, and had some 

vocational training. When he was 23, he worked for one year in a supermarket but fell and broke 

his arm. He refused to go back to work. 

Robert lives with his elderly, retired parents and goes to day habilitation (sheltered workshop). 

He had lived in a group home in the past, but he did not want to stay in that setting because he 

did not like his roommates. For the majority of his life, he has lived with his parents. He is the 
247 

second oldest of five siblings. Two of his brothers and one sister live nearby in Wisconsin. One 

sister lives in New Jersey. Robert is very involved with his family and visits his sister in New 

Jersey every year with his parents. Robert is friendly with some of the participants in his day 

program. Robert has a network of past teachers and counselors that he calls on the telephone 

every week. Some of these relationships have existed for more than 30 years. He enjoys music, 

football, and vacations with his family. He is able to take public transportation and go shopping 

at the mall by himself. 

Diagnosis and Level of Functioning 

According to the National Institutes of Health, schizophrenia is a chronic, severe, and disabling 

condition. People with schizophrenia often suffer terrifying symptoms, such as hearing internal 

voices not heard by others (hallucinations) or believing that other people are reading their minds, 

controlling their thoughts, or plotting to harm them. Approximately 1 percent of the population 

develops schizophrenia—more than 2 million Americans suffer from the illness in a given year. 

Children over the age of five can develop schizophrenia, but it is very rare before adolescence. 

Antipsychotic drugs are the best treatment now available, but they do not cure schizophrenia or 

ensure that there will not be further psychotic episodes.592

Robert takes antipsychotic drugs and regularly sees a psychiatrist for medication management. 

The antipsychotic drugs do not fully control his hallucinations. Over the years, he has been 

admitted for acute psychiatric hospital care when he is nonfunctioning because of the 

hallucinations. In a recent hospital admission, he was found to have high cholesterol, for which 

he now takes medication regularly. After that admission, he was referred to an internal medicine 

physician for medical care. It is not unusual for people with disabilities to have their medical 

care focused on their disabilities and not to have recommended preventive examinations and 

routine screenings. 

Robert is able to do his ADLs with oversight from his parents. Robert manages his weekly 

allowance and is able to go shopping and take the bus. In the past, he has flown alone to visit his 

sister with his parents getting him on the plane and his sister being there when he arrives. He has 
248 

not been able to live independently, cook his own meals, or manage a household. Robert 

participates in decisions about his life and trusts his parents and family. 

Present Services and Costs 

Robert meets the Wisconsin definition for adults with serious mental illness and, because of his 

balance and speech difficulties, meets the developmental disabilities definition. Chronic mental 

illness means a mental illness that is severe in degree and persistent in duration, which causes a 

substantially diminished level of functioning in the primary aspects of daily living and an 

inability to cope with the ordinary demands of life, which leads to an inability to maintain a 

stable adjustment and independent functioning without long-term treatment and support and 

which may be of lifelong duration. Chronic mental illness includes schizophrenia, as well as a 

wide spectrum of other severely disabling psychiatric conditions, but it does not include organic 

mental disorders or a primary diagnosis of mental retardation or of alcohol or drug 

dependence.593 An individual who also has been diagnosed with developmental disabilities has 

more difficulty with daily living skills and often lacks the ability to live without some amount of 

daily support. 

Wisconsin has been a national leader and an incubator in the area of services for the treatment of 

people with mental illness.594 The Wisconsin Administrative Code, Chapter HFS 63, mandates 

each county to have a Community Support Program (CSP). 

A CSP is a coordinated care and treatment program providing a range of treatment, 

rehabilitation, and support services in the community through an identified treatment program 

and staff, ensuring ongoing therapeutic involvement and individualized treatment for people with 

severe and persistent mental illness. The array of required treatment services available to CSP 

consumers includes crisis intervention; symptom assessment, management, and education; 

medication prescription and monitoring; psychiatric evaluation and treatment; and family, 

individual, or group psychotherapy. The required array of rehabilitation services available to 

CSP consumers includes vocational assessment, job development, and vocational supportive 

counseling; social and recreational skill training; and individualized support, training, and 

assistance in ADLs. The required array of support services available to the CSP consumers 
249 

includes assistance in obtaining needed physical and dental care, legal services, transportation 

services, acquisition of financial support and benefits, and housing supports. Case management 

is an integral part of CSP services. CSP case management includes coordination of assessment 

and treatments, coordination of referrals, assessment and monitoring of symptoms, providing 

supportive therapy, and symptom education. Case management also includes advocacy on behalf 

of consumers; education, support, and consultation with consumers, parents, families; and other 

supports.595 CSP is an HCBS waiver program for Medicaid, and the county in which the program 

resides pays the state portion. Because the counties are required to know what their constituents 

want and need, the programs vary by county. There is also a statewide quality assurance program 

for mental health services to collect client-specific data and measure consumer-oriented quality. 

Robert lives at home and attends a day habilitation program that is part of the CSP in the county. 

Day habilitation provides him with education, supportive therapy, socialization, and other 

activities. His case manager sees him at least once a month there. He is able take public 

transportation to and from the program. The CSP also covers his visits with the psychiatrist and 

medication management. 

Robert receives SSI and has Medicaid for health coverage. Robert also receives SSDI and 

Medicare from his retired parental work record, because he was disabled before he was 22 years 

of age, was never married, and does not have a sufficient work record of his own. 

Robert’s parents are both retired and middle class. They are his guardians and have power of 

attorney. They meet with the case manager once a year and as needed. When they are on vacation 

and Robert does not go with them, Robert stays with one of his brothers. His parents are members 

of the National Alliance for the Mentally Ill of Wisconsin and attend the local chapter meetings. 
250 

Annual Costs 

Community Support Services $ 6,030 (2001 dollars)596

Community Treatment Services $ 1,211 (2001 dollars)597

HCBS Waiver $36,528 (2002 dollars)598

Supplemental Security Income and $ 7,104 (2003 dollars)599

Social Security Disability Insurance 

Medicaid plus Medicare 

(average personal health costs) 

$21,236 (2000 dollars)600

Future Services and Costs 

In 2030, Robert will be 71 years old. As his parents aged, he agreed to live in a community 

residential home. When his parents were alive, he would come home for a weekend day and his 

parents would take him out one evening during the week for dinner. After both of his parents 

died, his siblings assumed the same schedule. He spends one weekend day with one of his three 

siblings in the area and another sibling takes him out to dinner once a week. His youngest brother 

is now his guardian and has power of attorney. 

Robert still has daily hallucinations. He is more unstable on his feet and uses a walker. He has 

developed high blood pressure and adult onset diabetes. He is more withdrawn and is often talking 

back to the voices. He does not want to go to a day habilitation program anymore. He likes to 

watch television, especially sports, and listen to music. He still spends part of each day phoning 

friends, siblings, and teachers from his past. He will walk around the yard or sit on the porch. He 

no longer wants to go on the bus by himself. He can still do his ADLs with reminders from the 

residential staff; the staff also help him with money management. The CSP provides him with 

medical care, dental care, psychiatric care, medication management care, and case management. 
251 

Annual Costs 

Community Residential Services $10,159 (2001 dollars)601

Community Treatment Services $ 1,211 (2001 dollars)602

HCBS Waiver $36,528 (2002 dollars)603

Supplemental Security Income and 

Social Security Disability Insurance $ 7,104 (2003 dollars)604

Medicaid/Medicare 

(estimated average personal health costs) 

$21,236 (2004 dollars)605

Case Summary 

Robert’s story represents a number of themes, including the family caregiving system, a wellcoordinated state system, and consumer direction. Robert’s family has a very strong sense of 

family responsibility. His parents cared for Robert his whole life while fostering independence 

and utilizing public and private support. The siblings have continued the support of Robert, as he 

is an integral member of his family. The state of Wisconsin has well-coordinated services, 

including acute care and LTC. Robert has benefited from coordinated services and case 

management. Robert has directed his life with the support of his family. The cost of services has 

been substantial, even with the family caregiving. The success of Robert’s story is consumer 

direction with active family support in a state with well-coordinated services. 

Lucy’s Story 

General Description 

Lucy is an 18-year-old girl with mental retardation. She lives at home in Massachusetts with her 

parents, who are a lawyer and a manager, and her younger brother, who is four years younger. 

Their home is in a small middle- to upper-class town northwest of Boston. Lucy attends a public 

high school. According to Massachusetts Chapter 766 and the Federal IDEA, the public school 

system must provide her with education and appropriate services until she is 22 years old. Lucy 

has been attending a full day of classes in the school’s special education department. She has had 

prevocational training to be able to clean trays and tables in the school cafeteria. This year, she 
252 

will be attending half-day vocational training as a health care assistant and half-day classes in the 

school’s special education department. 

Lucy’s social activities are parent-directed. She has attended dance classes and theater classes. 

She is involved and has competed in the Special Olympics for swimming and downhill skiing. 

She has four girlfriends. Three are from her special education class and the fourth is a girl she 

has known since elementary school. She usually talks with them on the telephone and attends 

school activities and dances with them. Lucy has a friend she calls her “boyfriend” whom she 

met through Special Olympics. She talks with him on the phone, but they do not see each other 

outside of the Special Olympics. Lucy lives at home with her parents, who have power of 

attorney for her. 

Diagnosis and Level of Functioning 

The definition of mental retardation, according to the American Association on Mental 

Retardation, is as follows: 

Mental retardation is a disability characterized by significant limitations both in 

intellectual functioning and in adaptive behavior as expressed in conceptual, 

social and practical adaptive skills. This disability originates before age 18. The 

five assumptions to the application of the definition are (1) Limitations in present 

functioning must be considered within the context of community environments 

typical of the individual’s age peers and culture; (2) Valid assessments consider 

cultural and linguistic diversity as well as differences in communication, sensory, 

motor and behavioral factors; (3) Within an individual, limitations coexist with 

strengths; (4) An important purpose of describing limitation is to develop a profile 

of needed supports; and (5) With appropriate personalized supports over a 

sustained period, the life function of the person with mental retardation generally 

will improve.606 

Lucy has cognitive development delay. Her IQ is 64. Her speech is slow. Her reading, writing, 

and math skills are at a first-grade level. While she is shy at times, she can be friendly with 

people she knows, and she communicates back and forth with peers and adults in a limited but 

effective way. She has no physical limitations or chronic illnesses. She can perform ADLs, such 

as bathing, dressing, and eating, with reminders from her parents. She would have difficulty with 

IADLs, such as money management, some shopping, and traveling. 
253 

Present Services and Costs 

The local education system is responsible for much of Lucy’s past training and costs. According 

to Massachusetts’ Chapter 766, the school system must provide education, training, and 

counseling up to the age of 22. The school has provided a special need education, vocational 

training, and speech and language therapy to work on her vocabulary, word retrieval, and 

language processing for appropriate responses. She has had ongoing counseling with the school 

social worker about adaptation and appropriate social behaviors. 

Because Lucy is 18, she is starting to transition to the adult support system through the 

Massachusetts Department of Mental Retardation. She is presently being reevaluated by the 

Regional Eligibility Team. The Regional Eligibility Team will do an Individual Support Plan 

(ISP) to determine the adequate, most appropriate, and least restrictive supports she will need. 

The ISP will include Lucy and her parents. The local provider for the Massachusetts Department 

of Mental Retardation, through an approved ISP, will continue her vocational training, provide 

her with activities for continued socialization, and assign her a service coordinator. The service 

coordinator is a case manager who will do ongoing assessments and provide information, crisis 

intervention, and advocacy. 

Lucy will continue to live at home while she is in vocational training. She is also staying 

involved with the Special Olympics. Lucy will no longer be covered by her parents’ private 

health insurance. She will go on MassHealth, which is Massachusetts’ Medicaid. She will also be 

eligible for SSI through the Social Security Administration. 

Her family will also be able to access support services. Family support services consist of any 

community-based service administered or financed by the state MR/DD agency providing 

vouchers, direct cash payments to families, reimbursement, or direct payments to service 

providers, which the state agency identified as family support. Examples of family support 

include cash subsidy payments, respite care, family counseling, architectural adaptation of the 

home, in-home training, sibling support, education and behavior management services, and the 

purchase of specialized equipment.607 While Lucy’s family is upper middle class, they take 
254 

advantage of family counseling and in-home training through the local Department of Mental 

Retardation provider. 

Annual Costs 

Average Cost per Special Education Student $13,542 (2003 dollars)608

Supplemental Security Income $ 6,624 (2003 dollars)609

HCBS Waiver $42,536 (2002 dollars)610

Average MassHealth Cost 

(estimated average MA personal 

health care cost, per capita) 

$21,820 (2000 dollars)611

Family Support $ 2,653 (2002 dollars)612

Future Services and Costs 

In 2030, Lucy will be 44 years old. It is expected that at that time she will be working as a health 

care assistant in an assisted living facility under a supported employment program of the local 

Department of Mental Health provider and an HCBS waiver. Supported employment consists of 

MR/DD state agency–financed programs for long-term employment support, with the goal of 

developing independent work skills leading to competitive wages for individuals with mental 

retardation.613 She will be earning minimum wage or above and have her health benefits through 

her employer. 

Lucy will live in a supported living apartment through an HCBS waiver. Supported living 

includes housing in which individuals choose where and with whom they live, in which 

ownership is by someone other than the support provider, and in which the individual has a 

personalized support plan that changes as his or her needs and abilities change.614 Lucy’s 

housing is provided by the local Department of Mental Retardation. She takes the bus to her job 

and to go shopping. 

Her parents still live nearby and have power of attorney. Lucy, her parents, and the service 

coordinator are discussing a long-term plan for Lucy as her parents’ age. They are discussing 
255 

whether her brother, who lives out of state, should have power of attorney or whether they 

should appoint a guardian. 

Lucy is still very involved with her parents. Lucy goes to church with her family, goes on 

vacation with them, and spends holidays with them. She also has social activities through the 

local Department of Mental Retardation provider. Lucy has a boyfriend whom she sees regularly. 

Lucy remains healthy, although she is now overweight. 

Annual Costs 

Housing Support $23,752 (2002 dollars)615

Employment Support $12,377 (2002 dollars)616

HCBS Waiver $42,536 (2002 dollars)617

Estimated Supplemental Security Income 

(earned wages would determine exact amount) 

$ 6,624 (2003 dollars)618 

Medicaid $21,820 (2000 dollars)619

 

Case Summary 

Lucy’s story represents a number of themes, including the family caregiving system, a wellcoordinated service system at the local level, and consumer direction. The success of Lucy’s 

family caregiving is that the family has resources. They are well educated and have a middle- to 

upper-class income. They know how to advocate for Lucy and foster her independence and 

socialization. The services available to Lucy are at the local level, including the town school 

system. The school system coordinates the transition to the local provider for the Department of 

Mental Retardation. Lucy has the advantage of a local agency that will support and coordinate 

care and independence. Because her parents have fostered her independence, Lucy can direct her 

life within the context of her abilities. Many of the earlier costs were assumed by the local school 

system and her parents. The costs increased as she assumed a more independent but supported 

life, although she earns an income and has medical coverage through her employer. 
256 

Miguel’s Story 

General Description 

Miguel is 27 years old and a resident of Colorado. He sustained a spinal cord injury at the level 

of T-4 (fourth thoracic vertebrae) in a car accident one year ago. He is wheelchair bound and is 

in his first year of rehabilitation. 

Miguel came to the United States from Central America when he was 12 years old and lived with 

his parents and two sisters in Arizona. Miguel speaks English and graduated from high school 

but has poor reading and math skills. Since high school, he has worked in the food industry as a 

dishwasher and short-order cook. He moved to Colorado three years ago with two friends to 

work at a ski resort in the kitchen as a cook. The pay was better and the resort offered low-rent 

housing to the staff. One night, after work, he was in a single-car accident. He hit a patch of ice 

and went off the road and hit a number of trees. He was thrown from the car and broke his back. 

Miguel has had two surgeries on his back. The first was to stabilize the dislocation of his spine 

with a spinal fusion. Six months later, he had a rod placement to further stabilize his back. He 

was in rehabilitation after the first surgery. Since the second surgery, he has received his 

rehabilitation in a nursing home, where he receives both physical therapy and occupational 

therapy. He is hoping to be discharged to an apartment that is handicap-accessible with the 

support of a personal assistant. 

His parents and sisters from Arizona have visited him three times since his accident and would 

like Miguel to move back home so they can be more involved in his life. His friends from work 

visited him at first, but now, a year later, they rarely come by. 

Diagnosis and Level of Functioning 

Spinal cord injury (SCI) occurs when a traumatic event results in damage to cells within the cord 

or severs the nerve tracts that relay signals up and down the spinal cord. The most common types 

of SCI include contusion (bruising of the spinal cord) and compression (pressure on the spinal 

cord). Severe SCI often causes loss of control over voluntary movement and muscles of the body 
257 

and loss of sensation and function below the point of injury, including loss of bowel and bladder 

control and sexual dysfunction.620

There are 11,000 new cases of SCI each year, and 247,000 Americans are living with SCI. The 

most common cause is motor vehicle accidents and the second most common cause is violence, 

such as a gunshot wound. Most SCIs occur in men between the ages of 16 and 30. Thirty-four 

percent of SCIs result in incomplete or quadriplegia (paralysis of all four limbs) and 25.1 percent 

result in complete paraplegia (lower limb paralysis).621

Miguel has a spinal cord injury at the T-4 level. He has paraplegia (loss of muscle control and 

sensation in his legs). He also has some paralysis of his trunk, which means he has difficulty 

sitting. His injury did not affect his diaphragm and he has no breathing problems. 

For his ADLs, Miguel has full use of his arms and hands. He can feed himself and participate in 

his hygiene and dressing. With rehabilitation and appropriate aids, he will be able to swing his 

lower trunk and transfer into a wheelchair. With rehabilitation, his ability to balance while sitting 

and leaning forward, backwards, and sideways is improving. Miguel needs significant assistance 

in the beginning of the day with hygiene, dressing, and getting in the wheelchair and again with 

settling for night. 

For IADLs, Miguel still needs assistance. The language barrier, especially the written word, is 

difficult. He does not always understand medical language, consent forms, and instructions. 

Transportation resources are limited, so his ability to go out of the nursing home is limited. He is 

able to manage his money. 

Miguel is very angry. He is angry about the accident and his injury and has not accepted his 

disability. His isolation and language issues frustrate him and he feels useless. His psychological 

state is impeding his rehabilitation and he is receiving counseling from a social worker. 

Present Services and Costs 

Miguel is presently living in a nursing home that provides rehabilitation, including physical 

therapy, occupational therapy, and social work. The social worker has helped him get SSI 
258 

through the Social Security Administration and Medicaid, through the State of Colorado. Miguel 

now has an income and medical coverage. In the nursing home, Medicaid pays all medical 

expenses and the SSI is paying for housing and food. 

Miguel will have access to services for adults with disabilities through Colorado’s Office of 

Adult, Disability and Rehabilitation Services (ADRS). ADRS’s mission is to ensure the safety 

of Colorado’s adults and individuals with disabilities, and their rehabilitation needs. This office 

promotes personal choice, independence, and improved quality of life. The program goals of 

this office are to help clients develop and exercise their individual competencies and talents, 

and to achieve the highest possible levels of rehabilitation, employment, community 

participation, and independence.622 

Miguel would like to have his own apartment that is accessible. With a personal assistant in the 

morning and evening, Miguel could probably live independently. However, in Colorado, there is 

a waiting list for housing. More than 1,200 families remain on the Supportive Housing and 

Homeless Programs waiting list for rental assistance.623 Miguel is on that waiting list. 

There is also a shortage of direct care staff, nationally and in Colorado. Miguel cannot go into 

an apartment without a personal assistant for ADLs. High turnover and low wages have 

resulted in personal care boarding homes, assisted living, and nursing homes reaching a crisis 

state for the industry.624 

The nursing home social worker has also referred Miguel to the vocational rehabilitation 

program in Colorado, The Division on Vocational Rehabilitation provides job coaching, 

adjustment training, and on-the-job training to offer one of the best opportunities for individuals 

with the most significant disabilities to secure and maintain gainful employment in integrated 

work settings in the community.625 Eligibility determination is usually completed within 49 days. 

Colorado is experiencing the largest shortfall in revenue in over 60 years. Colorado suffered an 

$869 million dollar shortfall in State FY 2002–03. A $900 million dollar shortfall is anticipated 

for state FY 2003–04. This will result in deeper and more significant program reductions at the 

state level. Little assistance from the Federal Government can be expected because recent federal 
259 

funding is flat.626 The recovery from Colorado’s last major recession, over two decades ago, took 

42 months. The recovery from the current recession is projected to be slower and more 

uncertain.627 This current fiscal situation in Colorado will result in increasing waiting lists for 

services and delays in new services, such as expansion of the Independent Living Centers. 

Annual Costs 

Nursing Home $42,000 (1999 dollars)628

Health Care and Income $25,394 (2004 dollars)629

Social Security Disability Insurance $10,404 (2004 dollars)630

Estimated Annual Medicaid $21,457 (2000 dollars)631

It is noted that the first year of costs, including health care and living expenses for a person with 

a spinal cord injury and paraplegia, is $249,549 in 2004 dollars.632

Future Services and Costs 

In 2030, Miguel is 53 years old and living in a board and care home. Also called an adult care 

home or group home, this home offers housing and personal care services to between 3 and 16 

residents who are assigned to a bed. Group home services such as meals, supervision, and 

transportation are usually provided.633 Miguel has a personal assistant for his ADLs when one is 

available. When one is not available, he pays someone at the board and care home under the 

table for help. Miguel is capable of assisting with his hygiene and toileting. He can prepare 

meals, go shopping, and manage his own money. He can transfer from bed to wheelchair and 

back to bed. He has a motorized wheelchair paid for by Medicaid after he developed chronic 

shoulder problems from his manual wheelchair. With the motorized wheelchair, he is able to 

travel where he needs to go in his neighborhood. 

Miguel did start vocational rehabilitation but was frustrated by the language barrier and 

inadequate transportation services. His vocational rehabilitation counselor was concerned about 

his mental health. They had difficulty finding a Spanish-speaking counselor and Miguel was not 

open to talking about his disability or his anger. He dropped out of the program because he was 
260 

frustrated. He has maintained an income through SSDI and SSI and medical insurance through 

Medicare and Medicaid. 

He remains very frustrated by his disability, social isolation, and language barrier. He drinks 

alcohol daily and is at times belligerent. He has been evicted from other housing situations in the 

past, and a number of personal assistants refuse to care for him. None of his old friends are in 

touch with him. His family still calls him and encourages him to come to Arizona, but he is 

afraid of losing his benefits. His social life is based on the people in his board and care home and 

the local bars. He has no steady relationships. Because of his drinking, he is on a waiting list for 

vocational rehabilitation and is not welcomed in an independent living center. Miguel has no 

case manager or coordination of care. 

His health has been affected by his alcohol abuse, mental health issues, chronic urinary tract 

infections, and pressure sores. The latter two conditions are related to his paraplegia and place 

him at risk for septicemia, which is an infection of the blood system and can be fatal. He receives 

his care at an outpatient clinic and the local emergency room. At times he is admitted to the 

hospital or has home care services for his infections and falls. He does not have a regular doctor 

and his care is based on each individual incident of infection or fall. He does not have 

coordinated care, nor does he have any preventive care or screenings. Most of the time, he either 

does not understand the physician’s instructions or he does not follow them. Medicaid covers his 

occasional prescriptions. He is not receiving any treatment for his alcohol abuse or his mental 

health issues. 
261 

Annual Costs 

Social Security Disability Income $10,404 (2004 dollars)634

Medicare and Medicaid $16,854 (1995 dollars)635

HCBS Waiver 

(Board and Care Home) 

$29,120 (1997 dollars)636

Personal Assistance Services 

(3 hours per day) 

$19,656 (2003 dollars)637

Case Summary 

Miguel’s story represents a number of themes, including a language barrier, complications added 

by substance abuse, lack of a family support system, lack of portability of services from one state 

to another, and lack of state funding for services. A SCI is a sudden-onset disability, and a 

negative, angry response is not unusual. An unhealthy response to disability, such as substance 

abuse, is also not unusual. The entire situation is compounded by the language barrier and social 

isolation. Miguel is at high risk. Because of a recession and budgetary restraints, state services 

are not coordinated or even available. There are long waiting lists. His health care is not 

coordinated. Miguel has and will continue to fall between the cracks. He will not reach his 

potential for rehabilitation and independence. Without addressing his anger, depression, and 

alcohol abuse, it is hard to say whether his rehabilitation will ever be consumer directed. 

Howard’s Story 

General Description 

Howard is a 72-year-old man living in Redondo Beach, a suburb of Los Angeles, California. 

Howard lives with his wife, Sophie, who is 68 years old. They have three children, ages 48, 45, 

and 39, and eight grandchildren. Howard retired five years ago from a small aerospace firm 

located in Los Angeles, where he worked as a design engineer technician. Sophie also retired 

five years ago from where she worked part time in a physician’s office as a registered nurse. 

Howard and Sophie live together in a two-bedroom modest condominium three blocks from the 

Pacific shore. They like to walk every morning along the beach, and twice a week they volunteer 

at the local high school for literacy program. 
262 

Howard and Sophie drive one weekend a month to visit with each one of their children and 

grandchildren, going to San Diego, Berkeley, and Pasadena. They have a circle of friends their 

own age who visit together frequently, occasionally meeting for lunch at a local cafe. Howard 

and Sophie enjoy attending their local community symphony concerts. 

Howard and Sophie have been relatively healthy. Howard has some difficulty walking due to a 

leg injury from an auto accident 25 years ago. However, he is able to walk unassisted. Howard 

has mild hypertension, which is being treated with an antihypertension medication he takes once 

per day. Sophie is a breast cancer survivor, and has been disease free for the past eight years. 

Howard and Sophie have Medicare as their primary insurance. 

During the past six months Sophie noticed that Howard was being forgetful, with such things as 

having read the morning paper, and he increasingly did not recall time spent at the high school 

literacy program. Recently, Howard was walking with his three-year-old grandson during a visit to 

San Diego and was unable to remember his way back to his daughter’s home one block away. 

Howard went to his physician and after evaluation was diagnosed with early Alzheimer’s disease. 

Diagnosis and Level of Functioning 

Alzheimer’s disease is a disorder of the brain’s nerve cells that slowly impairs memory, thinking 

and behavior, and is eventually fatal.638 The three stages of Alzheimer’s disease follow: 

• Mild. A person starts to lose short-term memory. He or she may forget names of friends, 

appointments, or new information. 

• Moderate. The person needs more help with ADLs. Agitation, confusion, and anger are 

common. 

• Severe. The person can no longer make decisions, has difficulty speaking, or may not 

recognize loved ones.639

Disease Impact 

• An estimated 4.5 million Americans have Alzheimer’s disease. The number of 

Americans with Alzheimer’s has more than doubled since 1980. 
263 

• In 2050, the number of individuals with Alzheimer’s could range from 11.3 to 16 million. 

• Increasing age is the greatest risk factor for Alzheimer’s. The disease affects 1 in 10 

individuals over 65 and nearly half of those over 85. 

• A person with Alzheimer’s will live an average of 8 years to as many as 20 years from 

the time of symptom onset. From the time of diagnosis, people with Alzheimer’s survive 

about half as long as those of similar age without the disease. 

• National direct and indirect annual costs of caring for individuals with Alzheimer’s 

disease are estimated at $100 billion. 

• Alzheimer’s disease costs American business $61 billion a year—$24.6 billion covers 

Alzheimer’s health care and $36.5 billion covers costs related to caregivers of individuals 

with Alzheimer’s, including lost productivity, absenteeism, and worker replacement. 

• Seven out of 10 people with Alzheimer’s disease live at home, where family and friends 

provide their care. Additional paid care average $12,500 per year. Families pay almost all 

of this out of pocket. 

• Half of all nursing home residents have Alzheimer’s disease. 

• The average cost for nursing home care is $24,000 per year but can exceed $70,000 per 

year depending on the state or area of the United States. 

• The average lifetime cost of care for an individual with Alzheimer’s is $174,000. 

• By 2010, Medicare costs for beneficiaries with Alzheimer’s are expected to increase 54.4 

percent, from $31.9 billion in 2000 to $49.3 billion. Medicaid expenditures on residential 

dementia care will increase 80 percent, from $18.2 billion to $33 billion in 2010.640

• On average, a worker who takes care of an older sick relative, such as a person with 

Alzheimer’s disease, loses $659,139 in lost wages, pension benefits, and Social 

Security income.641
264 

Services and Costs 

Howard and Sophie attended a local Alzheimer’s support group at the recommendation of the 

nurse practitioner in their physician’s office. The support group provided them with information 

on community resources and a support network of Alzheimer caregivers. 

Two years after the diagnosis, Howard was able to remain physically independent. He 

remained engaged in all his social relationships; however, his memory loss was increasing at a 

slow but noticeable rate. Howard and Sophie continued to do the activities they enjoyed 

together. There were increasing times that Howard would become very frustrated and angry at 

his memory loss. Howard and Sophie discussed Howard’s illness with their children and 

developed a living will outlining Howard’s wishes for medical treatment should he become 

incapable of expressing his wishes. 

Three years after the diagnosis, Sophie had to accompany Howard whenever he went outside 

their home. Howard could no longer drive. He required some help with bathing and dressing, and 

required the use of a cane when walking. Sophie and Howard visited less with their friends and 

no longer traveled to see their children. Howard and Sophie stopped their volunteer work. 

Friends and family were supportive and would visit Sophie and Howard in their home. 

Four years after the diagnosis Howard was able to carry on short simple conversations, but his 

short-term memory was severely impaired. Sophie had to dress and bathe Howard. Howard was 

incontinent during the night and required toileting reminders during the day. Sophie became 

dependent upon friends to stay with Howard so she could go the store and the bank and complete 

errands. Howard had one hospitalization after a fall in the shower. His hospital stay was only two 

days for evaluation of a possible head injury, at a cost of $3,500. Medicare reimbursement for 

rehabilitation to the subacute facility was not possible after his hospitalization because Howard 

did not have a three-day qualifying hospital stay. The hospital case manager arranged for home 

physical therapy to evaluate Howard and Sophie’s home for safety and assistive devices to aid 

Howard’s mobility. Sophie was concerned about being able to manage Howard alone: getting 

him out of bed, and in and out of a chair. The Home Health Agency providing the physical 

therapy did evaluate Howard for home health services and found that while Howard was in need 
265 

of physical care, his needs were not at a skilled level of nursing care. Therefore, help was not 

covered under Medicare. The cost of two weeks (6 one-hour visits) of home health services was 

$2,500. Sophie and her children met together to evaluate the medical resources available to them 

and to plan for Howard’s increasing physical dependence and mental deterioration. The concern 

of the children at this time was Sophie, who was becoming more isolated and no longer able to 

provide the total physical care Howard required. 

Howard met the eligibility requirements for the California Medicaid Waiver Program. The 

program is for adults who require nursing facility care but wish to remain at home.642 Services 

provided in the home include nursing, case management, therapies, and home aide assistance. A 

Medicaid waiver allows the state to waive portions of the Social Security Act referring to 

Medicaid and implement services that otherwise may not be covered under Medicaid, may be 

more cost-effective, or may enable a senior to remain in the least restrictive environment (i.e., 

the home).643 Howard remained in the Medicaid Waiver program for one year at a cost of 

$14,760. Medicaid Waiver Services provided an aide to bathe Howard and help him into a chair 

three times per week. A home health nurse visited once per month to evaluate Howard and his 

care plan. Howard died at home at age 77; Sophie was 73. During Howard’s last six months of 

life, his youngest son, who is single and employed full time, took a six-month unpaid leave from 

work to stay with Sophie and Howard. The son provided total care for Howard and helped 

Sophie, who became increasingly exhausted and unable to provide for all of Howard’s needs. 

Howard and Sophie’s other two children provided financial support for the son who took a leave 

from his job. 

Case Summary 

Alzheimer’s disease as depicted in this case is typical of the disease course and impact. 

Howard’s family, namely his wife, was responsible for the majority of his increasing physical 

needs.644 Alzheimer’s disease, as this case represents, is one that results in caregivers’ isolation 

and causes a long-term burden on a caregiver’s emotional, physical, and financial resources. As 

in this case, the LTC needs of those with Alzheimer’s disease are not medically acute or 

reimbursable under the benefit structure that currently exists. 
266 

Elise’s Story 

General Description

Elise is a 56-year-old African-American woman living in a rural Mississippi community. Elise is a 

widow, has a high school education, and lives alone. She has two adult daughters; one who lives in 

New York City and one daughter who is an officer in the Army, currently on active duty and 

stationed in Germany. Elise works part time (20 hours per week) at a local hardware and feed store 

as a checkout clerk. Additionally, she works at home babysitting a neighbor’s two toddlers three 

mornings a week. Elise is active in her church and sings in the choir every Sunday morning. 

Although they are distant in geography, Elise is close to her two daughters. They speak to each 

other every week by telephone. Elise has several woman friends with whom she socializes on a 

regular basis. Social activities include church events and a sewing group. Elise does not have a car. 

She walks to work and church, which are both one block from her apartment. 

Elise’s annual income from working is $10,400, plus a pension from her deceased husband, 

which provides her an additional $875 per month. Her total annual income is $20,900. Elise has 

no health insurance. 

Elise has smoked half a pack of cigarettes per day for the past 41 years. She is sedentary in her 

lifestyle, and is overweight by 65 pounds. Elise was diagnosed with diabetes five years ago and 

is insulin dependent. She has been hospitalized twice for high blood sugar and has recently had 

difficulty walking due to an open wound on her left foot. She self-administers insulin. She has a 

glucose monitor; however, she cannot afford the test strips to measure her blood glucose levels 

three times per day. 

Diagnosis and Level of Functioning 

Diabetes is a disease that affects the body’s ability to produce and use insulin. Insulin is a 

hormone made in the pancreas. Insulin is used to get glucose (sugar) from the food eaten into the 

cells of our body to be used as a source of energy. With diabetes, the body either doesn’t make 

enough insulin or can’t use the insulin it produces very well. Glucose then builds up in the blood. 
267 

Type 1 Diabetes usually appears in children and young adults, while Type 2 Diabetes usually 

appears after age 40; however, children who are overweight are at high risk for developing Type 

2 Diabetes. Another type of diabetes, Gestational Diabetes, appears during pregnancy. Women 

who develop gestational diabetes are at greater risk for developing Type 2 Diabetes later in life. 

In 2000, Mississippi ranked second in the United States in overall prevalence of diabetes, after 

Puerto Rico. 

The Mississippi State Health Department estimates that 9.3 percent of Mississippi’s adult 

population had diabetes in 2001. That’s an increase from 7.6 percent in 2000. In 2001, nearly 

190,000 individuals age 18 and over reported that they had been diagnosed with diabetes, and 

estimates are that another 95,000 have not yet been diagnosed. In total, it is estimated that more 

than a quarter million (285,000) Mississippians had diabetes in 2001. About 750,000 

Mississippians are at increased risk of undiagnosed (Type 2) diabetes because of the risk factors 

of age, obesity, and sedentary lifestyle (lack of exercise).645

Diabetes is the seventh cause of death by disease in the United States, affecting an estimated 16 

million people nationwide. It is the leading cause of heart disease, kidney disease, adult onset 

blindness, amputations, and stroke. In Mississippi, according to the Center for Disease Control 

(CDC), approximately 285,000 people have diabetes. Of those, 90,000 are unaware that they 

have it. Most people who are undiagnosed have no symptoms. 

Diabetes Prevalence 

Nationally, 2.3 million (10.8 percent) of African Americans have diabetes; however, one-third of 

those affected do not know it. In Mississippi, figures for 1996 showed that 56,253 African 

Americans were diagnosed with diabetes, and a like number of cases went undetected. 

• One in four African Americans between the ages of 65 and 74 has diabetes. 

• African Americans are 1.7 times more likely to develop diabetes than are white Americans. 

• The number of African Americans diagnosed with diabetes tripled between 1963 

and 1993. 
268 

• One in four African-American women and one out of five African-American men over 

50 has diabetes. 

• African-American women are at a higher risk for developing gestational diabetes during 

pregnancy than white women. 

• Diabetes is the fifth leading cause of death for African Americans between the ages of 45 

and 64, and the third leading cause of death for those 65 and older.646 

Diabetes Complications

African Americans experience higher rates of at least three of the serious complications of 

diabetes: blindness, amputation, and end-stage renal disease (kidney failure). 

Diabetic retinopathy is a term used for all anomalies of the small blood vessels of the retina 

caused by diabetes, such as weakening of blood vessel walls or leakage from blood vessels. 

African Americans are twice as likely to suffer from diabetes-related blindness. 

Diabetes is the most frequent cause of nontraumatic lower-limb amputations. The risk of a leg 

amputation is 15 to 40 times greater for a person with diabetes. Each year 56,000 people lose 

their foot or leg to diabetes. African Americans are 1.5 to 2.5 times more likely to suffer from 

lower-limb amputations; 10 to 21 percent of all people with diabetes develop kidney disease. In 

1995, 27,900 people initiated treatment for end-stage renal disease (kidney failure) because of 

diabetes. African Americans with diabetes are 2.6 to 5.6 times more likely to suffer from kidney 

disease, with more than 4,000 cases of end-stage renal disease each year.647

The per capita medical expenditures totaled $13,243 for people with diabetes and $2,560 for 

people without diabetes in 2002. The projected increase in the numbers of people with diabetes 

suggests that the annual cost in 2002 dollars could rise to an estimated $156 billion in 2010 and 

to $192 billion by 2020.648

Future Services and Costs 

Elise does not qualify for Mississippi Medicaid because her income is greater than $826 per 

month in 2003 and she has not been determined medically eligible.649
269 

In 2005, Elise will have two hospitalizations due to uncontrolled diabetes. The second 

hospitalization will be for surgery on the infected open wound on her foot. After the surgery, 

Elise will not be able work her part-time job at the hardware store. She will start the application 

process for SSI and SSDI. 

In 2006, Elise will qualify for Mississippi Medicaid, and receive an annual medical benefit of 

$2,969.650 She will also be eligible to apply for both SSI and SSDI through the Social Security 

Administration, because she is no longer able to work due to her diabetes. This year, Elise had 

four more episodes of acute uncontrolled diabetes. She has not been able to return to her parttime job. She is at high risk of a below-the-knee amputation caused by the early stages of 

necrosis in her lower left leg. The medical expenses for Elise in 2006 are $20,500. 

Late in 2006, Elise will have a below-the-knee amputation and experience a postoperative heart 

attack. She will be admitted to a nursing home posthospitalization and will undergo a slow 

recovery and rehabilitation. The expense of the surgery and nursing home care will be $38,000. 

By the end of 2006, Elise will no longer be able to participate in her social activities or maintain 

her home without assistance. She will become depressed and withdrawn, and will not follow her 

prescribed diet, exercise, or insulin regime. 

Elise is admitted to a nursing home after a lengthy hospitalization and development of a larger 

right leg ulcer, which is failing to heal. Elise spends the next two years in a nursing home 

($16,010 per year) under a Medicaid benefit.651 If she had SSDI, Medicare would also provide 

medical support to the nursing home. In addition to the nursing home stay, Elise has four acute 

hospital admissions. She undergoes a right below-knee amputation and experiences a second 

heart attack due to severe vascular disease caused by the uncontrolled diabetes and smoking 

history. Elise continues to live in the nursing home. In 2009, she signs advanced directives 

defining her wishes for no further treatment to prolong her life. 

Elise has six hospitalizations in 2009 at a cost of $72,000. Each subsequent hospitalization is due 

to vascular insufficiency, heart failure, and renal failure caused by uncontrolled diabetes. Elise 

refuses dialysis for the acute renal failure. She expires in January 2010 in the nursing home. The 
270 

cause of death is acute renal failure. The total medical expenses for Elise’s care from 2005 to 

2010 was more than $202,000. 

Case Summary 

Diabetes is a disease characterized by a lack of control of blood sugar. Although inadequate 

control of blood sugar levels can cause acute clinical problems and require hospitalization, in 

general, the most common health consequences of diabetes are chronic rather than acute.652

Elise’s case exemplifies the chronic characteristics of diabetes: poor healing of a lower leg 

wound leading to amputation, compromised cardiac function, and an increasingly impaired renal 

function. Her disease was difficult to control because of her excess weight, smoking, and 

inability to monitor her blood sugar. Progression of disease eventually affected Elise’s ADLs and 

IADLs, making her totally dependent on others for her care. 

Case Studies Summary 

These six case studies move the discussion from the abstraction of numbers and dollars to real 

people and their families in a struggle to find a coordinated, comprehensive response to their 

LTSS needs. Despite the diversity of challenges associated with varying types of disability and 

multiple secondary conditions, the underlying human element is the desire to live independently 

and with dignity. 

The examples of real-life struggles today and projected changes 25 years later in 2030 help 

capture both the complexity and significance of designing an LTSS system sooner rather than 

later. Several key findings can be offered from an analysis of the six life stories of individuals 

with chronic, intellectual, physical, and mental disabilities. 

The current system of responses to individual needs is dependent on state-specific differences in 

coverage and resource allocation. Families and friends are a critical component of an informal 

caregiving system that is eroding as America ages. Without federal intervention and financial 

assistance, no state can begin to cope with the growing demand for HCBS. Current state and 

federal budget deficits and funding priorities jeopardize a patchwork system of services and 
271 

supports that do not meet the current needs of the target population, let alone those projected into 

the future. 

Summary of Findings 

LTSS cannot be looked at in isolation from other health care needs, including acute care and 

mental health service needs. The range of needs across age and type of disability highlight the 

importance of service coordination, access to information, and need for support of the family as 

well as the individual with disabilities. Current costs are not a customized response to individual 

needs. Costs reflect matching an individual’s circumstances to available services and supports, 

based on federal eligibility criteria, with degrees of consumer choice and direction varied based 

on the state in which the individual lives. Medicaid, Medicare, and Social Security dominate the 

cost profiles and projections, with the quality of services and support most evident with active 

family intervention. The projected costs are dependent on, at a minimum, no loss of entitlements 

as we know them today. The evolution of a consumer-responsive comprehensive system 

demands additional analysis of the costs of raising and supporting, at home and in the 

community, individuals across a spectrum of functional need from birth through the aging 

process. Supporting families in their unpaid caregiving will help keep public costs lower. 

However, the balancing of public and private responsibility for caregiving must be confronted 

directly by policymakers through incentives, respite options, flexibility, and portability of 

services and skills training. 
272 

Part VII 

Moving Toward Reform 

Defining who needs LTSS. 

The development of public policy for LTSS requires finding a common ground for defining 

eligibility. There is not yet a common agreement among the critical stakeholders as to who needs 

LTSS. Most data and definitions are based on individuals age 65 and older. The definitions range 

for the target population from a medical diagnostic approach to a functional assessment. It is 

impossible for policymakers and researchers to accurately calculate current and future costs 

without a clear consensus as to who should be covered by an LTSS system. 

Growth in population over age 65 needing LTSS. 

Regardless of the definition of the target population, there is clear and undisputable data that the 

number of people over age 65 with ADLs and IADLs is growing and will double by 2030. 

Twenty percent of people age 65 and over will require assistance with at least one ADL, and 50 

percent will require such assistance by age 85. People in need of assistance with two ADLs will 

grow from 1.8 million to 3.8 million by 2045. 

Declining disability prevalence for individuals age 65 and older and rising 

disability rates for those 65 and under. 

The research concludes that disability has declined in the 65-and-older population using ADLs 

and IADLs as measurement. It is less clear whether this decline is due to health improvements or 

environmental changes aided by increased use of durable medical equipment, including assistive 

technology. The prevalence of disability in those 65 and younger is rising using the chronic 

condition definition of disability. The increased longevity of people with lifelong disabilities and 

its impact on the need and future costs for LTSS are unclear from the current literature. 
273 

Changes in disability prevalence across the age span and their impact on 

future LTSS costs are unclear. 

There are 38 million people under age 65 reporting some level of disability; of this group, 25 

million have a specific chronic disability. Depending on the definition used, the estimated 

population in need of LTSS under age 65 ranges from a conservative figure of 3.5 million to 

more than 10 million. 

As the prevalence of disability and use of LTSS increases in the under-age-65 population, it is 

unclear from the research what effect this growth will have on the future costs and services of the 

LTSS system. It is less clear how many individuals under the age of 65 are in need of assistance 

with ADLs and IADLs when different definitions of disability are used. There is no aggregated 

data on the overall costs of LTSS using the NCD/AARP definition, which includes 

transportation, nutrition, and housing. It is less clear what services and supports truly look like 

for individuals under age 65, across disabilities and specific age groups, for those working and 

living independently. The research shows that individuals under age 65 are heterogeneous and 

have specific needs according to gender, age, and type of disability. 

Disparities in LTSS needs among minority populations and impact on future 

LTSS costs. 

A further challenge was found in understanding the correlation between the disparities in LTSS 

needs among minority populations and the impact on future utilization and costs for LTSS. Black 

children were reported to be 13 percent more likely than white children to have a reported 

activity limitation. A recent GAO study confirmed that the black population has higher disability 

rates and lower lifetime earnings and shorter life expectancies than whites. The issues of poverty, 

lack of insurance, and continued segregation from affordable and consistent health care will 

increase the future needs and costs for LTSS for a population that is projected to make up 50 

percent of the American population by 2050. 
274 

Individuals with two or more ADL limitations and personal assistance needs under the age of 65 

estimated a shortfall of 16.6 hours of help and were more likely to be nonwhite females and to 

live alone. People who live alone are 10 times more likely to go hungry, 20 times more likely to 

miss a meal, and 5 times as likely to lose weight. Paid assistance for personal assistance services 

(PAS) goes primarily to people 65 and older, and working-age people 65 and under rely more on 

unpaid PAS. 

Growing prevalence of mental illness and impact on future LTSS costs. 

The prevalence of chronic disease and deaths caused by noncommunicable disease in the United 

States will increase from 28.1 million to 49.7 million between 1990 and 2020, an increase of 77 

percent. Mental illness will rank number two after heart disease and will replace cancer by 2010 

as having a greater impact on death and disability. Medicaid is the principal public payer for 

mental health services and represents (36%) of the $48 billion in spending. It is unclear what the 

future LTSS needs and costs will be for this population. 

Uncertainty of future utilization and costs for LTSS. 

Future utilization and costs for LTSS are highly uncertain because of the rising cost of health 

care, fiscal challenges of federal and state governments, increased longevity of high-cost 

disability populations, increased prevalence of chronic conditions, and the changing philosophy 

regarding where and how LTSS are delivered. 

There are 57 million working-age Americans (18–64) with chronic conditions such as diabetes, 

asthma, and depression; more than one in five (12.3 million) live in families that have a problem 

paying medical bills. The number of chronically ill people with private insurance who spend 

more than 5 percent of their income on out-of-pocket health care costs increased from 28 percent 

in 2000 to 42 percent in 2003, a 50 percent increase to 2.2 million people. Less than 55 percent 

of people with chronic conditions receive scientifically indicated care, and the “defect rate” in 

the quality of American health care is approximately 45 percent. 
275 

The impacts on LTSS costs for 6.6 million individuals with chronic care needs who are uninsured 

and go without needed care (42%), delay care (65%), or fail to get needed prescriptions (71%) are 

unclear, but without timely intervention they will affect future need and costs. 

Eligibility and service pathways to state Medicaid programs have expanded to meet the growing 

needs of their uninsured and LTSS beneficiaries and reflect the growing challenges of economic 

downturns, increased health premiums, increased longevity, a low savings rate, and slower wage 

growth. The ability of states to respond to current and future LTSS needs is beyond their 

capacity and resources. 

Medicaid has added many new eligibility pathways and programs over its 40-

year history and extends benefits to many middle-income Americans who are 

aging and faced with catastrophic LTSS costs. 

Two-thirds of Medicaid spending is for population groups and services technically defined as 

optional; these services account for 90 percent of all LTC Medicaid services. Optional services 

are currently undergoing cuts across the country as states struggle with unsustainable growth in 

costs and caseloads. It is unclear how vulnerable people with disabilities are, with the majority of 

their services and funding falling into optional categories. 

Seventy-five percent of HCBS waivers are for people with MR/DD and are used to purchase 

LTSS. The other 25 percent are used for people with physical disabilities and older people. Three 

small waiver programs serve individuals with a primary diagnosis of mental illness, accounting 

for 0.2 percent of HCBS waiver expenditures. Further research is needed to explore the LTSS 

needs of the other 25 percent using HCBS. 

Medicaid spending for acute care and LTC for the blind/disabled category was $91,889 

billion; $51,733 billion for the aged category; and $59,022 billion for children, adults, and 

foster care children. 
276 

All Medicaid beneficiaries, when broken into the following three categories, demonstrate a high 

vulnerability to rising health care costs and dependence on family members for health coverage 

and LTSS: 

• Almost 70 percent of the Medicaid caseload (18.8 million) are children; the rest are 

adults who rely solely on Medicaid for both Medicaid and SCHIP for an entire year. 

• About 12.3 million used both Medicaid and SCHIP for part of the year and were 

uninsured for two-thirds of the months they spent without Medicaid/SCHIP; job-based 

health insurance covered nearly all the remaining months over an entire year. 

• About 9.7 million never relied solely on Medicaid during the year and had other sources 

of coverage; less than 23 percent were children, but nearly half (46%) were seniors. 

Most uninsured Americans are working and many are LTSS 

paraprofessionals. 

Forty-nine percent of uninsured Americans are either self-employed or work for companies with 

fewer than 25 employees or fewer than 10 employees, of which only 52 percent offer insurance. 

Over 50 percent of low-income employees of small firms with incomes below 200 percent of the 

federal poverty level are uninsured. Over 2 million health care paraprofessionals do not work full 

time, do not receive benefits, and report wages below the poverty line. 

Private LTSS insurance is targeted to individuals age 65 and older and highly targeted to specific 

diseases such as Alzheimer’s. More than 6 million Americans own LTSS insurance, and 50 

percent of the claims paid are for Alzheimer’s and other forms of dementia. 

The risk of disability during a worker’s career is significant, as are the consequences to the 

individual’s and the family’s financial security. The risk of disability is higher than premature 

death and is higher for older people than younger people; females are more likely to become 

disabled than males. A 45-year-old earning $50,000 per year and suffering a permanent disability 

could lose $1,000,000 in future earnings. The public underestimates the help that is available 

from public disability insurance programs (SSDI and other state-mandated, short-term 
277 

programs). Workers compensation benefits cover only disabilities caused by injury or illness 

arising on the job—only an estimated 4 percent of disabilities. 

Lack of data on current and future costs for the under- and over-65 

populations with disabilities raises new questions for researchers 

and policymakers. 

The documented growing demand for LTSS in the home and community raises new questions for 

researchers and policymakers about current costs and projected future costs for the under- and 

over-65 populations with disabilities. The cost conundrum is exacerbated by four important factors. 

First, there is insufficient data on LTSS costs for individuals under age 65 across the spectrum of 

disabilities. Second, there is insufficient data on the costs of responding to a decreasing 

population of informal caregivers and the development of an approximately trained and paid 

workforce. Third, there is a lack of agreement on the role and responsibility of the government 

versus individuals and families to cover the costs of current and future LTSS needs. Without 

research to explore different public and private cost-sharing scenarios that focus on the underage-65 population with disabilities, it would be difficult to explore the relationship of public 

financing and private insurance. 

Disability insurance is the missing piece in the financial security puzzle for 

Americans with disabilities. 

The forth and final factor transcends the specific challenges of development of a responsive 

LTSS system for the targeted population. The global economic picture and changing 

demographics, in addition to the current federal budget deficit, raise questions about the political 

will to maintain current entitlements, let alone craft a new system. 
278 

The issues of identification of current and projected future costs for LTSS are 

further complicated by the role of formal and informal caregiving, and by 

workforce shortage and retention issues. 

There are 44.4 million American caregivers age 18 and over who provide unpaid care to an adult 

age 18 or older. Six out of 10 of these caregivers work while providing care; most are women age 

50 years or older. The value of donated care is estimated to be more than $200 billion, and it is 

unclear from the literature how the changing demographics will affect the unpaid care industry and 

whether there will be cost-shifting to paid care as fewer women become available in the future. 

It is unclear who is going to meet the growing demand for providing services and supports as the 

role of the informal caregiver decreases. The workforce shortage is both a supply and demand 

problem. As the 65-and-over population increases, the 65-and-under working-age population will 

decrease and there will be a shortage of workers and taxpayers. In addition, there is a shortage of 

nurses and home care workers for LTSS. Jobs for nurse’s aides are expected to grow by 23.8 

percent, while the employment of personal care and home health aides may grow as much as 

58.1 percent between 1998 and 2008. It is unclear how many workers (the “gray market”) are 

hired and supervised by consumers who pay for their own care, although the numbers are 

thought to be substantial. 

Direct care workers (3.1 million) are in short supply and have nearly a 100 percent turnover rate 

in nursing facilities; home care agencies have annual turnover rates of 40–60 percent. Direct care 

workers have low median hourly wages of $9.20 an hour, and one-fifth (far more than the 

national average of 12–13 percent) earn incomes below the poverty level; 30–35 percent of all 

nursing home and home health aides who are single parents receive food stamps. The financial 

ability for this sector to generate higher wage and benefits is limited by the constraints of thirdparty payers, such as Medicaid or Medicare, which are and will continue to be pressured to 

reduce costs under the weight of a growing retirement and disability population. 
279 

Americans with disabilities struggle to find a coordinated, comprehensive 

response to their LTSS needs despite the diversity of challenges associated 

with the varying types of disability. 

The current system of response to individual needs is dependent on state-specific differences in 

coverage and resource allocation. Families and friends are a critical component of an informal 

caregiving system that is eroding as America ages. Without federal intervention and financial 

assistance, no state can begin to cope with the growing demand for home and community basedservices. Current state and federal budget deficits and funding priorities jeopardize a patchwork 

system of services and supports that do not meet the current needs of the target population, let 

alone those projected into the future. 

LTSS cannot be looked at in isolation from other health care needs, including acute care and 

mental health service needs. The range of needs across age and type of disability highlights the 

importance of service coordination and access to information, and need for support of the family 

as well as the individual with disabilities. Current costs are not a customized response to 

individual needs. Costs reflect matching an individual’s circumstances to available services and 

supports, based on federal eligibility criteria, with degrees of consumer choice and direction 

varying according to the state in which the individual lives. Medicaid, Medicare, and Social 

Security dominate the cost profiles and projections, with the quality of services and support most 

evident with active family intervention. The projected costs are dependent on, at a minimum, no 

loss of entitlements as we know them today. 

The evolution of a comprehensive, consumer-responsive system demands additional analysis of 

the costs of raising and supporting, at home and in the community, individuals across a spectrum 

of functional need from birth through the aging process. Supporting families in their unpaid 

caregiving will help keep public costs lower. However, the balancing of public and private 

responsibility for caregiving must be confronted directly by policymakers through incentives, 

respite options, and skills training. 
280 

Americans with disabilities need to be represented in the current public policy 

discussion about the future of LTSS. 

How Americans will decide to solve the current demographic challenges of an aging and 

growing disability population is unclear. Few proposals have provided a total picture of what 

LTSS means to people with disabilities from birth till death. 

As Americans age there will be fewer workers contributing to the pay-as-you-go resources in 

Medicare and Social Security to keep even the current system afloat. It is unclear how 

Americans with lifelong disabilities under age 65 can become self-sufficient and economically 

independent through work and build careers without substantial LTSS reform that allows asset 

growth and public support for LTSS. It is unclear how Americans will provide for their own 

health care and services and supports in the future without substantial savings and insurance 

against the risk of disability. 

LTSS are not portable across states.

LTSS are not portable and cannot be moved with an individual from state to state, and current 

LTSS costs are not a customized response to individual needs. Current costs reflect matching an 

individual’s circumstances to available services and supports, based on federal eligibility criteria, 

with degrees of consumer choice and direction that vary according to the state in which the 

individual lives. The fiscal health of each state and its ability to provide the necessary match to 

draw on federal Medicaid resources determines the scope and array of LTSS for seniors and lowincome Americans with disabilities. The personal assistance service needs of an individual in 

California could be similar to those of someone living in Mississippi and yet the availability of 

services and funding would vary dramatically. 
281 

Chapter 3 

External Advisors and External Policymakers: 

Recommendations for Action 
282 
283 

Table of Contents: 

Chapter 3 

Page 

Part I 

Introduction................................................................................................................................285 

Part II 

Approaches to Development .....................................................................................................287 

Part III 

Expert Panel Discussion and Recommendations....................................................................321 

Part IV 

Conclusion ..................................................................................................................................327 

Appendix 3.A .............................................................................................................................331 
284 
285 

Part I 

Introduction 

The picture of a ship at sea comes into focus. It struggles in choppy waters to make progress, 

becoming more aware of the impending storm. State and federal budget deficits, competing 

budget priorities between homeland and social security, and domestic and global needs make it 

even more difficult to navigate safe passage. Demographic shifts, science and technology 

advances, and changing expectations of an aging baby boomer population to maintain and 

control the quality of independent living produce sporadic thunder but do not yet hold the 

sustained interest of the ship’s crew. 

As sudden as lightning streaking through a dark sky, current events attract media and public 

attention to the complexity of competing portraits of human identity: life with all its freedom 

defined by intellectual and physical capacity, and disability defined by decline and devalued in 

some economic terms by limited return on investment. For two weeks, the plight of Terry 

Schiavo was the focus of national media attention—the front page on newspapers and the lead 

story on the evening news.

On March 31, 2005, Terry Schiavo died, 13 days after her feeding tube was removed as a 

national debate continued about the ethics, politics, and spiritual significance of her life and 

death.653 Her plight raised new questions for policymakers, the courts, and families nationwide 

about who makes decisions about when life is worth living and when it is not. President Bush 

issued a statement lamenting that attempts at congressional intervention were not successful to 

override the decision of Schiavo’s husband: “The essence of civilization is that the strong have a 

duty to protect the weak.” 

What has been lost in much of the media attention to the Schiavo case is the shift of the spotlight 

from decision making about the end of life to the growing numbers of Americans living every 

day in need of assistance with activities of daily living (ADLs) to be able to achieve an enhanced 

level of human dignity and independence. A hundred years ago, the end of life was typically 

more sudden as a result of disease or injuries. With the advances of medical technology, there are 
286 

growing numbers of Americans with chronic conditions, below and above 65, whose quality of 

life will be defined by the level of supports and personal assistance that can be accessed through 

government financial assistance. 

The Schiavo family’s conflicts about who should decide to end a life and the attempts at judicial 

and legislative intervention to substitute public for private decision making should send an urgent 

message to all of us to revisit public responsibility to individuals with significant disabilities, who 

are not dead yet! The moral high ground needs to move beyond emotion and ideology to a muchneeded evaluation of public responsibility to recognize disability as a natural part of human 

experience with social and economic implications, to protect the “weak,” preserve human dignity, 

and enhance independent living through access to needed long-term services and supports. 

Are policymakers across the political spectrum ready to debate the role and responsibility of 

federal and state government to protect the right to live with dignity, which recognizes the need 

to confront the economic terms of meeting such objectives with financial assistance for LTSS? 

Terry Schiavo’s life and death transfixed the nation. At this writing, one week later, there is no 

shortage of expert opinions on policy options to consider bringing the ship forward in choppy 

waters and the impending storm. This chapter offers multiple perspectives of diverse 

stakeholders who recognize the urgency and importance of confronting these complex challenges 

sooner rather than later. 

The recommendations for action are broken into two parts. The first part offers a summary and 

analysis of selected approaches to future policy development by leading organizations and think 

tanks navigating their way through the diverse interests and needs of state government, 

providers, individuals with disabilities, and families. The second part offers the perspective of an 

Expert Panel assembled by the National Council on Disabilities to share their personal 

experiences and expertise on consumer direction, public financing, the workforce, and service 

delivery options to respond to pressing needs of individuals and families across the diverse 

spectrum of age, geography, disability, and economic class. 
287 

Part II 

Approaches to Policy Development 

NCD researchers compared and contrasted policy recommendations for improving access, 

availability, and quality of LTSS for individuals with disabilities that have been produced by six 

different national organizations: 

• National Academy for State Health Policy (NASHP) 

• National Governors Association (NGA) 

• National Academy of Social Insurance (NASI) 

• Congressional Budget Office (CBO) 

• Americans Disabled for Attendant Programs Today (ADAPT) 

• American Association for Retired Persons (AARP) 

Despite varied roles and relationships to advising policymakers at the federal level, the alignment 

of strategies proposed and the sense of urgency to move forward are more consistent than might be 

expected. All have a similar starting point. Demand is growing for LTSS that will not be able to be 

ignored by policymakers and that will require changes in structure and financing to respond to 

consumer preferences for home and community options. The greatest variance among organization 

proposals can be distinguished by the degree of fiscal commitment to a guaranteed coverage of a 

comprehensive benefits package organized around consumer needs and preferences. 

National Academy for State Health Policy 

NASHP is a nonprofit organization dedicated to helping states achieve excellence in health 

policy and practice. NASHP conducts research on emerging trends and challenges for states to 

respond to the needs of children and adults for health care and LTSS. Activities include policy 

analysis, training, and technical assistance to states, and convening regional and national forums 

to enable diverse stakeholders to share innovative and collaborative strategies related to service 

delivery, financing, management, and quality issues. 
288 

In January 2005, NASHP published a report on improving health and long-term care (LTC) 

coverage for low-income Americans.654 The report, “Making Medicaid Work for the 21st 

Century,” was a year-long effort undertaken by NASHP to develop recommendations that would 

improve the Medicaid program. A workgroup was convened of state officials and national 

experts representing a broad range of stakeholder interests. The focus of discussion was on the 

federal-state relationship in Medicaid and its financing of health care, LTC, and LTSS. Medicaid 

beneficiaries become entitled to benefits adopted by the state; however, the terms and conditions 

for a state to receive financial assistance are defined by policies and requirements of the Federal 

Government. Federal rules define benefits that are mandatory and a menu of others that are 

optional and defined by the state in terms of scope and population areas covered. The workgroup 

focused on three core areas for improvement: revising the eligibility process for Medicaid 

financing of community-based LTSS, incentives to encourage states to offer expanded coverage 

of community-based services and supports, and restructuring the system to improve beneficiary 

access to a full-range of at-home or community-based services. 

Revise Eligibility for Medicaid 

The workgroup agreed to an overarching goal: that Medicaid should “serve eligible populations 

through policies and enrollment processes that maximize coverage and ease administration.” The 

workgroup identified several features of current Medicaid eligibility rules that were particularly 

challenging. There is little consistency across states in how they define and value income and 

assets when determining whether an applicant meets Medicaid financial eligibility criteria.655

Existing eligibility rules are more expansive for individuals in an LTC institution rather than in 

the community.656 The workgroup recommended that a minimum national income eligibility 

threshold be established, with states having the flexibility to expand coverage to individuals and 

families above the eligibility floor. The national minimum eligibility threshold would require 

states to cover all individuals with household incomes up to 100 percent of the federal poverty 

level. This new requirement would be phased in over four years, and the Federal Government 

would offer an enhanced match for new eligibles. Implementation of this recommendation would 

provide Medicaid coverage to 5.3 million new individuals, including 4 million of the uninsured. 

When fully implemented, the estimated cost would be $16.6 billion per year, with an estimated 

federal share of $11.2 billion.657 When fully phased in, state Medicaid spending would increase 
289 

by 4.1 percent. The workgroup also recommended that states have the option to eliminate the 

assets test for all Medicaid populations. States do not currently have the option to eliminate it for 

Medicaid enrollees whose eligibility is tied to Social Security Income (SSI). 

Separate from financial eligibility for Medicaid, the workgroup also recommended that states be 

allowed to set different functional criteria for institutional and community-based services and 

supports.658 Separate standards would allow the provision of community-based supports before 

an individual’s condition deteriorates to the point that institutional care is the only option. 

Modify the Benefits Package 

The second core area of focus for the workgroup was on the benefits package and correcting the 

balance between institutional and home- and community-based services and supports. With more 

than 20 years of experience, and with community supports waiver applications tied to cost 

neutrality as compared to institutional care, it is time to move to a state plan option. The 

workgroup recommended that states be allowed to replace 1915(c) waivers with a home- and 

community-based services (HCBS) program with the following components: 

• States would submit a plan to the Centers for Medicare and Medicaid Services (CMS) 

describing the services to be covered. Once approved, the program would continue 

without renewal requirements. 

• States could set a higher income threshold for admission to an institution and a lower 

threshold for the HCBS program. 

• The program would not be subject to existing waiver requirements (cost neutrality, timelimited approvals, and links to nursing home level of care). 

• States would have the discretion to set caps on participation and distinguish service 

options for subpopulations.659

The workgroup recommended that, under the new HCBS programs, states be allowed to choose 

to provide optional populations (those with incomes above the minimal national eligibility 

threshold) with more restrictive choices of services and supports.660 Two other recommendations 
290 

from the workgroup would offer the consumer greater ability to manage and direct the delivery 

of services. States should be encouraged to expand Cash and Counseling Demonstrations that 

provide beneficiaries with an individual budget to purchase and mange their own service 

delivery.661 States should also be encouraged to expand Money Follows the Person beyond 

transitioning nursing home residents to individual residents of intermediate care facilities for the 

mentally retarded (ICF/MRs) and for individuals with long-term mental illness662

As part of the approach to expanding benefits, the workgroup also proposed two other 

recommendations to improve beneficiary access. Building on the early results from the Aging 

and Disability Resource Centers (ADRCs), states would be encouraged to create single entry 

points to provide Medicaid beneficiaries and applicants with information and assistance in 

determining eligibility and service needs. A complementary suggestion by the workgroup is that 

all beneficiaries seeking long-term services should provide a standardized assessment to help 

determine needs and service options to meet those needs. Assistance would be provided to help 

access appropriate services and supports. 

Provide Financial Incentives to States to Rebalance the Program 

The final area for improvements focused on current policies governing Medicaid financing. 

Medicaid is currently an open-ended entitlement to eligible individuals and states. As an 

entitlement, the Federal Government must reimburse the state for the federal portion of the cost 

for every dollar spent on Medicaid-covered services for eligible individuals. States’ matching 

rates vary based on the size of low-income populations. The minimum 50 percent federal 

matching rate ensures that states will receive a minimum level of federal cost-sharing. 

The workgroup recommended the creation of fiscal incentives to encourage and support the 

rebalancing of their LTSS system to favor home and community. The suggested approach would 

offer states a temporary, higher match on community-based services, combined with a 

continuation of Systems Change Grants to support infrastructure development.663 The enhanced 

match would be conditional, with a state required to document progress in serving more people 

in homes and communities, measured as a percentage of the total number of beneficiaries 

receiving long-term support, or as a decline in Medicaid-paid nursing home bed days.664
291 

The workgroup emphasized in its concluding comments that the proposed set of 

recommendations related to changes in eligibility criteria, the menu of benefits, and financing are 

interrelated and must be viewed as a whole. Strengths of the NASHP proposal include the 

creation of a minimum national financial eligibility level for Medicaid, regardless of what state 

one lives in, to ensure coverage for all Americans with incomes below the federal poverty level; 

a simplified community services program to replace the waiver; and fiscal incentives to states to 

relocate their resources away from institutional settings. The reduction of the number of 

uninsured individuals is estimated at about 4 million, or 10 percent of the total group.665

Although the increased projected federal and state costs are not insignificant ($16.6 billion), it is 

a step forward to reduce variability among states and provide important benefits coverage to a 

class of individuals with significant need. The replacement of the “waiver” context for HCBS 

and the conversion to a “program” not tied to institutional cost comparisons, with the added push 

of fiscal incentives, is a major step forward. 

However, the proposed program offers states the flexibility of carving out covered populations 

and limiting geographic scope as a way of containing costs. The approach does not yet create a 

true parity between the entitlement to skilled nursing care and home- and community-based 

LTSS. The recommendations to create financial incentives to states to reallocate their system as 

part of the design, development, and expansion of home- and community-based LTSS are not 

accompanied by any projections of cost. 

This set of recommendations from NASHP focuses exclusively on improvements to Medicaid. 

As a result, it does not look at a broader policy framework for expansion of coverage of LTSS 

across funding options and other existing federal authorities. 

The following table summarizes key recommendations from the NASHP report. 
292 

Table 3.1. National Academy for State Health Policy

Report/Recommendation: “Making Medicaid Work for the 21st Century,” January 2005. 

Scope of 

Approach Eligibility 

Benefits 

Coverage System Design Financing Strengths Weaknesses 

Focuses only 

on Medicaid 

changes 

Create a 

minimum 

national income 

eligibility 

threshold to 

cover all 

individuals with 

household 

incomes up to 

100 percent of 

the federal 

policy level. 

Set different 

functional 

criteria for 

institutional and 

communitybased services 

and supports. 

Eliminate the 

relationship of 

cost neutrality 

between Homeand 

CommunityBased Services 

(HCBS) waivers 

and institutional 

care. 

Create a new 

HCBS program 

as a state 

Medicaid plan 

option. 

States define the 

benefits 

coverage 

regarding longterm services 

and supports 

(LTSS) and can 

set caps to 

participation. 

Create single 

entry points to 

provide Medicaid 

beneficiaries and 

applicants 

assistance with 

determining 

eligibility based 

on service needs. 

States would be 

encouraged to 

provide eligible 

participants an 

individual budget 

to purchase and 

manage their 

own service 

delivery. 

Programs would 

continue without 

waiver renewal 

requirements. 

States could set a 

higher income 

threshold for 

admission to an 

institution and a 

lower threshold 

for the HCBS 

program. 

States allowed to 

carve out covered 

populations and 

limit geographic 

coverage. 

To accelerate 

rebalancing the 

LTSS system, 

states would 

receive a higher 

match on a 

temporary basis 

for HCBS. 

States would be 

required to 

document 

progress in 

serving more 

people in 

HCBS and a 

decline in 

Medicaid paid 

nursing home 

bed days. 

Continue 

Systems 

Change Grants 

from Centers 

for Medicare 

and Medicaid 

Services 

(CMS) to help 

states with 

building 

capacity, policy 

changes, and 

infrastructure 

development. 

Viable approach 

to end 

institutional bias 

of Medicaid. 

Fiscal incentives 

for states to 

rebalance LTSS 

system. 

Create Medicaid 

state plan 

option. 

Encourage use 

of consumerdirected 

individual 

budgets. 

Create single 

points of entry 

to overcome 

system 

fragmentation. 

Approach is 

optional, not 

required for 

states. 

States can carve 

out who is 

eligible, limit 

scope of 

benefits, and 

waive statewide 

coverage. 

Further research 

is needed on 

cost of proposal. 

Does not look 

outside of 

Medicaid at 

other federal 

authorities. 
293 

National Governors Association 

The NGA is the collective voice of the nation’s governors. In 2003, NGA Chairman Governor 

Dirk Kempthorne of Idaho created a task force to identify public policies that can help 

individuals live independently and with dignity.666 In his charge to the task force, Kempthorne 

urged the group to advance best practices in community care. “Overwhelmingly, Americans 

want to remain in their communities and places they call home.”667 In describing the scope of 

inquiry, Kempthorne encouraged an examination of effective transportation systems, emerging 

technologies, and reliable housing options, as well as identification of innovative practices to 

encourage and assist caregivers.668 Over the course of the past 15 months, through numerous 

forums and public policy research, the Lifetime of Health and Dignity Task Force developed 

multiple recommendations for future policy development. The discussion frequently returned to 

focus on the Medicaid and Medicare programs, which are the dominant federal means of 

assistance for our nation’s most vulnerable citizens, who would otherwise lack the means to 

afford the health care and LTSS they need. 

At their winter 2003 meeting, the governors adopted a statement of principles to be considered 

concerning any proposal to reform Medicaid. Included in the statement of principles is a finding 

that “the Medicaid statute has failed to keep pace with the changing health care system, current 

medical practices, and the needs of Americans in the 21st Century.”669

The proposed principles or policy framework adopt a core set of concepts that are reflected in the 

recommendations reviewed and analyzed from other national-level organizations. There is a need 

for more flexibility for states in the management of the Medicaid program. Current HCBS 

waiver authority must be revised to rebalance the current system of supports to favor community 

versus institutional settings.670 However, the NGA platform goes farther to address a range of 

issues of major concern to the governors and states. All three recommendations touch the 

sensitive issue of cost and allocation of responsibility if changes and improvements are to be 

made to enable all Americans to live longer with independence and dignity. 
294 

• The Medicare and Medicaid programs are interrelated, and any change made to 

Medicare, whether to strengthen its solvency, address its financing, or for other purposes, 

should be considered in conjunction with reforms to Medicaid. 

• The Federal Government should pay 100 percent of the cost of any new Medicaid 

mandates imposed under an Act of Congress, federal regulation, or court decision based 

on federal laws and regulations. 

• It is also unacceptable for Medicaid to be the only LTC program in the country. Other 

sources of coverage, whether federal, employer based, personal, familial, or community 

based, must be developed.671

It is not surprising that the governors are concerned about increased costs and the shifting of 

responsibility to the states. The last three Administration budget proposals have targeted 

Medicaid for federal cost reductions that would shift increased responsibility for beneficiaries to 

states.672 Total Medicaid spending has increased rapidly in recent years. In the past four years, 

Medicaid spending has increased by more than 50 percent.673 Over the past two decades, the 

average share of state budgets set aside for Medicaid spending increased from 8 percent in 1985 

to 22 percent in 2003.674 In 2005, Medicaid spending will surpass spending for elementary and 

secondary education as the largest single item in overall state budgets.675 According to CMS and 

the Congressional Budget Office, Medicaid spending is expected to continue to grow at a rate 

exceeding state revenue growth, driven by caseload growth, an aging population in greater need 

of assistance, and medical advances.676 

Despite cost concerns, the NGA task force explored additional, diverse options to change the 

current system of LTSS. A recommended list of “20 Actions Governors Can Take” was 

developed that divides proposed actions into four major categories: (1) promote communitybased care; (2) support family caregivers and home care workers; (3) encourage personal 

financial planning; and (4) promote health and wellness.677 All 20 recommendations are based on 

promising practices in one or more states concerning services for seniors. Several would require 

federal policy reform. However, many would also benefit individuals with disabilities at a 

younger age in need of LTSS. The review of 13678 of the 20 recommendations was selected 
295 

because of their relevance to the larger target audience of individuals with disabilities below and 

above the age of 65. 

Promote Community-Based Care 

1. Promote elder-ready communities to enable individuals to live in their homes and 

neighborhoods as long as possible. Based on the livable communities framework,679 state 

and local governments can work together to improve availability of affordable housing and 

transportation, and provide financial assistance with home modifications to enable an 

individual with the onset of disability to “age in place.”

2. Establish fast-track eligibility for HCBS. Following a hospital stay, individuals are 

routinely referred to nursing homes instead of being offered community-based services. 

Hospital discharge planners are often more familiar with nursing home eligibility rules than 

with options for coverage of in-home or community care. Several states have streamlined 

the eligibility process for HCBS waivers and established presumptive eligibility for 

community care that makes services available within 48 hours.

3. Improve access to long-term support options by developing Web-based information 

and assistance systems. With the complex set of rules and requirements that determine 

eligibility for services and supports and that are often different for each public funder and 

from state to state, numerous states are now developing information-rich Web sites to 

provide consumer-friendly information to determine support options and individual 

eligibility. Computer-based information systems are complemented by counselor support in 

local neighborhood centers.

4. Establish one-stop shops. Pioneered in Wisconsin, multiple sites are now piloting ADRCs 

with financial support from CMS and the Administration on Aging. Assistance is provided 

to both public- and private-pay individuals to better coordinate information and access to 

multiple federal, state, and local programs.

5. Include consumer direction in all state community-based service programs. Building on 

positive evaluations from selected state Cash and Counseling Demonstrations, consumer 

direction is an essential program design element that allows individuals with disabilities to 

have maximum choice and control over their support plan, including assessment of needs, 
296 

determination of how those needs will be met, selection of providers, and management of 

costs within an individual budget.

6. Coordinate transit funding sources. Access to reliable transportation services can be 

strengthened through linking transportation resources to health and social service programs. 

Improved coordination between state and local governments and public and private service 

providers can improve availability in urban and rural settings.

Support Family Caregivers and Home Care Workers 

7. Improve the tax treatment of caregiver expenses. State caregiver tax credits generally 

range from $500 to $1,500. At least 26 states and the District of Columbia have either 

refundable or nonrefundable tax credits for dependent care that generally benefit lowincome taxpayers. 

8. Expand Family and Medical Leave Act (FMLA) benefits. FMLA provides employees of 

businesses with at least 50 employees with at least 12 weeks of unpaid leave each year to 

care for a newborn or seriously ill family member, or to recover from their own serious 

health conditions. To further support family caregivers, the federal FMLA provisions could 

be expanded to cover employees in workplaces with fewer than 50 employees, allow leave 

for family medical needs that are not covered by the federal law, extend the periods for 

family and medical leave, and offer paid leave benefits. 

9. Inform home care workers about eligibility for federal tax credits. Tax refunds for a 

low-income worker with a family can be significant—up to $4,200 under the provisions of 

the earned income tax credit (EITC). Volunteer tax preparation assistance is available in 

most major cities.680

10. Encourage and assist in developing employer health insurance purchasing pools. 

Several states have organized public authorities that serve as employer of record for selfemployed home care workers to create a purchasing pool. Between 40 and 45 percent of 

paraprofessional home care workers lack health coverage. Health coverage options will help 

attract and retain direct care workers. 

11. Connect in-home workers to existing supports for taxes, housing, health care, 

transportation, and other service needs of low-wage workers. Selected states have created 
297 

direct care worker resource centers and have coordinated worker recruitment and links to 

support services through the workforce development system of One-Stop Career Centers.681

12. Encourage personal financial planning. Selected states are offering limited tax credits 

or deductions to encourage purchase of LTC insurance premiums. Encourage more 

consistent coverage across states with tax incentives for purchase of policies that benefit 

other family members.

13. Promote the use of reverse mortgages for long-term supports. Reverse mortgages allow 

homeowners to stay in their homes while cashing in on the equity they have invested. Funds 

received in a lump sum, as monthly payment over a fixed period of years, as a lifetime 

annuity, or as a flexible line of credit are considered tax free and do not count as income 

toward social security, Medicare, or Medicaid benefits. The full loan amount, including 

principal and interest, is repaid to the lending institution when the borrower or borrower’s 

spouse sells the home, moves, or dies. 

With its statement of principles for Medicaid reform and the breadth of recommendations for the 

creation of a more comprehensive system of support for individuals with disabilities to live with 

independence and dignity, NGA has offered possible ways to reexamine the current policy 

framework. Although there are no cost projections for any of the specific proposals, there are 

clear concerns about sharing the costs with the states. NGA wants any new federal Medicaid 

mandate to be 100 percent funded by the Federal Government. There is an understanding that no 

single federal program or funding authority offers a full solution to increasing long-term services 

demands and changing consumer preferences. There is an interest in embracing consumer 

direction and choice, as well as state commitment to continued expansion of the benefits options 

that support the family and recognize the important role of family caregiving, which reduces 

public costs. A comprehensive solution will need to improve collaboration among federal, state, 

and local government and public and private sector interests. The NGA recommendations make 

it clear that the allocation of costs is at the center of future discussions and debate. 

The following table summarizes the NGA recommendations. 
298 

Table 3.2. National Governors Association Report/Recommendation: “Lifetime of Health and Dignity Task Force,” 2004.  “Policy Resolution HHS-27,” Winter Meeting, 2005.  “Twenty Actions Governors Can Take,” 2004. 

Scope of Approach Eligibility 

Benefits Coverage System Design Financing Strengths 

Focus on Medicaid and Medicare, but with the recognition that other strategies must be developed, including employer-based, family, and private sector solutions. 

Establish fast-track eligibility for homeand community-based services (HCBS). Consider presumptive eligibility for HCBS based on functional assessment of needs. Involve the consumer actively in assessment of needs and determination of an individual service plan to meet those needs. 

Does not define the benefits coverage for HCBS. Does promote the elder-ready or livable communities concept and encourages state and local governments to work together to improve availability of affordable housing and transportation, and financial assistance with home modifications. 

Establish One-Stop Shops to better coordinate information on eligibility and access to diverse public and private services and supports. Improve information access by developing Web-based information systems. Include consumer direction in all state community-based programs. 

Federal Government should pay 100 percent of the cost of any new Medicaid mandates. Any changes to Medicare must address the impact on Medicaid, which shares costs between the Federal Government and the states. Improve tax benefits for dependant care to help families with the expenses of informal caregiving. Encourage and assist in developing employer health insurance purchasing pools to help attract and retain direct care workers. Promote the use of reverse mortgages to increase personal funding to pay for long-term services and supports (LTSS). Expand family and medical leave benefits to further support family caregivers. 

Recognition of the multidimensions to the challenfaced by individuals and growing numbers. Endorse livable communframework to improve coaccessible transportation housing strategies. Support consumer-directindividual budgets and aconsumer choice and maof public resources. Support improved informaccess and presumptive for community services bfunctional assessment raon the institutional care bcurrent system. Support expanded tax befamilies involved in depand assistance in health cfor direct care workers to recruitment and retention challenges. 
299 

National Academy of Social Insurance 

NASI is a nonprofit organization made up of the leading experts on social insurance. Members 

include policy analysts in income security and health care financing, economists, political 

scientists, administrators of public and private benefit programs, and practitioners in related fields. 

Social insurance encompasses broad-based systems for insuring workers and their families against 

economic insecurity caused by loss of income from work and the cost of health care. NASI 

convenes study panels to conduct research and issue findings and policy recommendations. 

In January 2003, the Study Panel on Medicare and Chronic Care in the 21st Century issued a report 

titled “Building a Better Care System.” When Medicare was first established in 1965, it was 

modeled after the health insurance system of that time. Medicare served primarily as a claims 

payer. Its benefits package and reimbursement systems were not designed for chronic 

conditions.682 The study panel adopted a definition of a chronic condition as “a condition which 

lasts (or is expected to last) a year or longer, limits what a person can do, and requires ongoing 

care.”683 The report identified the cost of managing chronic conditions as substantial. A 

disproportionate amount of Medicare dollars are spent on beneficiaries with chronic conditions. 

Beneficiaries with five or more chronic conditions account for 20 percent of Medicare spending.684

The need to manage chronic conditions has increased over the past two decades. The number of 

beneficiaries is expected to continue to grow from 40 million in 2001 to 77 million by 2030. The 

number of beneficiaries over age 85—those with the greatest chronic care needs—is projected to 

grow from 4.3 million to 8.5 million over the same period.685 The report also noted that the 

disabled population under the age of 65 has grown even faster than the aged population. 

Enrollment rose from 2.2 million in 1975 to 5.6 million in 2000. By 2017, Medicare is expected 

to cover 8.5 million individuals with disabilities.686

The study panel adopted three principles for selecting policy changes to promote better chronic care: 

• Medicare should recognize and aim to focus on beneficiaries’ needs and preferences. 

• Payment should support recommended models of care delivery. 
300 

• Policies should aim for efficient care with beneficiaries getting the best value for the 

dollars spent. Policies should help beneficiaries maintain function and quality of life.687

The panel’s recommendations include a long-term vision for Medicare and six short- to mid-term 

requirements. The long-term vision entails a shift in focus to chronic care with access to needed 

services to enhance function and quality of life and financial protection from costs that pose 

barriers to needed supports.688 There would be a seamless continuum across acute, chronic, longterm, and end-of-life care. 

To achieve the long-term vision, the panel recommended six key areas for improvement, some of 

which could be implemented immediately. 

1. Provide beneficiaries with financial protection from chronic conditions. To limit costsharing requirements, add an annual cap on out-of-pocket expenditures for covered services. 

2. Expand the continuum of care beyond those services presently covered by Medicare. The 

current statute prohibits payment for services that are “not reasonable or necessary for the 

diagnosis or treatment of illness or injury or to improve the functioning of a malformed body 

member” (1862 (a)).689 The panel recommended a change in statutory language to prohibit 

payment for services that “are not reasonable and necessary for the prevention, diagnosis, 

treatment of illness or injury, or to improve, maintain, or slow the decline of function.”690 This 

change would shift the Medicare focus to allow for coverage of preventive and rehabilitative 

services that would enhance function and quality of life. The panel suggested the addition of a 

prescription drug benefit as the most important addition for management of chronic 

conditions. The report was written before the passage by Congress in 2003 of the Medicare 

Modernization Act.691 Other suggested changes in coverage included durable medical 

equipment, with the specific intent of maintaining or restoring function and support of 

rehabilitation as a tool to improve, maintain, or slow the decline of function.692

3. Promote new models of care. The panel adopted the position that incremental changes in 

policy will not be sufficient to significantly improve the system of services and supports for 

individuals with chronic conditions. Services must be integrated for individuals dually 

eligible for Medicare and Medicaid. Payments should support the redesign and expanded 
301 

benefits coverage. The risk adjustment of evaluation and management codes should be 

considered. Add-on payments for beneficiaries with specific chronic conditions would 

compensate providers for longer visits, additional supports, and coordination with other 

providers to improve the quality of care.693 The panel also suggested the design and testing 

of a variety of payment models for different subpopulations. 

4. Strengthen the role of CMS as a purchaser of services. The panel supported the use of 

enhanced payments to providers who provide high-quality chronic care. The panel 

recognized the challenges of implementation of such a system and suggested that CMS fund 

demonstrations to improve measures and measurement on the quality of chronic care and 

examine strategies to make the information available to beneficiaries. Quality-of-care 

reporting requirements would eventually be required of individual providers, physician 

groups, and health plans.694

5. Support enhanced information systems. Medicare should support the implementation of 

information systems that track beneficiaries across multiple providers and care settings. 

Information systems should transition to longitudinal electronic records from handwritten 

case files. The panel notes that information systems can proactively facilitate care, reduce 

provider errors, and improve CMS oversight and assessment of quality of care, highlight 

potential areas for improvement, and provide evidence of which practices optimize quality 

of care.695 CMS should also promote the collection and standardization of health and 

functional assessment data. The current separate measures and information systems for 

different provider settings make it difficult to track an individual’s health, function, and 

quality of life across care settings.696

6. Implement and support funding for research and demonstration projects. The panel 

suggested that CMS sponsor a wide variety of research and demonstration projects. 

Projects to consider included alternative models of care management, research on risk 

adjustment, options to increase family participation in care and support decisions, and 

other approaches to improve quality of care for specific subpopulations with functional 

and cognitive limitations.697

The NASI panel did not attempt to project the costs of implementing their recommendations. It 

did, however, prioritize their top three suggestions for federal policymakers. Their priority 
302 

recommendations were to limit beneficiary costs by adding an annual cap for out-of-pocket 

expenses, support new models of care by risk-adjusting evaluation and management codes, and 

implement an information system that tracks beneficiaries across multiple providers and care 

settings. The panel’s focus on care reflects the influence of the medical system historically on a 

population increasingly determined to have a greater role in assessment and management of 

service and support plans. 

There is recognition of the need for change that would significantly alter and improve the 

Medicare program for a growing population that is younger and more disabled. These changes 

will require significant additional spending of public resources. The NASI panel was more 

narrowly focused on a single federal program and did not look at the interrelationship of other 

federal authorities outside of Medicare and Medicaid. Analysis and measurement of quality of 

life for people with chronic conditions would evaluate alternative care settings for rehabilitation 

and enhanced function. However, challenges of affordable housing and aging-in-place at home 

were beyond the scope of inquiry. The panel suggests testing alternative payment models but 

leaves the scope of options to future research and demonstration activities. The panel does offer 

an important shift in focus for Medicare that suggests the possible framework for a more 

comprehensive set of benefits “to improve, maintain, or slow the decline of function.” 

The following table summarizes the NASI recommendations. 
303 

Table 3.3. National Academy of Social Insurance Report/Recommendation: “Medicare and Chronic Care in the 21st Century—Building a Better Care System,” 20Scope of Approach Eligibility Benefits Coverage System Design Financing Strengths Focuses only on changes to Medicare and the growing population with chronic conditions. Does recognize the interrelationship with Medicaid for future policy development. 

Allow payment for services that are reasonable and necessary for the treatment of illness or injury to improve, maintain, or slow the decline of function. 

Expand coverage to include durable medical equipment with the specific intent of maintaining or restoring function and support of rehabilitation as a tool to improve, maintain, or slow the decline of function. Shift the focus of Medicare to chronic care with access to needed services to enhance function and quality of life. 

Services must be better integrated for individuals dually eligible for Medicare and Medicaid. Support improved information systems that track beneficiaries across multiple providers and care settings. Standardize health and functional assessment data across care settings. Support research and demonstrations to learn more about approaches to improve quality of care for specific subpopulations with functional and cognitive limitations. 

Limit beneficiary cost-sharing with an annual cap on out-ofpocket expenditures for covered services. Consider risk adjustment of evaluation and management codes with add-on payments to cover costs of beneficiaries with the need for more intensive supports. Conduct additional research to understand more about cost and the impact of a riskbenefit approach and options to increase family participation in care and support decisions. 

Support of new models that are at risk of adjusting evaluation and management codes under Medicare. Improve coordination across funders and care settings through an enhanced information system that tracks beneficiaries across multiple providers. Recognize the need to change coverage of Medicare for a growing population that is younger and more disabled. Limit out-of-pocket expenses annually for beneficiaries. 
304 

Congressional Budget Office 

The CBO conducts policy research at the request of members of Congress and congressional 

committees. Its mission is to provide independent, objective information to help consider policy 

options for the future. At the request of the House Budget Committee, the CBO’s Health and 

Human Services Division analyzed the current state of financing for LTC and delineated a range 

of policy approaches to consider for future policy development. A report entitled “Financing 

Long-Term Care for the Elderly” was issued in April 2004. In keeping with its mandate to 

provide impartial analysis, the report contains no recommendations. However, CBO does 

provide a careful analysis of the current context to consider increasing costs affected by 

demographic trends that demand the attention of policymakers. Although the target population is 

more narrow than the larger group of individuals across the age span with LTSS needs, the CBO 

analysis is relevant and helpful to the understanding of recent growth in public spending and the 

possible relationship between public and private financing. 

CBO explains that the need for LTC is already substantial, even without the aging of the baby 

boom generation. The doubling of the senior population by 2040 is expected to further intensify 

demand for services. CBO defines “long-term care” as 

the personal assistance that enables impaired people to perform daily routines 

such as eating, bathing, and dressing. Such services may be provided at home by 

family and friends; through home- and community-based services such as home 

health care, personal care, and adult day care; or in institutional settings.698 

With the exception of room and board covered by Medicaid for individuals who qualify for 

skilled nursing facilities, the CBO analysis does not explore, within the context of LTC, 

alternative less restrictive places to live and public and private financing options. Within the 

definition of LTSS adopted by CBO, the report explains that most costs are provided through 

personal resources. Most seniors with a need for assistance with at least four aspects of daily life 

rely on informal caregiving.699 Donated caregiving is most common among lower-income groups 

and among seniors who live close to people willing to provide it, such as family members. CBO 

estimates that replacing the donated costs with professional care would cost between $50 billion 

and $103 billion in 2004 dollars.700
305 

The CBO report acknowledges that, in general, people who are younger than 65 use LTC for 

different reasons than do people who are over 65. Seniors in need of LTSS generally are 

adversely affected by physical problems such as arthritis and heart disease. Younger individuals 

with disabilities are more likely to be affected by mental retardation and mental illness.701

Medicaid is by far the biggest funder of LTSS for individuals under the age of 65, and the 

program spending for this group continues to grow significantly with the shift from institutional 

care to HCBS.702

The CBO report sets out three options to respond to growing demand for LTSS. The first set of 

proposals would tighten eligibility for Medicaid and limit Medicare’s home health benefits. The 

second set of proposals explores the relationship between LTC insurance and public coverage 

under Medicaid. It seeks to alter the incentives that encourage people to spend down assets to 

become financially eligible for Medicaid for private LTC insurance. The third set of options 

would expand public programs that finance LTSS. 

1. Restrict growth in LTC spending by Medicaid and Medicare. The rationale for this 

suggestion is that, by placing new restrictions on eligibility and benefits, individuals with 

disabilities and families would turn to private market solutions that would be developed to 

respond to the need.703 One approach would be to tighten existing limits on income and 

assets that would delay some applicants’ entry into the Medicaid program and discourage 

others from applying at all. Such a proposal would probably most adversely affect 

individuals with disabilities under age 65. These individuals are the least likely candidates 

for any market-driven product of LTC insurance, because their need for services and 

supports is more intense and costly. As a group, they are the least likely to be able to afford 

premiums that would be risk-adjusted and most likely be at the higher end. 

2. Improve the functioning of the market for private LTC insurance. This second proposal 

seeks to improve the relationship between Medicaid coverage and coverage under private 

insurance policies. The first part of the proposal is to standardize LTC policies.704 Such an 

approach would make it easier for companies to compare premiums for uniform sets of 

benefits. It might lead to more competition among insurers and possibly drive prices down. 

A standard benefits package that conforms to government standards might also help prevent 
306 

insurers from tailoring policies to appeal only to healthier purchasers or those with less 

intense needs. CBO’s analysis of this approach suggests that standardization of benefits may 

block the objective it was meant to achieve.705 A required minimum set of benefits and 

consumer protections might be so comprehensive that insurers would have to charge higher 

premiums, with the result that consumer interest would decline. An additional disadvantage 

discussed is that standardization could prevent insurers from offering a variety of products 

to meet the needs of a very diverse consumer audience. A second part of this proposal would 

allow consumers to supplement Medicaid coverage with private policies. Current rules do 

not allow enrollees to hold supplemental private insurance. Applicants for Medicaid must 

exhaust all other sources of LTC financing, including benefits offered by private insurance. 

Allowing Medicaid beneficiaries to supplement coverage with private insurance would 

conserve public resources. 

 The Long-Term Care Insurance Partnership Program that began as a four-state model, and 

will be expanding to a nationwide model in the near future, allows people who have 

exhausted or used most of their private LTC insurance benefits to qualify for Medicaid and 

exempt all or some of their assets from Medicaid estate recovery requirements.706 Several 

states are experimenting with partnership policies that allow individuals with more modest 

means to purchase less expensive, shorter-term coverage and still protect some or all of their 

assets.707 In the partnership policy, some or all of the policyholder’s savings are allowed to 

be designated as uncountable assets for determining current and future eligibility for 

Medicaid. What is unknown is whether the partnership policy approach reduces or increases 

Medicaid spending. In a small study conducted in California’s partnership program, a 

savings of $1.3 million was calculated for 18 individuals who used private policies versus 

Medicaid coverage.708 It was noted that it was unclear whether the participants in this study 

had transferred assets before applying to Medicaid. 

 CBO concludes that, without question, partnership policyholders would generate more 

Medicaid expenditures, because they would be allowed to qualify without first exhausting 

all assets.709 What is not as clear is how Medicaid expenditures might be affected by people 

who would not have purchased insurance at all. CBO questions whether people without 
307 

insurance have a diminished incentive to preserve their finances. By exhausting their 

resources, they qualify for Medicaid that much faster.710

3. Expand public programs that finance LTC. This third set of proposals is described by 

CBO as the most costly and would “probably worsen the fiscal difficulties the future 

demographic changes are expected to bring if current law remains unchanged.”711 Three 

approaches are offered to expand the menu of benefits and the group of individuals who 

would be eligible for the enhanced menu of LTSS. Similar to the NASHP proposal, the 

Federal Government and states could raise the current limits on assets and income so that 

more individuals met the program criteria for financial eligibility. CBO suggests that such 

an approach is likely to depress further the development and sale of private insurance 

products. It is also likely to shift costs away from out-of-pocket spending by individuals 

who, under the new criteria, would probably have had to spend down more of their assets. A 

second part of this approach would be to expand benefits under Medicare. Suggested 

expanded benefits include home health services and respite care to promote and support 

informal caregiving.712 CBO again points out that any expansion of benefits will reduce 

consumer interest in private insurance products. A third option suggested by CBO for 

consideration is to look at several types of tax credits as an alternative to expanded direct 

public funding. CBO proposes a tax credit to taxpayers who are “functionally impaired or 

who have a functionally impaired dependent.”713 A tax credit as an alternative to a defined 

program benefit offers beneficiaries a greater degree of choice and control about the type of 

services to be purchased and the providers to be selected. CBO does not offer more details 

on the amount of the tax credit or whether it would be available to individuals and families 

below a certain income level. 

The CBO report offers a set of options that recognize demand for services and their resultant 

costs. The proposals have not been analyzed in terms of specific projected costs to implement or 

the comparative costs of selecting one of the three approaches over another. The CBO report 

does raise important concerns about the relationships among out-of-pocket spending, informal 

caregiving, private insurance coverage, and federal spending by Medicaid and Medicare. 

Decisions about changes in financial eligibility will have an impact on the development, design, 

and utilization of private insurance products. CBO urges more study of how partnership 
308 

products, which seek to balance individual and public spending, could respond to growing needs 

for LTSS for individuals with disabilities. Without more federal involvement to require private 

policies to conform to particular design standards, it is an unlikely option for individuals with 

disabilities with diverse needs. 

The following table summarizes the CBO recommendations. 

Table 3.4. Congressional Budget Office 

Report/Recommendation: “Financing Long-Term Care for the Elderly,” 2004. 

Scope of 

Approach Eligibility 

Benefits 

Coverage 

System 

Design Financing Strengths Weaknesses 

CBO offers 

three policy 

options with 

an analysis of 

each 

approach. 

CBO does 

not 

recommend 

one option 

over another. 

Restrict growth 

in longer-term 

care spending 

by Medicare 

and Medicaid 

by placing new 

restrictions on 

eligibility by 

tightening 

income and 

asset limits. 

Expand 

eligibility to 

provide an 

expanded 

menu of longterm services 

and supports 

(LTSS). 

Increase 

government 

involvement with 

the private longterm care (LTC) 

insurance market 

by requiring a 

standard benefits 

package that 

must be made 

available. 

Allow consumers 

to supplement 

Medicaid 

coverage with 

private insurance 

policies. 

Expand benefits 

coverage under 

Medicare, 

including 

coverage of 

respite care, to 

promote and 

support informal 

caregiving. 

CBO explores 

ways of 

complementing 

public 

programs with 

private LTC 

insurance 

without losing 

public 

eligibility. 

Consider a 

variety of tax 

credits as an 

alternative to 

expanded direct 

public funding to 

reimburse 

individuals and 

families for the 

expense of 

LTSS. 

Allow consumers 

to use private 

insurance to help 

reduce public 

costs. 

CBO raises 

important concerns 

about the 

relationship 

between out-ofpocket spending, 

private insurance 

coverage, and 

public spending on 

LTSS. 

CBO urges more 

research about the 

costs and benefits 

of the relationship 

between insurance 

products and 

publicly financed 

benefits. 

Use of tax credits 

to help support the 

expense of family 

caregiving. 

Narrow focus of 

analysis on 

expansion or 

reduction of 

coverage through 

Medicaid and 

Medicare. 

Need for further 

research on cost 

and benefits of 

linking insurance 

product coverage 

with Medicaid 

eligibility. 
309 

Americans Disabled for Attendant Programs Today 

ADAPT has a history of organizing the disability community using civil disobedience and 

similar nonviolent direct action to achieve its goals. The organization was founded by individuals 

with disabilities in Denver as American Disabled for Accessible Public Transit and began its first 

national campaign in the 1980s, to improve access to public transit for people with disabilities. 

ADAPT members nationwide began to organize in 1990 for the reallocation of 25 percent of 

federal and state Medicaid dollars from institutional programs to consumer-controlled HCBS and 

supports. The reaction of ADAPT members to HCBS waivers has been one of disappointment. 

Inconsistent coverage from state to state, both in terms of limited eligibility and benefits 

coverage, has left too many individuals with disabilities and their families with few choices 

outside of nursing homes and other large institutions.714 As a possible solution to the institutional 

bias of Medicaid, ADAPT developed a legislative proposal designed to encourage states to 

provide more HCBS. First introduced in the 105th Congress in 1997, two similar legislative 

proposals stalled in the House Subcommittee on Health and Environment and the Senate Finance 

Committee.715 In the 106th Congress, and each subsequent legislative session through 2004, 

related versions of the ADAPT proposal have been introduced but have not secured sufficient 

support for passage. 

The ADAPT policy recommendations focuses on three core areas for improvement of the 

Medicaid program. They focus on eligibility, access to benefits that are consumer directed, and 

financing strategies to encourage states to rebalance their services and supports away from 

institutions to home and community settings. The Medicaid Community Attendant Services and 

Supports Act (MiCASSA) does not propose the creation of a new entitlement. However, it does 

propose to offer states more flexibility in the use of federal funds to establish a national program 

of community-based attendant services and supports for people with disabilities, regardless of 

age or type of disability. In the version of the proposal introduced in the 108th Congress in 2003, 

congressional findings indicated that the goals of the Nation properly include providing families 

of children with disabilities, working age adults with disabilities, and older Americans with 
310 

a. a meaningful choice of long-term services and supports in the most integrated setting 

appropriate to their needs; 

b. the greatest possible control over the services received and, therefore, their own lives and 

futures; and 

c. quality services that maximize independence in the home and community, including in the 

workplace.716 

To achieve these goals, the ADAPT legislative proposal would establish a mandatory Medicaid 

plan benefit for coverage of community-based services and supports to be transitioned over a 

four-year period. 

1. Expand coverage of LTSS. Rather than a plan option or an inclusion as a benefit under an 

HCBS waiver, the ADAPT proposal would require all states who choose to participate in the 

Medicaid program to include a new set of benefits for community-based attendant services 

and supports. Services and supports in the benefit would cover assistance with tasks 

necessary to assist an individual in accomplishing ADLs and IADLs; and the acquisition, 

maintenance, and enhancement of skills required to accomplish ADLs and health-related 

functions. Support includes hands-on assistance; supervising and/or cueing; and help to 

learn, keep, and enhance skills to accomplish such activities.717 ADLs include eating, 

toileting, grooming, dressing, bathing, and transferring. IADLs include meal planning and 

preparation, managing finances, shopping, household chores, phoning, and participating in 

the community.718 Services must be provided in the most integrated setting appropriate to 

the needs of the individual based on an individual plan.719

 Not included under the benefit are the provision of room and board for the individual, 

special education, and related services provided under the Individuals with Disabilities 

Education Act; vocational rehabilitation services provided under the Rehabilitation Act, 

assistive technology devices and services, durable medical equipment, and home 

modifications.720 The list of excluded services and benefits is an attempt to not duplicate 

coverage available through some other federal program authority, such as special education, 

vocational rehabilitation, or an HCBS waiver. It does not attempt to offer new resource 
311 

support for affordable and accessible housing, even though Medicaid continues to cover 

room and board only in nursing home settings. 

 For a state plan amendment with the new mandatory community-based services and 

supports benefit to be approved, a state must establish an extensive quality assurance 

program to maximize consumer independence and consumer control in both agencyprovided and other delivery models.721

2. Adopt current standards of eligibility for community-based services and supports. 

Eligibility for the new benefit would include any individual who (1) is eligible for medical 

assistance under the state plan, (2) is determined to need the level of care provided in a 

nursing facility or an intermediate care facility for the mentally retarded, and (3) chooses to 

receive these services and supports in a community setting.722 Financial eligibility would be 

the same as currently required for nursing home eligibility—up to 300 percent of the SSI 

level. States would have the option to adopt a higher threshold. 

3. Offer states financial assistance to rebalance their systems. The ADAPT proposal offers 

states enhanced federal matching assistance for those who move ahead with the redesign and 

rebalancing of their systems. The proposal also offers states additional reimbursement for 

the provision of community-based services and supports to an individual for whom costs 

exceeds 150 percent of the average cost of providing nursing facility services but who 

chooses to receive assistance at home or in community settings.723

The ADAPT proposal attempts to provide the consumer of LTSS with more options and choices 

outside nursing facilities and institutions. It offers states additional federal financial assistance to 

rebalance the service delivery system away from an institutional bias. As a mandatory benefit in 

a state’s Medicaid plan, policymakers may have significant concerns about the number of 

individuals who would seek to apply for the community-based benefits and add costs to the 

Federal Government and states. The ADAPT proposal does not include cost projections. 

The proposal offers no additional policy options to respond to the growing demand for affordable 

and accessible housing. The ADAPT proposal continues to influence policy debates as to 

possible approaches for federal financial assistance to follow an individual involved in nursing 
312 

home traction. The possible strategy of different levels of federal financial participation for 

support of states that try to rebalance their systems deserves further research on cost and utility. 

The following table summarizes the ADAPT recommendations. 

Table 3.5. Americans Disabled for Attendant Programs Today 

Report/Recommendation: “2003 Legislative Proposal—Medicaid Community Attendant 

Services and Supports Act,” 2003. 

Scope of 

Approach Eligibility 

Benefits 

Coverage System Design Financing Strengths Weaknesses 

Focus on 

changes to 

Medicaid to 

expand 

coverage of 

home- and 

communitybased 

services 

(HCBS). 

Similar 

eligibility 

requirements as 

currently exist 

for Medicaid, 

including 

financial 

eligibility and 

individual 

determination of 

need for a level 

of care provided 

in a nursing 

facility or an 

Intermediate 

Care Facility for 

the Mentally 

Retarded. 

The change 

would be to 

honor individual 

preference to 

receive those 

services in a 

community 

setting. 

Benefits are 

expanded to 

cover 

assistance with 

the activity of 

daily living or 

instrumental 

activities of 

daily living 

including meal 

planning and 

preparation, 

managing 

finances, 

shopping, 

household 

chores, and 

community 

participation. 

Services must 

be provided in 

the most 

integrated 

setting 

appropriate to 

the needs of the 

individual. 

Rather than a 

state plan option 

or an inclusion as 

a benefit under 

an HCBS waiver, 

the ADAPT 

proposal would 

establish a new 

mandatory plan 

requirement for 

all states that 

choose to 

participate in the 

Medicaid 

program. 

A state must 

establish an 

extensive quality 

assurance 

program to 

maximize 

consumer 

independence 

and control in 

both agencyprovided and 

other delivery 

models. 

States are offered 

enhanced 

financial 

matching 

assistance to 

move ahead with 

system design 

and rebalancing. 

States are offered 

additional 

financial 

assistance for 

individuals who 

participate and 

for whom costs 

exceed 50 percent 

of the average 

costs of providing 

nursing facility 

services to an 

individual, but 

who prefers to 

receive assistance 

at home or in 

community 

settings. 

Adding a 

mandatory benefit 

will provide the 

eligible population 

access to needed 

services not tied to 

an institutional 

model in all states. 

The choice of 

participation is not 

left to the discretion 

of the states if they 

want to continue to 

participate in the 

Medicaid program. 

Financial incentives 

are offered to 

encourage state 

participation. 

Consumer-directed 

service planning 

and implementation 

is emphasized. 

A mandated 

service meets great 

resistance from 

federally focused 

budget analysts 

and state 

governments who 

are cost-sharing 

partners in the 

Medicaid program. 

There is no 

consideration of 

supports from 

other federal 

authorities, such as 

housing and 

transportation, 

which are part of a 

larger framework 

for discussion of 

an expanded longterm supports and 

services system. 

Further cost 

analysis is needed 

to fully understand 

the implications of 

implementation of 

the ADAPT 

proposal. 
313 

American Association for Retired Persons 

AARP is a national nonprofit membership organization. Its membership is diverse, including 

individuals in their 50s who are working and enjoy a comfortable standard of living as well as 

those over 80 who are struggling with minimal resources. Each year AARP, with input from its 

members, develops a set of policy recommendations to help improve economic security, health 

and LTSS, and independent living. The Policy Book for 2005 offers an analysis of the current 

environment, articulates a list of principles to frame future policy development, and offers a 

detailed and comprehensive set of policy recommendations to improve access, availability, and 

quality of LTSS for individuals in need, regardless of age or income.724

AARP’s description of the current environment recognizes that for many Americans, advancing 

age means an increasing likelihood of chronic illness and disability. However, AARP, utilizing 

census data, points out that millions of younger adults and children also need LTSS. If a broad 

functional definition of “disability” is used to include individuals who need assistance with one or 

more ADLs or IADLs, AARP estimates that 11.5 million individuals of all ages have disabilities 

severe enough to require LTSS.725 With the aging of the population over the next 25 years and 

continued improvements in health care, the class of individuals needing services and supports will 

grow dramatically.726 Other factors identified by AARP in the current environment included 

changing consumer preference for HCBS as a first choice, dependence on unpaid family 

caregiving, and limited coverage of Medicaid and Medicare with private LTC insurance not filling 

the void for many individuals in need of assistance because of high cost or adverse selection.727

AARP takes a strong position on the need for comprehensive reform and offers 11 principles that 

should be used to evaluate any new policy proposals.728

1. Long-term services and supports should receive adequate public financing through a 

social insurance program. Under social insurance programs, individuals pay into the system 

and are subsequently entitled to benefits when they are needed. The costs are spread across an 

entire population, which is the financing mechanism for Social Security and Medicare. 
314 

2. Implementation of a comprehensive public LTSS system should be phased in. 

Expansion of services requires development of the needed infrastructure, including building 

the capacity of a workforce to respond to long-term individual support needs. 

3. A comprehensive range of LTSS should be guaranteed to all who need them, 

regardless of age or income. Uniform assessments should determine whether a person 

meets eligibility criteria for the program, and what type and level of service a person 

requires. The range of services includes in-home assistance, community services, a full 

range of supportive housing options, institutional care, rehabilitative services, assistive 

technology, and assistance with home modifications. Consumer choice and direction should 

also be key elements of assessment of need and service delivery management. 

4. Public LTSS should give meaningful support to family and friends who provide 

caregiving. Any new national program should support, not necessarily replace, caregiving 

by family and friends. 

5. Private sector insurance should supplement public LTSS financing. Any private sector 

approach should be subject to strong standards to protect consumers from inadequate 

products or deceptive marketing practices. 

6. Provider payments should be adequate. Reimbursement for services and supports must be 

reasonable and offer appropriate incentives to deliver quality services and to attract and 

retain qualified staff. 

7. Cost-containment mechanisms should be built into the comprehensive long-term 

support program. Appropriate mechanisms should promote efficiency in service delivery, 

tying the amount of benefits to disability levels. However, cost containment should not 

reduce access to adequate and affordable services and supports. 

8. The Federal Government and state governments are responsible for monitoring and 

ensuring the delivery of quality services. To protect the health and safety of consumers, 

both levels of government should swiftly and vigorously apply sanctions when needed to 

enforce laws and regulations concerning the quality of services and supports being provided. 

9. LTSS should promote consumer independence, dignity, autonomy, and privacy. The 

design and delivery of services should promote concepts of consumer choice and direction. 
315 

The framework for decision making should recognize and support consumer choices to the 

maximum extent possible. 

10. The rights of consumers receiving LTSS should be protected. Consumers receiving 

services should have a private right of action in court to ensure their rights. The list of 

protections should include the right to timely information concerning their care, including 

access to records, the right to keep personal possessions, and the right to express grievance 

without fear of reprisal. 

11. Consumers of LTSS have a right to privacy. Regardless of the long-term service setting, 

consumers should have private areas for visitation, security protections for personal 

property, and access to private telephones. 

In addition to these principles to help design and evaluate future policy proposals, The Policy 

Book offers more detailed strategies for consideration by the Federal Government and state 

government that are divided into six core areas: creating a consumer-directed system, support for 

family caregivers, expanding HCBS, development of appropriate health and functional criteria, 

preserving access and quality, and coordination and integration of LTSS. 

1. Creating a consumer-directed system. The underlying philosophy presumes that 

consumers are the experts on their own service needs and that meaningful choice can be 

introduced into all service environments. As AARP explains it, the potential benefits of 

consumer direction include cost savings, flexible and more individualized service packages, 

increased consumer satisfaction with management of service provision, and use of family 

caregivers, which increases the pool of available providers.729 Efforts to establish or offer 

consumer-directed services and supports should include guidelines and standards for care, 

consumer direction, counseling to assist people in arranging for services, flexibility in 

selection of providers, and choice to return to traditional agency-directed HCBS.730 AARP 

indicates that not everyone may be an appropriate candidate for consumer-directed services. 

Screening guidelines should be developed with timely grievance and appeal procedures for 

consumers dissatisfied with, or turned down for, services.731

2. Support for family caregivers. AARP recommends that LTSS cover respite care and adult 

day services that supplement caregiving by family and friends. Five specific proposals 
316 

suggested by AARP include extending the Family and Medical Leave Act to provide paid 

leave and cover more workers for longer periods, additional tax benefits to help underwrite 

some percentage of costs associated with unpaid caregiving, increased funding for the 

National Family Caregiver Support Program, amending the SSI rules so that they do not 

reduce benefits for people living with family members, and public education to encourage 

employers to take advantage of existing tax incentives, such as flexible spending accounts 

for dependent care.732

 AARP also suggests that federal and state policies should allow payment to relatives and 

friends who provide LTSS as part of an individual plan. However, the AARP 

recommendation does not respond to the concerns of policymakers that such policies will 

simply shift costs from the individual family to government and not necessarily expand 

supports in response to individual needs. 

3. Expand HCBS. AARP urges the expansion of federal funding for LTSS through multiple 

federal authorities, including Medicaid, the Older Americans Act, and the Social Services 

Block Grant (SSBG) program.733 AARP also recommends more vigorous enforcement of the 

Americans with Disabilities Act, with more active oversight of state activities to implement 

plans in response to the Olmstead decision and its community inclusion mandate.734

 To expand HCBS, AARP describes multiple strategies. There is no single policy option that 

can produce the comprehensive system of supports that is currently unavailable. Budgets 

and policies must be designed to eliminate institutional bias and expand access under the 

HCBS waivers. Specific policy options should allow states more flexibility to set separate 

eligibility criteria for nursing facility care and waiver options.735 Other options to be 

considered include 

• enacting laws that ensure nurse delegation to home care workers of certain tasks that 

provide adequate consumer protection and liability protection; 

• initiating nursing home diversion programs with a comprehensive range of services to 

meet health and functional needs; and 
317 

• supporting volunteer service credit banks for expanding access to LTSS. These 

community services should not be used as alternatives to public responsibility for funding 

adequate supports.736

4. Development of appropriate health and functional criteria. AARP suggests that eligibility 

for LTSS should be based on functional needs. Appropriate measures should recognize the 

diversity of the population to assess functional needs of individuals with physical 

impairments, cognitive impairments, and chronic illness.737 Eligibility for people with 

physical disabilities would be based on difficulty in performing two of the five basic ADLs. 

5. Preserve access and quality for people with cognitive disabilities. AARP indicates that, 

despite the high prevalence of cognitive disabilities among nursing home residents, few 

have access to mental health professionals. The policy approach suggested by AARP is to 

require cooperative agreements with Area Agencies on Aging and community mental health 

centers to meet the needs of older people in the community. AARP urges changes in federal 

requirements for all skilled nursing facilities to include mandatory annual review of changes 

in the physical and mental condition of mentally ill or mentally retarded nursing facility 

residents to ensure that they receive necessary treatment and services in the most appropriate 

care setting.738

6. Improve coordination and integration of services and supports. Arranging for 

appropriate services is a daunting task for most individuals and families. Services and 

funding are divided among multiple agencies. An essential part of a comprehensive system 

is effective case management and service coordination. Policy recommendations include 

• establishing a single point of entry for people seeking publicly or privately funded services; 

• ensuring that case management is available through a community organization that is not 

a direct service provider (to avoid conflict of interest); 

• requesting state certification and annual continuing education for case managers; 

• ensuring that individual service plans are based on functional needs, not ability to pay; and 

• requiring the development of the plan in partnership with the individual and family, with 

an emphasis on a person-centered approach.739
318 

AARP recognizes that development and implementation of many of the proposed 

recommendations will be costly. Medicaid and Medicare are the two largest public programs; 

they account for more than 50 percent of the cost of the current imperfect system of LTSS. 

Smaller public programs that provide LTSS, such as the Older Americans Act and the SSBG 

program, account for less than 2 percent of total expenditures on long-term services.740

Consistent with AARP principles for development and design of any new proposal for policy 

reform, an approach to financing must have the government and individuals sharing 

responsibility. Public financing must be “progressive, broadly based, stable, and capable of 

growing with enrollment.”741 AARP supports the development of a publicly financed social 

insurance program that would have individuals pay into the program and be entitled to benefits 

defined in law, including a cash payment option, when they need services. Eligibility for this 

entitlement should be based on functional criteria and “take into account cognitive, physical, and 

social limitations, and the need for support, supervision, and training.”742 Although there are no 

cost projections for this policy framework, AARP explains that the most important way to 

control costs associated with LTSS is to avoid unnecessary institutionalization by providing 

HCBS in response to standard individual assessments and individual plans.743 Other approaches 

suggested to achieve cost savings include improved data collection to evaluate services and 

outcomes and cost-effective allocation of resources; global budgeting strategies for states that 

combine nursing home and community services expenditures into a single pool, which enables a 

state to rebalance more efficiently the use of public dollars in community settings; and consumer 

self-directed budgets to manage their own service plans.744

In a separate section of The Policy Book, AARP documents that housing is the single largest 

expenditure category for older households.745 Housing figures prominently in an individual’s 

quality of life and, depending on the availability of services and supports, can have a major 

influence on whether an individual can age in place and remain independent. The rising housing 

costs and the challenges of linking affordable and accessible housing options with needed longterm supports requires improved coordination of multiple federal, state, and local public agencies 

that have separate management responsibilities for housing and supported services.746 AARP 

recommends that the Department of Housing and Urban Development (HUD) establish a high-
319 

level office or senior staff member to develop and coordinate policy on housing and services.747

Similar high-priority action is needed at CMS to identify strategies to improve coordination with 

HUD and link affordable housing objectives with access to community-based LTSS. 

Of the six national level organizations with policy recommendations to review and analyze, 

AARP offers the broadest set of strategies to develop a comprehensive system for all Americans 

who seek to remain independent and in the community. The adoption of the social insurance 

model to spread costs across the largest number of people to finance a menu of benefits that 

enhance function and preserve individual freedom and choice offers a framework for reform that 

requires further research and evaluation. The recognition that there is a public and private 

responsibility to share risk moves the policy discussion from the narrow focus of Medicaid to the 

larger context of community and multiple federal authorities with responsibilities for housing, 

social and human services, and civil rights. The larger context for policy framework also 

recognizes the need to improve coordination among those federal authorities to develop a 

seamless, one-stop system that is responsive to the consumer in need of information, access, and 

user-friendly service delivery options that respect consumer preferences 

The following table summarizes the AARP recommendations. 
320 

Table 3.6. American Association for Retired Persons Report/Recommendation: The Policy Book: AARP Policies 2005. 

Scope of Approach Eligibility 

Benefits Coverage System Design Financing Strengths 

Comprehensive framework for policy recommendations. Focus on individuals with defined functional needs over age 50. Build a social insurance program to spread cost for a comprehensive long-term services and supports (LTSS) system. 

A comprehensive range of LTSS should be guaranteed to all who need them, regardless of age or income. Uniform assessment process should determine eligibility for the type and level of services based on functional needs. 

Range of service includes in-home assistance, community services, a full range of supportive housing options, rehabilitative services, assistive technology, and home modification assistance. LTSS should provide meaningful support to family and friends who provide caregiving. 

Comprehensive LTSS should be phased in to allow development of needed infrastructure, including workforce development. Private sector insurance should supplement public LTSS financing. Framework for decision making should recognize and support consumer choices and direction. Federal and state policies should help underwrite some percentage of costs associated with family caregiving. Eliminate institutional bias of Medicaid and allow home- and community-based services (HCBS) waivers to have separate eligibility for home and community services. Improve coordination among federal authorities. At a local level, improve case management and service coordination with a single point of entry. At a federal level, require senior lead staff at Department of Housing and Urban Development (HUD) and Centers for Medicare and Medicaid Services (CMS) to work together to improve coordination between housing and services. Improve federal monitoring of response of states to Olmstead mandate. 

Public financing must be progressive, broadly based, stable, and capable of growing with enrollment. Establish a publicly financed social insurance program that would have all wage earners pay into a system and then be entitled to benefits defined in law, including the choice to self-direct a service management plan. To control costs, eliminate the institutional bias of Medicaid, encourage global budgeting by states, and improve data collection to evaluate services and outcomes in different settings with consumerdirected budgets. 

Offers the broadesstrategies to advancomprehensive LTsystem. Adoption of social insurance model wspread costs and pcost-sharing with a pool of participantwill need benefits different levels in future. Recognition of neeincreased funding other federal authoincluding HUD, thDepartment, and thAdministration on to expand other nesupports and overscivil rights protectRecognizes the neimprove system coordination at a fstate, and local levthrough shared infsystems, one-stop centers, and agreemassessment approadetermine need to matched with publprivate resources. 
321 

Part III 

Expert Panel Discussion and Recommendations 

On February 24, the National Disability Institute of the NCB Development Corporation, in 

concert with the National Council of State Legislatures (NCSL), convened an Expert Panel to 

discuss the current state of federal policy concerning LTSS for people with disabilities and a 

possible framework for future policy recommendations. The panel members represented diverse 

experience and expertise regarding consumer choice and control; formal and informal 

caregiving; the support options available under Medicaid, Medicare, and other social service 

funding streams; the relationships between federal policy and state reform efforts; aging and 

disability service delivery; individual budgets; and risk management. 

The panel was convened to provide advice to NCD and to produce new knowledge and 

understanding of current experience with, and future need for, affordable LTSS nationwide for 

Americans with disabilities of all ages. 

There were two parts to the discussion with panel members. The first part of the discussion was 

reactions to research findings on the current state of LTSS for individuals with disabilities, both 

above and below the age of 65. The second part of the discussion was to provide advice and 

recommendations on future policy development to establish a comprehensive system of HCBS 

that enable individuals with disabilities to have expanded choice and direction to live 

independently and with dignity. 

The findings from the first phase of research on current federal experience were summarized for 

the panel. Key findings identified were the fragmentation of service delivery; inconsistent policy 

with an institutional bias; and variance of access to needed supports based on age, income, type of 

disability, and geography. The challenges of program coordination resulted from separate and 

distinct authorities across the Federal Government having responsibility for program rules on 

eligibility and scope of benefits coverage. The complexity and fragmentation in the legislative 

branch also made it difficult to bring together responsible federal authorities for oversight and 

produce consensus for further policy development. In a post-Olmstead environment, state budget 
322 

pressure and federal discretionary grants are significant factors accelerating state interest in 

reexamining infrastructures, the budget process, consumer-directed service delivery, cross-agency 

and intergenerational collaboration, and public and private partnerships. The pace of change varies 

by state and perception of progress with comprehensive reform and realignment of systems to 

enhance consumer choice, and direction varies by stakeholder class. Litigation continues in over 

half the states as people with disabilities challenge the pace of change, with particular focus on 

realignment of resources to support expansion of home and community choices. 

The discussion by the panel of current challenges reaffirmed the scope of issues identified in the 

research on current experience. The public policy discussion of private individual accounts for 

younger workers has heightened interest in, and evaluation of, who is responsible for long-term 

needs and what they will cost. Beyond discussions of an entitlement to retirement income, is 

there a public responsibility to vulnerable populations for LTSS? What are the dividing lines 

between public and family responsibility? The Expert Panel did agree that current federal and 

state budget obligations and future projections will intensify the need to reexamine the current 

approach to support of HCBS. Demographic changes will continue to add further stress on the 

role of the public system, as fewer caregivers will be available to support unpaid caregiving 

within a family. Panel members described the current system as 

• not working effectively for many individuals with disabilities and their families; 

• inconsistent in scope with significant variability across states; 

• dominated by an institutional bias that defines the policy framework; 

• fragmented; 

• impacting budgets as costs are growing with increasing demand from diverse stakeholders; 

• forcing individuals and families to be impoverished to be eligible for benefits; 

• inflexible; 

• limiting individual choices; 

• complex; 
323 

• confusing; 

• divisive as groups compete for resources; 

• devaluing; and 

• out of balance, as waivered services and supports are optional and not required. 

There was agreement that the current picture cannot be ignored. The range of challenges is 

intergenerational, as more individuals and families seek public assistance to remain independent 

with LTSS. The lack of community options and the costs are overwhelming individuals and 

families who seek alternatives to skilled nursing facilities. Changing expectations of aging baby 

boomers will compel policymakers to ask new questions: 

• Are we investing in the right things? 

• Do we understand enough about the costs of HCBS to make an economic argument for 

policy change? 

• Do we need to look beyond a budget rationale to adoption of a critical principle for future 

public policy development that supports living independently at any cost? 

There was agreement from the panel that additional research is needed to understand more about 

the full set of costs of living at home or in the community and what cost savings, if any, are 

possible from nursing home diversion. Additional questions were raised about the cost savings 

achieved from family support and informal caregiving. Concern was expressed about some states 

and projects that are using a consumer-directed individual budget approach to long-term supports 

as a strategy to reduce individual and systems expenditures. There was general agreement that 

policy development that uses a cost-savings rationale for expansion of LTSS must proceed with 

caution. More needs to be learned about the relationship between paid and informal caregiving 

and the cost benefits of consumer-directed individual budgets as the management structure for 

service delivery. 

Panel members cited current demonstration projects funded by CMS and the Administration on 

Aging that will help policymakers and other future stakeholders learn more about the costs and 
324 

benefits of consumer-directed service delivery. Other demonstration initiatives, such as the 

ADRC and Workforce Development projects, were identified to help key stakeholders increase 

their understanding about the cost benefits of streamlined access to information and services, 

improved coordination of supports and services, and workforce skill development and retention. 

The second part of the discussion followed a summary of specific state efforts at innovation 

related to service delivery, financing, and consumer choice. Participants were asked to frame a 

new picture that sets out a different set of expectations for all Americans and that recognizes 

disability as a natural part of human experience. The panel members offered multiple strategies 

for systems change. 

The majority of suggestions affirmed recommendations from one or more of the six organizations 

that are reviewed and analyzed in the first part of this chapter. The overwhelming agreement of the 

panel was to create a policy framework that recognizes the important and essential federal 

responsibility to contribute public resources and that sets consistent expectations for states to 

establish a comprehensive system. Such a system of supports must respond to the long-term 

support needs of the target population over a life span, in the least restrictive environment. 

Recommendations from the panel focused on the essential elements of a comprehensive system, 

including eligibility, benefits coverage, infrastructure, and financing. 

• Determine eligibility based on functional need. The panel urged movement away from 

current medical status and disability type to a standardized assessment process to evaluate 

functional needs related to ADLs and IADLs. 

• Reevaluate financial eligibility criteria. Although not specific with what would be an 

appropriate income and asset test, the current threshold, which in effect requires 

individuals and families to spend all assets to be eligible for Medicaid, must be changed. 

• Develop an expanded benefits menu that organizes service options from a 

presumption of individual preference for remaining at home and in community 

settings. The panel, without describing benefits coverage in more detail, recognized that 

different people have different needs. As a result, the benefits coverage based on functional 
325 

assessment must be flexible, individualized, and comprehensive. Nursing home level of 

care should be removed from an entitlement status to an option of last resort. 

• Offer more consumer choice and direction in determining needs, creating a service 

plan, and directing and managing provider selection and service delivery. The panel 

suggested that all eligible consumers have a choice to direct an individual budget as an 

alternative to traditional agency direction of services. 

• Provide incentives to support and encourage family caregiving. Consider tax 

incentives to help defray expenses of dependent care for LTSS. 

• Reach agreement across federal authorities on key outcomes and a measurement 

system. Shared information and data collection and analysis across agencies in multiple 

settings should help improve understanding of cost-effectiveness based on different 

service delivery models. Outcomes to be focused on performance are wellness, 

productivity, inclusion, and independence. 

• Spread the cost across all wage earners over a lifetime as part of a social insurance 

financing framework. Similar to the approach of Social Security and Medicare, 

individual needs will vary over a life span. However, there is a basic safety net to help 

with the sharing of costs for a comprehensive system. The panel did not develop the 

specifics of such a proposal. Further research would be needed to calculate individual 

cost scenarios and system capacity to respond. 

The panel did not expect to reach an agreement in one meeting on the details of a social 

insurance solution. There was a sense in the group that, during the next five years, policymakers 

will struggle with multiple options to improve the current system in response to increasing 

demand. Rather than predict the range of policy options to be considered, the panel suggested a 

framework to evaluate any future proposal. The beginning framework is a set of questions, or 

lenses, through which to evaluate future policy proposals. 

Any new proposals to reform Medicaid and Medicare should be evaluated from an impact 

perspective on low-income individuals with disabilities. States should be able to modify asset 

and income lists to determine eligibility for a menu of LTSS. 
326 

Any reform proposal must be evaluated to determine the following: 

• Does it simplify and expand eligibility? 

• Does it improve coordination, access, and choice? 

• Does it compel states to rebalance institutional and HCBS systems? 

• Does it allow states to set financial and functional criteria for eligibility? 

• Does it encourage families to continue informal caregiving through tax incentives and 

mandated family leave benefits? 

• Does it encourage multiple points of entry and informed decision making on support 

options? 

• Does it encourage consumer direction and offer the option of management of individual 

budgets? 

• Does it favor one group over another because of age or functions? 

• Does its approach to financing reduce eligibility or benefit coverage? 

• Does the approach to financing spread risk and costs across a larger population to help 

reduce individual liability and spread costs across multiple shareholders in an equitable 

way to minimize adverse impact on individuals because of age, disability, location, or 

income status? 
327 

Part IV 

Conclusion 

In a new report of the U.S. Government Accountability Office (GAO), entitled “21st Century 

Challenges: Reexamining the Base of the Federal Government,” major emerging forces are 

identified that will require the Federal Government to rethink its entire approach to policy 

design, priorities, and management.748 According to David Walker, Comptroller General of the 

United States, “There is a daunting long-term fiscal outlook.”749 Competing demands from 

existing federal entitlements—Social Security, Medicaid and Medicare, and other federal 

commitments to respond to the nation’s global war against terrorism and homeland security 

needs—present only a partial picture of expected federal spending in the future. Government 

spending continues to increase across the board as the federal role has grown in addressing a 

wide range of needs.750 The growing imbalance between expected federal spending and tax 

revenues will ultimately require the nation to decide what level of federal benefits and spending 

it wants for which segments of the American population, and how it will pay for these benefits. 

According to the GAO report, one of the significant forces that will place new demands on 

government in the future is an aging and more diverse population.751 An additional significant 

force is the rapid pace of change in science and technology, which offers new opportunities to 

maintain function and independence. However, these advances raise their own unique 

vulnerabilities, risks, and privacy and equity concerns.752 These and other cited trends—evolving 

foreign policy, a changing economy, build-up of homeland security, growing federal deficit, and 

increasing divide between rich and poor—will cause policymakers to conclude that all the 

government’s existing programs, policies, and activities cannot continue as “givens.”753 GAO 

concludes that many of the government’s programs were designed decades ago to address earlier 

challenges informed by life expectancies, health conditions, organizational structures, 

technologies, and management models of prior eras.754 GAO offers policymakers and the 

American people a set of questions to help address what the Federal Government does and how it 

does it. Key questions include the following: 
328 

• Is the federal role warranted? 

• Are benefits targeted to those most in need? 

• Is it affordable and sustainable over time? 

• Are policies consistent with best practice? 

• How do we measure success? 

• Are all applicable costs and benefits being considered?755

The lens offered by the Expert Panel takes a very similar approach to that of the GAO. 

Evaluation of current federal programs and policies—as well as future proposals to transform the 

government’s role as a funder, provider, and manager of a comprehensive system of LTSS for 

people with disabilities—must consider relevance and responsiveness to changing demands and 

consumer preferences. The Expert Panel and six organizations representing diverse stakeholder 

interests within and outside government all agree that there is a need for a fundamental federal 

presence to offer expanded financial assistance that is adequate to support a growing population 

as it lives with maximum independence and dignity at home and in community settings. There is 

an equally strong concurrence of opinion that, for low-income members of the target population 

and for individuals with significant disabilities, the private markets and state and local 

governments will not be able to respond to the demand and cost of LTSS without the Federal 

Government playing a role as a funder. 

There are differences of opinion among the analyzed groups as to the scope of benefits, the 

interrelationships of existing federal authorities, and how and to whom to allocate costs. Most 

promising for future policy development is the extent of interest in increasing consumer 

protection in an assessment process to determine functional need; to develop an individualized 

service plan; to have a choice of service environments and providers; and to control, if interested 

and appropriate, an individual budget. All groups and the Expert Panel agree that current 

Medicaid policy, with its institution bias, must end, but they disagree about the extent of 

flexibility states would be allowed to exercise to define eligibility, benefits coverage, service 

provider options, and cost-sharing. 
329 

The majority of the groups and the Expert Panel express strong support for improving access and 

information to the target population about program eligibility and available public and private 

resources. There is also strong support for assisting families with some tax relief to reduce 

expenses of informal caregiving, and to expand respite care options to provide further assistance 

to individuals and families engaged, in some way, in meeting the support needs of individuals 

with disabilities. 

The combined number of recommendations for future policy development offered totals more 

than 40. Although the strategies proposed would most directly affect the Medicaid and Medicare 

programs and CMS, other federal authorities that would be affected are the Administration on 

Aging, Social Security Administration, and the Departments of Labor, Treasury, and Justice. 

Most recommendations require additional research that would project costs for specific program 

amendments. The analysis of this body of recommendations helps underscore differences of 

opinion about targeted versus more comprehensive strategies. It is apparent, however, that the 

longer we wait, the more painful and difficult the choices will become. 
330 
331 

APPENDIX 3.A 

Advisory Panel: Participants and Contributors 

Long-Term Supports and Services 

Expert Panel Participants 

February 24, 2005 

Washington, DC 

* In attendance 

* Lisa Maria B. Alecxih, Vice President 

Center on Long Term Care 

Lewin Group 

3130 Fairview Park Drive, Suite 800 

Falls Church, VA 22042 

Lisa.alecxih@lewin.com 

703-269-5542 

703-269-5503 FAX 

* Elizabeth Clemmer, Assistant Director 

AARP Public Policy Institute 

601 E. Street, NW 

Washington, DC 20049 

eclemmer@aarp.org 

202-434-3840 
332 

* Sue Christmas 

Topeka Independent Living Resource Center 

501 SW Jackson Street 

Topeka, Kansas 66603 

schristmas@tilrc.org 

785-233-4572 

* Jeff Crowley, Project Director/Senior Researcher 

Institute for Health Care Research and Policy 

Georgetown University 

2233 Wisconsin Avenue, NW, Suite 525 

Washington, DC 20007 

Jsc26@georgetown.edu 

202-687-0880 

* Steve Edelstein, Policy Specialist 

Paraprofessional Healthcare Institute 

349 East 149th Street, 10th Floor 

Bronx, NY 10451 

edelstein@paraprofessional.org 

718-402-7413 

* Jackie Golden 

2626 Wendover Road 

Parkville, MD 21234 

jlgolden@comcast.net 

410-262-1276 

410-882-2080 FAX 

 
333 

 Lynn Feinberg, MSW 

Deputy Director, National Center on Caregiving 

Family Caregiver Alliance 

180 Montgomery Street, Suite 1100 

San Francisco, CA 94104 

lfeinberg@caregiver.org 

www.caregiver.org 

415-434-3388 

415-434-3508 FAX 

 Patrick Flood, Commissioner 

Vermont Department of Aging and Disabilities 

103 South Main Street 

Waterbury, VT 05671 

Patrick@dad.state.vt.us 

802-241-2400 

802-241-2325 FAX 

* Marty Ford, Director of Legal Advocacy 

The Arc and UCP Disability Policy Collaboration 

1660 L Street, NW, Suite 701 

Washington, DC 20036 

ford@thearc.org 

www.thearc.org 

www.ucp.org 

202-783-2229 

202-783-8250 FAX 
334 

 Suellen Galbraith, Director Government Relations 

American Network of Community Options and Resources 

1101 King Street, Suite 380 

Alexandria, VA 22314 

sgalbraith@ancor.org 

703-535-7850 

703-535-7860 FAX 

 Linda Horton, Director of Community Relations 

AIDS Alliance 

lhorton@aids-alliance.org 

 Gail Hunt, President and CEO 

National Alliance for Caregiving 

4720 Montgomery Lane, 5th Floor 

Bethesda, MD 20814 

gailhunt@caregiving.org 

301-718-8444 

* Allen Jensen, Director 

Work Incentives Project 

Center for Health Services Research and Policy 

George Washington University 

ihoacj@gwumc.edu 

202-530-2319 

 LaRhae Knatterud, Planning Director 

Department of Human Services 

444 Lafayette Road North 

Saint Paul, MN 55155 

Larhae.knatterud@state.mn.us 

651-296-2062 
335 

* Chas Mosley 

National Association of State Directors of Developmental Disabilities 

Services (NASDDDS)

113 Oronoco Street

Alexandria, VA 22314

cmoseley@nasdds.org 

703-683-4202

703-683-8773 or 703-684-1395 FAX

* Brenda Premo, Director 

Center for Disability Issues and Health Care Professions 

Western University of Health Sciences 

309 E. Second Street/College Plaza 

Pomona, CA 91766 

bpremo@westernu.edu 

909-469-5385 

 Debra Stone 

P.O. Box 367 

Goshen, NH 03752 

Deborah.stone@dartmouth.edu

603-863-5653 

603-863-8114 FAX 

* Eileen Sweeney, Senior Fellow 

Center on Budget and Policy Priorities 

820 First Street, NE, Suite 510 

Washington, DC 20002 

Sweeney@cbpp.org 

202-408-1080 

202-408-1056 FAX 
336 

 Hollis Turnham, Michigan Policy Director 

Paraprofessional Healthcare Institute 

5013 Applewood Drive 

Lansing, MI 48917 

hollis@paraprofessional.org 

www.paraprofessional.org 

www.directcareclearinghouse.org 

517-327-0331 

260-846-5347 FAX 

* Tony Young, Executive Director 

NISH 

8401 Old Courthouse Road 

Vienna, Virginia 22182 

tyoung@nish.org 

571-226-4660 

703-849-8916 FAX 

info@nish.org 

Project Staff 

Michael Morris, Director 

National Disability Institute 

NCB Development Corporation 

1725 Eye Street, NW, Suite 60 

Washington, DC 20006 

and 
337 

Associate Director 

Law, Health Policy & Disability Center 

University of Iowa College of Law 

mmorris@ncbdc.org

202-521-2930 

202-218-7297 FAX 

Johnette Hartnett, Vice President 

NCB Development Corporation 

National Disability Institute 

1725 Eye Street, NW, Suite 600 

Washington, DC 20006 

and 

Law, Health Policy, & Disability Center 

University of Iowa College of Law 

jhartnett@ncbdc.org

202-218-7284 

202-218-7297 FAX 

Donna Folkemer, Program Manager 

National Conference of State Legislatures 

444 North Capitol Street, NW, Suite 515 

Washington, DC 20001 

donna.folkemer@ncsl.org

202-624-5400 
338 

National Council on Disability 

Martin Gould, Director of Research and Technology 

National Council on Disability 

1331 F Street, NW, Suite 850 

Washington, DC 20004 

mgould@ncd.gov

202-272-2004 

202-272-2022 FAX 

Jeff Rosen, General Counsel/Director of Policy 

National Council on Disability 

1331 F Street, NW, Suite 850 

Washington, DC 20004 

jrosen@ncd.gov

202-272-2124 

202-272-2022 FAX 
339 

Chapter 4 

Moving Forward: Selected State Strategies for 21st Century 

Long-Term Services and Supports: Financing and Systems 

Reform for Americans with Disabilities 
340 
341 

Table of Contents: 

Chapter 4 

Page 

Part I 

Introduction................................................................................................................................343 

Part II 

Five State Case Studies..............................................................................................................348 

Part III 

Conclusion ..................................................................................................................................429 

Appendix 4.A..............................................................................................................................433 
342 
343 

Part I 

Introduction 

The current picture of long-term services and supports (LTSS) documented by families, 

policymakers, researchers, and service providers is complex, confusing, and frustrating. It is a 

ship struggling with the weight of escalating costs and an increasing number of passengers 

seeking access and safe passage. Services and supports are scattered throughout numerous 

federal programs, with uncertain points of entry and different rules of eligibility defined by 

geography, income level, age, and nature and type of disability. 

There is no comprehensive national policy focused on LTSS that is free from the medical model 

and institutional bias of long-term care (LTC). However, at the state and local levels, there is a 

push to move forward: setting new policies, reallocating resources, testing new service delivery 

approaches, and engaging individuals with disabilities and families in a public dialogue to 

redesign the ship to support a consumer-responsive system that encourages choices, seeks 

flexibility in service delivery, invests in public-private collaboration, and values the role of 

formal and informal caregivers. None of the highlighted activities can offer a comprehensive 

roadmap to reform of existing systems. However, each highlighted state or local system focuses 

a spotlight on innovative thinking, including policies, processes, and methods of administration 

to help guide the redesign efforts for the future. 

This chapter identifies and highlights selected activities at the state and local levels that are 

leading toward increased access to LTSS with federal and state dollars. A growing number of 

states are reevaluating their current systems to identify a range of options for consumers to 

remain in their own homes or communities rather than be forced into more restrictive 

environments and skilled nursing facilities. Researchers selected five states to profile and 

analyzed current activities that are in different stages of development toward the goal of 

comprehensive, person-centered service and support programs. 
344 

Five State Study 

The barriers that the selected states had to overcome to achieve preferred and valued results 

suggest opportunities for the Federal Government to reform LTSS at the national level. Indeed, 

many of the innovations implemented by the five states have been made possible by recent 

federal policies and programs that have recognized the hurdles states have to overcome to help 

people with disabilities lead meaningful, independent lives. The New Freedom Initiative has 

provided states with grants to achieve the following: 

• assist individuals to move out of nursing homes into community settings; 

• create regional information and assistance centers that serve as one-stop shopping for 

consumers to meet their needs for services and supports; 

• adopt and improve consumer-directed features in their home care programs and train 

consumers on their use; and 

• form community partnerships to develop accessible and affordable housing and 

transportation for people with disabilities. 

While many of these grants have been modest in amounts, they have helped to keep the 

momentum going in states faced with tight budgets. The five states selected are using these 

grants and adopting a variety of strategies to achieve their goals for rebalancing their LTSS 

systems. They are at different stages in this process. At one extreme is Washington, which has 

taken a step-by-step approach over more than 20 years to expand home- and community-based 

services (HCBS). At a different point in the spectrum is Texas, which has only recently 

embarked on a major overhaul of state agencies that administer LTSS, while also continuing a 

large-scale effort to move thousands of people out of nursing homes into community living. 

The five states were selected because of several characteristics identified as common to the states 

and instrumental to their expansion of HCBS. These characteristics include a strategic planning 

process, systems reorganization, involvement of consumers in shaping new policy, and 

interagency collaboration. These five states were chosen to reflect geographic diversity and 

unique program design and development. 
345 

The mandate for planning has generally come from the governor or the legislature. These states 

have also developed consensus about the direction to take their programs through involvement of 

key stakeholders from all parts of the community, including advocates, providers, and 

policymakers. Most of the selected states have a tradition of discussion and collaboration over 

public policy issues. 

Pulling together state agencies that have responsibilities for LTSS has been a starting point (or at 

least a necessary element) for making services more accessible to consumers and responsive to 

their needs in the states under review. States that place the responsibility for both nursing homes 

and home- and community-based care under the same state agency provide greater flexibility for 

that agency to allocate funds based on the needs of its clients rather than having separate silos for 

those funds. 

Each state has developed some unique programs or approaches to serving people with 

disabilities. Washington was one of the first states in the country (in 1983) to take advantage of 

the then-new federal Medicaid HCBS initiative, the HCBS waiver program.756 Vermont is 

pioneering a global budgeting approach to providing services that will pool nursing home and 

HCBS funds to allow people with disabilities to select whichever option they prefer. The state 

will establish priorities for meeting the needs of people with disabilities by dividing these people 

into those with the highest needs (who are the state’s first priority) and those with less high or 

moderate needs. 

Minnesota has embarked on an ambitious project to review and prioritize public and private 

financing options for LTSS so the state can develop a campaign to ensure an optimal 

combination of the two. The goal is to help address the critical public financial situation that 

could develop when baby boomers age and need services and supports. Texas has broken new 

ground with a Medicaid managed care system that is serving more than 60,000 aged and disabled 

people in one area of the state. The state is also revamping its agency structure to provide 

consumers with easier access to services. The effort, which could take three to fives years to 

complete, involves 12 agencies, 200 programs, and about 50,000 state employees. Indiana has a 

state-funded home- and community-based care program that is so highly valued by consumers 
346 

and public policymakers that the program has received ever-rising appropriations, even though 

the state has been facing difficult fiscal times.757 

Each state case study is divided into sections that discuss programs and services for different 

groups of people with disabilities. Additional sections outline residential options and consumerdirected initiatives. A final section singles out two particularly innovative projects in each state. 

Taken together, these five state case studies offer an optimistic and encouraging picture of the 

possibilities for reforms in LTSS. They suggest additional steps that can be taken at the federal 

level to continue to help states move forward in the evolution of a comprehensive system of 

support for individuals with disabilities that favors consumer choice and control. 

The following table offers a summary of each state’s reform strategies and its significance to 

future policy development. 

Table 4.1. Five States: Long-Term Services and Supports Reform Strategies 

State Reform Strategies Importance 

Indiana Public-Private Long Term Care (LTC) 

Insurance Program—links purchase of 

private LTC insurance with Medicaid 

coverage of long-term services and supports 

(LTSS). 

State-funded Community and Home 

Options to Institutional Care for the Elderly 

(CHOICE) program is for low-income 

individuals who do not qualify for 

Medicaid and/or are waiting for Medicaid 

services. Covered services are case 

management, home health supplies and 

services, personal assistance services, 

transportation, respite care, home delivered 

meals, and adaptive aids and devices. 

The program is administered by the Area 

Agencies on Aging. Twenty percent of 

service dollars must be used by people with 

disabilities under the age of 60. 

Tax deduction for cost of premium. For 

every dollar of benefits that a policy pays 

out, the purchaser earns $1 of asset 

protection to remain eligible for Medicaid. 

Targets a population not on Medicaid with a 

sliding fee schedule based on income level. 
347 

State Reform Strategies Importance 

Vermont Coordination of LTSS for people who are 

aging and/or disabled. 

One department includes Aging, Physical 

Disabilities, and Developmental 

Disabilities. 

A global budgeting approach allows the 

state to combine Medicaid home- and 

community-based services (HCBS) waiver 

funds with the state’s nursing home 

appropriation. 

Single agency improved information flow to 

consumers. 

Removes institutional bias and offers 

eligible people community choice and 

expanded service options. 

Increased consumer satisfaction and cost 

savings. 

Washington Balanced global funding of institutional 

services and LTSS with consolidated 

administration under the Department of 

Social and Human Services. 

With a focus on movement out of nursing 

homes, state general revenue funds (up to 

$816) are available to help a person move 

from a nursing home to a less restrictive 

setting. State funds are also used to pay for 

assistive technology. 

Improved coordination in the delivery of 

services with a client-centered integrated 

service plan that is managed by a service 

broker. 

State investment in one-time transition costs. 

Minnesota Examination of long-term support 

insurance options to balance public and 

private responsibility. 

Creation of benchmarks to assess change 

over time in state system (for example, a 

percent of long-term care dollars spent on 

institutional versus community support). 

Shared Care is part of the state’s Medicaid 

Personal Care Assistance Choice Program. 

With Shared Care, two consumers can share 

a personal assistant, with the cost divided 

between two people. The worker will be 

paid one and one-half times the regular rate. 

Seek to identify tax incentives and other 

means to maximize private resource 

utilization and still achieve state policy 

goals. 

Ability to assess change in the state system 

over time. 

An approach to increase wage levels and 

still achieve consumer satisfaction. 

Texas Reorganization of administration with 

integrated eligibility determination process. 

Movement of Medicaid funding from its 

nursing home budget to its budget for 

Community Care Programs. 

Will allow an integrated application process 

for medical, food, and other LTSS. Money 

Follows the Person from a nursing home to 

the community. 

More than 3,000 individuals have made the 

transition from nursing home to community 

living coordinated with supports. 
348 

Part II 

Five State Case Studies 

Washington 

Washington is among the leaders among states seeking to create and maintain a 

balanced long-term care system that offers real choices for consumers among an 

array of settings and service options.758 

 —National Academy for State Health Policy for 

 the Community Living Change Collaborative, 

 November 2003 

Introduction 

Like its neighbor, Oregon, Washington began its efforts to limit institutionalization and expand 

HCBS for people with disabilities in the 1980s, long before most other states. Washington was 

one of the first states to take advantage of what was then a new federal option: Medicaid HCBS 

waiver programs, which allow a state to offer people at risk of institutionalization a chance for 

community care instead. 

In FY 2003, Washington spent $1.6 billion on Medicaid-funded LTSS, of which about $770 

million (49.5 percent) was allocated to institutional care (nursing facilities and institutions for 

people with mental retardation or developmental disabilities, MR/DD). Another $784 million 

(50.5 percent) went to HCBS. This contrasts sharply with the national average allocation, which 

is about 70 percent for institutional care and 30 percent for HCBS. Over half of the public 

expenditures for LTSS in Washington are noninstitutional, and more than 75 percent of 

participants receive community-based services rather than institutional care. 

Allowing consumers the opportunity to direct their services themselves is another important 

feature of Washington’s HCBS programs. The HCBS programs strongly promote choice. 

Washington has also been in the forefront of states in realizing the importance of providing 

assistance to family caregivers to enable them to continue caring for family members. The state 

developed its own program of family caregiver supports before the enactment of the National 

Family Caregiver Support Program. 
349 

The state has also realized the importance of developing a stable and trained workforce of direct 

care workers if quality care is to be provided to people with disabilities. The creation by voter 

initiative and legislation of the Home Care Quality Authority in 2000 is unique among states in 

its concept and operation. 

Perhaps as important as anything else to Washington’s ability to create a comprehensive system 

has been its management of most services for people with disabilities in one agency. The 

Department of Social and Health Services (DSHS) serves one in five Washington residents (with 

health as well as support services) and, in some of the mostly rural counties, more than one-third 

of the population.759 Within DSHS, the Aging and Disability Services Administration (ADSA) 

has responsibility for nursing homes as well as HCBS and for people with developmental 

disabilities as well as the frail elderly and other adults with disabilities. This single-agency focus 

has made it possible for the state to shift resources from institutions to community services and 

to coordinate services for people with disabilities who have complex health, mental, and longterm support needs that span several agency programs. 

Background 

The total population of Washington was about 6 million in 2002. The state experienced a 21 

percent increase in population from 1990 to 2000, compared with a national population increase 

of 13 percent. The number of people age 65 and older in 2000 totaled 662,000, or 11.2 percent of 

the total population. Between 1990 and 2000, the state saw a 15.1 percent increase in the number 

of elderly. From 2000 to 2025, the Census Bureau predicts a 131 percent increase in this age 

group in Washington, the sixth highest growth rate in the country.760

The number of people with a disability totaled 981,007 in 2000. The state has a relatively 

homogeneous population with only 3.2 percent black, 5.5 percent Asian, and 7.5 percent 

Hispanic. The number of people with incomes below the poverty level totaled 10.6 percent of the 

population in 2000.761 

More than three-fourths of the state’s residents live in urban areas. In 2003, the state had the 

largest budget deficit in its history: $2.4 billion. 
350 

Integrating Services for People with Disabilities 

Washington has been gradually evolving a strategy of integrating LTSS for people with 

disabilities. In 1986, the state consolidated administration of all long-term supports for older 

people and people with disabilities into the Aging and Adult Services Administration under the 

umbrella of the DSHS. The Mental Health Division (MHD) and the Division of Developmental 

Disabilities (DDD) were also located within the umbrella agency. 

Kathy Leitch, assistant secretary of ADSA, says that the 1986 reorganization brought nursing 

homes and HCBS together under one administration. “There was always this push,” she says, 

“that the nursing home entitlement got in the way of providing home- and community-based 

services.” The purpose of the reorganization, she adds, “was to organize around consumers and 

have an array of options available to them.” 

The department estimated that almost 25,000 people received services from two or more of the 

following DSHS programs in 1999: mental health, aging and adult services, alcohol and 

substance abuse, and developmental disabilities. In November 2000, DSHS began developing the 

No Wrong Door care coordination project to design integrated case coordination models for 

people and families served by several different DSHS programs. The project involves 

multidisciplinary teams made up of staff from various DSHS programs, local community 

organizations, and other supports of the person and family. A “client-centered integrated service 

plan” is developed and a service broker/coordinator then manages joint planning and coordinated 

delivery of services. 

One example of service integration was the October 2002 the creation of the Aging and 

Disability Services Administration (ADSA) in DSHS, which combined aging programs from the 

former Aging and Adult Services Administration (including nursing facilities as well as 

community-based programs) with developmental disabilities programs (both residential centers 

and community programs). Mental health and alcohol and substance abuse programs remain 

within the Health and Rehabilitation Administration in DSHS. 
351 

Expansion of Community Supports 

Washington has steadily increased the number of people who receive home and community 

services, while decreasing the number of nursing home residents. State officials say they can 

place two people in community services for the cost of one person in a nursing home. 

In FY 1992, 19,330 people were being provided publicly funded HCBS; by FY 2003, that 

number had grown to 33,729. Over the same period, the Medicaid caseload in nursing homes had 

dropped from 17,353 to 12,943.762 About 33,000 people are now receiving community services 

from the Division of Development Disabilities through Medicaid Personal Care, Family Support 

Services, or Community Residential Services, compared with 1,330 people in the state’s 

Residential Habilitation Centers (RHCs).763 

Moving people out of nursing homes whenever possible has become a major priority for the 

state. Four funds are available to assist people with their transitions to the community: 

• Medical Institution Income Exemption Fund. Beneficiaries who qualify for Medicaid 

nursing home care must pay all their income toward the cost of their care, except for a 

personal needs allowance. Under the income exemption, a new nursing facility resident 

may keep income, up to 100 percent of the federal poverty level, for a six-month period. 

Residents can use this income to maintain their home in the community by paying rent, 

mortgage, property tax, insurance, and/or utility payments.764 This means that a person 

who may have a short stay in a nursing home is less likely to face the prospect of losing 

his or her residence during that period. 

• Residential Care Discharge Allowance. This allowance provides up to $816 in state 

general revenues to help a person move from a nursing home or other residential setting 

(such as an assisted living facility or adult family home) to a less restrictive setting. 

• Civil Money Penalties. The state uses fines paid by nursing homes with deficiencies to 

help people in such nursing homes move to another facility or to an alternative residential 

setting. The amount is limited to $800 per resident but may be higher if the facility has 

been decertified or if an emergency exists in which residents must be relocated. 
352 

• Assistive Technology Fund. State general revenues are used to pay for assistive and 

adaptive technology, as well as durable medical equipment; evaluations; training; or 

minor home modifications. The average request is for about $2,000; requests for more 

than $10,000 must be reviewed by state officials.765 

Programs for individuals who are elderly and/or physically disabled: The major program 

serving older people and young adults with disabilities is the Medicaid HCBS waiver program, 

the Community Options Program Entry System (COPES). An average monthly caseload in April 

2004 was 23,110 people—almost 15,000 of these people were receiving in-home services and 

the remainder were in residential settings.766 Expenditures for FY 2003 totaled about $295 

million. (For more detailed information on COPES, see “Innovative Practices” below.) 

Washington also operates a Medicaid Personal Care program that provides services to people 

who need assistance with at least one activity of daily living (ADL), such as dressing, bathing, or 

self-medication. The average monthly caseload in April 2004 was about 11,000 people. 

Expenditures totaled $226 million in FY 2003. The state also offers limited home care services 

through the state-funded Chore Program, which provides personal care and help with household 

tasks. However, the state’s budget crunch in 2002 and 2003 resulted in cutbacks in this program.

Programs for people with developmental disabilities: Washington has faced a number of 

challenges with regard to its services for people with developmental disabilities. For example, a 

1999 study found that the DDD was “fully serving the needs of only 62 percent of its caseload.”767

A 1999 lawsuit, The Arc of Washington State v. Lyle Quasim, charged that the state failed to 

provide LTSS with reasonable promptness to people with developmental disabilities. Another 

lawsuit, Boyle v. Braddock, filed in December 2001, alleged that the state had failed to make 

available the full range of services offered through the Community Alternatives Program to 

program participants.768 Both cases were combined for purposes of oral arguments before the 

Ninth Circuit Court scheduled for October 2004. 

The secretary of DSHS appointed a Developmental Disabilities Strategies for the Future 

Stakeholder Workgroup in 1997 to help develop a plan for the future needs of people with 
353 

developmental disabilities. At its inception, the Stakeholder Workgroup stated that choice and selfdetermination should be the “foundation for restructuring services and supports” for people with 

developmental disabilities. Its many recommendations after five years of work included enhancing 

case management services, increasing wages of direct care staff, and encouraging self-directed 

services.769 Direct care workers have received modest wage increases in recent years, although the 

state’s fiscal problems continue to make this a contentious issue for policymakers. Consumer 

direction has been incorporated into the new Medicaid waiver programs discussed below. 

The case management recommendations, however, became part of a larger overhaul of 

management practices because the workgroup’s efforts were soon followed by critical reviews of 

the DDD by the Centers for Medicare and Medicaid Services (CMS) and by Washington’s Joint 

Legislative Audit and Review Committee. Their reports were critical of the agency’s assessment 

and case management processes and management controls. One major response of the 

Department of Social and Health Services was to merge DDD with the Aging and Adult Services 

Division. The reorganization included mandates from the DSHS secretary for organizational, 

management, and service delivery reforms for DDD. 

One change seeks to address issues concerning DDD’s procedures for assessing potential 

applicants for its programs and then allocating resources to its clients. The change involved 

replacing the agency’s single Medicaid HCBS waiver program, the Community Alternatives 

Program (CAP), with four waivers, each of which is targeted toward a particular subset of the 

potential client population.770 The 10,500 people who were receiving services under the CAP were 

to be moved into the new waiver program that was most appropriate for each person’s situation. 

These waivers were approved by the Federal Government in December 2003 and officially 

replaced the CAP waiver on April 1, 2004. The programs and the groups they cover follow: 

• Basic Waiver: Individuals who live with family or in their own homes and have a 

“strong natural support system.” The family/caregiver’s ability to continue to provide 

care may be at risk but can be continued with additional services. These services include 

physical and occupational therapy, behavior management, emergency assistance, respite 
354 

care, specialized medical equipment, specialized psychiatric services, supported 

employment, and transportation. 

• Basic Plus Waiver: Individuals who live with family or in another setting with 

assistance. They are at high risk of out-of-home placement. Clients are eligible for all the 

general services covered in the Basic Waiver plus skilled nursing, adult family home, and 

adult residential care services. 

• Core Waiver: Individuals who require residential habilitation services or live at home 

but are at immediate risk of out-of-home placement. Services include residential 

habilitation and all the Basic Plus services, except emergency assistance, adult family 

home, and adult residential care services. 

• Community Protection Waiver: Individuals who require 24-hour staff supervision and 

require therapies and/or other habilitation services. They live in or are moving into the 

community.771 Services include all Core Waiver services, except personal care, respite, 

community access, adult family home, and adult residential care services. 

Participants in these programs can hire, train, and supervise workers they choose, or they can 

elect to have agency services. Because the number of people with developmental disabilities has 

increased significantly in recent years, demand for services has been greatly exceeding supply. 

The state reported that 5,000 people were on a waiting list for the Family Support Program, with 

an average wait for services of about 18 months. (Family Support helps people find and pay for 

respite care, therapy, special equipment, and participation in community activities.)772 

Another major issue for the agency has been the future of the state’s five RHCs that provide 24-

hour residential housing for individuals with developmental disabilities needing institutional care. 

At their peak in 1967, the centers had a combined population of 4,000 residents. By 2004, that 

population had shrunk to 1,100 residents after the state had begun closing some of the facilities. 

Programs for people with mental illness: The state has made vigorous efforts to move longterm psychiatric state hospital patients into community settings. Those efforts have resulted in 

the closure of 178 psychiatric state hospital beds between December 2001 and April 2003.773 
355 

The foundation of the state’s mental health system is a network of local mental health managed 

care plans called Regional Support Networks (RSNs). Services include crisis services; individual 

or group therapy; medication evaluation, prescription, and management; and case management. 

Each RSN is allotted a specific amount of money to provide these services to people in its area 

and an allotment of beds for people who need hospitalization at state hospitals. Most RSNs also 

use private psychiatric inpatient facilities closer to home.774

The DSHS received a $1.4 million federal Real Choice Systems Change Grant in 2002 to 

improve services for adults and older adults with co-occurring medical and behavioral disorders. 

A draft report on the grant in March 2003 noted that only one in three adult DSHS clients with a 

diagnosis in the group, including dementia and other organic disorders, was served by the MHD 

in FY 2001. A high percentage of older adults leaving state hospitals, the report said, are never 

seen in community services.775 

In response, DSHS began an Expanding Community Services (ECS) Initiative, which received 

funding in the FY 2001–2003 state budget. The goal is to fund the development and operation of 

community support services for long-term state hospital patients who are facing barriers to discharge. 

Community funding is becoming available through closure of some state hospital wards.776 

Residential Options 

The residential alternatives for people with disabilities include adult family homes that can 

provide care for up to six residents, and boarding homes licensed to care for seven or more 

people. “Boarding homes” is a term that covers adult residential care (ARC), assisted living, and 

enhanced ARC. Services in ARC homes include lodging, meals, general supervision of residents, 

and assistance with personal care. Enhanced residential care services include the services 

provided through an ARC contract and limited nursing services. 

Washington has more than 2,000 adult family homes that provide room, board, laundry, 

supervision as needed, and assistance with ADLs. Boarding homes that provide assisted living 

services offer a private unit with a private bathroom and help with personal care tasks that do not 

require a professional worker. Some boarding homes specialize in nursing services, while others 

serve individuals with mental health problems, developmental disabilities, or dementia. 
356 

A Medically Needy Residential Waiver program pays for personal care and other services for 

aged, blind, or disabled people in adult family homes, assisted living facilities, and enhanced 

ARC facilities. Medicaid funding was available for about 2,900 residents of assisted living 

facilities in 2000; that number had grown to 3,762 in 2002.777 

In 1995, the state moved licensing and oversight responsibility for assisted living from the 

Department of Health to DSHC, which also has enforcement authority over nursing facilities. 

The legislature enacted a law in 1997 to establish a consultative approach to help assisted living 

providers meet state licensing requirements. The Quality Improvement Consultation Program, as 

it was called, employed a staff of consultants to advise and train assisted living providers. The 

nine regionally based consultants conducted site visits, led training sessions, and responded to 

telephone inquiries.778 

After six months of operation, about 82 percent of providers voluntarily participated in the 

program. Evaluations conducted six months and two years after the program started found a 

large majority of providers expressing satisfaction with the program. Among residents assessed 

by the consultants on more than one visit, 86 percent showed improvement in various aspects of 

care, such as administration of medications and assistance with ADLs. 

The program fell victim to budget cutbacks in the FY 2003 budget, however, and ended in 

June 2002. The U.S. General Accounting Office (GAO) found that the number and 

percentage of facilities that had incurred penalties “fell substantially” after implementation 

of the program. The state imposed fewer civil fines, conditions on licenses, license 

revocations, and summary suspensions.779

Washington has received a four-year Coming Home grant from the Robert Wood Johnson 

Foundation to help the state explore development of affordable models of housing with services 

for the elderly and adults with disabilities. Part of the grant calls for setting up focus groups to 

obtain input from the disability community on current housing and new models.780 
357 

Workforce Issues 

Direct Care Workers: Initiative 775 enacted by Washington voters in 2001 established the Home 

Care Quality Authority “to regulate and improve the quality of in-home care services by 

recruiting, training, and stabilizing the workforce of individual providers.”781 The 2002 

legislature incorporated the text of the initiative in state law. In May 2002, the governor 

appointed the authority’s nine-member board, which held its first meeting in June 2002. 

The authority is developing a referral registry for individual home care providers, which is to be 

available by July 2005, and providing training opportunities for consumers and providers. The 

authority has a mandate to recruit providers and then match consumers to qualified providers in 

both routine and emergency situations. 

After the passage of the initiative, the Service Employees International Union, which represents 

about 26,000 home care workers in Washington, negotiated a contract with the state that called for 

a $2.07 per hour increase and a package of state-subsidized benefits. But the money to implement 

the contract required legislative approval, and the state had hit a severe revenue shortfall. 

The contract was rejected in the 2003 legislative session, although the budget did include $25 

million to cover a $0.75 per hour raise for home care workers. Then, the union won legislative 

approval in March 2004 for a revised contract that called for a $0.50 per hour raise as well as 

new health and workers’ compensation benefits. Home care workers saw their wages rise from 

$7.18 per hour in 2001 to $8.93 in 2004.782 

Family Caregivers or Informal Care: Washington has also strengthened its support for family 

caregivers over the years. The state estimates that more than 540,000 family caregivers are 

helping adults who have chronic illnesses or serious disabilities.783 A respite care program 

established statewide in 1989 had a $2.8 million budget in FY 2003. A state family caregiver 

support program was started in October 2000, with an annual budget of $610,000. When the 

National Family Caregiver Support Program was enacted that year, Washington was allocated 

about $2.4 million.784
358 

Washington has also devoted considerable efforts to ethnic family caregivers. The state has used 

two federal Alzheimer’s Disease Demonstration Grants to target Chinese, Hispanic, Korean, and 

Native American communities as well as rural communities. 

Consumer Direction 

Washington has long been a state that promotes consumer-directed care for participants in its 

home- and community-based programs. Participants in the Medicaid Personal Care program and 

COPES may use workers from home care agencies or hire independent providers However, state 

policy requires clients who need more than 112 hours of service a month to use an independent 

provider rather than an agency, which was intended as a cost-containment measure and to 

address shortages of home care workers, particularly in rural areas. For this reason or because of 

preference, the majority of in-home clients use independent providers rather than agencies. 

In the Medicaid-funded programs, participants may hire family members but not a spouse or 

parent of a client. A 1998 survey by the Aging and Adult Services Administration found that 52 

percent of independent providers were family members. Independent providers, including family 

members, must submit to criminal history background checks and complete a state-designed 

training course. After hire, a worker must take a two-hour orientation course, take 28 hours of 

mandatory training within the first 120 days of hire, and take 10 hours of continuing education 

each year thereafter. 

In addition to hiring and supervising his or her worker, the consumer trains the worker regarding 

individual needs and health-related tasks. A case manager determines the client’s eligibility for 

the program and the number of hours of service the worker may provide. The client signs the 

timesheets; the case manager authorizes services and payment. The state cuts a check, which it 

sends directly to the worker. 

The state applied in 2004 for a Robert Wood Johnson grant to implement a Cash and 

Counseling project, which will allow eligible Medicaid participants to receive a monthly 

allowance to be spent to hire their own workers, including relatives. The project will also 

provide counseling and financial assistance to help clients plan and manage their 
359 

responsibilities, including choosing a fiscal agent if they wish to maintain their accounts, write 

checks, withhold taxes, and file tax returns. 

Innovative Practices 

Two key innovative practices in Washington include one program that has been the foundation 

of the state’s successful HCBS system for almost 20 years (COPES) and one demonstration 

program that has only recently been implemented (the Medicaid Integration Partnership). 

The Community Options Program Entry System (COPES): The heart of the home- and 

community-based system in Washington is COPES, begun in 1983. It is one of the largest HCBS 

waiver programs in the country in terms of number of participants, with more than one-third of 

the participants age 18 to 64 years old. Not only does the program provide assistance with 

personal care and household tasks in the home, COPES also funds services in adult family 

homes, assisted living facilities, and enhanced ARC facilities. 

To qualify for COPES services, an individual must be at risk of nursing home care and need 

assistance with two or more ADLs or be cognitively impaired. The financial eligibility standard 

is 300 percent of Supplemental Security Income (SSI). Initial functional and financial eligibility 

determinations are carried out by local ADSA caseworkers throughout the state. If a client 

receives services at home, an Area Agency on Aging worker will assume case management 

responsibilities for that person. If the client enters a residential facility to receive services, the 

state agency caseworker will retain the case management function. 

Covered services include assistance with personal care and household tasks, adult day care, 

environmental modifications, home delivered meals, personal emergency response systems, and 

specialized medical equipment and supplies. Other services include skilled nursing and home 

health aide services that are beyond the amount, duration, and scope of regular Medicaid 

services, as well as training and transportation to meet therapeutic goals. 

Medicaid Integration Partnership: This is a demonstration program aimed at bridging the gaps 

that exist for many high-risk clients of the DSHS who are eligible for or are receiving services 

from different divisions of the department. The project is aimed at individuals with complex 
360 

medical conditions, cognitive impairment, mental illness, addiction disorders, and physical and 

developmental disabilities who make heavy use of medical, hospital, or nursing home services; 

prescription drug services; or mental health services. The goal is to provide these clients with an 

integrated package of services “to slow the progression of illness and functional disability, 

reduce unnecessary emergency room and hospital visits, and reduce the overall cost of care.”785

Agencies involved include the Office of the Secretary of DSHS, ADSA, the Medical Assistance 

Administration (Medicaid), the Budget Office, and the Research and Data Analysis Division. An 

intra-agency workgroup began developing the demonstration project to be implemented during 

the FY 2003–05 biennium. The legislature authorized DSHS to combine and transfer funds for 

Medicaid clients in this program from the separate budget categories for the ADSA, Alcohol and 

Substance Abuse, Mental Health, and Medical Assistance (Medicaid) program budgets into the 

2003–05 biennium. Enrollment is expected to reach at least 4,000 people. 

One of the first steps in the project was to analyze the Medicaid population in terms of 

demographics, use of services, and cost and setting of care. The workgroup has been working on 

coordinating arrangements for health care, mental health, substance abuse benefits, and LTSS. In 

addition to the state agencies working together, the project envisions community partnerships 

made up of groups of medical, behavioral, and long-term service providers in one or two 

counties. Funding streams will be integrated into a single monthly capitated payment for medical 

services, prescription drugs, LTSS, and behavioral health. 

The program must evaluate changes in cost, utilization, and client outcomes. In January 2005, 

the department will prepare a Medicaid waiver proposal that outlines further steps in Medicaid 

integration that the state wishes to pursue, including fully integrating Medicare and Medicaid 

funding and services.786

Future Plans and Challenges 

The pressures brought through class action lawsuits on behalf of people with mental illness and 

individuals with developmental disabilities have pushed the state to advance its communitybased agenda despite severe budget and fiscal pressures. Although the commitment to increasing 

community services for people with disabilities remains strong, tensions over budget issues have 
361 

slowed some actions to improve LTSS, such as raising wages and benefits for direct care 

workers or expanding state-funded programs such as the Chore Program. 

At the same time, however, the state’s Medicaid agency has been looking at enhanced rates for 

boarding homes that serve people with dementia, says Bernard Dean, senior fiscal analyst of the 

House Appropriations Committee. ADSA Assistant Secretary Leitch points out that some 

specialized dementia care boarding homes that have been developed in the state are at least $50 per 

day cheaper than nursing homes and delay nursing home placement. Pat Thibaudeau, the ranking 

member of the Senate Health and Long-Term Care Committee, believes that the legislature also 

has “to figure out a better way to fund nursing homes,” pointing to a number of nursing home 

closures and the potential need for some facilities to care for baby boomers in the future. 

As the agency charged with Olmstead planning, DSHS completed a draft plan in December 

2002, but the agency described its work as an ongoing process. The Washington Olmstead plan 

“is intended to be a living document, subject to continuous planning and change,” the agency 

said. The goals are to continue to divert people from institutional admissions by creating 

sufficient options in home and community settings, and to help people already in institutions 

make the transition to the community.787 The state will be tested through its fiscal difficulties to 

realize these goals. 

The reorganization within DSHS also poses challenges for the state as the newly created ADSA 

strives for cohesion and coordination among its somewhat disparate parts. 

As DSHS increasingly promotes the delivery of services through teams from different parts of 

the agency, it will be learning whether efficiencies can be achieved and the quality of care 

improved for all its clients. 
362 

Vermont 

Vermont’s long-term care system is “characterized by collaboration among key 

agencies, advocates, and other stakeholders. It is built upon the principle of 

maximizing participant choice of services, providers and living arrangements.” 

 —MEDSTAT report for CMS, 2003

Introduction 

Although a small rural state, Vermont has built an enviable record of providing LTSS for people 

with disabilities that enhance their independence and dignity and promote choice. This system 

has evolved through years of planning since the 1990s and is built on a firm commitment to the 

goals articulated in legislation and program administration for providing services that reflect 

each individual’s needs and choices. 

The key components of Vermont’s programs are extensive and ongoing planning, expanded 

HCBS, residential options, worker initiatives, and self-directed services. Agencies for different 

populations with disabilities have collaborated on a number of projects, and a recently 

implemented reorganization plan will unite most agencies for people with disabilities under one 

umbrella department. 

Vermont’s efforts are strengthened by the close partnership between the state and 10 local 

coalitions throughout the state. These coalitions bring together advocates and providers to 

collaborate on ways to improve service design, options, and coordination in each geographic area. 

Significant milestones in Vermont’s planning for and development of home- and community-based 

options for people with disabilities include Act 160, which was enacted in 1996, and “Shaping the 

Future of Long Term Care” reports, which have been issued since 2000. Act 160 laid the 

groundwork for rebalancing the state’s system of LTSS from an institutional approach to greater 

emphasis on home- and community-based options. The “Shaping the Future” reports set out goals 

and measure progress toward meeting those goals for the elderly and people with disabilities. 
363 

Background 

Vermont had a population of about 616,600 people in 2002, forty-ninth in the country. 

Encompassing only about 9,250 square miles, the state has a population density of 65.8 people 

per square mile (compared with the U.S. average of 79.6 people per square mile). The population 

is largely white and nonpoor—96.8 percent white with a poverty rate of 9.4 percent (compared 

with the national average of 12.4 percent poor). 

The state had 77,510 people age 65 and older in 2002. The number of people age five and older 

with a disability totaled 97,167 in 2000.788 The state estimates that 3,835 people were living in 

the community in 2003 who required assistance with at least two ADLs. Forty-five percent of 

these individuals were low income. The state estimates that by 2013, this number will grow to 

5,464 people (a 42 percent increase).789 

In the 1980s, Vermont’s public officials began to review the state’s LTSS, which consisted 

largely at that time of institutional care, Older Americans Act services, and a small state-funded 

attendant care program. A set of recommendations for expansion of community services came 

out of a 1986 report to the state legislature and a 1988 commission headed by the lieutenant 

governor. As a result of this work, the state developed a Medicaid home care waiver program, 

and provided additional state funds for adult day services and homemaker services. 

Another outcome was the creation of the Department of Aging and Disabilities (DAD) in 1989, 

which issued a 1991 report “Long Term Care in Vermont.” A major recommendation of that 

report was that the state allocate for community services at least 30 percent of total public funds 

for institutional and home- and community-based care.790 

Integrating Services for People with Disabilities 

Until 2004, Vermont did not integrate or coordinate LTSS for all people with disabilities. 

Separate administration and program operations existed for aged and disabled people in DAD 

and for developmentally disabled and mentally ill people in the Department of Developmental 

and Mental Health Services (DDMHS), although both departments were located in the Agency 

of Human Services. 
364 

Significant progress has been made, however, in coordinating all services and supports for 

elderly people, people with disabilities, and people with developmental disabilities through a 

reorganization that has been in the planning stages since 2002 and was implemented in 2004. 

The reorganization has resulted in the creation of the Department of Aging and Independent 

Living, which pulls together programs from DAD and developmental disabilities services from 

DDMHS (which was abolished as an agency). The reorganization also locates mental health 

services in the Department of Health, along with programs from the Division of Alcohol and 

Drug Abuse.791 (Throughout this report, the names of the former agencies will be used in most 

cases because the services and programs to which the report refers evolved through the years 

under those agencies.) 

This effort at coordination and consolidation of services came about when the Vermont General 

Assembly in the FY 2003 Appropriations Act instructed the Agency of Human Services to 

recommend a comprehensive plan for reorganization of the agency’s operations. For six months 

(July 1, 2003, to December 31, 2003), the agency consulted a wide range of Vermont consumers, 

providers, state employees, and stakeholders through surveys, focus groups, regional stakeholder 

meetings, regional and state advisory groups, and a statewide conference. 

The agency said that “widespread agreement” emerged that it needed “to do a better job” in 

several areas, which included integrating the state’s approach to LTSS “so that consistent support 

and services are available based on the need of the individual or family, rather than by diagnosis 

or geographic region of the state.” The system, the agency said, “tolerated significant disparities 

and inequities that inhibit too many children and adults with disabilities from receiving vital 

services and supports they need to live independently in integrated community settings.”792

When the legislature backed the reorganization, says Peter Youngbaer, executive director of the 

Vermont Coalition on Disability Rights, lawmakers felt that a key component had to be a 

“detailed financial plan.” The state’s director of long-term care services, Brendan Hogan, says 

that the state has experienced incremental changes in the years since passage of Act 160. With 

reorganization, he says, “There is more of an overall strategy.” Completion of the reorganization 

is expected to take about three years, with final implementation scheduled for mid-2006. 
365 

Putting developmental disabilities services into a single department with aging and physical 

disabilities was a “real step forward,” says Debra Leese Baker, executive director of the Vermont 

Independent Living Center. Coordination is still sometimes difficult, she says, because “mental 

health remains in another department.” 

It should be noted that, before the reorganization, the various agencies with responsibilities for 

services for people with disabilities often collaborated on various projects. For example, a 1999 

Workforce Task Force begun in DAD was later expanded to include DDMHS and DDD. DAD 

and DDMHS jointly administer the ElderCare Initiative, begun in FY 2001 to provide mental 

health services for older adults in their homes (see below). 

Another major collaborative activity has been the work by DAD, DDD, and DDMHS on a series 

of activities funded by a $2 million, three-year federal grant under the Real Choice Systems 

Change Grant program. The objectives for the project include the following: 

• improving and coordinating information flow to consumers to ease their ability to 

navigate service delivery systems; 

• identifying best practices to foster self-determination and self-advocacy among 

consumers; 

• supporting workforce development (discussed in greater detail below under “Workforce 

Issues”); 

• developing a Medicaid waiver to eliminate a bias toward institutional care (see 

“Innovative Practices” below); and 

• researching the option and implementing a pilot program to provide direct funding to 

people with developmental disabilities and their families. 

All three agencies are involved in the first three objectives, the Medicaid waiver application is a 

project of DAD, and direct consumer funding is a project of DDS. In May 2004, the agencies 

applied to CMS for a no-cost extension that would continue the projects through autumn 2005.793 
366 

Public/Private Partnerships 

In the process of expanding its HCBS, Vermont has “achieved remarkable consensus on policy 

goals,” according to one study, “among state officials, the disability community, aging 

advocates, service providers and program participants themselves.” Creating a state-level 

coalition “consisting of all relevant stakeholders,” the report said, helped the state reach 

consensus on policy goals and strategies for realizing those goals.794

After the 1991 “Long-Term Care in Vermont” report, stakeholder groups consisting of people with 

disabilities, the elderly, and providers convened at the local level. These groups provided community 

input into the process that led to passage of Act 160. After that, DAD used a small amount of the 160 

funds to support the transition of 10 stakeholder groups around the state into coalitions. 

The coalitions have been “widely credited with fostering collaborations among various 

stakeholders and improving access to services.”795 The coalitions developed business plans that 

focused on filling local gaps in services in the first years of their existence. The 10 LTC 

coalitions operate in areas generally corresponding to county boundaries. They have been given 

authority by DAD to select either an Area Agency on Aging or a home health agency in their 

region to coordinate management of the Home-Based and Enhanced Residential Care Medicaid 

Waiver Programs, and they now oversee the Housing and Supportive Services Program as well. 

Expansion of Community Supports 

Act 160 laid the groundwork for a multiyear effort to limit institutionalization of people with 

disabilities who need services and supports by expanding home care and other community 

residential options. Act 160 linked increased funding for HCBS to reduced growth in nursing 

facility expenditures for the four years following passage of the law. The state had estimated 

that spending on nursing home care would increase 8 percent a year, the rate of growth 

experienced between 1983 and 1996. Act 160 provided that any savings realized by the state 

from spending less on nursing homes than the projected amount could be used to finance 

expanded community options. 

When the legislation was enacted, 3,600 people were residents of nursing homes; as of 

December 2003, the number of nursing home residents had dropped to 3,256. In 1992, about 22 
367 

percent of Vermont’s population age 85 or older lived in nursing homes. By 2002, 15 percent of 

that age group were living in nursing homes.796

Programs for individuals who are elderly and/or physically disabled: The following are the 

major programs for seniors and people with disabilities that are administered by DAD: HomeBased Medicaid Waiver Program, Attendant Services Program (ASP), Traumatic Brain Injury 

Medicaid Waiver, Enhanced Residential Care Medicaid Waiver, Adult Day Services Program, 

Homemaker Program, and Housing and Supported Services. 

Personal care services are provided in the Home-Based Medicaid Waiver Program. These 

include assistance with essential daily activities such as dressing, bathing, eating, grooming, 

toileting, mobility, and transferring. Assistance may also be provided for other activities, such as 

medication management, meal preparation, cleaning, and shopping. The program also pays for 

up to 720 hours a year of respite care services for family caregivers. The program has more than 

1,300 participants 

The ASP also provides assistance with the daily activities described above, but allows for several 

models of consumer-directed care. A program assessor completes an in-depth assessment of an 

applicant’s needs in his or her home. Then an eligibility committee (consisting of program 

participants) reviews the assessment and authorizes a specific number of hours of service per day. 

The program has four different components. The state-funded Participant-Directed or Medicaid 

Participant-Directed Programs are for people who need assistance with at least two ADLs and 

who can manage their own care A third ASP component is a state-funded Personal Services 

Program for people who need assistance with at least one ADL or meal preparation. The fourth 

ASP component is the Group-Directed Attendant Care Program for people who need four or 

more hours of attendant services daily. 

The Enhanced Residential Care Waiver Program provides personal care, case management, 

activities, and 24-hour staffing for people who live in residential care homes or assisted living 

facilities. The program serves about 200 people a year in 38 licensed Level III residential care 

homes. (For further information on residential care homes, see “Residential Options” below.) 
368 

The Adult Day Services Program offers personal care and meals, therapeutic activities, and 

professional nursing services in adult day settings. The Homemaker Program provides 

homemaker services for people with one or more ADL deficiency and/or cognitive impairment. 

The Housing and Supported Services Program provides services and coordinates access to 

existing community services for residents of congregate housing. (For further information on this 

program, see “Residential Options” below.) 

Programs for people with developmental disabilities: The state has created comprehensive 

community-based services for people with developmental disabilities through the DDMHS. The 

services that the state has developed have led to the following results: 

• Vermont ranks first among the states in the number of people with developmental 

disabilities per 100,000 population who receive supported employment. 

• The state is fourth in the nation in terms of total family support spending per family with 

a person with developmental disabilities.797 

• Vermont has the nation’s highest percentage of people with developmental disabilities 

living in residential settings of three or fewer residents.798

• The only public institution in Vermont for people with developmental disabilities, the 

Brandon Training School, was closed in November 1993. 

The Developmental Disabilities Act of 1996 laid out 12 principles of service that included 

employment, accessibility, meaningful choice, individualized support, and health and safety, 

among others. DDD has contracts with 15 nonprofit developmental services providers: 10 

Designated Agencies in each geographic region of the state and 5 Specialized Services Agencies 

that provide services to meet distinctive individual needs. 

In FY 2003, the agency provided supports to 2,889 people, which agency officials say represents 

only 25 percent of the eligible population. Medicaid funds 99 percent of developmental services 

through the Home- and Community-Based Waiver Program that served 1,918 people in FY 2003. 
369 

Participants have choices for the management of their services: self-direction, agency management, 

“shared” management between an agency and the consumer, or family management. 

A smaller state-funded program, Flexible Family Funding, provides up to a maximum of 

$1,122 annually to eligible families with children or an adult family member who lives at 

home. The money can be used for services and supports at the family’s discretion. (Families 

receiving Flexible Family Funding can also get services under the Medicaid waiver program if 

they are eligible.)799 

The Federal Government has praised Vermont’s program for people with developmental 

disabilities for its attention to each participant’s needs. For further information on the state’s 

approach, see “Innovative Practices” below. 

Programs for people with mental illness: A Medicaid waiver program provides services for the 

chronically and persistently mentally ill through a network of community mental health agencies. 

The FY 2003 appropriation for community-based services for adult mental health was $35.6 

million. Programs include Community Rehabilitation and Treatment (CRT), Adult Outpatient 

Services, and Emergency Services. 

The CRT program, which had about 3,200 clients in FY 2003, provides medication prescription 

and monitoring, and helps clients find and keep a job and locate housing. The program also 

assists clients in getting an education and provides social and recovery skills. Adult Outpatient 

Services, which has served more than 7,000 people annually in recent years, offers a range of 

mental health services, such as evaluation and family, individual, and group therapy. People are 

typically seen for 1 to 10 visits. 

Emergency services are available 24 hours a day, 365 days a year to evaluate mental health 

crises and to provide or arrange whatever treatment or support is needed to cope with the crisis. 

The program serves about 7,600 people annually. Consumer/Family Initiatives services include 

information, advocacy and referral, and training for providers. Support groups and telephone 

emotional support are also available.800
370 

ElderCare Initiative: A joint program of DAD and DDMHS, the ElderCare Initiative was 

started in FY 2001 with a $250,000 appropriation. Clinicians provide outreach, case 

identification, and home-based mental health treatment services for adults age 60 or older. The 

most frequent diagnosis is depression, with a small percentage of cases of substance abuse or 

dementia. At the local level, the program is run by the state’s five Area Agencies on Aging and 

10 community mental health centers.801 

Residential Options802

The first “Shaping the Future of Long Term Care” report called for the development of additional 

supportive housing, such as enhanced residential care, assisted living, group-directed congregate 

housing, and adult family care. Although state officials say that significant progress has been made 

in developing new housing models, getting the models up and running has been difficult. In some 

parts of Vermont, older people have a two- to five-year wait for affordable housing. 

Vermont’s first licensed affordable assisted living residence opened in July 2003. The 28 

apartments were all leased or under signature within three months of opening. Other entities are 

in various stages of developing assisted living residences, with the state hoping to produce a 

specific plan for future growth in 2004. (People in assisted living facilities and residential care 

homes who are Medicaid-eligible can receive Medicaid-covered services through Vermont’s 

Assistive Community Care Services Program.) 

Residential care homes are state-licensed group living arrangements designed to meet the needs 

of people who cannot live independently but who may not need the level of care provided in 

nursing homes. Assistance in residential care homes primarily includes help with daily activities 

such as bathing, dressing, and eating. There are two levels of these facilities: Level III homes 

provide nursing overview but not full-time nursing care, and Level IV homes do not provide 

nursing overview or nursing care. 

Other housing options in the planning or development stage include the following: 

• Consumer-directed congregate living arrangements that provide individual apartments 

and shared caregivers for a small number of young adults with severe mobility 
371 

impairments. One nine-unit site in Burlington is being evaluated by the state for future 

planning replication. 

• Adult family care, an arrangement in which an older person or a young adult with a 

disability lives with an unrelated family that provides housing, personal care, and 

supportive services. This option is in the development stage in a few areas; the state 

hopes to expand the concept statewide sometime in 2005. 

• Housing and Supportive Services (HASS) provide service coordination and gap-filling 

supportive services to people living in 29 congregate housing sites. The goal of HASS is 

to allow residents to age in place, thus avoiding or delaying institutional placement. 

Wellness initiatives, exercise programs, and community meals are provided. As of June 

2003, about 800 people were participating in this program. 

• Homeshare Vermont, a program currently in only a few areas of Vermont, brings together 

a homeowner who needs support and assistance with a caregiver looking for a place to 

live. In 2003, a match-up program in Central Vermont opened through the collaboration 

of multiple partners in the area. 

Workforce Issues 

As with most states, Vermont has problems finding enough direct care workers for its home care 

and residential programs, a situation that is exacerbated by the sparse population in rural areas. A 

study by DAD found that turnover rates ranged from 35 to 60 percent in nursing homes and 

home health agencies, and up to 400 percent in residential care homes.803 The state has attempted 

to address these shortages in several ways: 

• Used savings in the nursing home budget in FY 2001 to increase payment rates for the 

consumer-directed option in waiver programs. (After a year’s experience, a worker would 

be paid $10 an hour, on average.) 

• Enacted wage pass-through804 legislation for nursing homes. The legislature appropriated 

$6.3 million in FY 2001, $8.7 million in FY 2002, and $8.3 million in FY 2003. 
372 

• Applied part of a federal Systems Change Grant to establish a paraprofessional 

organization, the Vermont Association of Professional Care Providers. The association 

will give workers an opportunity to help shape their training and work conditions. 

Another major effort has been the creation of a community coalition led by the Community of 

Vermont Elders (COVE) with a demonstration grant from the Better Jobs/Better Care (BJBC) 

program805 to develop quality criteria for nursing homes and other LTC providers that include 

staff development and support, working conditions, and recognition for workers. One outcome of 

the effort was the appropriation by the 2004 legislature of $7 million in extra funding to support 

nursing home rate rebasing that will augment funds for direct care staff. The coalition also won a 

5 percent increase (to $50 per day) in rates for assistive community care services in residential 

care homes. 

DAD and the Vermont Health Care Association have collaborated to develop a “Gold Star” 

designation program to improve staff retention in nursing homes.806 The program was designed 

by nursing home professionals and state staff to promote nursing homes that agree to use best 

practices with their employees. Nursing facilities must meet criteria in seven areas (the examples 

for each component are taken from descriptions in the BJBC newsletter):807

• Staff recruiting: Honest depiction of job duties and expectations and involvement of 

direct care workers in interviewing. 

• Orientation and training: Well-developed orientation and hands-on training and 

mentoring for new employees. 

• Staffing levels and work hours: Flexible scheduling, worker control over hours, and safe 

workloads. 

• Professional development and advancement: Career ladders, mentoring opportunities, 

and training in specialized care. 

• Supervisory training and practices: Training for all supervisory staff, accessible 

supervisors, and respect for all workers. 
373 

• Team approaches: Involvement of direct care staff in care planning, permanent 

assignments for patient care, and regular communication among team members. 

• Staff recognition and support: Rewarding years of service with pay increases or 

opportunities for advancement, counseling resources, and strategies to express 

appreciation and respect. 

Nursing facilities are to be given flexibility in how they implement the practices within their own 

facilities. A nursing home must be a participating Gold Star facility to qualify for one of the five 

$25,000 Quality of Care awards given by DAD each year. 

Consumer Direction 

Providing consumers with the opportunity to choose their own services and providers and to 

direct their own care has been a key element of Vermont’s programs for people with disabilities. 

The “Principles of Developmental Services” for people with developmental disabilities, for 

example, talks about “meaningful choices” that ensure that “each recipient is directly involved in 

decisions that affect that person’s life.” Another principle states that “adults, regardless of the 

severity of their disability, can make decisions for themselves....”808 Vermont policymakers 

strongly support the concept because of consumer preference, cost-effectiveness, and shortages 

of paid providers, particularly in rural areas. 

For the elderly and older adults with physical disabilities, self-directed services have been 

integral to programs managed by DAD. The agency provides consumers with a “Consumer and 

Surrogate Directed Services Employer Handbook.” In 1997, the state began offering enrollees in 

the Medicaid Home-Based Waiver Program the option of directing their own care, and a year 

later, provided a surrogate-directed choice. 

Currently, half of all personal care hours under the Home-Based Waiver Program are used by 

people who manage their own care or have a surrogate for this role.809 According to Patrick 

Flood, commissioner of the Department of Aging and Independent Living, this widespread use 

of consumer-directed services saves the state money that can be applied to expanding HCBS. 

“We were paying $24 per hour for a home health aide,” he said, compared to $12 for consumer-
374 

directed care.” “If we didn’t do this, we would not have been as successful in shifting dollars to 

home- and community-based services,” he adds. 

Individuals in the state-funded participant-directed component of the ASP may even hire their 

own spouses to provide their care. Participants recruit, select, and supervise their workers, and 

develop work schedules. The participant and attendant complete, sign, and submit biweekly time 

reports to a designated payroll agent, who approves the payment and mails a check to the worker. 

Vermont Independent Living Center director Debra Leese Baker says that consumer direction 

also needs to be made available to people with psychiatric disabilities. Even with consumer 

direction options for the other programs, she says, finding workers is difficult because of the low 

pay and benefits for direct care workers. She points to the state-funded participant-directed 

program, which allows spouses to be paid as aides but which is underfunded because of the 

state’s fiscal constraints. “We hope we’ll get permission under the new Medicaid 1115 waiver to 

pay spouses,” she says.810

Innovative Practices 

While Vermont has a number of noteworthy initiatives and practices, probably the most 

significant are its waiver proposal to create equal access to either nursing home or home- and 

community-based care and its comprehensive community care system for people with 

developmental disabilities. 

The 1115 Medicaid waiver proposal: DAD filed a 1115 Research and Demonstration Waiver 

proposal in October 2003 with CMS after a year-long planning process with providers, 

advocates, and consumers. The program would allow the state to create a program without an 

institutional bias by combining Medicaid HCBS waiver funds with the state’s nursing home 

appropriation in a “global budget.”811 (Vermont spent a total of $133 million in FY 2004 for all 

LTSS, including nursing home care.) 

Eligible elderly people or people with disabilities would have the option of receiving either 

Medicaid-covered HCBS or care in a nursing home. People choosing HCBS will not have to wait 

for a slot to open up in the Medicaid waiver program. 
375 

The state proposes to establish a priority system for eligible people, who will be placed into three 

groups: highest need, high need, and moderate need. The highest need group, who must meet the 

state’s Medicaid financial eligibility criteria,812 will be entitled to either nursing home care or 

HCBS. The high need group will not be legally “entitled” to LTSS, but will be served to the 

extent that funds are available. These consumers will also have to meet Medicaid financial but 

not functional eligibility criteria. The moderate need group will consist of people who do not 

meet nursing home or HCBS waiver eligibility criteria but are believed to be at risk for 

institutionalization based on their assessed care needs. (Functional eligibility criteria for each 

group are listed in Attachment 4.A.) 

Service options for the highest and high need groups are the same: case management, personal 

care, adult day services, respite, companion services, assistive technology and home 

modifications, emergency response system, enhanced ARC, or nursing facility care. The type 

and amount of services depend on the assessed strengths and needs of each individual. For 

consumers with moderate need, service options will include case management, adult day 

services, and/or homemaker services. 

At the time of the state’s application, 2,200 people were “entitled” to nursing home care in the 

state. State officials believe an additional 800 people will benefit from an entitlement to either 

nursing home care or HCBS. As of October 2004, the state had not yet received formal federal 

approval of the proposal, although most details had been worked out by the state and CMS. State 

officials estimated a July 1, 2005, start for the program. 

A model developmental disabilities system: In a review of the state’s renewal request for its 

Medicaid HCBS waiver program for people with MR/DD, CMS said that the Vermont system 

for this population serves as a model for other states.813 The federal agency said 

Vermont’s home- and community-based services waiver for individuals with 

mental retardation and developmental disabilities continues to reflect the 

commitment and dedication of the Division of Developmental Services, other 

involved State officials, service providers and other stakeholders to provide high 

quality developmental services and opportunities for enjoyment of life in the 

community to all people receiving developmental services. 
376 

Goals and outcomes defined in Vermont’s Developmental Disabilities Act of 1996 

and its implementing regulations are reflected in all systems operating within the 

waiver. DDS staff continue to strive to improve all aspects of the program Their 

focus on continued growth in the quality of individualized planning and consumer 

involvement, health and wellness, provider oversight, and accountability in the 

utilization of resources for outcomes-based service delivery, can serve as a model 

for other home- and community-based services waiver programs.814 

The federal agency said that DDS ensured ongoing quality in its program through “availability of 

full information, individualized supports, meaningful choices, community participation and 

employment, accessibility, health and safety, trained staff, and fiscal integrity.” The CMS report 

noted that Individualized Support Agreements (care plans) use a person-centered approach, 

which sometimes includes brief histories of the participant’s experiences and goals, often written 

in the participant’s own words. 

DDS has produced a document called “Individual Support Agreement Guidelines,” intended for 

a consumer audience to help participants understand the process and to provide information 

about supports, approvals, and making changes The CMS report also noted that all consumers 

whose case files were reviewed had current documentation of their need for an intermediate care 

facility for the mentally retarded (ICF/MR)815 level of care and therefore of their eligibility for 

HCBS waiver services. 

Future Plans and Challenges 

A DAD goal that was articulated in the “Shaping the Future of Long-Term Care” reports has 

been to establish a county minimum of 40 HCBS waiver slots for every 60 Medicaid-funded 

nursing home beds. Five of the state’s 13 counties had reached or exceeded that goal by 2003, 

with several other counties “poised” to reach the goal, according to DAD.816 Setting these goals 

and implementing the planning efforts to reach them has helped the state to learn which counties 

“need more infrastructure building,” says Peter Youngbaer of the Coalition on Disability Rights. 

Youngbaer also notes that the state is in the middle of an Olmstead817 planning process, and is 

developing a plan that will be more comprehensive than the “Shaping the Future” reports. The 

Olmstead plan, he says, will encompass education, transportation, housing, health care, and other 

relevant issues. 
377 

An effort is also under way to better manage care for people who need both medical and chronic 

care services. Vermont was one of nine states that participated with the Hartford Foundation to 

establish PACE (Programs of All-Inclusive Care for the Elderly) in their states. In Vermont, the 

plan is for these programs to operate in Burlington and Rutland, with about 100 clients in each of 

the two areas. The legislature appropriated $100,000 for planning work. 

Although Vermont did not experience as severe a fiscal crisis as many other states in 2002 and 

2003, funds have been tight for initiatives, such as improving direct care worker wages and 

benefits or increasing funds for accessible and affordable housing. Agency officials talk about 

waiting lists for certain services or programs, such as the Flexible Funding Program for families 

of people with developmental disabilities . 

Vermont continues to evolve its system of LTC services and supports, which reflects a 

commitment to offering options to people with disabilities about where they will live, what kinds 

of services they will receive, and how they want to direct those services. 
378 

Attachment 4.A 

Functional Criteria for 1115 Waiver Program818

Highest Need Group 

• Individual needs extensive or total assistance with one or more of the following: toileting, 

eating, bed mobility, and transfer and needs at least limited assistance in any other ADL; or 

• Individual has a severe impairment with decision making skills or a moderate impairment 

with decision making skills and one of the following behavioral symptoms/conditions 

that is not easily altered: wandering, verbal abuse, physical abuse, inappropriate behavior, 

or resists care; or 

• Individual has any of the following conditions or treatments that require skilled nursing 

assessment, monitoring, or care on a daily basis: Stage 3 or 4 skin ulcers, IV medications, 

end-stage disease, ventilator/respirator, potential feedings, sectioning, nasogastric tube 

feeding, or second- or third-degree burns; or 

• Individual has an unstable medical condition that requires skilled nursing assessment, 

monitoring, and care on a daily basis related to conditions or treatments, including but 

not limited to (19 conditions or treatments are listed that include dehydration, internal 

bleeding, therapy, aphasia, transfusions, surgical wounds, oxygen respiratory, and 

cerebral palsy). 

High Need Group 

• Individual who requires extensive to total assistance on a daily basis with any of the 

following ADLs: bathing, dressing, eating, toileting, and/or physical assistance to walk. 

Individual requires skilled teaching on a daily basis to regain control or function with 

ADLs, gait training, speech, range of motion, or bowel and/or bladder training; or 

• Individual who has impaired judgment or decision making skill that requires constant or 

frequent redirection for ADLs or one of the following behaviors that require a controlled 
379 

environment to maintain safety: constant or frequent wandering, inappropriate behavior, 

or aggression; or 

• Individual who has any of the following conditions or treatments that require skilled 

nursing assessment, monitoring, and care on less than daily basis and an aggregate of 

daily services, including rehabilitation therapy: wound care, medication injection, endstage disease, potential feeding, suctioning, ventilator/respirator, nasogastric feeding, and 

severe pain management. 

Moderate Need Group 

• Individual requires supervision or any physical assistance three or more times in seven 

days with any single or combination of ADLs or IADLs,819 or 

• Individual has impaired judgment or decision making skills that require general 

supervision on a daily basis, or 

• Individual requires at least monthly monitoring for a chronic health condition, or 

• Individual’s health condition would worsen if LTC services are not provided or if 

services are discontinued. 
380 

Minnesota 

We envision a long-term care system that supports self-determination, provides 

services that meet consumer needs, provides high-quality care, (and) ensures 

efficiency and affordability.

 —Minnesota Long-Term Care Task Force, January 2003

Introduction 

In 2001 the Minnesota Legislature enacted a series of measures to expand LTSS that built on a 

set of recommendations issued by a task force the year before. The goal was to reduce 

institutionalization of people with disabilities and expand the availability of home- and 

community-based options. Although the task force work and the subsequent legislation were 

framed with a focus on the older population, the state has also been steadily improving 

community options for other disability groups as well. 

As a result of these efforts, Minnesota closed almost 5,000 nursing home beds from FY 2001 to 

FY 2003. The number of people age 65 and older served through publicly funded HCBS grew 

from 23,000 to nearly 30,000, a 25 percent increase, over those years.820 Minnesota has also seen 

a surge in housing options for people with disabilities that has included a doubling in the number 

of assisted living residences over the previous five years. 

The state has also made a major effort to provide most people with disabilities an opportunity to 

direct their own services. That option has been available for many years in selected counties to 

participants in the Medicaid Personal Care program and in the Medicaid HCBS waiver program 

for people with mental retardation and related conditions. With federal approval, the state plans 

to extend consumer direction in 2005 to all counties and to its other four Medicaid waiver 

programs, as well as to two managed care programs that provide a combination of Medicare and 

Medicaid health and LTSS. 

Background 

The total population of Minnesota in 2000 was about 5 million people. The number of people 

age 65 and older totaled almost 600,000, which was 12.1 percent of the total population 

(compared with the national average of 12.4 percent).821 The population is largely white (89.4 
381 

percent) with 3.5 percent who are black, 2.9 percent Asian, and 2.9 percent Hispanic. People 

who are foreign born constitute 5.3 percent of the state’s total population. 

Individuals with incomes below the poverty level in 2000 account for 7.9 percent of the population 

(for people age 65 or older, the percentage was 8.2 percent). Fourteen percent of the population age 

21 through 64 reported having a disability, as did 36.9 percent of the over-65 population.822 

Integrating Services for People with Disabilities 

The Minnesota Department of Human Services (DHS) is an umbrella agency that ensures basic 

health care for low-income Minnesotans, provides economic assistance, and assists people with 

disabilities and the elderly. The department’s FY 2004–2005 biennial budget includes a little 

more than one-third of the state’s total public spending.823 In outlining department priorities in 

2003, DHS included a goal of providing “more consistent services across all of the home- and 

community-based waivers through development of a common services menu and a common 

screening tool.”824 The DHS agencies with major responsibilities for services for people with 

disabilities include the following: 

• The Disabilities Services Division, which encompasses services for people with 

developmental disabilities, traumatic brain injuries, physical disabilities, and chronic 

medical conditions; 

• The Mental Health Division, which provides support to counties that are the local 

mental health authorities; and 

• The Aging and Adult Services Division, which provides protective services, supportive 

assistance, and alternative housing arrangements for older people and vulnerable adults.

A different form of integration that Minnesota has pioneered is the Minnesota Senior Health 

Options program that provides Medicare and Medicaid benefits through an integrated care 

coordination model to a voluntarily enrolled group of older people who are eligible for both 

Medicare and Medicaid. About 5,000 people in 10 Minnesota counties receive their care through 

a provider network they select. Enrollees live in both nursing homes and community settings.825
382 

Another model of integration is the demonstration project mandated by the 2003 Legislature that 

moves the Medicaid Elderly Waiver HCBS program into the Pre-Paid Medical Assistance 

Program, thus integrating medical care and LTC for elderly Medicaid recipients who are at risk 

of institutionalization.826 This program, originally scheduled for implementation July 1, 2004, 

was delayed six months to a year to give counties and health plans a chance to negotiate a role 

for counties in this new managed care model.827 

Expansion of Community Supports 

In 1980, Minnesota’s nursing home utilization rate was the highest in the country, 8.8 percent of 

people age 65 and over. In 1983, the state began providing HCBS for Medicaid-eligible older 

people at risk of institutionalization through the Elderly Waiver program. At the same time, the 

state established a parallel state-funded Alternative Care program for older people of low income 

who were not eligible for Medicaid.828 

Despite these efforts, high nursing home utilization rates continued. In 1996, Minnesota spent 

92.6 percent of its Medicaid LTC dollars on nursing homes, ranking seventh out of 50 states in 

the proportion of those Medicaid expenditures going to nursing home care. The result was the 

formation of a Long-Term Care Task Force composed of Minnesota legislators and state agency 

officials in 2000 to address gaps in the state’s programs and delivery of LTSS, and to develop 

strategies for addressing those issues.829 

The task force issued a report, “Reshaping Long-Term Care in Minnesota,” in January 2001.830

A number of its recommendations were enacted into law by the 2001 Legislature, including the 

appropriation of $183 million to carry out many of the provisions, including the funding of 

community service grants to pay startup, capital, and other costs for developing supportive 

housing and HCBS in areas where current resources were judged inadequate to meet needs. 

Examples of some of the 200 community services grants that were awarded in 2002 and 2003 

include the following: 

• Ageless Care Options—Coordinate care, provide licensed home care services for older 

adults in four senior apartment buildings in the town of Grygla, and two senior apartment 
383 

buildings in Warroad, provide adult day services and transportation services for residents 

of the senior apartments and other older people in both towns. 

• Sholom Home East—Purchase a van to deliver kosher meals for 30 to 40 people, and 

add restrooms and shower/tub for Adult Day Service program in St. Paul. 

• First Care Medical Services—Provide assisted living services to at least 18 clients in 

four subsidized senior apartment buildings in Fosston, Minnesota. 

• Lutheran Social Services—Provide assisted living services to 40 people in three 

affordable apartment buildings in Carver County. 

• Highland Manor, Inc.—Construction of 16 units of low-income senior housing in New 

Ulm in conjunction with a Section 202 grant from the U.S. Department of Housing and 

Urban Development (HUD), register the building as housing with services, and provide 

licensed home care. 

• Eventide Home Association—Close Eventide 50-bed nursing facility in Mountain Lake 

and convert it into 14 units of affordable assisted living plus, out-of-home respite, and an 

8-unit dementia care facility; collaborate with Good Samaritan Village to delicense 15 

nursing facility beds and create private rooms.

• Western Community Action, Inc.—Use volunteer drivers and public transit buses to 

provide transportation in Marshall to distant medical clinics and local senior support services. 

Other initiatives supported by the legislation included expanding in-home services programs, 

providing incentives for nursing homes to voluntarily close beds or convert them into assisted 

living, authorizing grants for providers who developed best practices and innovation in delivering 

services, and creating scholarship programs for direct care workers in nursing homes.831 (Further 

details on the scholarship programs are provided in Section VI, Workforce Issues.) 

In February 2002, the Minnesota DHS issued a report, “Keeping the Vision,” detailing progress 

on addressing local gaps in long-term services. The 2001 legislation had called for a local 

analysis and planning process to assess how well counties were currently meeting the long-term 

needs of older people. The services and supports most frequently rated by local authorities as 
384 

being inadequate included transportation, in-home respite and caregiver support, and chore 

services Counties cited lack of start-up funding, lack of staff, and low reimbursement as barriers 

to further development. Other barriers included service delivery problems in rural areas, and lack 

of awareness of services by many seniors. 

Local communities had also reported a shortage of accessible and affordable housing.832 By early 

2004, the DHS was able to report that 93 percent of counties reported that there were more home 

and community care options in their counties in 2003 than in 2001. Sixty percent of the counties 

described their supply of HCBS as “adequate.” As evidence of the increased availability of 

community services, the number of people receiving such publicly funded services totaled 

38,555 in FY 2003, an increase of almost 60 percent over the number of participants in FY 2000. 

Programs for individuals who are elderly and/or physically disabled: Four of Minnesota’s 

five Medicaid HCBS waiver programs cover elderly and physically disabled people: the Elderly 

Waiver, Community Alternatives for Disabled Individuals, Community Alternative Care, and the 

Traumatic Brain Injury Waiver. The fifth Medicaid waiver program is for people with mental 

retardation and related conditions (see below). 

Six services are part of all five waiver programs: case management, homemaker services, home 

modifications, extended personal care assistant services (assisting with daily activities such as 

bathing and dressing),833 respite care, and transportation. (Other services specific to a individual 

waiver program are noted within the descriptions for that program.) 

Elderly Waiver: One of the largest publicly funded HCBS program operated by Minnesota is the 

Medicaid Elderly Waiver (EW) program, which grew from 9,772 participants in FY 2000 to 

13,405 people in FY 2003. Services can be provided not only in the home but also in assisted 

living facilities, foster care homes, and residential care. 

Two new services for the EW were approved by the Federal Government in April 2004: 

transitional supports and consumer-directed community support. Transitional supports are 

intended to help cover the activities and expenses incurred in moving from a nursing home to the 

community, such as expenses related to establishing housing such as lease or rental deposits, 
385 

essential furniture, and utility set-up fees and deposits. Consumer-directed community supports 

refers to a model of self-direction that the state has made available in other Medicaid waiver 

programs for several years, and will now implement in the EW program in April 2005. (For 

further details on self-directed models of care, see “Consumer Direction” below.) 

Community Alternatives for Disabled Individuals: This is a waiver program for children and 

adults under age 65 who would otherwise require a nursing home level of care. The category 

includes people with physical disabilities or mental illness. Enrollment more than doubled from 

FY 2000 to FY 2003—from 3,957 participants to 8,420 participants.834 An additional service 

provided under this program is supported employment. 

Community Alternative Care: A small program, the waiver covers children and adults who are 

chronically ill or medically fragile and who require a level of care provided at a hospital. In FY 

2003, CAC had 165 participants. An additional service covered under this program is extended 

prescription medication.835 

Traumatic Brain Injury: Eligible individuals include people with a traumatic or acquired brain 

injury that is not congenital, who have significant cognitive and behavioral needs related to the 

injury, and who require the level of care provided in a specialized nursing facility. The program 

had 861 participants in FY 2003. 

Two state-funded programs cover community services for older people as well. One is the 

Alternative Care (AC) program serving people whose income and assets would be inadequate to 

fund a nursing home stay for more than 180 days. Although the program reached a total 

enrollment of 12,233 people in 2002, the caseload dropped to 11,709 people in FY 2003 and was 

dropping further by the end of calendar year 2003, according to state officials. In the face of 

serious budget shortfalls, the 2003 Legislature had taken actions to reduce program expenditures, 

such as tightening eligibility criteria, expanding monthly fees, and imposing state recovery 

provisions (liens).836 

Another state-funded home care program is the Consumer Support Grant program, which is an 

alternative offered to participants in the Medical Assistance (Medicaid) home care program who 
386 

can choose to switch to this consumer-directed model. They receive a grant to purchase the 

services of a personal care attendant and they can purchase supplies. The amount of the grant is 

based on an assessment by a case manager and on the prevailing rate for the provider they 

choose to use. They can receive their grant in the form of cash, vouchers for services, or direct 

payments to vendors. 

Programs for people with developmental disabilities: The Medicaid Mental Retardation/ 

Related Conditions (MR/RC) waiver program (which many other states call mental 

retardation/developmental disabilities) received about 79 percent of total Minnesota Medicaid 

waiver program expenditures in FY 2003. The number of recipients almost doubled from 8,313 

participants in FY 2000 to 15,704 participants in FY 2003.837

In FY 2002, Minnesota spent $139 per capita on the MR/RC waiver program, which was the 

second highest per capita rate in the country and three times the national average. Compared with 

the national average, Minnesota spent 22 percent less per capita on institutional care for people 

with mental retardation.838 

In addition to the services available in all the waiver programs, the MR/RC program covers 

supported living and day training/habilitation. Supported living refers to a set of related services, 

including training and assistance in self-care, communication, interpersonal skills, sensory and 

motor development, money management, health care, community living, leisure and recreation, 

and reduction in challenging behaviors. Almost 70 percent of expenditures for the program goes 

to supported living services.839 

According to state reports, the program has changed substantially since the late 1990s. For 

example, the state introduced consumer-directed community supports in certain counties in 

1998, which allows recipients and their families to select their services and employ friends and 

family members if they wish. In FY 2003, almost 3,300 MR/RC waiver recipients chose 

consumer direction.840 

In 2001, the state instituted an open enrollment period to reduce the program’s long waiting list. 

The result was an increase of more than 5,500 people to the waiver program, a 50 percent jump 
387 

in the program’s caseload. However, faced with state budget shortfalls, DHS reduced the rate of 

growth in the county budgets for the MR/RC waiver program in 2003. (DHS sets the county 

budgets for the waiver program, which counties may not exceed unless they pay for the excess.) 

Still, the state reports that 3,485 people were waiting for MR/RC services as of June 30, 2003. 

Legislative researchers point out, however, that more than 2,600 people in this group were living 

with their immediate family, or an extended family member, and may have been receiving other 

Medicaid home care services, family support grants, or other publicly funded assistance while on 

the MR/RC waiting list.841 

Programs for people with mental illness: The 1987 Minnesota Comprehensive Adult Mental 

Health Act established basic standards for a statewide network of services for this population. It is 

a state-supervised, county-administered system. The counties either provide services directly or 

have contracts with local mental health providers. Community Mental Health Centers located 

throughout the state provide a range of services such as outpatient treatment, medication 

management, and community-based services. Seventy-two residential treatment facilities generally 

have 16 beds or less and provide 24-hour supervised treatment for people who require a more 

restrictive, supervised setting before they can move to more independent living in the community. 

Public mental health services are developed by each county board and must include (1) education 

and prevention services; (2) emergency services—24 hours a day, seven days a week; (3) 

outpatient services—individual, group, and family therapy, diagnostic assessments, medication 

management; (4) community support services—designed to help an individual function and 

remain in the community; (5) residential treatment services—a 24-hour program in a community 

residential setting; (6) acute care hospital inpatient treatment; (7) regional treatment center 

inpatient services; and (8) case management. 

In 1997, Minnesota began a Mental Health Initiative intended to encourage counties to work 

together through greater regional planning to reduce reliance on facility-based care for people 

with mental illness (particularly care in the five state hospitals) through alternative service 

delivery models in the community. The state wanted to get away from an 87-county approach, 

state officials say, and instead encourage counties to develop service packages that could cross 
388 

county lines. Sixteen initiatives emerged out of this effort, with the largest regional grouping 

involving 18 counties working together.842 

The initiatives have included expanded crisis services, housing and supports, and Assertive 

Community Treatment teams that provide intensive case management. The state also moved 

250 state employees out of the state hospitals to work in mental health centers and other 

community facilities. 

The Minnesota Legislature also turned its attention to adult mental health reform legislation in 

2003, fostering a broad array of community-based mental health services, including a range of 

housing options. The intent was to develop services in closer proximity to where people lived, 

rather than forcing them to travel to regional treatment centers. The goal is the development of 

natural support systems, such as smaller hospital units, crisis response services, in-home 

supports, and long-term residential supports.843

A public-private partnership is also developing around mental health issues in Minnesota. The 

formation of the Minnesota Mental Health Action Group grew out of meetings among 

government officials and health care providers in 2002 to try to determine why people with 

mental health issues were increasingly being diverted to hospitals far from their communities for 

assistance and treatment. The organization now consists of mental health providers, hospitals, 

private organizations, health plans, advocates, and government agencies. An example of the 

activities that this effort has spawned is an East Metro Adult Crisis Stabilization Collaborative 

that involves three counties, three hospitals, four major health plans, and DHS. The group meets 

bimonthly and provides oversight to a mobile crisis response team.844 

Residential Options 

Minnesota has seen an explosion of housing development for people with disabilities in recent 

years, particularly the development of assisted living residencies. Between 1997 and 2004, the 

number of residences doubled from 426 to 907, and the number of units tripled, rising from 

13,000 to slightly more than 40,000 units. State officials say the state now has more assisted 

living residences and units than it has nursing homes and nursing home beds. Some of the 
389 

growth can be attributed, officials say, to nursing homes converting a portion or all of a facility 

into assisted living.845

The number of participants living in assisted living facilities and receiving services through the 

EW or the AC programs rose from 4,285 clients in 2000 to 7,403 clients in 2003. Nearly all these 

people were living in assisted living plus settings that provide 24-hour supervision.846

About 4,800 residential settings in the state come under the broad heading “group residential 

housing”; about 4,000 provide adult foster care, which are private homes that provide housing 

for up to five people. About 13,600 people were being provided adult foster care in 2003. About 

9 percent were seniors, and 52 percent of the clients under age 65 were participants in the 

MR/RC Medicaid waiver program.847 

Workforce Issues 

The Long-Term Care Task Force, in its 2001 report, gave significant attention to the issues 

affecting both the paid direct care workforce and the informal network of family caregivers. The 

report noted that Minnesota was experiencing a severe shortage of workers in health and LTC. In 

terms of family caregivers, the report pointed out that Minnesota had one of the highest labor 

force participation rates for women in the country, thus indicating the need for “supplemental 

assistance that working women need ...to provide care to frail relatives.”848

One measure that has evolved out of the concern about recruitment and retention of workers in 

nursing homes is a small scholarship program. The state has offered funds to nursing homes to 

provide scholarships to lower-wage employees who work at least 20 hours per week. The 

scholarships, which have averaged about $1,000 for each eligible worker, can be used for any 

educational program that would lead to advancement within the facility or to a career in LTC, 

such as a certified nursing assistant training for a licensed practical nurse or registered nurse 

degree. The state set no limit on how much scholarship money an individual facility could 

distribute. Whatever a facility did spend was factored into its rate the following year. 
390 

In the first year (ending September 30, 2002), about 90 percent of the state’s facilities gave out 

scholarships to just over 3,000 employees for a total of $3 million. In the second year, about 75 

percent of facilities gave out more than 2,400 scholarships that totaled $2.5 million.849 

Another direct care worker model than Minnesota has implemented is called Shared Care; it is 

available to people participating in the state’s Medicaid Personal Care Assistance Choice 

program. This program allows people receiving personal care services to direct those services 

themselves. With Shared Care, two consumers can share a personal assistant, with the cost 

divided between the two people. One example would be a personal assistant helping two 

participants to go shopping together, for which the worker will be paid one-and-a-half times the 

regular rate.850 

To help family caregivers of children with mental retardation, Minnesota provides a Family 

Support Grant, available to families with incomes up to $76,170 in annual adjusted gross income 

(2003). Grants may not exceed $3,000 per calendar year, and can be spent in any way that would 

help the family keep their child at home. 

Consumer Direction 

In March 2004, the Federal Government approved Minnesota’s request to expand consumer 

direction statewide to all its Medicaid waiver programs and to the Minnesota Senior Health 

Options (MSHO) and Minnesota Disability Health Options (MnDHO) programs. Consumer 

direction had been an option for people covered by the MR/RC waiver program since 1998, but 

only in 37 counties. DHS immediately began developing a timetable for full implementation of 

this expanded Consumer-Directed Community Supports (CDCS) program by April 2005. 

As described in a DHS bulletin, the consumer-direction option 

includes a range of allowable services and supports that can be tailored to meet an 

individual’s needs. Recipients are able to describe services and supports in ways 

that are meaningful to them and customize supports to best meet identified needs. 

Part of the flexibility built into CDCS is the ability to completely customize one’s 

community support plan.851 
391 

The participant directs development of his or her own Community Support Plan (care plan). The 

plan must delineate “individual specific parameters,” which include service outcome, how it will 

be met, what training and qualifications are required of providers, how the service will be 

monitored, and what the payment will be. DHS sets individual budgets, and all services and 

supplies must be provided within the budget amount. County or health plan case managers 

determine whether the Community Support Plan assures the participant’s health and safety, and 

they authorize services and complete an annual reassessment of the client. 

Each participant must have a Fiscal Support Entity (FSE) to pay providers or workers. The FSE 

must provide, at a minimum, payroll assistance, and offer participants a range of services that 

allow the client to select how much autonomy he or she wants in employing, managing, and 

paying for services and supports. Clients will hire, fire, manage, and direct their workers.852 

A $900,000 federal grant under the Systems Change Grants for Community Living program is 

being allocated to a program called Pathways to Choice: Minnesota’s Consumer-Directed 

Personal Assistance Program. In describing its grant proposal, DHS noted that although the state 

has been offering consumer direction options to participants in the Medicaid Personal Care and 

several HCBS waiver programs, a chronic worker shortage has been a major factor limiting the 

use of the option. DHS planned to address this problem by developing a Consumer-Initiated 

Partnership and Support (CIPS) model. Through CIPS, consumers will access each other’s 

natural supports, such as family and neighbors, to provide personal care services.853 

Consumers will have access to a registry of available workers to help match personal care 

attendants who want to work more hours with consumers who need more assistance. Workers on 

this registry will be paid a higher rate because provider agencies will charge only a fiscal 

intermediary fee.854 

DHS planning director LaRhae Knatterud said the state had recently received a Robert Wood 

Johnson Foundation grant to educate people about consumer direction, including people who are 

not on Medicaid. According to Knatterud, the state would like to encourage consumers buying 

privately to consider consumer direction with an agency providing fiscal intermediary services. 
392 

Innovative Practices 

Minnesota’s planning process for expanding its LTSS has involved establishing benchmarks to 

measure progress, a unique feature of state reform efforts. Another feature unique to Minnesota 

is its focus on how services and supports are financed. The 2003 Legislature called for the DHS 

to complete a study of nongovernmental resources, and to consider options to help individuals 

and families use their own resources to pay for needed LTSS. 

Setting Benchmarks for Long-Term Care Reform 

The Minnesota Long-Term Care Task Force not only established priorities for a number of its 

strategies, it also set benchmarks to assess change in the state’s system. The first five 

benchmarks are listed below, with the changes that have taken place as noted in the 2003 “Status 

of Long-Term Care in Minnesota” report: 

• Percent of public long-term care dollars spent on institutional vs. community care for 

persons 65+. 

This benchmark measures the relative proportion of the state’s and each county’s total budget for 

nursing home care and for community care (Medicaid EW program, state-funded AC program, 

and Medical Assistance Home Care program). Minnesota’s use of nursing home care was higher 

than the national average with the statewide proportion of expenditures for institutional care at 

86 percent in 2001, 14 percent for community care. In 2003, the proportion had shifted to 80/20, 

with expenditures in the 87 counties ranging from 67.2/32.8 percent in Crow Wing County to 

96.5/3.5 percent in Cook County. 

• Percent of nursing home residents 65+ that is case mix A. 

“Case mix A” is defined as a less-disabled class of residents who have limitations in four to five 

daily activities (such as bathing, dressing, and eating) but no special conditions and no nursing 

rehabilitation needs. The state believes many of these residents can be maintained in the 

community if proper supports are available. 
393 

This benchmark is in the process of being redefined because the case mix A system was replaced 

in October 2002, and the benchmark now needs to use measures in the new system. In 2002, 16 

percent of nursing home residents were case mix A. 

• Percent of Elderly Waiver and Alternative Care recipients that is case mix B–K. 

This benchmark measures the percent of seniors in the EW and AC programs that need more 

intensive services to remain in the community because of greater difficulties with daily activities. 

In 2002, 37.2 percent of statewide clients in these two programs had the higher case mix levels. 

That proportion had increased to 39.7 percent in 2003, indicating that more intensive services were

being provided to keep people in their homes and communities despite a high disability level. 

• Ratio of nursing home beds per 1000 persons 65+. 

Minnesota’s ratio of nursing home beds per 1,000 people has been higher than the national 

average. The Minnesota ratio was 83.9 beds per 1,000 people 65 and older in 1993. By 2002, 

the ratio was down to 65.7 beds per 1,000 (compared with 49 per 1,000 nationally). There is 

wide variation among counties, with the ratio ranging from 132.3 in Norman County to 22.4 in 

Anoka County. 

• Percent of EW/AC recipients in assisted living that is case mix B–K.

This benchmark measures the proportion of disabled recipients in assisted living settings, with 

case mix scores of B–K reflecting need for intensive services. To reduce reliance on nursing 

homes, the state needs an adequate supply of housing options that offer high levels of services. In 

2003, 54 percent of assisted living residents receiving publicly funded services were in the case 

mix B–K category. 

The state concluded in its 2003 status report that the five benchmarks 

indicate that the measures are changing in the direction called for in the 2001 

reform. The percent of total public long-term care dollars spent on institutional 

care is declining, and the proportion spent on community care is increasing. The 

ratio of nursing home beds per 1000 has continued its downward trend.... 
394 

The “most dramatic” change, the report notes, has been the “increased percentage of more 

disabled clients supported in the community with the EW and AC programs.”855 Knatterud says 

the state is “going in the right direction on all the benchmarks.” 

Public-Private Financing Study 

The 2003 Legislature called for the DHS to complete a study by January 2005 of nongovernment 

resources for LTSS, and to look at the feasibility of various options to help individuals and 

families use their own resources for this purpose. “New sources of non-governmental funds to 

pay for long-term care are increasingly seen as options that could blunt some of the projected 

growth in government entitlements for long-term care services,” says a DHS fact sheet on the 

project.856 The options include the following: 

• Health insurance options, especially the inclusion of LTC in Medicare supplemental plans. 

• LTC insurance options, including incentives to purchase such insurance and expansion of 

individual and group-based products. 

• Life insurance annuities and combined life and LTC insurance products. 

• Reverse mortgage products and other options that make use of home equity. 

• Universal LTC tax/savings plans, similar to a plan passed by the Hawaii legislature but 

vetoed by the governor. 

• Personal savings and pensions. 

• Family care, including incentives for families to provide services or supports or to pay for 

services and supports through special loans. 

The results of this analysis, says the department, will be a listing of these options from strongest 

to weakest in terms of their ability to achieve the state’s policy goals and maximize private 

resources. “Our goal is to find the right way to ‘slice and dice’ this set of options so they work in 

Minnesota,” says Knatterud. The department will attempt to identify the most effective tools to 

implement the options, such as tax incentives and consumer education and information.857 
395 

DHS and the Minnesota Board on Aging sponsored a series of briefings on these financial issues 

throughout 2004 that included bringing in national experts to discuss possible approaches, such 

as LTC insurance, reverse mortgage products, and various tax savings plans. The last of the 

briefings in December 2004 was intended to be a statewide conference to review all private 

financing options that had been explored in the previous regional briefings, and to obtain input 

from Minnesotans on which options they considered to have the greatest potential to meet their 

needs. To inform and involve the public in this effort, DHS began distributing an email 

newsletter in December 2003, and posting notices on the DHS Web site about briefings, forums, 

and focus groups being held as part of the project. 

The DHS also has asked the University of Minnesota to apply national data from the Employee 

Benefit Research Institute on future retirement income and assets to Minnesota. The report is 

expected to help the state determine the capacity of Minnesotans to pay for health and LTC costs 

in the future and suggest options for addressing the adequacy of income and assets.858 

Forty-eight percent of Minnesota’s top 25 public and private employers offer LTC insurance, 

compared with a national average of about one-third of all large private employers. The state of 

Minnesota has been offering an LTC insurance plan to its employees since 2000 (and later to 

retirees). When the plan was opened in October/November 2000, initial enrollment was 11,000 

people (75 percent employees, 22 percent spouses, and 3 percent parents of employees). The 18 

percent rate of participation of the 61,000 eligible state employees was the highest initial 

enrollment of any public employee LTC insurance plan in the country.859 (For details on the 

plan’s major features, see Attachment 4.B.) 

Future Plans and Challenges 

Like many other states, Minnesota has had to grapple recently with budget deficits and shrinking 

expenditures, resulting in some tightening of human services spending. For example, the 2003 

legislature limited increases in enrollment and reduced spending for the Medicaid HCBS waiver 

programs. Still, Minnesota has been moving forward on many fronts that significantly expand 

the options available to people with disabilities to live and work in the community and to selfdirect their personal care services. 
396 

The landmark work of the Long-Term Care Task Force continues to generate ideas and to 

stimulate initiatives. The Task Force set benchmarks to measure the state’s progress in 

rebalancing its LTC system, and status reports help to keep the momentum going. In Minnesota, 

the 87 counties deliver LTSS, and their efforts are being bolstered by community service grants 

from the state and other state general revenue dollars. Minnesota is also devoting considerable 

attention to the question of the most effective way to encourage greater personal financial 

responsibility for LTSS to conserve public resources for its most vulnerable populations. Its 

review of these issues should produce significant proposals in 2005 for other states to consider. 
397 

Attachment 4.B 

Minnesota Long-Term Care Insurance Plan for State Employees860

The state offers two LTC insurance plans, one for state employees and their spouses and parents, 

and another for retirees and their spouses. The plans differ in underwriting, benefits, and costs. 

The employee plan has 48 possible plan combinations; the retiree plan has 32 plan combinations. 

The main decisions an employee or retiree must make are as follows: 

• Lifetime maximum amount. For an employee, six possible limits are provided from 

$100,000 to $600,000. For retirees, four limits are possible from $58,400 to $219,000. 

• Daily benefit amount. The maximum dollars that can be paid out each day is either $80 or 

$120 per day. 

• Inflation protection. Participants can choose a lifetime 5 percent automatic benefit 

increase (no premium increases) or a guaranteed benefit option that allows the participant 

to purchase additional coverage in the future. 

Premiums are based on the participant’s age when coverage becomes effective and will not 

increase as the employee ages. Examples include $20.03 a month for a 45-year-old and $47.16 

for a 65-year-old. (These premiums, which were the cost of the plan in 2001, remained constant 

through 2004.) Costs could be lower because Minnesota law allows residents to claim a tax 

credit of up to 25 percent of LTC premiums paid, or $100 a year, whichever is lower. 

The benefits include assistance at home, adult day care centers, assisted living facilities, or 

nursing homes. The plan pays for a variety of services for people who are unable to care for 

themselves because of an injury, chronic illness (such as arthritis), acute episode (such as a 

stroke), or cognitive impairment (such as Alzheimer’s). 
398 

Texas 

The Legislature envisioned...a health and human services system which is not 

simply more efficient and cost effective...but which is transformed in very 

fundamental ways to significantly improve the quality of services provided to 

Texans who need these services.

 —H.B. 2292 Transition Plan, November 2003 

Introduction 

For many years, Texas had a system of LTSS that was heavily dependent on institutional care 

rather than on HCBS. The state had excess bed capacity in its nursing homes and a high 

institutionalization rate for people with developmental disabilities. This pattern began to change 

beginning in the late 1990s. 

In response to the U.S. Supreme Court Olmstead decision, then-Governor George W. Bush issued 

an Executive Order in September 1999 directing the Texas Health and Human Services 

Commission (HHSC) to review community services and supports available to people with 

disabilities in Texas and to propose improvements. With the creation of the Promoting 

Independence Advisory Board that year, work began on expanding access to community services. 

A Promoting Independence Plan was delivered to the 77th Legislature in January 2001, with a 

revised plan issued in December 2002. The recommendations in these plans, and subsequent 

actions by the legislature, have produced a number of initiatives that have greatly increased 

opportunities for people with disabilities to leave institutions to live in the community and to 

direct their own services and providers. 

One of the most important of these innovations, called the Rider 37 initiative (named for the 

rider to the state appropriations act that set it in motion), has resulted in the relocation of 

thousands of institutionalized Texans to community settings since its enactment in 2001. (Texas 

was also one of the first states to pioneer the concept of Money Follows the Person861 in 

connection with its deinstitutionalization drive, which a number of other states have adopted.) 

Even before the Promoting Independence initiative began, however, Texas was also breaking 

new ground with its STAR+PLUS demonstration program—a Medicaid pilot project to integrate 
399 

delivery of acute and long-term services through a capitated managed care system. Today, the 

project serves more than 60,000 aged and disabled people in Harris County (the Houston area). 

Background 

The total Texas population in 2003 was almost 22 million people, ranking second only to 

California. About 15 percent of the population had incomes at or below the poverty level in 

2001. From 1998 to 2000, Texas had the eighth highest rate of poverty in the nation. The 

percentage of the population age 65 or older totaled 9.9 percent, compared with the national 

average of 12.4 percent. About 3.6 million people had one or more limitations in ADLs in 2002. 

Fifty-two percent of the population is white and 11.5 percent is black. Nearly one in three Texans 

are of Hispanic origin (32 percent compared with the national average of 12.5 percent). People 

who are foreign born constitute 13.9 percent of the population.862 

Integrating Services for People with Disabilities 

Reorganization to improve integrated service delivery: The Texas HHSC was created in 1991 to 

oversee the state’s health and human services departments, which included the Texas 

Department of Mental Health and Mental Retardation (TDMHMR), Department of Human 

Services, and Department on Aging. As this umbrella agency grew, it came to encompass 11 

separate agencies that have administered more than 200 programs, employed about 50,000 state 

workers, and operated from more than 1,000 different locations across the state.863

In May 2003, the Texas legislature enacted H.B. 2292, consolidating the duties and functions of 

the 12 agencies into a structure composed of HHSC and four new departments. The transition 

plan for the new organization noted that 

Texans who seek the services and protections on the state’s health and human 

services enterprise today face a bewildering array of organizations, office 

locations, and overlapping (sometimes conflicting) programs and services. 

...there is a lack of coherence and a lack of integration in the services being 

provided to individual clients, groups of clients, or geographic areas.864 
400 

Although the new departments were all in place by the summer of 2004, full implementation was 

expected to take three to five years.865 

Two of the new departments took over responsibility for all the services for people with 

various disabilities: 

• Department of Aging and Disability Services (DADS): Consolidates the mental 

retardation and state school programs of the former TDMHMR, the community care and 

nursing home services programs of the former Department of Human Services, and the 

aging services (mostly Older Americans Act programs) from the Department on Aging. 

• Department of State Health Services: Consolidates the health programs and the 

mental health community services and state hospital programs formerly operated by 

TDMHMR and the services formerly provided by the Texas Commission on Alcohol 

and Drug Abuse.866

The other two departments are the Department of Family and Protective Services (child and adult 

protective services and child care regulatory services) and the Department of Assistive and 

Rehabilitative Services (services for the blind and visually impaired and deaf and hard of hearing 

and early childhood intervention services.) 

A major issue for the new DADS involves the separate local service systems and processes of the 

three agencies that have been merged. The Department on Aging operates, for example, through 

28 Area Agencies on Aging, many of which are housed in regional municipal governing bodies. 

The Department of Human Services operates through 400 local offices in 10 regions that serve 

all of the state’s 254 counties. TDMHMR provides services through local authorities in each 

county that provide services to people with mental retardation directly or through a network of 

local providers. The opportunity exists, says DADS commissioner Jim Hine, of creating “a 

consistent, integrated and accessible ‘front door’ for service delivery.” 

Another important feature of the reorganization is the integrated eligibility determination process. 

The proposed redesign of the state systems will allow Texans to apply for medical and aged and 
401 

disabled services, food, and cash assistance in person, through the Internet, over the telephone, by 

fax, or by mail. Call centers are to be established to receive and process applications.867 

Another pilot program is integrating funding and services for people with mental health and 

substance abuse problems. Begun in 1999, NorthSTAR is an initiative of TDMHMR and the 

Texas Commission on Alcohol and Drug Abuse that is operating in the Dallas area to provide a 

single system of care for mental health and chemical dependency treatment. 

The 2003 legislature directed the Health and Human Services Commission to expand managed 

care further. HHSC contracted with the Lewin Group in 2003 to project the cost impact of such an 

expansion. Based on the consultant’s findings, HHSC has developed a framework for expansion.868

Expansion of Community Supports 

The Promoting Independence Advisory Board became the S.B. 367 Interagency Task Force on 

Appropriate Care Settings for Persons with Disabilities after passage of S.B. 367 in May 2001, 

which called for status reports on HHSC plans to “ensure appropriate care settings for persons 

with disabilities.” In its December 2002 report, the task force noted a number of steps that had 

already been taken, such as the following: 

• the creation of relocation specialists to help assist people who were making the transition 

from institutions to community residential settings, 

• the development of a new Texas Home Living Medicaid waiver program by TDMHMR 

to enable the state to move people off waiting lists, and 

• provision of housing vouchers for people transitioning from nursing homes. 

Programs for individuals who are elderly and/or physically disabled: Texas operates a 

number of Medicaid HCBS waiver programs, Medicaid state plan services, and state-funded 

services under what DHS calls its Community Care Program for the elderly and adults with 

disabilities. (These programs have now been folded into DADS.) The major programs that serve 

the largest number of people include the following:869
402 

Medicaid-Funded Programs 

• Primary Home Care is a Medicaid Personal Care program under the Medicaid State 

Plan. It is the largest Texas community care program in terms of participants, with an 

average monthly caseload of about 51,900 people of all ages who have limitations in at 

least one personal care task. The program provides personal care services (assistance with 

daily activities such as bathing and dressing), homemaking, and medical escort services. 

• Community Attendant Services is a variant of the Primary Home Care program for 

people with slightly higher incomes. The financial eligibility standard is an annual 

income of up to 300 percent of SSI, or $1,656 a month in 2003. The program served an 

average of almost 35,000 people per month in 2003. 

• Community-Based Alternatives (CBA), which is a Medicaid HCBS waiver program, had 

an average monthly caseload of about 30,300 people in FY 2003. Services include personal 

assistance, adaptive aids, medical supplies, adult foster care, assisted living/residential care, 

nursing, respite care, home-delivered meals, and home modifications. 

• Day Activity and Health Services are offered as an optional Medicaid State Plan service 

under rehabilitation services. The program provides nursing and personal care; noon 

meals and snacks; physical rehabilitation; transportation; and social, recreational, and 

educational activities. Individuals may receive up to 10 hours of services per day, five 

days a week. In 2003, this program provided day services to a monthly average of almost 

16,000 people. 

State-Funded Programs 

• In-Home and Family Support provides direct grants to beneficiaries or their families, up 

to a maximum of $3,600 annually. About 3,800 people receive an average cash subsidy 

of $150 per month. (They may also be eligible for a one-time grant of up to $3,600.) This 

program is for people of any age with a physical disability that substantially limits the 

person’s ability to function independently. People with incomes at or above 105 percent 

of the state’s median income must contribute to the cost of services on a sliding fee 

schedule. Grants may be used for therapies, medications, skills training, transportation, 
403 

respite care, equipment, home modifications, or adaptive aids, or personal assistant 

services for medically fragile people. 

• Consumer-Managed Personal Assistant Services targets adults age 18 or older with 

disabilities who are capable of self-directing workers who provide personal care. Contract 

agencies determine client eligibility and the amount of care needed. These agencies also 

develop a pool of potential personal assistants and provide emergency backup if an 

assistant fails to show. The program serves about 700 people a month.

Programs for people with mental retardation/developmental disabilities: Until the 

reorganization of the HHSC agencies, programs for people with MR/DD were split between the 

Department of Human Services and TDMHMR. DHS operated the Medicaid Community Living 

Assistance and Support Services (CLASS) program for people with developmental disabilities. 

The definition of the eligible population for these services is “persons with related conditions,” 

which is defined as severe disabilities other than mental retardation (such as epilepsy, brain 

injuries, and spina bifida) that originated before age 22. The caseload was about 1,800 people per 

month in FY 2003. 

TDMHMR has operated the HCBS Medicaid waiver program for people with mental retardation, 

which served an average monthly caseload of about 6,700 people in FY 2003. Both waiver 

programs offer the same menu of services as do the waiver programs for the elderly and physically 

disabled: nursing, respite care, home modifications, therapies, adaptive aids and supplies, and 

emergency response systems. The CLASS program also offers personal attendant services. 

In 2000, TDMHMR implemented a process known as the Community Living Options Process 

for individuals living in state-operated campus facilities and community ICF/MR programs. The 

process helps identify individuals who want to seek an alternative living arrangement. The 

department may provide Medicaid waiver services to these individuals, but the waiting list for 

such services is very long. As of February 2004, there were 908 ICF/MRs in Texas (including 13 

state schools and 895 public or private ICF/MRs) serving more than 12,400 individuals).870 
404 

Governor Rick Perry issued an Executive Order (R.P. 13) in April 2002 directing TDMHMR to 

develop a Medicaid “essential services” waiver called the Texas Home Living Waiver. The 

intent is to move people who are Medicaid-eligible but currently receiving state-funded services 

to the Medicaid waiver program, thus freeing up state general revenues to create additional 

program slots for people on the waiting list. Services covered by this program include 

community support, day habilitation, supported employment, specialized therapies, minor home 

modifications, adaptive aids, and dental treatment. 

Eligible recipients for these waiver services are people whose needs can be met within a 

$10,000 per year cost ceiling. The department identified 1,915 people whose current general 

revenue–funded community services cost between $3,500 and $10,000 per year. The Federal 

Government approved the waiver application in February 2004; enrollment was scheduled to 

begin in April 2004. 

Despite this array of community programs and services, there were still 5,000 people in the 13 

State Mental Retardation Facilities in 2003. In addition, waiting lists for community services 

continue to be very large. In September 2002, 11 individuals and The ARC of Texas filed a class 

action complaint against HHSC, the Department of Human Services, and TDMHMR for failing 

to provide people with MR/DD with community-based options and services. The complaint 

charged that about 17,500 people with mental retardation were on waiting lists for HHCS 

services and another 7,300 people had requested but not received CLASS waiver services. Final 

adjudication of all issues in the case had not been reached as of October 2004.871 

Programs for people with mental illness: TDMHMR has been contracting with 39 Community 

Mental Health Centers, which are also called Local Mental Health Authorities, across the state, 

and NorthSTAR, a Medicaid managed care plan that serves seven counties in the Dallas region. 

(The Texas DHS now has responsibility for mental health programs.) Each authority develops 

policy and coordinates and allocates resources within its local service area, and generally 

contracts with another organization to provide actual services. 

A key model for service is the Assertive Community Treatment (ACT) program, a national 

program endorsed by the National Alliance for the Mentally Ill and adopted in Texas in 1995. 
405 

ACT clinical and rehabilitation staff provide psychiatric, substance abuse, nursing services, 

medication management, employment, and housing services through one service delivery 

system. The teams also work with families to provide education and support. 

About 50 teams throughout the state provide these services to people with severe and persistent 

mental illness who have not responded to traditional mental health approaches. The typical 

recipient of services has schizophrenia or another serious mental illness, such as bipolar disorder 

or major depression, and has experienced multiple psychiatric hospital admissions.872

S.B. 367 (2002) required TDMHMR to identify people who have been admitted to state mental 

health facilities three or more times in 180 days or less as being at imminent risk of requiring 

placement in an institution. The legislation required the state to develop strategies to meet the 

needs of these people in the community. Monthly reports track this population for the local 

community mental health authorities so that intensive services can be focused on this group.873

Residential Options 

“Affordable, accessible, integrated housing remains an integral part of successfully transitioning 

individuals from institutional care into the community,” noted the S.B. 367 Task Force.874

Governor Perry and the Legislature requested that HHSA, DHS, and the Texas Department of 

Housing and Community Affairs (TDHCA) develop a housing assistance program to assist with 

these transitions from nursing homes to residential settings. 

Also pursuant to Governor Perry’s April 2002 Executive Order, TDHCA sets aside funds to 

serve people with disabilities who want to move out of institutions to community settings. The 

department set aside $2 million to go to nonprofits, public housing authorities, and units of local 

government that want to provide Tenant Based Rental Assistance (TBRA), which include rental 

subsidies, security deposits, and utility allowances (for 24 months). The income of a consumer 

assisted with TBRA cannot exceed 80 percent of the area median income, and 90 percent of the 

people assisted must have incomes below 60 percent of the area median income. 

An eligible entity could apply for up to $500,000. Although the department sent out information 

and held workshops across the state with more than 600 entities (nonprofits, housing authorities, 
406 

and independent living centers), the program got off to a slow start. In 2003, only four applications 

were received and approved for a total of $442,681 to provide rental assistance to 40 people. After 

potential housing applicants said that the 6 percent administration fee allowed by the department 

was too low, the TDHCA raised that fee to 10 percent. But only one other application was 

approved in July 2004 for $103,194 to help 10 more people with rental assistance.875

In August 2001, the housing agency received 35 out of 400 housing vouchers made available 

nationwide by HUD under a program called Project Access Housing Choice Voucher Program. 

The vouchers are provided to people with disabilities who want to leave nursing homes to live in 

the community. The vouchers help them to move into subsidized housing. The first Project 

Access Housing Choice Voucher was issued in Texas in August 2002.876 

The DHS also created Transition to Life in the Community grants, a new statewide service 

within the In-Home and Family Support program. The program targets people moving from 

nursing homes to the community, and provides grants in amounts up to a maximum of $2,500 to 

be used for set-up costs. As of August 2003, the program had helped 91 individuals with initial 

rent and utility deposits, and other relocation-related expenses and household items.877

Adult foster care is provided in DHS-enrolled homes. This service provides 24-hour living 

arrangements, and includes meal preparation, housekeeping, and help with personal care. 

Residential care in DHS-licensed facilities provides services to eligible adults who require access 

to services on a 24-hour basis, but who do not need daily nursing intervention.878 

Consumer Direction 

In July 2002, Texas was one of the first states to receive approval from CMS for the 

implementation of consumer direction in multiple Medicaid HCBS waiver programs and in the 

Medicaid state plan. Four Texas programs had put consumer direction into practice in September 

2001: three programs in DHSDHS—CLASS, the Deaf/Blind waiver, and the ConsumerManaged Personal Assistant Services programs; and one program in TDMHMR—In-Home and 

Family Support program. In January 2002, consumer direction was added to the Medicaid 

Primary Home Care (personal care) program in DHS. With the added federal approval in 2002, 

Texas was able to provide vouchers for participants of the CBA and STAR+PLUS programs.879
407 

Consumers can manage, recruit, hire, supervise, and fire their workers. A fiscal agent handles 

employer-related administrative functions, such as payroll and tax-related reports, and provides 

back-up personal assistants when a worker is sick or fails to show up. A more limited version of 

consumer direction is the Consumer-Managed Personal Assistant Services model. The program 

contracts with licensed agencies to provide personal assistants. The agency determines consumer 

eligibility and the amount of care needed, develops a pool of potential workers, and provides 

emergency backup. The client supervises the worker. 

Use of consumer direction was moving slowly in some programs, however. HHSC reported the 

utilization rate of CDCS varied from a high of 28 percent in CLASS to a low of .07 percent in 

the CBA program and Primary Home Care. The HHSC report noted that the state faced a key 

challenge in ensuring that enrollees in the home- and community-based programs “are aware of 

and sufficiently educated about” consumer direction.880

To help consumers understand the concept and how they can use consumer direction, Texas 

sought and was granted a federal Systems Change Grant. The grant will help the state test two 

models of consumer control in one region, then statewide. One model calls for participants to 

manage their own budgets and hire and supervise their workers, while under the other model, 

participants will handle the personnel duties but not have budget responsibility. 

Innovative Practices 

Texas is breaking new ground with several of its LTSS projects. Other states have developed 

projects similar to the two described below, but Texas stands out because of the considerable 

number of people with disabilities involved in these efforts and also by specific strategies the 

state has adopted. In the Rider 37 initiative, the state and its community partners have 

devoted significant resources to facilitate the transition from nursing home to community 

living for the participants. 

The STAR+PLUS project integrates acute and long-term services for Medicaid recipients. One 

of the health maintenance organizations in the pilot received approval from CMS in 2002 to 

operate as a Medicare+Choice plan.881 For dual-eligible people who choose this plan, the state 

has removed the three-prescription-per-month limit that applies to other project participants. 
408 

Rider 37 (Money Follows the Person): A number of factors were responsible for the passage of 

Rider 37, including the U.S. Supreme Court’s Olmstead decision, the creation of the Promoting 

Independence Advisory Board and its subsequent development of a plan and recommendations, 

and legislative action to implement some of those recommendations. 

In September 2001, the Texas legislature included a rider in the state appropriations act (Rider 

37), which allowed the Texas DHS to move Medicaid funding from its nursing facility budget to 

its budget for Community Care Programs when a Medicaid recipient moves from a nursing 

facility into a home or other residence in the community. The program is called Money Follows 

the Person.882 A nursing home resident who wants to move to the community does not have to 

wait for a slot to open up in a Community Care Program, particularly the Medicaid waiver 

programs that have long waiting lists. 

The state has entered into relocation contracts with various organizations, such as independent 

living centers, that have helped to publicize the effort, identify individuals who want to move to 

the community and are eligible to do so, and then assist them in making the move. These 

organizations received Community Awareness and Relocation Services funding to publicize the 

project and to help individuals make the transition to the community. For the latter, grants of up 

to $2,500 per individual are available as start-up funds for furniture, utility and security deposits, 

and other essentials. 

As of the end of February 2004, more than 3,400 people had made the transition from an 

institution to the community under the Rider 37 program and its successor amendment, Rider 28. 

One-third of the participants were under age 65, with the remaining two-thirds age 65 and older. 

Within about half of the regions in the state, between one-third and one-half of the people who 

relocated moved into assisted living facilities. Within other regions, greater percentages of 

individuals moved into their own homes or family homes. (Advocates have noted, however, that 

lack of affordable and accessible housing still presents a significant barrier for people moving 

out of nursing homes.)883 

Many observers believe that strong and persistent work from organized advocates has been 

essential to the success of the Rider 37 effort to date, as has been the ongoing partnership and 
409 

collaboration among advocates, DHS, and other groups. The Promoting Independence 

Interagency Task Force, which formalized this collaboration, has been called a task force “with 

high visibility and powerful influence.”884 

In September 2003, the Federal Government gave Texas a grant of more than $730,000 to help 

educate employees and advocates involved in the transition process about community care options 

so they could better assist people leaving nursing homes to make appropriate community choices. 

Integrated Funding and Services for Acute and Long-Term Services 

Senate Concurrent Resolution 55 in the 74th legislative session required the HHSC to pilot a 

cost-neutral model for the integrated delivery of acute and long-term services for aged and 

disabled Medicaid recipients in Harris County. The project required getting federal approval for 

two Medicaid waivers, 1915(b) and 1915(c), in order to mandate participation and to provide 

home- and community-based services. The Federal Government approved the waivers in 

February 1998. 

STAR+PLUS is a single capitated managed care delivery system that was serving 63,630 people 

as of July 1, 2004. For people who are dually eligible for Medicare and Medicaid (about half of 

the enrollees), STAR+PLUS covers LTSS, and Medicare provides primary and acute care. 

Participants may choose from two HMOs. 

While dually eligible people constitute only 23 percent of the state’s Medicaid population, they 

account for almost 60 percent of Medicaid’s expenditures. Controlling costs for this population 

was a major reason for the demonstration, as was offering a way to provide a continuum of care 

with a wide range of options and increased flexibility to meet individual needs.885 

LTSS provided by the HMOs include day activity and health services and personal assistance. 

Additional services include adaptive aids, adult foster home services, assisted living, emergency 

response services, medical supplies, minor home modifications, nursing services, respite care, 

and therapies. A care coordinator is responsible for coordinating the client’s acute and long-term 

services, even if the client is a dually eligible person who receives Medicare services from a 

provider not affiliated with the STAR+PLUS HMO. 
410 

Future Plans and Challenges 

In additional to STAR+PLUS, the state has undertaken to test consolidation of a number of 

different Medicaid waiver programs for different groups of people with disabilities. The 75th 

legislative session called for HHSC to conduct the three-year pilot in one county. Under this 

demonstration, called the Consolidated Waiver Program, HHSC provides a single array of 

services to multiple populations with different types of physical disabilities who are sharing 

common providers with consistent rates. 

The pilot began in December 2001 and serves about 200 people annually. It combines funding 

from five Medicaid HCBS waiver programs. Applicants must be waiting for Medicaid waiver 

services from one of the five programs and must meet level-of-care criteria for ICF/MR care or 

meet the medical necessity criteria for nursing home care. The target population is people who 

are medically fragile or have mental retardation. 

In the legislative session immediately following issuance of the Promoting Independence Plan, 

legislators appropriated expansion monies for all the state’s community waiver programs, the 

development of transition services, and alternative family-based options for children. For 

example, $63 million was appropriated for FY 2002 to provide community services for 5,600 

people on waiting lists. In addition, the state received five federal Real Choice Systems Change 

Grants in 2003 that totaled $3.3 million. One initiative that will be funded with this money is the 

Creating a More Accessible System for Real Choice for Long-Term Care Services (the Texas 

Access Project). In two areas of the state, models of “system navigation” will be tested to help 

individuals and families cut through state government bureaucracy and red tape to obtain needed 

LTC services. 

Still, in the face of the bleak budget situation that developed in Texas, progress on expanding 

community options slowed. Long waiting lists for community services remain a major challenge 

for the state. However, the Promoting Independence Plan made clear that the state viewed its 

response to the Olmstead decision as an ongoing process. State officials say they intend to 

continue moving forward in their effort to identify individuals who want to move out of nursing 

homes to the community, help those individuals make that transition, reduce waiting lists for 
411 

community services, and coordinate all LTSS.886 The restructuring of the human services 

agencies, which will take several years to complete, offers the possibility of greatly improved 

coordination and integration of publicly funded services for people with disabilities, but it also 

involves a substantial amount of work and commitment on the part of agency personnel as well 

as many other stakeholders. 
412 

Indiana 

Indiana has a long history of innovation and support for community-based longterm care. 

 —Family Caregiver Alliance, 2002 

Introduction 

Indiana began moving away from institutional care for people with disabilities and toward 

expanded HCBS in the early 1990s. Legislative and gubernatorial actions led to the creation of 

commissions and task forces to study the state’s LTSS and to recommend ways to shift greater 

resources to HCBS. The early 1990s also saw the creation of the state-funded Community and 

Home Options to Institutional Care for the Elderly (CHOICE) program, and a Medicaid HCBS 

waiver program for people with MR/DD. 

A quick look at Indiana’s statistics shows, however, that the state still must overcome significant 

hurdles if it is to meet its goal of shifting greater resources toward home- and community-based 

care for people with disabilities. About 76 percent of its Medicaid LTC dollars ($1.5 billion) 

were allocated to institutional care in FY 2003, compared with the national average of 67 

percent. The state has, however, made significant strides in the last several years to build on its 

earlier initiatives, and considerable pressure has been placed on state agencies by advocates and 

lawmakers to continue the momentum. 

From 1992 to 2000, the state reduced funding for institutional settings by 52 percent, compared 

with a 16 percent reduction nationally. From 2001 to 2003, the state helped to create options for 

more than 4,800 elderly and 2,000 people with disabilities to live in their homes and 

communities. A priority for the state is the expansion of community services for 1,000 more 

people with developmental disabilities.887 

Background 

Indiana calls itself “the crossroads of America.” A midwestern state, Indiana had a total 

population of about 6.1 million people in 2000, 87.5 percent of whom are white. Only 8.4 

percent of the state population is black and 3.5 percent is Hispanic. The population age 65 and 
413 

older totals about 752,000 (one in eight Hoosiers), of whom about 42 percent have some 

limitation in two or more ADLs, as do about 18.5 percent of the population age 21 to 64.888

About 9.5 percent of the population had incomes at or below the poverty level in 2000 

(compared with the national average of 12.4 percent). 

Integrating Services for People with Disabilities 

The Family and Social Services Administration (FSSA) is an umbrella agency that houses the 

Division of Disability, Aging and Rehabilitative Services (DDARS) and the Division of Mental 

Health and Addiction (DMHA). Within DDARS are the Bureau of Aging and IN-Home Services 

and the Bureau of Developmental Disabilities. This structure was created by the Indiana General 

Assembly in 1991 “to better integrate the delivery of human services.”889 

FSSA had a $6.3 billion budget in FY 2003. The agency acts as the safety net for nearly a 

million Hoosiers, about one in six people in the state. In 1992, the IN-Home Services program 

was created, bringing together funding from a variety of programs for the elderly and people 

with disabilities: the state-funded CHOICE program, Older Americans Act and Social Services 

Block Grant programs, and seven Medicaid HCBS waiver programs. 

For these programs, the state’s 16 Area Agencies on Aging act as single entry points, providing 

information about options and assistance in applying for benefits. All community services for the 

elderly and people with disabilities are integrated and delivered through the Area Agencies on 

Aging. In 1998, the National Governors Association (NGA) recognized Indiana for its 

interagency collaboration and innovations. Two strengths of the Indiana system, the NGA said, 

were the authority given to case managers to blend funds for home care and the decentralization 

of power across Indiana’s Area Agencies on Aging.890 

Public-Private Partnership 

Indiana is one of only four states that are participating in a public-private LTC insurance 

program that links purchase of private LTC insurance with Medicaid coverage of LTSS. The 

program promises protection from estate recovery of a Medicaid-covered nursing home 
414 

resident’s assets after death if the individual has purchased LTC insurance that initially paid for 

the institutional care.891 

The Indiana program offers two types of asset protection: dollar-for-dollar and total asset 

protection. Under the dollar-for-dollar option, for every $1 of benefits that a policy pays out, the 

purchaser earns $1 of asset protection. To earn total asset protection, on the other hand, the 

consumer must purchase a policy in an amount that equals or exceeds a specified amount (a 

state-set dollar amount), which was $187,613 in 2004.892

The enabling legislation for the program was enacted in 1987; federal approval was received in 

December 1991. The first policies became available in May 1993. By September 2004, about 

31,000 people age 19 through 90 had purchased policies from the 12 insurance companies that 

have been approved by the state to sell the policies. Fifty-three percent of the purchasers were 

under the age of 65 (average age of purchasers was 62). About 80 percent of the policies 

purchased included coverage for both nursing home care and home and community care.893 

Through legislation enacted in May 1999, Indiana residents who pay premiums for partnership 

policies could (beginning with the 2000 tax year) receive a 100 percent tax deduction for the cost 

of the premiums. There is no cap on the deduction. Indiana has also made LTC insurance a 

pretax insurance option for all state employees. 

Expansion of Community Services 

Over the years, Indiana has had a much higher than average supply of nursing home beds and high 

rates of institutionalization for people with disabilities. Of total Medicaid LTC expenditures in 

Indiana in FY 1997, about 91 percent went to institutional care and 9 percent to HCBS. By FY 

2003, that split had dropped to 76 percent for institutional care and risen to 24 percent for 

HCBS.894 From 1992 to 2000, the state reduced funding for institutional settings by 52 percent.895

The state’s focus on community services was given impetus by several commissions in the late 

1990s and subsequent years. The first major development was the 1997 passage of S.B. 317, 

which called for community options for people with developmental disabilities. An S.B. 317 
415 

Task Force appointed by the governor developed a comprehensive plan of reforms in 1998. The 

state has since devoted significant resources to implementing the S.B. 317 plan. 

In September 2000, Governor Frank O’Bannon issued an Executive Order that identified the 

FSSA as the agency in charge of planning to address the issues raised by the U.S. Supreme Court 

Olmstead ruling in 1999, which called for greater community integration of people with 

disabilities. The Executive Order required FSSA to conduct a comprehensive study of services 

for people with disabilities and to recommend ways to improve community integration. 

The agency released a plan on June 1, 2001: “Indiana’s Comprehensive Plan for Community 

Integration and Support of Persons with Disabilities.”896 The plan called for greater consumer 

choice, support for the informal family network, strengthened quality assurance, workforce 

development, and improved access to HCBS through expanded information and assistance. 

The next development was the creation by Governor O’Bannon in July 2002 of the Governor’s 

Commission on Home- and Community-Based Services, which released an interim report in 

December 2002 and its final report in June 2003. The commission made 16 recommendations in its 

interim report and 28 additional proposals in its final report.897 The commission’s goal, it said, was 

to develop short- and long-term strategies to create or expand community options for people with 

disabilities. (For further details on the commission’s work, see “Innovative Practices” below.) 

Building on the recommendations of the Governor’s Commission was the enactment of S.B. 493 

in 2003, which makes it a matter of state policy for FSSA to establish “a comprehensive program 

of home- and community-based services to provide eligible individuals with care that is not more 

costly than services provided in institutions.” Its provisions include raising the monthly income 

standard for the Medicaid Aged and Disabled Waiver program to 300 percent of the SSI standard 

(having the effect of qualifying more people for Medicaid coverage under the waiver), adding 

20,000 Medicaid HCBS waiver slots (without additional cost to the state), and adding spousal 

impoverishment provisions to the Aged and Disabled Waiver (also a recommendation of the 

Governor’s Commission).898 
416 

The legislature failed to fund the provisions of S.B. 493, however, in the face of declining state 

revenues. Nevertheless, the Governor’s Commission chair Katie Humphreys believes that the 

general purpose of S.B. 493 is to “eliminate barriers to care, increase community capacity, and 

support consumer choice.” Legislative analyst Kathy Norris points out that lawmakers thought it 

important to authorize 20,000 waiver slots, for example, even if money could not be found 

immediately to allow filling the slots. Once the slots are available, Norris says, they can be 

funded at a later date when the revenue outlook improves. 

In FY 1998, total expenditures for the state’s seven Medicaid HCBS waiver programs was $52 

million. That total had reached almost $295 million in FY 2003. By that year, the seven waiver 

programs were serving a combined total of more than 7,600 individuals.899 

Programs for individuals who are elderly and/or physically disabled: The two major HCBS 

programs for this population, as administered by the Bureau of Aging and IN-Home Services, are 

the Medicaid Aged and Disabled Waiver program and the state-funded CHOICE program. A 

waiver program for coverage of services in assisted living facilities was approved by the Federal 

Government in July 2002. 

Aged and Disabled Waiver program: This waiver program was established in 1990. In 2002, the 

state added about 1,600 slots to the program to bring the total number of slots up to 6,000. 

However, due to budget restrictions, the state was serving only about 4,000 people under the 

program in 2004. Services include case management, attendant care, homemaker services, respite 

care, adult day services, adaptive aids and devices, and environmental home modifications. 

CHOICE program: Beginning as a pilot program in several counties in 1988, CHOICE went 

statewide in 1992. The program was funded at about $48.7 million and served 11,272 people in 

FY 2003. The average monthly care plan cost about $538. As of January 31, 2004, 10,776 

individuals were on a waiting list for CHOICE services. (For further details on CHOICE, see 

“Innovative Practices” below.) 

Programs for people with mental retardation/developmental disabilities: Indiana has made 

“tremendous progress in the past four years in reducing reliance on institutions and in 
417 

establishing the HCBS waiver as a major funding source for community developmental 

disabilities service expansion,” according to a 2004 report.900 The beginnings of this expansion 

of community services was passage of S.B. 317 in May 1997. This law called for the creation of 

a 12-member task force whose responsibility was to prepare a comprehensive plan of 

implementation for the future of community living arrangements for people with MR/DD. 

The task force issued a report in 1998 (“Comprehensive Plan for the Design of Services for 

People with Developmental Disabilities”) that called for the implementation of person-centered 

planning and person-centered funding for all people with developmental disabilities. Other 

recommendations included redirecting funding in the developmental disabilities system away 

from congregate settings to integrated housing and day services, and expanding community 

capacity to support people with developmental disabilities, and their families, particularly those 

who had been waiting for services because of the lack of sufficient resources in the system.901 

In response to the recommendation on person-centered planning, the state promulgated a rule in 

May 2003 (460 IAC 7) that mandates the use of a person-centered planning process, including 

the development of an Individualized Support Plan (ISP) for all people getting services from the 

Bureau of Developmental Disabilities Services (BDDS), whether they are receiving supportive 

services in their homes or communities, receiving services and supports from group home 

providers, or living in ICF/MRs. The resources to help implement the ISP are allocated through 

an Individual Community Living Budget, which becomes a financial agreement between the 

individual, the provider agency, and the BDDS. 

The state agency also adopted a policy for residents who moved to the community from 

Central State Hospital, which closed in 1994, that allowed the funds that supported those 

individuals at Central State to be used for their community supports. “Funding following the 

person was a key vision of the 317 plan,” BDDS officials said in 2003, “and we continue to 

make progress in this area.”902

The agency has also been able to report significant progress on the 317 Task Force 

recommendation about redirecting funding from congregate to community settings. Of the 10 

private ICF/MRs, only three were still open in 2004. In 1999, the state had been serving 834 
418 

people in private ICF/MRs; that number had dropped to 343 by the end of 2003. The population 

of the State Development Centers went from 800 people in 1999 to less than 500 people in 2003 

and was expected to drop to about 200 people by 2005. In addition to Central State Hospital, two 

other State Developmental Centers (New Castle and Northern Indiana) were closed in 1998. 

When the task force report was published in 1998, $467 million was being spent by the state for 

services for people with developmental disabilities, of which only $110 million was going 

toward community services. About 5,000 people were on waiting lists for services.903 The total 

number of people with development disabilities in residential settings increased 34 percent 

between FY 2000 and FY 2004. Group homes have been one of the community alternatives for 

people with developmental disabilities. These are residences for four to eight individuals that 

include 24-hour supervision by paid staff, who help residents develop daily living skills. 

Follow-up services for supported employment have also been expanding. In 2000, about 1,800 

people received these services after getting a job. The number had increased to 2,300 people by 

2002, and BDDS has set a goal of 3,700 by June 30, 2005. Medicaid spending for the HCBS 

waiver program for people with developmental disabilities increased 360 percent from FY 2000 

to FY 2004, while ICF/MR spending dropped 16 percent. However, while the number of people 

in the waiver program totaled 5,139 in FY 2004, more than 11,000 people still were on a waiting 

list for services.904 

The two major Medicaid waiver programs for people with developmental disabilities are the 

following:

Developmental Disabilities Waiver: Originally established in 1992 as the ICF/MR waiver, the 

program was amended in 2001 to become a Developmental Disabilities waiver program with 

expanded services, which range from adult day services to case management and crisis 

assistance. Recreational, occupational, speech, physical, and music therapy are offered as well as 

community education and therapeutic activities (an annual allowance to pay for the costs of 

community activities). Other services include environmental modifications, family and caregiver 

training, specialized medical equipment, and transportation. Services under the waiver can also 
419 

be provided in adult foster care facilities (limited to four people per residence), and in 24-hour 

residential care facilities. 

The Federal Government approved an amendment in July 2003 to the Developmentally Disabled 

and Autism waiver programs to provide a Community Living Budget. This program provides a 

$1,000 allowance to people moving out of institutional care to community settings. The 

allowance pays for the client’s initial security deposit on an apartment, essential furnishings, pest 

eradication, and set-up fees for utilities and telephones. The program was originally entirely state 

funded, but moving the program under Medicaid allows for a 62 percent federal match.905 

Support Services Waiver: This program was created to address a problem that had arisen with the 

Developmental Disabilities waiver. The resources of that program were not proving sufficient to 

cover the expenses of providing adult day services for many recipients, including activities to 

help individuals get ready for jobs, supported employment follow-up, and sheltered workshops. 

Begun in April 2002, the Support Services program offers a family allowance of up to a 

maximum of $13,500 per person annually and is intended for people living at home with their 

families or other informal caregivers. The program includes all the services provided under the 

Developmental Disabilities waiver program except for adult foster care or residential services 

and environmental modifications. Enrollment totaled 3,550 people in FY 2004; several thousand 

people were on a waiting list for the services. 

For people not financially eligible for Medicaid, state funds provide an array of services that 

allow individuals with developmental disabilities to live in their own homes. State funds may be 

used when other funds are not available, such as when a Medicaid recipient loses eligibility for 

that program.906 State funds are also available to cover rent and meals (Residential Living 

Allowance) for people in residential facilities whose services are being covered by the Medicaid 

Development Disabilities waiver program; Medicaid does not cover rent and meals. 

Programs for people with mental illness: DMHA reports that 38,194 adults with serious 

mental illness were served in the community in FY 2001. That number had increased to 42,076 

by FY 2003.907 DMHA contracts with managed care providers, which are generally Community 
420 

Mental Health Centers or networks of several centers. These centers, of which there are 31 in the 

state, receive an annual allocation for each person they enroll. 

The primary source of services and supports for adults with serious mental illness is the Hoosier 

Assurance Plan (HAP). This program accounts for almost 80 percent of funded treatment 

services provided by DMHA. People eligible for HAP must qualify for Medicaid or Food 

Stamps, or have incomes that fall at or below 200 percent of the federal poverty level. They must 

also meet certain evaluation criteria as determined by mental health professions. The agency 

estimates that 59 percent of eligible adults (people with mental illness who meet the low-income 

requirements) are enrolled in HAP. 

HAP does not pay for 100 percent of a person’s care. Each individual in the program is expected 

to contribute toward the cost of care based on a sliding fee scale applied to the person’s income. 

The Mental Health Centers are responsible for providing a continuum of care that includes 

individualized treatment planning to increase patient coping skills and symptom management, 

24-hour-a-day crisis intervention, case management, and outpatient services, such as substance 

abuse services, counseling, and treatment. The centers must also offer residential services, day 

treatment, family support services, and medication evaluation and monitoring. The centers also 

provide supported employment services; the state estimates that more than 1,200 people have 

been helped to find jobs from 1999 to 2003. 

Residential Options 

“...if development of new housing initiatives is not aggressively pursued,” said the Governor’s 

Commission on Home- and Community-Based Services, “the State is likely to find itself in the 

position of having developed a plethora of new service options yet have no consumers to utilize 

them.”908 Giving people with disabilities options to live in the community in small residential 

settings rather than in institutions has been a major challenge for Indiana. For example, the 

national average for individuals with MR/DD living in settings of six people or fewer was 61 

percent in 2000; in Indiana, the rate was only 44 percent.909 
421 

In the 1970s, Indiana created two state-funded programs, Assistance to Residents in County 

Homes and the Room and Board Assistance Program for residents of board and care facilities. 

These programs subsidize the difference between a resident’s income and the state-approved 

daily rate for a county home or a licensed residential care facility. In 1992, the two programs 

came under the authority of the DDARS, and in 2000 merged into the Residential Care 

Assistance Program (RCAP). 

In 2003, there were 19 county homes and 42 licensed board and care homes. In addition to 

providing financial assistance for room and board, the program offers residents a personal needs 

allowance ($52 a month in 2003) and medical assistance. About 2,500 people were in the 

program at the end of FY 2003; these are people who cannot live independently but who do not 

need nursing home level of care. They must be financially eligible for Medicaid or SSI. Total 

expenditures for the program were about $14 million in FY 2003.910 

Of the 3,700 households receiving housing assistance through Indiana’s Housing Choice 

Voucher Program (Section 8) rental assistance program in FY 2001, two-thirds had an elderly or 

disabled family member. In that year, however, 7,000 households were on the preapplication list 

waiting for assistance.911 

Another project that attempts to create opportunities for people with disabilities to own or rent 

homes is the Back Home in Indiana Alliance. The state has funded the project through the 

Indiana Housing Finance Authority and the Governor’s Planning Council for People with 

Disabilities The alliance is a coalition of various organizations that includes Fifth Third Bank, 

Irwin Mortgage, the Indianapolis Neighborhood and Housing Partnership, Indianapolis Resource 

Center for Independent Living, and Independent Residential Living of Central Indiana. Also 

involved are Fannie Mae and HUD.912 

The project, which is housed in Indiana University’s Institute on Disability and Community, 

connects people with disabilities and their families to housing organizations and resources. A 

preliminary financial assessment is conducted; potential clients must have incomes at or above 

30 percent of the local median income. If the applicant meets this standard, he or she is directed 

to a homeownership counseling and educational organizations that will provide information 
422 

about low-cost lending and the steps an applicant must take. Alliance staff say that the key factor 

sustaining this project is “the development of partnerships with organizations experienced in 

housing, advocacy, and supporting people with disabilities.”913

Indiana has also created two other housing possibilities for people with disabilities in recent 

years. The state submitted an application to the Federal Government for a Medicaid Assisted 

Living Waiver that was approved in July 2002. By FY 2004, the program was serving 70 people, 

with 36 people on a waiting list. The Aged and Disabled Waiver was amended to include a new 

congregate care option that was approved by the Federal Government in 2003. 

Workforce Issues 

In 2001, the General Assembly authorized the creation of a Governor’s Commission on Long 

Term Caregivers. The mandate of the commission, which began meeting in 2002, was to review 

information and data related to long-term caregivers; evaluate the adequacy of the state’s training 

programs; and make recommendations to increase the supply of certified nurse aides, licensed 

practical nurses, and registered nurses in health facilities, home health care, and other 

community-based settings. The commission made a number of recommendations to strengthen 

education and training opportunities for direct care workers, improve workplace conditions, and 

develop recognition programs for the workers.914 

In 2002, the General Assembly enacted a bill that permits certain individuals who are not licensed 

health care professionals to provide health-related services to people receiving in-home care under 

the CHOICE program and the Medicaid HCBS waiver programs. The workers are called personal 

services attendants. The DDARS was charged with developing a registry of these workers. 

Consumer Direction 

A key recommendation of the Governor’s Commission on Home- and Community-Based 

Services was that all applicable Medicaid waiver programs “should include and implement the 

consumer-directed care service option.”915 Although 2001 legislation had given recipients of 

CHOICE the option of directing their attendant care services workers, only 140 program 

participants were exercising that option in 2004. 
423 

The state requested an amendment to the Aged and Disabled Waiver in November 2001 to allow 

self-directed attendant care, which was approved by the Federal Government in January 2002. 

Indiana applied for and was awarded a $1.4 million Real Choice Systems Change Grant in 2002 

to develop systems that support consumer choice and consumer-directed care. Another $725,000 

federal grant that year for community personal assistance services and supports calls for the 

development of a pilot model of self-directed care based on the work of three local coalitions. 

The coalitions are to include an Area Agency on Aging, an Independent Living Center, a nursing 

home, and other support providers and advocacy groups. The goal of the project is to develop a 

system whereby self-directed personal attendant care “is a realistic and accessible service for any 

individual who chooses to live in the community.”916 

The FSSA noted in 2004 that efforts to expand self-directed care had been complicated by fiscal 

intermediary issues. The Area Agencies on Aging administer CHOICE and the Aged and 

Disabled Waiver programs. The Area Agencies on Aging reported concerns about how they 

would handle their fiscal intermediary responsibilities and about how to limit their liability 

regarding “employer of record” issues.917 However, the state was moving ahead in mid-2004 to 

issue a request for proposals for an organization to serve as fiscal intermediary. 

Innovative Practices 

Indiana has been a pioneer in two very different directions for expansion of LTSS. Through the 

actions of a broad-based commission on HCBS, bolstered by gubernatorial and legislative 

support, the state has put into place, in effect, a graduated schedule of reforms that should enable 

it to keep its reform momentum going even in the face of tough fiscal times. At the same time, 

the state has managed to develop and strengthen a state-funded home- and community-based 

program that has strong and continuing support from the political and advocacy communities. 

Governor’s Commission on Home- and Community-Based Services: The commission called its 

report with its comprehensive series of recommendations “a blueprint for reform in Indiana.” 

Mindful of the state’s tight fiscal situation at the time, but also because of the “opportunities 

presented by the upcoming legislative session,” the commission said it tried to frame many of its 

initial recommendations in terms of achievable results. For example, in its December 2002 
424 

Interim Report, the commission said it proposed to identify the “most significant of the longterm care service delivery barriers and to develop comprehensive recommendations in 

response.”918 Taking note of this strategy, NCD said in September 2003 that the commission’s 

“effort to prioritize activities that could begin immediately and at little short-term cost is 

exemplary and should serve as a model for other states.”919

One such immediate activity with little short-term cost was pursuing federal grant opportunities. 

The FSSA lost no time in applying for such grants and reported that it received a total of $6.4 

million in FY 2002 and FY 2003, mostly from the Real Choice Systems Change Grant program 

under the New Freedom Initiative. One $1.4 million federal grant helped to create and staff the 

Governor’s Commission and also went toward the distribution of mini-grants to communities 

around the state to stimulate creative community thinking about independent living for people 

with disabilities. The state awarded $430,000 to 12 communities in February 2003 and another 

$320,000 to 11 communities in May 2003 in mini-grants of up to $40,000. 

Projects were to encourage innovation in community living, housing, transportation, supported 

employment, and caregiver support. Activities funded through the mini-grants include, for 

example, training for Indianapolis housing suppliers and consumers to increase the availability of 

community-based housing for people with disabilities, support for Bloomington’s continuum of 

services for adults with developmental disabilities and/or mental illness, and the development of 

resources in New Palestine that enable homeowners with disabilities to access home repair or 

modification services.920 

Other commission recommendations also saw quick action by the state, such as implementing 

spousal impoverishment provisions in the Aged and Disabled Waiver program similar to the 

provisions applicable to nursing home care.921 A waiver amendment to allow this action was 

approved by the Federal Government in February 2003. (For additional information on 

commission proposals and subsequent state actions, see Appendix 4.A.) 

One major commission recommendation (i.e., to raise the monthly income standard for the Aged 

and Disabled Waiver program to 300 percent of SSI), however, proved to be more problematic 

because of cost concerns. An initial state estimate of the additional first-year cost of the change 
425 

was $2.7 million. FSSA contracted with the Lewin Group to conduct a more comprehensive 

analysis of the fiscal impact of this proposed change and the addition of 20,000 waiver slots 

mandated by S.B. 493. The report was due by November 2004. 

The commission also established Benchmarks for Measuring Success for each of its 

recommendations. For example, for the Adult Foster Care Medicaid waiver program, the 

benchmarks included implementation of the program, development of an adult foster care 

consumer base (with the number of consumers increasing each quarter), and development of an 

adult foster care provider base (with the number of providers increasing each quarter). However, 

the commission expired at the end of 2003, leaving open to question how monitoring would be 

conducted in the future. 

CHOICE: Although many states offer limited state-funded services for people whose low 

incomes still do not qualify them for Medicaid-funded services, Indiana has a 12-year-old 

comprehensive state-funded program that continues to be popular not only with consumers and 

advocates but also with legislators and other policymakers. The CHOICE program has lasted 

through tough fiscal times and continues to gain strength. 

The CHOICE program has received national recognition since its inception in the late 1980s, 

largely because it fills a gap for low-income people who are not eligible for or are waiting for 

Medicaid services. People must be at least 60 years of age (or any age with disabilities) and 

unable to perform at least two ADLs as determined by an assessment. 

There are no financial eligibility requirements for CHOICE. However, cost-sharing on a sliding 

fee scale is required of people with annual incomes between 150 percent and 350 percent of the 

federal poverty level. People with incomes below 150 percent of the poverty level are not 

required to pay for services; people with incomes above 350 percent must pay the entire cost of 

their services. 

Covered services include case management, home health supplies and services, attendant care, 

homemaker services, respite care, home-delivered meals, adult day care, transportation, minor 

home modifications, adaptive aids and devices, and other necessary services. The program is 
426 

operated locally by Area Agencies on Aging. At least 20 percent of an Area Agency on Aging’s 

CHOICE service dollars must be used for people under the age of 60 with disabilities. 

Future Plans and Challenges 

Although Indiana still has many challenges to face to overcome its earlier bias toward 

institutionalization, the state has made considerable progress in recent years in offering many 

more people with disabilities the option of living independently in the community. The strides 

made in the last two to three years are impressive compared with the state’s past record in 

providing home- and community-based options for people with disabilities. The state-funded 

CHOICE program continues to receive strong ongoing support from public officials. 

The executive and legislative branches of the Indiana government have shown a convincing 

commitment to continuing this forward movement. In 2003, the state set a goal of creating 

community options for 1,000 more seniors and 1,000 more people with disabilities over two 

years.922 Several federal grants are helping to keep the momentum going, and local efforts 

supported by mini-grants should help develop new initiatives. 

Representative Peggy Welch, vice chair of the Assembly Public Health Committee, says that 

“implementing what we’ve got and how to pay for it” is a major challenge for lawmakers. 

Legislators are committed to expanding home- and community-based care, she says, but they 

worry about the short term. “We seem to be improving our economic status,” she says, but FY 

2005 “will be a tough budget year.” 

Another key stakeholder, Beth Quarles, chair of the Indiana Independent Living Center, is 

concerned that no group is charged with monitoring activities that have been recommended by 

the Governor’s Commission. “We need a group to conduct follow-up reviews,” she says, and to 

distribute results to stakeholders around the state. Federal or state money needs to be invested in 

that follow up, she adds. 
427 

Attachment 4.C 

Selected Recommendations of the Governor’s Commission on Home- and 

Community-Based Services 

The status of some of the commission recommendations was provided by FSSA secretary Cheryl 

G. Sullivan in a November 10, 2003, letter to commission chair Katie Humphreys. Secretary 

Sullivan said that “in prioritizing its efforts and commitment given available resources,” all 18 of 

the commission’s recommendations that were directed to FSSA could not be accomplished 

within the commission’s proposed time frame. 

• Implement a diversion project that presents consumers with real alternatives to nursing 

home placement. FSSA worked with Area Agencies on Aging (AAAs) to provide 

discharge planners in hospitals to offer consumers community alternatives to nursing 

home care. In addition, FSSA worked with the AAAs, Independent Living Centers, and 

the Nursing Home Coalition to fund two separate conversion team projects to work with 

families in moving individuals from nursing homes. The agency hoped to pilot the project 

in other parts of the state. As of March 2004, there had been 780 diversions (people who 

chose alternatives to nursing home care) and 60 conversions (people who left nursing 

homes for home and community settings). 

• Reduce to 20 days the time involved in determining Medicaid eligibility and in initiating 

services. Applicants must often wait months, the commission said, for the process to be 

completed. The process had been reduced to 39 days and, as of August 2003, the agency 

had established a centralized Medicaid financial eligibility determination unit. 

• Develop the infrastructure for a consumer-directed program that includes policies for 

fiscal intermediary services; information, education, and training for consumers, 

workers, and providers; a training curriculum for case managers; and a marketing plan. 

FSSA received a $725,000 Systems Change Grant in 2002 to expand consumer-directed 

personal attendant care under the Aged and Disabled Waiver. The state has developed a 

Consumer Manual and an Attendant and Case Management Manual available for use 

electronically and in print versions. 
428 

• Add Adult Foster Care as a service to the Aged and Disabled Waiver program. FSSA 

said that Adult Foster Care was a service component of the waiver and explained how the 

agency was working to expand the service. FSSA had finalized Foster Care Certification 

Standards, and was working on outreach for the program. The agency said quality 

assurance “would be a major challenge” as the program expanded, but it had applied for 

and received federal grant funding to “enhance the infrastructure” for quality assurance.

• Fully and immediately develop the Assisted Living Waiver. The program had been funded 

since July 1, 2001, but had signed up few providers. The secretary reported that the 

agency had hired a manager to specifically direct this program in early 2003. After that, 

FSSA developed new application materials and a marketing presentation for the program. 

The agency presented the material at the annual conference of the Indiana Association of 

Assisted Living Facilities as well as at three regional meetings. FSSA also reported 

having engaged in discussions with two major assisted living providers and public 

housing authorities in three areas. 

• Expand Adult Day Services efforts. FSSA said it continued to increase community-based 

options and had 42 certified sites to provide Adult Day Services. Because of increased 

marketing, the agency said, it was receiving on average three contacts per week of 

entities interested in becoming providers of these services. FSSA said it was “working 

closely” with the Indiana Association of Adult Day Services in providing technical 

assistance for new providers. 
429 

Part III 

Conclusion 

Key shared features of the movement forward by the five selected states are (1) an ongoing 

intensive planning process that involves policymakers with all critical stakeholders, (2) 

organization changes in the management of budget and service delivery, and (3) a focus on 

expansion of consumer choices to respond to individualized needs. 

The planning process. A number of factors combine to make for an effective planning process: 

• A comprehensive endeavor that involves a full range of stakeholders—from state 

officials to providers to advocates and people with disabilities themselves—and the 

commitment and support of the governor and legislature. 

• Final plans with realistic recommendations that take into account the state’s fiscal 

situation but also take advantage of available federal money, develop community 

partnerships, and implement cost-limited regulatory changes. 

• The setting of benchmarks to measure results and to place responsibility for tracking and 

reporting the results to policymakers and the public. 

Structural changes. Although it is difficult for states to quantify the impact of merging and 

consolidating state agencies, state officials believe that services can be delivered more 

effectively and efficiently after such moves. They also argue that combining nursing home and 

home- and community-based dollars means that they can allocate funds according to the needs of 

people with disabilities rather than to cost centers. 

Consolidation at the state level also means local-level changes that can make access to services 

easier for consumers and that simplify and speed the application process. There is also a trend 

toward establishing single-point-of-entry systems at the local level that has been adopted by 

many states and encouraged through federal grants to make for easier access to LTSS. 
430 

Global budgeting. States are hampered in expanding HCBS by budgeting practices that 

maintain separate line items for nursing homes and HCBS and by separate funding sources, such 

as Medicaid, Older Americans Act funds, and state general revenues, which are often 

administered by separate agencies. Several of the study states have developed strategies to use 

savings from limiting nursing home use or to transfer dollars that were previously allocated to 

nursing homes to people who move from those institutions to community settings. 

The most far-reaching approach, however, has been to budget for both institutional care and 

HCBS within the same agency and to tap pooled funds to meet care needs in any setting. Called 

“global budgeting” by some policymakers, this practice allows states the flexibility to respond to 

the preferences of people with disabilities to remain at home or in the community. 

Broadening home- and community-based services. Allowing greater numbers of people with 

disabilities the opportunity to direct their own care (hiring, training, and supervising their workers) 

has become a major objective not only of the five selected states but of many other states as well. 

Federal grants are helping many states consider how to educate consumers about the option, 

provide them with training, and set up fiscal intermediaries to assist consumers with bookkeeping 

and taxpaying. The selected states are also using the Medicaid waiver amendment process to 

broaden benefits, help more people, and provide services in a variety of residential settings. 

What each of these five states has accomplished provides lessons to be learned for future policy 

development at the state and federal levels. An analysis of activity across the five selected states 

resulted in the identification of 10 findings that will help inform the design of the 21st century 

LTSS system: 

1. Response to the Olmstead decision stimulated executive and legislative review of the 

current system of service delivery, unmet needs of target populations, and where the dollars 

are being expended. 

2. Cross-agency planning with consumer stakeholder voice was included as part of the process 

to develop recommendations for systems reform. 
431 

3. Structural changes have involved substantial reorganization to an umbrella department for 

multiple target populations with LTSS needs. 

4. Change in structure has given emphasis to streamlining eligibility determinations, improving 

access to information for consumers, and rebalancing funding between community and 

institutional settings. 

5. All five states have embraced principles of self-determination with varying degrees of 

choice and control. This has led to expanded opportunity for greater numbers of people to 

manage and direct support and service plans with the assistance of service 

brokers/coordinators and fiscal intermediaries. 

6. The states continue to expand their use of Medicaid waivers to broaden benefits and longterm services to subpopulations. 

7. All five states have encountered federal policy barriers that restrict their flexibility, increase 

their costs, and reduce capacity to meet individual needs at home or in the least restrictive 

settings. The most restrictive policy most frequently identified was the Medicaid 

institutional bias. 

8. There remains confusion in the use of language regarding long term care and long term 

supports and services. The traditional term has been “long-term care.” Long-term care is the 

more frequently used term to describe needs that include personal assistance with daily 

living activities through nursing facility services and home care. The confusion often is a 

result of the medically oriented funding base of the primary funding stream (Medicaid), 

which covers a range of LTC services, including institutional and community-based 

services. Medicaid community-based services include personal care, targeted case 

management, home health, transportation, habilitation, and home modifications. The 

language being used is not keeping up with the philosophy as the pace of change varies 

across states. 

9. All selected states have waiting lists for specific target subpopulations, even though states 

may limit services and operate the waiver on less than a statewide basis. 

10. Current budget challenges at the state level have compelled states to reexamine the balance 

between public and private responsibility for LTSS, evaluate approaches to target 
432 

individuals based on an assessment of level of need, and seek to identify strategies that 

encourage coverage of supports through some type of insurance coverage and other private 

sector resource sharing. 
433 

Appendix 4.A 

Stakeholders Interviewed for State Case Studies

• State Senator Linda Berglin, Chair, Minnesota Health and Human Services Budget 

Committee 

• Pat Casanova, Director of Waiver Services, Indiana Division of Disability, Aging, and 

Rehabilitation Services 

• Cathy Cochran, Olmstead Coordinator, Washington State Department of Social and 

Health Services 

• Bernard Dean, Senior Fiscal Analyst, Washington State House Appropriations 

Committee 

• Melissa Durr, Executive Director, Area Agency of Aging; Chair, Hoosiers for Options 

(represents the major long-term care stakeholders in Indiana) 

• Patrick Flood, Commissioner, Vermont Department of Aging and Independent Living 

• Marc Gold, Director, Texas Medicaid Long-Term Care Policy 

• Emily Hancock, Director of Long-Term Care, Indiana Office of Medicaid Policy and 

Planning 

• Brendan Hogan, Director of Long-Term Care Services, Office of Vermont Health Access 

• Adelaide Horn, Deputy Director, Texas Department of Aging and Disabilities 

• Katie Humphreys, Consultant, Health Evolutions; Chair, Indiana Governor’s 

Commission on Home- and Community-Based Services; Former Secretary, Family and 

Social Services Administration 

• Lois Johnson, Chair, Minnesota Independent Living Center 

• Steve Kappel, Associate Fiscal Analyst, Vermont Joint Fiscal Office of the Legislature 

• LaRhae Knatterud, Planning Director for Aging Initiatives, Minnesota Department of 

Human Services 
434 

• Debra Leese Baker, Executive Director, Vermont Independent Living Center 

• Kathy Leitch, Assistant Secretary, Aging and Disability Services Administration, 

Washington State Department of Social and Health Services 

• Steve Lerch, Senior Research Economist, Washington State Institute for Public Policy 

• Kathy Norris, Senior Fiscal and Program Analyst, Office of Fiscal Management Analysis, 

Indiana Legislative Services Agency 

• State Representative Pat O’Donnell, Vermont Appropriations Committee 

• Beth Quarles, Chair, Indiana Independent Living Center 

• State Senator Pat Thibaudeau, Ranking Member of the Washington State Health and 

Long-Term Care Committee 

• State Representative Peggy Welch, Vice Chair, Indiana Public Health Committee 

• Peter Youngbaer, Executive Director, Vermont Coalition on Disability Rights; former 

state legislator 
435 

Chapter 5 

Moving Forward: Local and Individual Strategies for 

21st Century Long-Term Services and Supports: Financing 

and Systems Reform for Americans with Disabilities 
436 
437 

Table of Contents 

Chapter 5 

Page 

Part I 

Introduction................................................................................................................................439 

Part II 

Conclusion ..................................................................................................................................486 
438 
439 

Part I 

Introduction 

At the individual, family, and community levels, the public and private sectors are working 

together to design new strategies to provide accessible, affordable long term services and 

supports to meet the needs of individuals with disabilities and people who are aging. Criteria 

used to identify promising practices included the documentation of (1) alternative financing 

approaches or relationships; (2) support of consumer choice and direction; (3) nontraditional 

housing and service delivery models that expand supply and access; (4) response to workforce 

quality and retention challenges; (5) support of family caregivers; (6) promotion and preservation 

of resources and assets; and (7) replication potential. 

Each of the highlighted initiatives builds on strengths of partnerships at the local level and offers 

the target audience expanded choices for community inclusion and participation. None offer 

comprehensive solutions to the challenges of meeting LTSS needs in the future. However, similar 

to the profiled state experiences, each highlighted strategy offers policymakers additional 

possibilities for inclusion in a more comprehensive systems approach to LTSS needs in the future. 

The following table provides an overview of the selected local or individual strategies that realign 

service and financial relationships. For each initiative, the table includes a brief description, what 

can be learned from the implementation of the strategy, and program contact information.
440 

Table 5.1. Selected Local and Individual Strategies Worker Cooperatives—Waushara County, Wisconsin Description What Can Be Learned Contacts The home care worker co-op helps about 82 individuals who are elderly and/or who have disabilities live independently in their own homes. The 74 worker-owner members now enjoy higher wages, workers compensation, health insurance, and profit sharing. Was a finalist this past year in the Harvard “Innovations in American Government” award. The U.S. Department of Agriculture is looking at replication with planning grants to projects in Hawaii, Washington, Colorado, and Nebraska. 

Response to workforce issues of low pay and poor retention. Different approach to organize service delivery. 

Kathleen McGwin, Executive DiCooperative Care PO Box 620 402 E. Main Street Wautoma, WI 54982 Phone: 920-787-1886 mcgwin@co-opcare.com

http://co-opcare.com/

Time Banks/Time Dollars—Washington, D.C. Description What Can Be Learned Contacts Time Banks are based on the concept of people using their time as money. Communities that are “cash-poor, time rich,” are able to trade their time providing each other with valuable services to benefit people with disabilities and families. The system is based on equality: one hour of help means one Time Dollar. 

Provides a way for individuals with time to give, but little income, to get the services they need. The elderly and individuals with disabilities are able to secure personal assistance, shopping, and other support services they may need. They are also able to offer services themselves on behalf of people with similar challenges. 

Time Dollar Institute 5500 39th Street, N.W. 

Washington, DC 20015 Phone: 202-686-5200 contact@timedollar.orghttp://www.timedollar.org
441 

Together We Can—New York City Description What Can Be Learned Contacts One of two approaches to affordable housing that offer nontraditional choices to individuals with disabilities with limited income. Together We Can offers affordable cooperative living with limited equity shares to keep prices well below market rate. 

Response to unmet critical need for affordable housing without being locked into specific service menu or provider. 

Jim Gray, Vice President Together We Can NCB Development Corporation 1725 Eye Street, N.W., Suite 600 Washington, DC 20006 Phone: 202-336-7642 jgray@ncbdc.orghttp://www.ncbdc.org/ (The link 

“Affordable Co-op Housing.”) 

No Place Like Home Communities—Robbinsdale, Minnesota Description What Can Be Learned Contacts One of two approaches to affordable housing that offers nontraditional choices to individuals with disabilities with limited income. No Place Like Home Communities offers homeownership and subsidized rental options within a rehabilitated multifamily development that also includes a range of supportive services. 

Response to unmet critical need for affordable housing without being locked into specific service menu or provider. 

Emily Fuerste, Executive DirectoNo Place Like Home Communiti4101A West Broadway Robbinsdale, MN 55422 Phone: 763-537-0170 info@nplhc.orghttp://www.nplhc.org

Self-directed Support Corporation—Baltimore, Maryland Description What Can Be Learned Contacts A Microboard designs supports for one person as an alternative to traditional long-term care providers. The Board members of a legal nonprofit corporation make a personal commitment to the individual with a disability to assist with person-centered planning. It is recognized by the state as the employer of record to provide or purchase support services for the individual. 

Different approach to service delivery and consumer direction. 

Jackie Golden Inclusion Research Institute 1010 Wisconsin Avenue, N.W. Suite 340 Washington, DC 20007 Phone: 202-338-7253 jlgolden@comcast.nethttp://www.inclusionresearch.org
442 

Pooled Trust—Bedford, New Hampshire Description What Can Be Learned Contacts Pooled Trusts provide an efficient and economical way to have trust funds administered for people with disabilities that will supplement the benefits offered by public programs. The assets placed in trust by parents or others are allocated to a separate subaccount. The assets from all subaccounts are pooled together to invest and manage as one larger amount. 

Financial service that offers responsible decision making and protection of assets to remain eligible for means-tested government benefit programs. 

Enhanced Life Options Group 15 Constitution Drive, Suite 169 Bedford, NH 03110 Phone: 603-472-2543 contact@elonh.orghttp://www.elonh.org/

Child Trust Fund—United Kingdom Description What Can Be Learned Contacts Through the Child Trust Fund, each child born in Great Britain from September 2002 is eligible to receive government funds for the purpose of opening an account that matures at age 18. Families below the poverty level will receive an additional allocation of funds double that of other children at birth. 

A similar strategy with restricted use of funds for children determined to have a certain level of need for future long-term supports and services might be evaluated as an alternative (supplemental or complementary financing strategy to current college 529 plans or individual retirement accounts). 

Child Trust Fund Office Waterview Park Mandarin Way Washington, NE38 8QG, United Phone: 08453-021470 childtrustfundoffice@ir.gsi.gov.uhttp://www.childtrustfund.gov.uk
443 

Worker Cooperatives—Waushara County, Wisconsin 

Background 

Many individuals who require long-term supports and services (LTSS) may only need assistance 

with such activities as dressing, bathing, feeding, shopping, meal preparation, and housework to 

allow them to live independently in their own homes. Research suggests that home care 

maintains the recipient’s dignity and independence. The supports and services that home care 

workers can provide to these individuals allow them to remain in their homes, providing them 

with a preferred alternative to a nursing home or other facilitated care setting. In addition to 

helping to maintain a person’s dignity and independence, in-home care is much more costeffective than institutional care.923 Research also clearly documents that the demand for home 

care will only increase as the population ages, especially as the baby boom generation nears 

retirement. By 2030, one in five Americans will be over the age of 65. In many rural areas, the 

elderly already have reached this critical mass. Home care providers have traditionally been a 

key factor in helping people continue living in their own homes and not going into a nursing 

home. While this in-home, direct care services model has helped save counties and states money, 

it has also stretched limited financial resources. 

Despite the growing demand and cost-effectiveness of in-home care, there is a serious shortage 

of home care workers. Low wages and lack of benefits provide a disincentive for people to enter 

into this profession. Turnover within the industry is very high—between 40 and 60 percent 

annually—and in a tight labor market, individuals can easily work in less stressful retail or 

service industries for similar wages. 

Like many counties in the state of Wisconsin, Waushara County has struggled to find enough 

appropriate direct care providers for its elderly and disabled populations. Waushara is one of the 

state’s poorer counties and it is also rural, which forces home care workers to drive significant 

distances between clients. The county’s economic status, low wages for home care workers, lack 

of benefits, and rural nature made finding and keeping direct care providers a challenge.924, 925

Prior to the creation of Cooperative Care, Waushara County Department of Human Services 

(DHS) developed the In-Home Providers Program to serve the rural elderly and individuals with 
444 

disabilities. For more than 20 years, DHS paired homemaker and personal care providers with 

low-income adults with disabilities and frail elderly residents who qualified for state-funded 

programs or Medicare. In this arrangement, care providers were not county employees, but rather 

considered domestic workers hired by the service recipient and paid by a third-party fiscal 

intermediary; that is, the client was the actual employer, but the county was the fiscal 

intermediary. The county was charged with handling the payroll and all other financial details, as 

well as scheduling worker home visits, providing employee background checks, and helping 

clients find in-home service providers. 

This arrangement stretched limited public resources and left care providers without workers 

compensation and benefits. Compounding the situation, state and federal funding did not keep 

pace with cost-of-living expenses, resulting in lower-than-average wages. In Waushara County, 

this posed a potential liability because another rural Wisconsin county with a similar 

arrangement had recently been sued to cover medical costs incurred by a caregiver’s injury on 

the job. Despite the existence of a third-party fiscal intermediary, the Internal Revenue Service 

(IRS) has ruled that counties in this arrangement are the true employers and therefore liable for 

workers compensation and payroll reporting. 

Lu Rowley, director of Waushara County’s DHS, recognized that the delivery of home care 

services, which allowed the low-income elderly and individuals with disabilities to live 

independently in their own homes, came at the expense of their low-income caregivers. For 

years, care providers had asked the county for higher wages and benefits, but tight budgets had 

prevented the director from accommodating their requests. The DHS director heard about a coop approach to addressing the challenges faced by home care workers in south Bronx, New 

York—Cooperative Home Care Associates (CHCA)—that pioneered the first home care worker 

cooperative in the United States in 1985, and decided to apply for a state grant to allow 

Waushara County to explore utilizing the worker co-op model in a rural setting. The DHS 

director felt that Waushara County could form a similar worker-owned co-op. The county could 

sign a contract with the co-op to continue providing services to its low-income elderly and 

disabled residents. As a private company, the co-op could also serve counties beyond Waushara 
445 

and care for private clients. By combining public and private revenue sources, it might be 

possible for a worker-owned co-op to offer much-needed benefits and perhaps higher wages. 

Program Description 

Founded in 2001, Cooperative Care is a worker-owned cooperative in rural Waushara County. It 

provides homemaker and certified nursing assistant care to the elderly and individuals with 

disabilities in their homes. Each worker-member owns a share of the cooperative and has one vote. 

Workers share the cooperative’s profits and sit on its board of directors, where they help direct 

company policy and strategic planning. Cooperative Care is the first such co-op in the Midwest 

and came together as a result of a unique collaboration among the federal, state, county, and 

private sectors. By sharing a vision and working together, social workers, administrators, and 

caregivers joined together to build an organization that has the potential to serve as a model for 

state counties and direct care workers.926, 927, 928 Cooperative Care started with an experienced 

workforce in desperate need of higher wages and basic benefits. Most of the worker-owner 

members are lower-income white women from a rural county with limited employment 

opportunities. All are ideologically committed to home care and have chosen to work in the field 

although they would earn slightly higher wages in institutional settings. A fair percentage of the 

providers are employed to care for their family members who would otherwise be institutionalized. 

Cooperative Care offers the care providers comprising its membership a kind of organizational 

ownership that they had never enjoyed nor probably even imagined. It also provides them with 

member benefits that are not often found in this field of work (the lack of these benefits is one of 

the key reasons why there is such high turnover). Membership in Cooperative Care provides 

worker-owners with profit sharing, with each member’s share based on the number of hours 

worked during the past year. Workers receive differential pay for unscheduled work and are paid 

extra for filling in when a colleague misses a scheduled shift. Workers are reimbursed for time 

spent traveling between clients, which is especially important given the rural nature of the 

county. Workers are guaranteed a minimum of one hour’s pay for any assignments that last less 

than an hour. Benefits also include nine paid holidays a year, overtime pay, paid vacation time, 

and subsidized health insurance for those who work at least 30 hours a week, as well as a flexible 

benefit plan, liability insurance, and worker’s compensation. 
446 

For its home care clients, Cooperative Care provides a stable, committed, and professional 

workforce. For the county, it takes the scheduling and financial management of home care 

workers out of the county’s hands, freeing up case managers to better focus on providing the best 

social services possible. 

Core Program Elements 

Staffing 

Cooperative Care has an executive director and a five-member worker-owner board of directors, 

who are voted into office by caregivers. Qualified worker-owner applicants must be certified 

home health aides or nursing assistants, and applicants must have state certification or be 

prepared to obtain it on their own. If membership is granted, the new worker-owner pays a onetime $50 membership fee for a share in the co-op. 

Initially, Cooperative Care was able to tap into an existing core of providers, which required no 

recruiting efforts. It expanded on a 20-year-old program and thus was able to build upon strong 

support from both the county and the community. Cooperative Care utilized partnerships and 

collaborations on the county, state, and federal levels. On the county level, it utilized the 

expertise of the director of DHS, a nurse, social workers, and the county board. On the state 

level, Cooperative Care applied for grants and used the money to hire a local organizer and tap 

into resources to assist in research and support. It utilized the services of a local nonprofit to 

review the business plan and offer advice on the financial aspects of starting up and running a 

co-op. At the federal level, the U.S. Department of Agriculture (USDA) provided co-op technical 

assistance, co-op services advice, and a 2004 grant/loan fund to explore other co-ops. 

Cooperative Care used representatives from other co-ops to help set up the accounting system 

and get advice on dealing with conflict resolution. Finally, the University of Wisconsin Center 

for Cooperatives (UWCC) provided board members with training videos, conflict resolution, 

legal direction, and research. 

Funding and Expenditures 

Waushara County received a Community Options Program (COP) Community Links grant from 

the state of Wisconsin to explore the feasibility of forming a cooperative. COP is a state-funded 
447 

program to provide assessments, case plans, and community services as an alternative to nursing 

home placements for all disability groups as well as the frail elderly. A $125,000 loan from the 

state bank provided the start-up money, 20 percent of which was spent on capital expenditures. 

The rest covered payroll until the cooperative achieved adequate cash flow. The cooperative is 

now funded entirely by client payments (it has a contract with the county) and its $50 

membership fees. 

Technical Assistance 

To help facilitate the co-op development process, the director of Waushara County’s DHS 

brought in Margaret Bau, an expert on co-ops. In her job with the USDA Rural Development in 

Stevens Point, Wisconsin, Bau had advised and helped develop numerous rural cooperatives. She 

knew what was involved, how to develop a business plan, and how to structure the governing 

board. The organized plan that Bau and Dianne Harrington, a social worker and the other project 

coordinator, used to build Cooperative Care mirrored the 10-step model for building a co-op 

developed by the USDA.929, 930, 931 The following are the 10 steps: 

1. Hold an exploratory meeting with others who have a similar interest and determine whether 

you have common needs and desire to address those needs as a group. 

2. Select a steering committee to guide the group through the formation process. 

3. Conduct a survey of potential members. 

4. Analyze markets for products, supplies, and services. 

5. Prepare a business plan. 

6. Incorporate the business. 

7. Adopt bylaws and select a board of directors. 

8. Find investment funds—including member investment needed to carry out the business plan. 

9. Hire management and employees, and acquire facilities and equipment. 

10. Begin operations. 
448 

Lessons Learned and Accomplishments 

The cooperative started with 61 caregivers in June 2001; as of December 2004, it had 74 members, 

with about 63 active. Of this group, all but two are certified nursing assistants. Two members are 

homemaker aides. The co-op has 82 active clients. Financially, Cooperative Care exceeded its 

fiscal projections. Year-end profits for 2001 exceeded $41,000. After prepaying part of the 

business loan and setting aside funds for capital reserves, cash patronage refunds were distributed 

at the first annual meeting. Checks averaged $440 but were as high as $1,000, based on the number 

of hours worked. At the end of the co-op’s second year of operation, net profits totaled more than 

$65,000, which was distributed to its members as retained equity and as cash payout. 

Every year since its inception, worker-owners have received increases equivalent to hourly raises 

per hour worked. For example, in 2002 (for the year 2001), worker-owners received an increase of

$1.39 per hour worked (14 percent for workers who earned $9.75 and 18 percent for workers who 

earned $7.75/hour). In 2004 (for the year 2003), worker-owners received an increase of $0.58 per 

hour worked (6 percent for workers who earned $9.75/hour and 7.4 percent for workers who 

earned $7.75/hour). Harvard’s John F. Kennedy School of Government named Waushara County 

and Cooperative Care as one of 99 semifinalists (out of a pool of 800 applicants) in the prestigious 

2002 Innovations in American Government Awards. Wisconsin Rural Partners named Cooperative 

Care as Wisconsin’s Top Rural Development Initiative for 2003. 

In 2002, a survey was developed to assess the impact of the formation of the cooperative on the 

satisfaction worker-members feel with their jobs. The survey was administered in the fall of 

2002. Forty-three members (69 percent) completed surveys. Analysis of survey responses 

indicated that Cooperative Care members were generally and uniformly satisfied with most 

aspects of their jobs. The formation of the cooperative in June 2001 seems to have had an overall 

positive impact on the job satisfaction of current members. That impact is both tangible 

(increased wages and access to benefits) and intangible (an increased feeling of investment in the 

organization’s management and well-being and a greater sense of security and stability).932 In an 

effort to gauge consumer satisfaction with Cooperative Care’s providers, the co-op conducted a 

consumer survey in the summer of 2002.933 The survey asked consumers whether they were 

satisfied with eight different aspects of the care they received from Cooperative Care members. 
449 

Forty people responded. The results indicated that consumer satisfaction with services performed 

during the co-op’s first year of operation was extremely high—an average of 96 percent of the 

respondents reported they were satisfied with each of the eight aspects of care. This suggests 

great satisfaction with all facets of provider service. A ninth question asked whether the 

consumer was satisfied, overall, with the services receive. Ninety-seven percent of respondents 

answered yes. 

The development and building of the Cooperative Care workers co-op in Waushara County has 

been able to offer advantages for its workers, its consumers, and for the county of Waushara. 

Worker-owners experience personal empowerment and increased professional self-esteem; they 

receive professional benefits, stability, better pay, and job satisfaction; and they have a voice in 

their business and enjoy profit participation. Because of the low turnover, consumers are receiving 

consistent service from satisfied and conscientious workers. Cooperative Care offers Waushara 

County a stable and dependable provider source. It removes the operational burden from the 

county, as well as the potential of IRS liability. Finally, the co-op helps the families of providers. 

Time Banks/Time Dollars—Washington, D.C. 

Background 

Time Banks are based on the concept of people using their time as money. People build credits 

for time they put into voluntary activities in providing health or social care and other worthwhile 

work in their communities. Communities that are “cash-poor, time rich” are able to trade their 

time, providing each other with valuable services such as assistance for the elderly and 

individuals with disabilities, and family support. The Time Bank/Time Dollar idea was 

developed by Edgar Cahn in 1980 when, at the age of 46, he suffered a massive heart attack. 

Recuperating in the hospital and “feeling useless,” he dreamed up Time Dollars as a new 

currency to provide a solution to massive cuts in government spending on social welfare. Seven 

years later, at the London School of Economics, Cahn developed his theoretical explanation for 

why the currency should work. He came back to the United States and started putting service 

credits (not yet called Time Dollars) into operation. Cahn described the idea as working like a 

blood bank or babysitting club: 
450 

Help a neighbor and then, when you need it, a neighbor—most likely a different 

one—will help you. The system is based on equality: One hour of help means one 

Time Dollar, whether the task is grocery shopping or making out a tax return. 

Credits are kept in individual accounts in a “bank” on a personal computer. 

Credits and debits are tallied regularly. Some banks provide monthly balance 

statements, recording the flow of good deeds.934, 935

The result of this conceptualization represents a parallel economy using time as the medium of 

exchange and, by doing so, making connections between people and rebuilding a sense of trust. 

Time Banks create a reciprocal relationship between people and institutions, as well as between 

people and people, which ordinary volunteering finds harder to achieve. It allows almost 

anybody in society, including the elderly and individuals with disabilities, to give something 

back. In the Time Bank concept, the focus shifts from people’s problems to their abilities: Time 

Banks focus on people’s assets, what they can do. Time Dollars and Time Banking can serve as a 

tool for social change. 

Each local Time Bank has a broker who facilitates time exchanges and keeps track of members’ 

time accounts. This method is of particular benefit to individuals with time to give but little 

income to get the services they need. For the elderly and individuals with disabilities, they are 

able to secure caring, shopping, sitting, and other support services they may need. They are also 

able to offer services themselves, which may be telephone or e-mail based or include other 

supportive/advocacy services on behalf of people with similar challenges. Time Banks are 

currently in operation worldwide. 

Program Description 

In the United States, Time Banks use a currency called Time Dollars. Time Dollars represent a 

special, tax-exempt form of money that anyone can earn by using time, energy, skills, and talents 

to help others. One hour of service provided to another human being or to the community earns 

one Time Dollar. A Time Dollar Exchange is formed whenever Time Dollars are earned and spent. 

Anyone can earn Time Dollars through membership in a Time Dollar Exchange. Time Dollar 

Exchanges use Time Dollars in two main ways. One way is through generalized helping and the 

other is through “specialized” activities that are targeted to a specific outcome. Time Dollar 
451 

Exchanges offer a way to provide social networks that support the elderly and individuals with 

disabilities, making it possible for them to live independently in their own homes.936, 937, 938, 939

Time Dollars represent an alternative currency that can be used to recognize, validate, and 

reward the work of people seeking to build community. Because everyone earns Time Dollars at 

the same rate, regardless of what they are able to contribute, Time Dollars measure and reward 

the efforts people put in and send the message that every individual counts in ways that money 

simply cannot. At the same time, Time Dollars provide purchasing power to individuals whose 

contributions are often unrecognized in the market economy. For example, they are used to 

access food, clothing, computers, legal services, health care services, housing, and rides to the 

store. Members of Time Dollar organizations help each other in ways that family and neighbors 

have traditionally done. 

Co-Production as an idea was also developed by Edgar Cahn in 1993, in which he worked out a 

theory to explain why and how Time Dollars could so profoundly change the dynamics of social 

welfare programs. The concept behind Co-Production is that all individuals, no matter how frail, 

fragile, damaged, even delinquent, can feel valued for contributions that they are able to make in 

their family. neighborhood, or community. Co-Production contains a different understanding of 

the role of clients and beneficiaries in that it regards all people as assets and as co-producers of 

outcomes. This nonmonetary, unmeasured sector of the economy also includes housework and 

efforts that go into caring for relatives.940, 941, 942

Cahn first used the term “Co-Production” to explain his particular approach to training lawyers. 

Students at the University of the District of Columbia School of Law are trained on the job by 

providing legal support for people and communities who need it but can’t normally afford it—

and this is where Co-Production comes in, because the students do not provide their services for 

free. They charge out their time in Time Dollars. The recipients of legal advice pay their bills by 

earning Time Dollars themselves, either by passing on what they have learned to somebody else 

or by helping out in the community in some other way. 

Co-Production includes four core values: assets, redefining work, reciprocity, and social capital. 

Assets as a core value recognize that the real wealth of a society is its people. Every human being 
452 

can be a builder and a contributor. Redefining work as a core value recognizes that work must be 

redefined to include whatever it takes to rear healthy children, preserve families, make 

neighborhoods safe and vibrant, care for the frail and the vulnerable, attack injustice, and make 

democracy work. Reciprocity as a core value recognizes that the impetus to give back is universal. 

Wherever possible, we must replace all forms of one-way acts of helping with two-way 

transactions, so that “You need me” becomes “We need each other.” Finally, human beings require 

a social infrastructure as essential as roads, bridges, and utility lines. Social networks require 

ongoing investment of social capital generated by trust, reciprocity, and civic engagement. 

When Time Dollars are earned and spent by individuals who are elderly or individuals with 

disabilities—who find they have no one to turn to except professional caregivers for the support 

and help they need—then every one of the four core values of Co-Production comes into play. 

All those who earn Time Dollars are viewed as assets—their contributions are redefined as 

work—the Time Dollar earned sets up an obligation on the recipient who paid out the Time 

Dollar to contribute, in turn, to someone else; and, in the process, new social networks of mutual 

help and mutual trust are formed. In return for the help they receive from professionals, clients 

use their own strengths to contribute to the organization’s mission, preferably by using their 

talents and skills to help others. Measuring and rewarding those contributions—simply by 

recognizing the effort, commitment, and worth—lifts the contribution to the status of work and, 

in doing so, can transform a top-down relationship between professionals and clients into an 

equal, reciprocal one. 

In communities across the country, Time Dollars as a tool and Co-Production as an approach 

have enabled the people for whom the market economy has little or no use to contribute in ways 

that go far beyond volunteering. 

Core Program Elements 

Technical Assistance 

The role of the Time Dollar USA Institute is to promote Time Dollars and Co-Production and to 

nurture and nourish the network of independent Time Dollar initiatives established by 

community groups, social service agencies, local governments, community action programs, and 
453 

so on.943, 944 In this role, the institute facilitates links and exchanges of knowledge between new 

and well-established Time Dollar initiatives worldwide. It offers publications and provides howto and learning materials, such as its Web site, workshops, and training. The institute makes 

available speakers for forums, conventions, and other public events. It developed Timekeeper 

software designed for use by Time Dollar Exchanges to keep accounts for Time Dollar members 

and to match providers to recipients. The software is free and downloadable from the Web site. 

Lessons Learned and Accomplishments 

Experience using Time Dollars and Co-Production945, 946 has shown that these concepts can save 

money. Research at Member to Member in Brooklyn, New York (see example below), has 

shown reductions in the costs of caring for customers under the social health maintenance 

organization (HMO) Elderplan. Local networks and support allow members to care for one 

another, resulting in the ability to remain in their own homes and out of nursing homes longer. 

Similar efficiency has been shown in a range of other Co-Production programs. Governmentfunded research in the United Kingdom has shown that rewarding individuals with Time Dollars 

attracts community involvement from some of the hardest-to-reach sections of the population, 

including people with disabilities. Programs that successfully incorporate Co-Production have 

been praised by participants and foundations alike for their ability to increase a sense of local 

trust and safety and cross racial divides. Research has shown over and over again that people 

who are active in their community are healthier, and Co-Production promotes active engagement 

in families, neighborhoods, and communities. An additional program benefit has been the 

sustained involvement over time of participants. Both in the United Kingdom and the United 

States, research on programs that use Time Dollars has shown that involvement grows the longer 

participants have been involved. At the New England Time Dollar Exchange Network (NETEN), 

member engagement (number of hours put in by participants) leaped by 150 percent in the fifth 

year of membership. (See more information about the New England Network below.) 

Example of Time Dollars Building Co-Production: Elderplan, Brooklyn, New York 

Elderplan, a social HMO in New York serving the elderly population of Brooklyn, Queens, and 

Staten Island, was one of the first organizations in the world to use Time Dollars as a method of 

delivering Co-Production in its Member to Member program. Since its inception in 1987, it has 
454 

created long-term relationships that function as a supportive, extended family for its members, 

many of whom would otherwise suffer from isolation. The HMO’s elderly clients are given the 

option of signing up for the Member to Member Time Dollar Exchange. Enrollment in Member 

to Member means that clients can receive help from other members who earn Time Dollars for 

providing the help. By encouraging members to support other members, the HMO found that 

health benefits extended not just to those being supported, but also to those who were doing the 

helping. The result has been a marked increase in health, a decrease in the need for nursing home 

institutionalization, and a reduction in the social isolation and depression that is known to have 

serious health consequences.947, 948, 949, 950

Beyond the large-scale visibility and financial advantages, there are individual savings associated 

with Member to Member as well. Each day that a stay in the hospital can be shortened because 

of the Time Dollar program saves Elderplan $1,000. One avoided nursing home stay saves 

$35,000. The support, encouragement, and assistance that Member to Member participants 

provide to each other also reduces the costs incurred when medication isn’t taken regularly or in 

the right dose, and that same support can provide the early intervention needed to reduce costs 

and risk when chronic conditions worsen. Since Member to Member’s inception, Elderplan has 

come to rely on the program’s built-in monitoring system to manage those costs (as well as 

others) effectively. Recent research confirms that only 1 to 2 percent of customers leave 

Elderplan every year when they are involved in Member to Member, whereas the voluntary 

disenrollment rates for Elderplan’s competitors and other HMOs is normally between 10 and 15 

percent. Research also found that interventions regarding medications and hospitalization were 

significantly lower for Time Dollar participants than for other members of Elderplan. 

Contact information: 

Elderplan Member to Member 

745 64th Street 

Brooklyn, NY 11220 

Phone: 718-921-7909 

Email: customerservice@elderplan.org

www.elderplan.org/programs/member_to_member.shtml
455 

Example of a Time Dollar Network: New England Time Dollar Exchange Network 

It was in late 1995 that Richard Rockefeller, the founder of NETEN (formally known as Maine 

Time Dollar Network), first heard Edgar Cahn speak about Time Dollars. Up to that point, most 

of Rockefeller’s philanthropy dollars had supported environmental issues. However, after 

hearing Cahn speak, he realized that we cannot expect people to take care of our environment if 

we are not first taking care of each other. Rockefeller felt compelled to bring the concept of Time 

Dollars to Maine and began to share his vision in 1996. In 1997, Maine hosted an International 

Time Dollar Congress in cooperation with Cahn, bringing together 40 Time Dollar programs 

from all over the world.951, 952 

In 1998, the New England Time Dollars Exchange Network set its strategic direction to create 

a model Time Dollar exchange on Portland’s Munjoy Hill and to replicate that model 

throughout Maine. Between 1998 and 2003, NETEN became a leader in the International Time 

Dollar movement. NETEN created a successful Time Dollar exchange and began to replicate 

the model in several New England communities: Portland, Brunswick, Rockland, Lewiston, 

Mount Desert Island, and Millinocket, Maine; Manchester and North Conway, New 

Hampshire; and Lynn, Massachusetts. Its membership grew from 90 individuals in 1998, who 

exchanged 1,540 hours of services, to a statewide membership of just under 1,000, who 

exchanged 25,000 hours of services in 2003. During these five years, the members exchanged 

well over 50,000 hours of services, a market economy value of over $800,000 (using United 

Way’s average volunteer hourly rate of $16.07). NETEN hosted and mentored Time Dollar 

exchange groups in the United States from Massachusetts, New Hampshire, Oklahoma, 

Florida, California, Colorado, Indiana, and Pennsylvania; and around the world from England, 

Scotland, Singapore, Canada, Japan, and France. 

NETEN’s current strategic direction is responding to and capitalizing on the growing interest in the 

Time Dollar concept. The plan extends NETENs reach from Maine to all of New England and 

addresses issues of capacity, sustainability, governance, and technology. The goals through 2008 

include reframing its geographic scope to include all of New England; increasing the number of 

exchanges from 14 to 60; increasing the number of members participating in exchanges from 875 

to 15,000; and increasing the number of hours exchanged from 18,000 to 300,000. 
456 

Contact information: 

Auta Main, Director 

New England Time Banks 

144 Cumberland Avenue 

Portland, ME 04101 

Phone: 207-874-9868 

Email: infomtdn@maine.rr.com 

www.mtdn.org

A study conducted in 2004953 summarizes information collected through 30-minute, face-to-face 

interviews with 12 local Time Banks at the Time Banks International Conference. The purpose 

of the interviews was to begin to gather qualitative data on what is happening at the local level so 

that best practices and lessons learned can be shared across the global network. Questions 

focused on organizational structure, partnerships, and sources of funds in order to look at how 

local Time Banks can make more efficient use of resources and enhance sustainability. 

In terms of the sources of funds, members of local Time Banks in the United States all rely on 

federal, state, and city/county dollars. Federal sources include Americorps/VISTA, the 

Department of Housing and Urban Development (HUD), National Emergency Grant, and the 

Substance Abuse and Mental Health Services Administration. State sources included the 

Departments of Education, Mental Health, and Social Services; and city/county sources included 

public schools and county government. With the exception of the Americorps/VISTA program, 

government dollars typically go to a Time Bank that operates as part of a larger agency. With the 

exception of some of the Time Banks that are part of the network in New England, the local 

Time Banks are likely to have difficulty pursing a comprehensive family/individual donor 

strategy without additional support to develop the capacity to do so. All of the Time Banks 

interviewed have less than 2.75 full-time enrollees (FTEs), with most relying on the equivalent 

of one or less than one paid staff member. Most do not currently have the administrative systems, 

staffing, or specialized skills to build and manage a database, develop materials, and conduct the 

necessary relationship-building and follow-up. 
457 

Four out of the 10 local U.S. Time Banks interviewed report doing mini-fundraisers and hosting 

special events to raise money. The events are important for community building as members 

typically earn Time Dollars for organizing and staffing the fundraiser. Other costs are covered 

through in-kind member contributions and local sponsors. Agency-based Time Banks rely on 

their parent organization for overhead and other resources (e.g., event space, administrative 

support), which considerably reduces their need to raise cash for operating expenses other than 

personnel. Well-established agencies typically have visibility in the community, as well as 

partnerships and funding relationships that can be further developed to include the Time Bank. 

The challenge to being agency-based is often the need for a cultural shift—in terms of how staff 

and clients interact and relate to each other—and, as a result, the Time Banks model can be 

difficult to implement effectively. None of the U.S. Time Banks interviewed reported receiving 

funds from private foundations. This may reflect an organization’s stage of development, 

geographic area, or capacity for foundation research, relationship-building, and grant writing. 

Only one organization mentioned an effort to earn revenue by selling cookbooks with local and 

outdoor cooking recipes. This initiative is in the early stages and has not been tested. 

In terms of the partnerships, members of local Time Banks in the United States report that they 

have been able to marshal resources and improve the variety of services offered to members 

through creative partnerships. Partnerships are a key component of sustainability, in terms of 

recruiting and retaining members, gaining visibility in the community to attract funders, and 

reducing operating expenses through exchanges. Partners will typically offer resources in kind; 

earn Time Dollars, and donate them back to the Time Bank; earn Time Dollars and spend them 

“hiring” members to cover staffing needs; or allow members to purchase services in Time 

Dollars that normally have a cash fee. In the latter case, members pay cash for any products that 

are needed to complete the service (e.g., food for catering, bike parts for a tune-up). Based on the 

interviews, the following types of partners are emerging: 

• large organizations that rely on large numbers of volunteers, require minimal training, 

and have a standardized orientation process in place—examples include hospitals or local 

chapters of a national nonprofit (e.g., Red Cross); 
458 

• small businesses, nonprofits, or local government offices with temporary staffing or 

volunteer needs that require minimal training; and 

• small businesses and nonprofit organizations that occasionally need skilled labor that is 

outside their area of expertise (e.g., repairs, landscaping). 

In terms of products, local Time Banks in the United States report that members are exchanging 

Time Dollars for products, mainly by earning a specified amount of Time Dollars and redeeming 

them for donated items (e.g., computers). The obvious challenge with product Time Dollar 

exchanges is pricing. It is difficult to attach a time value to a product, and the local Time Banks 

are reluctant to take on the responsibility of setting prices. Exceptions that are occurring at some 

of the New England Time Banks include products that are exchanged in an aggregate amount. 

For example, members of a local New England Time Bank—Katahdin—may exchange one 

Time Dollar for one meal from the daily menu at the local hospital’s cafeteria. Members set their 

own prices, negotiating (independent of the Time Bank) what a particular product is worth in 

Time Dollars. For example, some members of a local Time Bank—Portland—have offered items 

for sale to other members in Time Dollars or in Time Dollars plus some amount of cash. 

Time Bank Spotlight: Portland East End (Portland, Maine) 

In addition to the summary of findings from the interviews with the local Time Banks listed 

above, the specific outcomes of the interview with the Portland East End Time Bank are 

highlighted below. The Portland East End Time Bank operates independently as a member of the 

New England Time Banks Network. It provides a good illustration of the strategies and resources 

utilized to run a successful local Time Bank. 
459 

Table 5.2. The Portland East End Time Bank 

Start date (month/year) Pilot in 1996; up and running in 1998 

Membership Open 

Number of members (as of 

August 2004) 

600+ 

Total FTEs 2.75 

Americorps/VISTA 1 (ABLE = program funded by AARP; 2 seniors volunteer each work 20 

hours/week) 

Sources of funds Individual donors (80–90 percent); AARP; event sponsorship; local churches; 

and government (federal) 

Member/community activities Monthly potlucks with themes; Day of Sharing (community service); and 

Holiday Bazaar. Fundraisers include cookie and lemonade sales; Tastes 

Around the World; and gift wrapping (paper is provided by the Portland 

Exchange and Time Dollar members do the wrapping for customers shopping 

at local businesses). 

Examples of exchanges with local organizations that help the Time Bank to reduce its operating expenses 

Advertising The local newspaper accepts 1 Time Dollar to run a small ad to promote 

events sponsored by the Time Bank. The newspaper spends its Time Dollars 

to hire members when extra clerical help is needed. 

Examples of products and services available to members through partnerships with local businesses, 

schools, health care providers, and other nonprofits. 

Theater tickets 

(Access to the Arts) 

The theater earns Time Dollars by donating tickets that members can then 

buy with Time Dollars. The theater relies on members to help with ushering, 

mailings, filing, and hanging posters. 

Adult education classes 

(Portland Adult Education) 

Members can take classes using Time Dollars. In exchange, members provide 

tutoring to other students. 

Physical and mental health 

services 

(True North) 

The practice automatically receives 4 Time Dollars each month from the 

Time Bank. Members pay 2 Time Dollars per session for services. Members 

get a 10 percent discount on supplies. 

Aikido classes Members can take classes for Time Dollars. In exchange, the business relies 

on members for Web site and brochure design. 

Acupuncture On a limited basis, members can pay for services with Time Dollars (the 

provider limits the number of clients per month). In exchange, the business 

relies on members to provide catering services for open house events. 

Advertising Members can post ads on the Time Banks Web site in exchange for 1 Time 

Dollar. A staff member scans all ads before posting. 

Examples of individual member to member product exchanges 

Car 

Used furniture 

Members post items for sale and negotiate the price in Time Dollars with 

each other. 

Homemade gifts At the annual Holiday Bazaar, members bring homemade goods that they 

buy/sell for Time Dollars. 
460 

Affordable Housing 

Background 

Throughout the United States, advances in research care, corresponding increases in frailty and 

cognitive impairments,954 and the Olmstead decision are forcing states to reconfigure their LTSS 

systems for elders and individuals. According to HUD’s latest Worst Case Housing Needs 

Report, people with disabilities make up at least 25 percent955 (estimated by HUD as 1.1 million 

to 1.4 million people) of the households with worst case housing needs in the United States.956 In 

the past 30 years, states have continued to evolve their approach to housing and related services 

for people with disabilities. In general, states have moved away from an institutional model of 

segregated facilities that ties together housing and service needs to a variety of smaller 

community-based living options. To varying degrees, these community living alternatives are 

intended to provide more choices and independence for the targeted populations. With the 

authorization by Congress in 1981 of the Medicaid home- and community-based services 

(HCBS) waiver, there have been new options for states to consider in supporting community 

integration. However, despite these increases, Medicaid payment policy does not cover housing 

or meal costs in a home- or community-based setting, although Medicaid does factor these costs 

into payments for nursing homes. In recent years, people with disabilities and individuals who 

are aging have been consistent in articulating essential principles to frame housing choices and 

related services to meet their needs. People with disabilities have pushed to separate housing 

choices that are affordable and accessible from the provision of LTSS. 

According to a 2004 report by NCD,957 individuals with disabilities identified that their 

satisfaction with their housing situation is the primary factor for either remaining in or moving 

from their communities. Satisfaction—according to this target population—depends on two key 

factors: affordability and accessibility. Affordable and sustainable homeownership is a virtue that 

has been embraced by housing advocates and by the Bush Administration. Widely cited 

dividends resulting from homeownership include both individual and societal benefits. While a 

number of programs have extended ownership to people at increasingly lower income levels, 

roadblocks continue to exist, such as rapidly escalating housing costs—both rental and 

ownership, particularly in urban environments; low credit ratings among those aspiring to 
461 

homeownership; predatory lending and the not-surprising default rate; unanticipated 

postpurchase expenses; escalating monthly expenses; and the absence of a network to support 

new homeowners as they confront these challenges.958 Compounding the homeownership 

challenges faced by individuals with low incomes is that, increasingly, affordable rental housing 

is being lost as HUD-insured mortgages and low-income housing tax credits expire, which 

threatens significant displacement and loss of affordable housing units as these properties face 

pressure for conversion to market-rate housing stock. 

As the supply of affordable units grows increasingly tight, new sources of affordable housing 

must be found: affordable homeownership opportunities that combine support services as an 

option for individuals with disabilities and the elderly.959 To significantly increase 

homeownership rates of lower-income families in light of the rapidly escalating cost of housing, 

other alternative mechanisms need to be considered, such as multifamily structures with 

condominium and cooperative ownership. Multifamily homeownership, whether it is organized 

as a condominium or a cooperative, is often an entryway to homeownership, providing 

ownership at a substantially lower cost than single-family homes. 

A housing cooperative is formed when people join together to own or control the building in 

which they live. They form a corporation and pay a monthly amount (maintenance fee) that 

covers operating expenses. Residents buy shares or a membership in the co-op, but the 

cooperative owns the building, land, and any common areas. Members pay a fixed amount each 

month that covers the mortgage, property taxes, insurance, administrative expenses, 

maintenance, and reserves. Costs are typically less than either rental or single-family housing in 

the same neighborhood. Cooperative housing represents a viable homeownership alternative that 

provides affordable, quality living space and a number of social benefits. Particularly in highcost markets, cooperative housing is an effective means for households with little savings and 

limited income to achieve homeownership. Cooperatives provide residents with the stability and 

opportunity to keep more of their income and to improve their lives.960, 961, 962

Cooperative housing offers an affordable homeownership alternative that can lower, or at least 

stabilize, housing costs, especially if it is a Limited Equity Cooperative (LEC). A LEC is created 
462 

when restrictions are placed on the resale of cooperative interests to make them affordable to 

multiple generations of purchasers. Unlike properties made affordable by programs such as the 

low-income housing tax credit (LIHTC) or Mitchell-Lama, which expire after a set period of time, 

LECs remain as sources of affordable homeownership in perpetuity. Like all kinds of affordable 

housing, subsidies are needed to make most affordable LEC projects feasible. Subsidies invested in 

cooperative housing result in homeownership that is affordable to the tenants in residence at the 

time of conversion. With the benefit of subsidy, cooperatives can be made available to households 

of very low income. For example, a family earning less than $20,000 per year, and with as little as 

$2,000 in savings, can qualify for ownership in a cooperative.963

Because cooperatives are owned and managed by their residents, they are uniquely suited to 

offer alternatives to forcing seniors and individuals with disabilities into institutions. 

Homeownership in a group setting of people with similar needs and lifestyles gives those who 

may not be capable of living on their own many viable opportunities for independence and 

autonomy with mutual support. Co-ops can leverage the community to offer a customized level 

of care that suits the needs of their members. The residents decide what services are appropriate 

and then provide them on a volunteer basis or pay for them together, often getting services like 

personal aides and transportation at greatly reduced rates. Those who would normally find 

themselves in group homes or other institutional settings can achieve independence, along with a 

sense of community and responsibility, in a cooperative.964 

Across the nation, the reconfigurations relative to accessible and affordable housing initiatives 

that are under way at the state level, in general, include two primary efforts: (1) developing more 

state and local programs that help keep people who are disabled, frail, or cognitively impaired at 

home; and (2) community-based residential alternatives for people who are elderly and disabled 

who can no longer manage at home but do not need the 24-hour subacute care/skilled nursing 

environment provided in nursing homes. To make these institutional alternatives available to 

people with low-incomes, states use a variety of state and Medicaid-funded approaches to deliver 

home-based and residential services. 
463 

Program Description 

This section examines two approaches to affordable housing that offer nontraditional choices to 

individuals with disabilities and the elderly with limited income. Together We Can offers 

affordable cooperative living with limited equity shares to keep prices well below market rate. No 

Place Like Home Communities (NPLHC) offers homeownership and subsidized rental options 

within a rehabilitated multifamily development that also includes a range of supportive services. 

Together We Can—New York City 

Together We Can is a project of the NCB Development Corporation (NCBDC). Building on its 

successful history in cooperative housing finance, NCBDC launched Together We Can in late 

2003 as a three-year project to build the capacity of community-based development 

organizations to engage in cooperative development, increase the number of public and private 

partners, and provide financing for the rehabilitation of rental properties and the conversion of 

these properties to affordable cooperative homeownership. Together We Can promotes 

cooperatives as an effective means of preserving affordable housing and creating 

homeownership opportunities for low-income families. Through this initiative, housing units are 

preserved as affordable to serve as vehicles for family stabilization and wealth creation for lowincome families and important anchors for neighborhood revitalization.965, 966, 967

The Together We Can program promotes the use of the cooperative model as an effective means 

of preserving affordable housing and creating homeownership opportunities for very low-income 

families in New York City. In 2004, NCBDC began working in New York City, where publicprivate partnerships are already an effective tool for community development. Over the course of 

this project, the goals will be to more fully address the need for affordable housing in New York 

City by creating at least 1,600 units of affordable cooperative homeownership; to build the 

capacity of community-based development organizations to develop affordable housing; and to 

demonstrate the effectiveness of the cooperative model to enable low-income residents to 

become homeowners and maximize partnering and leveraging opportunities to preserve existing 

affordable housing. Together We Can will also increase personal wealth by creating 

homeownership and equity-building opportunities for low-income families. 
464 

Implementation of the program builds on existing partnerships with the Department of Housing 

Preservation and Development (HPD) of the City of New York, the Urban Homesteaders 

Assistance Board (UHAB), community-based development organizations (CBOs), the local 

HUD office, financial institutions, and private foundations. The Together We Can initiative has 

the potential to provide permanent, affordable homeownership for low-income families during 

the three years of the program. In addition, by building the capacity of CBOs, it also has the 

potential to build an infrastructure of capability and expertise—creating a pipeline of affordable 

cooperative housing development and multiplying the impact of this initiative. 

No Place Like Home Communities—Robbinsdale, Minnesota 

NPLHC began in 1996 as a committee of families of people with disabilities and special 

education and social services professionals (organized by Intermediate School District 287) who 

were committed to helping young adults with disabilities achieve as much independence as 

possible. This group wanted to find a means of developing stable, long-term supportive housing 

for adults with disabilities so they could make full use of their abilities. The group evolved into 

an incorporated nonprofit organization in 2001, with 501(c)(3) designation received in 2002. 

NPLHC was named by the adults with disabilities who were going to live in the organization’s 

pilot project—Adair Apartments.968, 969, 970, 971

NPLHC is best known for its work in the area of supportive, affordable housing and 

homeownership. It is one of the first organizations in the country to approach permanent, 

accessible, affordable, supportive homeownership in a way that promotes economic 

independence and self-direction among people with disabilities by helping them achieve 

financial equity in their homes and emotional equity in their lives. In 2001, NPLHC acquired an 

apartment complex consisting of three buildings with 11 units each in Robbinsdale, Minnesota. 

NPLHC developed a financing model that dealt effectively with the limited public resources 

available for supportive affordable housing. The NPLHC model is based on the understanding 

that, while all of the residents with disabilities who will live in NPLHC housing are low-income, 

some of their families have adequate assets to buy an affordable unit with supportive services for 

their family member with a disability, while others require public subsidy even to rent a unit with 
465 

services. NPLHC’s pilot site—Adair Apartments—contains 15 purchased condominium units 

and 15 rental units subsidized through a variety of public funding sources. Through this model, 

NPLHC developed 30 units of supportive housing for people with disabilities, with public 

subsidies covering the cost of 15 units, thus doubling the effectiveness of public funding for 

affordable housing. 

In addition to affordable housing, NPLHC provides service coordination, crisis management, 

conflict resolution, and activities to promote social growth, self-advocacy, and independent 

living. These services, which are offered through NPLHC’s on-site Resource Center, ensure a 

critical safety net for adults with disabilities who are striving to become independent citizens. 

Participation in the Resource Center services and activities is completely voluntary for residents. 

In this model, NPLHC gives adults with disabilities the freedom to make their own decisions, 

while offering crucial supports to sustain them on their path to independence. 

Core Program Elements 

Funding and Expenditures 

Together We Can 

Together We Can works with foundations to fund and offer a loan fund for predevelopment 

expenses; a credit enhancement fund to provide a partial guarantee of the cooperative mortgages 

to attract investors and build understanding of and confidence in cooperative loans; and a 

capacity-building resource fund for CBOs. 

No Place Like Home Communities 

Asset-building activities currently sponsored by NPLHC include accessible, affordable, 

supportive homeownership and conversion of Section 8 renters to homeownership through 

innovative down payment and closing cost programs. The development of a financial literacy 

and first-time homebuyer education program known as “This Is Mine!” covers basic banking, 

credit, budgeting, saving, loans, fraud, and consumer rights, and helps to develop emotional 

equity through long-term relationships with highly trained volunteer mentors. Programs help 

individuals with disabilities, their families, and their employers understand and use favorable tax 

provisions and savings programs through Individual Development Accounts (IDAs) and 529 
466 

plans. Business planning, including securing microenterprise loans for home-based businesses 

owned and operated by individuals with disabilities, and solutions that more responsibly serve 

individuals with disabilities who are the beneficiaries of supplemental needs trusts. 

Technical Assistance 

Together We Can Program Financing and Technical Assistance Tools 

Through the Together We Can initiative, NCBDC offers technical assistance to experienced 

nonprofit developers who want to offer affordable homeownership options. Together We Can 

works to increase affordable homeownership by building developers’ capacity to develop 

affordable cooperatives. 

Lessons Learned and Accomplishments 

A 2004 study972 of LECs in the United States and Canada found that LECs provide high-quality, 

safe, affordable housing for low-income families; contribute to stable, economically and 

ethnically diverse neighborhoods; can fulfill some economic and social needs more successfully 

than rental housing, particularly for groups that have special needs or where housing is especially 

expensive or distressed; offer stable housing costs in hot real estate markets and resistance to 

default in down markets, while requiring similar or lower subsidies than comparable rental 

housing; and can be an attractive housing alternative for a substantial portion of renters and some 

homeowners who spend more than 50 percent of their income on housing. 

NCBDC and the Together We Can Program: Impact and Experience 

In its 20 years of operation, NCBDC and its affiliate, National Cooperative Bank (NCB), have 

financed $500 million supporting the development of 30,000+ units of affordable cooperative 

and rental housing. The Together We Can initiative started off strong. It obtained $15.7 million 

for renovations and expenses related to co-op conversion for 425 units; it leveraged $19.5 

million in public funds and $5 million more for 120 units; and it developed a new co-op training 

curriculum in the fall of 2004. In October 2004, it hosted an Affordable Cooperative Housing 

Roundtable with the Ford Foundation and Harvard Joint Center for Housing Studies in New 

York City to increase the visibility and understanding of co-ops in the affordable housing 

community. Together We Can won the HUD technical assistance contract in Metropolitan New 
467 

York City and secured funding from Fannie Mae Foundation, Surdna, Wells Fargo Foundation, 

MSN Fund/Cooperative Development Foundation, and Bank of America Foundation.973

No Place Like Home Communities: Impact and Experience 

NPLHC is currently working with local community groups of adults with disabilities, their parents, 

social workers, educators, and community leaders to develop new projects in Washington, 

Ramsey, and suburban Hennepin County that will serve a minimum of 120 individuals with 

disabilities by the end of 2006. Ultimately, NPLHC hopes to serve as a recognizable national 

model for homeownership and asset development for people with disabilities.974

In early 2004, NPLHC began working with NCBDC and its National Disability Institute to 

strategize NPLHC’s expansion across Minnesota and the Upper Midwest. NCBDC is exploring 

partnering further with NPLHC to develop more opportunities for accessible, affordable, 

supportive homeownership in the Twin Cities area and the Upper Midwest. NCBDC brings the 

creativity, financial expertise, mission orientation, and willingness to explore nontraditional 

forms of financing that NPLHC needs to develop a long-term version of its model for people 

with disabilities. NPLHC has been acknowledged as one of the first organizations in the country 

to approach permanent, accessible, affordable, supportive housing in a way that promotes 

economic independence and self-direction among people with disabilities by helping them 

achieve financial equity in their lives. Its unique financial model, utilizing both public and 

private resources, has garnered national attention from disability advocates, policymakers, and 

funding sources. 

Self-Directed Support Corporation—Baltimore, Maryland 

Background 

The conceptualization of Microboards came from David and Faye Wetherow in the Canadian 

province of Manitoba in 1984. The Wetherows formed the first Microboard around a young man 

leaving an institutional setting. A Microboard, which does not have a specific legal meaning, is 

formed when a small (micro) group of committed family and friends join together with a person 

who lives with challenges to create a nonprofit society (board). Together this small group of 

people addresses the person’s planning and support needs in an empowering and customized 
468 

fashion. A Microboard comes out of the person-centered planning philosophy and is therefore 

created for the sole support of one individual.975, 976

At the time the Wetherows began developing the Microboard concept, there were only three 

ways that the Canadian government would finance community support services in Manitoba: (1) 

by licensing and funding a limited number of residential or day program “spaces” under the 

auspices of incorporated nonprofit societies or proprietary agencies; (2) by paying board and care 

rates to the proprietors of commercial residential facilities; and (3) by paying the equivalent of 

board and care rates to foster families for children and adult home provider rates for adults. In all 

three instances (except for foster care), the government was funding an agency to operate a 

certain number of program spaces or slots. This had several implications for the people served. If 

an individual who needed supports did not happen to fit an open “slot,” the person would be 

forced to wait until an agency developed and the government funded a new slot or a different 

kind of slot. Functionally, this showed up in the form of waiting lists. If a person was being 

served in an existing slot, and the type of service represented by that slot did not fit that person’s 

actual needs, there was very little opportunity to change the service configuration, because 

alternative slots were almost always full and had long waiting lists. Because there were such 

powerful disincentives to make changes, people who were able to make advances remained in 

mismatched service arrangements. The express premise of many services—which was that they 

would be “transitional” to other, less restrictive services—was inoperable because actual 

movement was limited or entirely absent. On the other hand, people who began experiencing 

increasing challenges or difficulties were forced to remain in services that could no longer meet 

their needs. Because of the congregate nature of most services, people were extensively 

disconnected from relationships and opportunities in the larger community. With rare exceptions, 

the places these individuals lived, worked, and played, and the days of their lives, were entirely 

defined by the agencies that supported them. 

The intention of the Microboard was to bring the structures for providing supports more in line 

with person-centered and family-centered principles. The Microboard was designed to allow 

people to move (1) from agency funding to funding individual support services; (2) from agencytype governance structures to supports directly governed by the individuals being supported and 
469 

their friends and family members; (3) from relatively inflexible service structures to supports that 

could adapt rapidly to changes in a person’s needs, interests, relationships, and environments; 

and (4) from lives defined by services to lives increasingly defined by companionship, 

connection, and contribution in the broader community. 

The structure of the first Microboards began with a simple question: “What is the smallest unit of 

human organization that would be eligible to receive agency-level funding?” The answer was a 

three-person nonprofit corporation that could be organized to support as few as one named 

individual; hence, the “Microboard.” In 1989, the first large-scale application of Microboards 

was developed by the Vela Microboard Association in British Columbia, Canada, to develop the 

concept into a critical service option for people with developmental disabilities. Since its 

inception, Vela has helped set up over 170 Microboards in Canada. 

Ensuring access to key health and support services was included as one of the lessons learned from 

the community initiatives for adults with disabilities that are described in the 2004 NCD report on 

livable communities.977 One of the priority action steps listed in the area of health care is 

allowing money to follow the person to the most appropriate and preferred care 

setting to create a more equitable balance between institutional and communitybased services, eliminate barriers to care, and provide consumers with choice over 

the location and type of services provided. 

This is in concert with the Microboard concept. 

Program Description 

The Self-Directed Support Corporation (SDSC) model was established in October 2001 by the 

Inclusion Research Institute (IRI) as a project of national significance funded by the 

Administration on Developmental Disabilities. The SDSC model was created to adapt the 

concept of the Microboard to the legal, regulatory, and service delivery system for people with 

developmental disabilities in the United States. The U.S. adaptation was developed using 

existing service delivery components that are widely accepted in the disability community. From 

a service perspective, the SDSC model and similar small boards serve as independent 

incorporated nonprofit entities, established to negotiate, receive funds, organize, and manage 
470 

supports around one person and/or the person’s family. In addition, the SDSC serves as a 

personal support circle. The state funds the SDSC directly. The SDSC is the employer of record 

and independently purchases the goods and services it needs, just as the members of an ordinary 

household would purchase the goods and services they need. The SDSC has complete freedom 

as to where and from whom it purchases goods and services. For example, if the SDSC wants to 

purchase payroll services rather than spending its time doing the payroll, it can purchase that 

service from a bank, a commercial payroll service, or a private bookkeeper, or it may join with 

other SDSCs to form a cooperative payroll service. If the SDSC doesn’t like the service it is 

receiving, it can change the source at will, just as an ordinary family may change lawyers or 

change banks.978, 979, 980

The SDSC approach is another option that provides an opportunity for public dollars to serve the 

person with a disability, while providing accountability to the Federal Government and state 

governments. An SDSC becomes the administrative body of the resources that the person with 

the disability requires. It differs from traditional support services because the board members 

(together, the provider) serve only one person. Because support services are provided to only one 

person, states may choose to be more flexible with regulations. However, an SDSC must follow 

the accounting requirements of both the Federal Government and the state government. It 

undergoes yearly audits to ensure accountability to both of these entities. It is subject to the same 

audits and reviews by state agencies as any other licensed service provider. It also must follow 

labor laws and nursing regulations.981, 982

The foundation of the SDSC model is six building blocks983 that interlock to form a foundation 

on which people with disabilities and their families can strive to build a life that offers real 

opportunities for security, dignity, and contribution. These building blocks are personal support; 

person-centered planning; responsive and flexible individual assistance; individual funding; 

transition of existing services; and community development. Supports are designed using the 

principles and tools of self-determination to meet the individual’s unique support needs. The 

components of the SDSC model have been derived from emerging best practices in selfdetermination described by Moseley and Nerney,984, 985 including the following: 
471 

• Flexible Individual Budgeting 

The overall objective is to change state service delivery systems to actively support, 

encourage, and enable people to directly control the services they receive and the 

resources provided on their behalf. 

• Individually Created Budgets 

The person with a disability, with freely chosen family and friends, should develop the 

budget for the supports he or she is to receive. 

• Open Budgeting Process 

The amount of the budget should be set through a process that involves the individual in a 

discussion that identifies the person’s needs, the supports required to meet those needs, 

the presence of natural or alternative means that can be used to meet needs, and the costs 

of the support to be provided. 

• Authority Over Personnel 

The individual budget is designed to enable the person to supervise and direct the staff 

who provide support. Even if the person receiving services delegates responsibility to 

another organization (or individual) to be the employer of record, the budget 

development and implementation process recognizes the primary authority of the 

individual over personnel. 

• Flexibility 

Within approved amounts, budgets are designed to support the reasonable movement of 

dollars from line item to line item, as long as the essential supports are maintained. 

• Administrative Structure 

The overall administrative and funding structure is designed to support individual budgeting 

at two levels: (1) funding is allocated from the state to the fiscal intermediary in a manner and 

form that enables the organization to meet the financial and accounting demands that are 
472 

necessary to sustain a large number of individual budgets for people receiving services; and 

(2) funding is allocated from the “provider” to the individual through a mechanism that easily 

pays for the variety of support alternatives that may be chosen. 

• Personally Directed and Controlled Planning Process 

The planning process must respect and reflect the central role of the individual in the 

determination of its content and scope. Recognizing that the authority for decision making 

rests with the consumer moves person-centered planning to the next step by validating the 

authority of the individual to choose the service provider, directly control how resources 

allocated on his or her behalf will be spent, supervise the staff who provide supports, and 

define how he or she will participate in the overall service delivery system. 

• Independent Support Coordination 

The function of support coordination, or brokerage, is separate from support provision. 

Ideally, support coordination is offered by an independent organization or individual that 

is able to work solely on behalf of the consumer without conflicting interests or 

responsibilities. In this context, the support coordinator functions to facilitate the transfer 

of power and control from the current system to the individual. 

• Autonomous Fiscal Intermediary Services 

In many cases, the fiscal intermediary is the private nonprofit organization established by 

and for the individual to hold the funds that have been provided, including financial 

services to people for functions typically performed by the business offices of agencies 

and corporations. These activities may include, among other things, Medicaid billing; 

check writing for all bills; administration of personnel issues, such as employer of record 

services, tax withholding, worker’s compensation, and health insurance; and the 

management of other taxes and benefits that might be appropriate, depending on the 

individual’s budget. The fiscal intermediary works for the individual and remains 

accountable for ensuring compliance with all federal and state laws. 
473 

Core Program Elements 

Staffing 

The board of directors of an SDSC is responsible for identifying what is important to the person 

receiving the supports. The board is not a paid entity, which keeps it free of conflict of interest. 

As with any board, it must keep records, manage the budget, and ensure that policies and 

procedures are followed. 

Funding and Expenditures 

The costs of establishing an SDSC are in setting up the agency. These vary from state to state, 

but the main cost is the incorporation process. This is done through the state entity that oversees 

the taxation and assessment process. Usually the cost is anywhere from $40 to about $150. 

Usually funding for the supports that the person with the disability requires is obtained through 

the state’s Medicaid HCBS waiver. The HCBS waiver dollars come from both state and federal 

Medicaid dollars. The state is responsible for writing its own waivers and is responsible for 

matching the federal dollars. Each state’s match is different and, because the state writes its own 

waivers, each state may have different polices and regulations in place. However, the funding 

stream for the SDSC is the same as for any other provider agency. 

Technical Assistance 

Some states have created Microboard associations to assist families and other entities that wish 

to establish an SDSC or a small board. These associations provide development, support, and 

training. The Inclusion Research Institute (IRI) provides guidance, resources, and tools for 

creating an SDSC on its Web site.986

Lessons Learned and Accomplishments 

The IRI has been tracking the establishment of SDSCs and the Microboard approach. Currently, 

there are approximately 100 SDSCs (or some form of this model) across the United States. The 

numbers are growing rapidly, with about 75 more SDSCs in some phase of exploration or startup. States that already have these small boards include Maryland, Colorado, Oregon, Missouri, 

Utah, Oklahoma, Virginia, Pennsylvania, Arizona, Minnesota, California, and Tennessee. States 

that are in the process of developing them include Nevada and New York. 
474 

SDSC Spotlight: Joshua’s House Incorporated 

Jackie Golden, executive director of IRI, shared the story of her son, Joshua, and how the SDSC 

model made a difference in his life as well as his family’s life. Joshua’s House Incorporated 

(JHI) is the SDSC that was designed to deliver the supports Joshua needs to live successfully and 

be fully included in his community. JHI is a provider agency that provides custom-designed 

supports for Joshua. For Joshua and his family, JHI delivers his supports using the principles and 

tools of self-determination.987, 988

Joshua Golden is a survivor of traditional support networks. Since Joshua was eight years old, he 

has been receiving some type of public supports. The supports never fully matched Joshua’s 

needs and often hurt him both physically and mentally. The Goldens explored the SDSC model 

and wondered why they could not become the provider of Joshua’s supports. The Goldens 

understood the need for accountability regarding public funds, but they also knew that Joshua 

needed control over his supports, and they felt that the system was taking too long to catch up 

with his needs. Therefore, they believed that the SDSC model was the answer. Joshua has 

significant cognitive disabilities and requires full-time care. JHI incorporated and then applied 

for and became a licensed provider of supports for Joshua. JHI is the employer of record. 

The Goldens formed a nonprofit, JHI, around Joshua and became the legal entity to receive 

Joshua’s allotted Medicaid dollars. Only individuals who care and share a vision for Joshua serve 

on the board of directors for JHI on a volunteer basis. The board, committed to Joshua, ensures 

that Joshua receives services that match his needs, desires, and lifestyle. He is in control, with the 

assistance of people who want him to be successful. 

What does this mean for Joshua? It means that Joshua no longer has to deal with a system that 

does not value him as a person. He can select who comes into his life, as he is the director and 

decision maker of his support team, balanced with others who care about him. 

What does this mean for Joshua’s family? Joshua’s sister and his parents serve on his board, 

along with Joshua. The board also has five other members. The key for the Goldens was to 

include people with a vision and commitment who are willing to spend time with Joshua. It also 

means a support network for Joshua’s family. No longer is it only his parents looking to secure 
475 

Joshua’s future. Now his legal board of directors is working for him. For Joshua’s sister, she 

knows that she will have people to help her with Joshua when his parents are no longer around; it 

is a support team for her as well. While the SDSC has been a lot of work, it is also the most 

wonderful thing that has happened to the Golden family. Joshua truly can have a life that is his 

own, and his family can finally sleep at night, knowing that people who care about him are 

involved in his life. 

Pooled Trust—Bedford, New Hampshire 

Background 

Making financial arrangements for an individual with disabilities is an important part of planning 

for future needs. These arrangements help ensure that there will be some financial security when 

a parent or guardian can no longer provide help. Because of the various factors that need to be 

considered, making these arrangements can be quite complex. Arrangements include a family’s 

finances, the family member’s needs, and government benefits or other assets of the family 

member with a disability. Many individuals with disabilities receive means-tested benefits, such 

as Supplemental Security Income (SSI) and Medicaid. Means-tested benefits are benefits 

available to people with minimal income and minimal assets or resources. If a person’s income 

or assets/resources exceed the specified limit, he or she will not be eligible for the benefit. Often, 

for example, parents or others plan for the future financial security for their child with a 

disability by leaving the child an inheritance. If an individual receives SSI and/or Medicaid and 

has access to more than $2,000 in assets, he or she would lose eligibility for SSI and Medicaid. 

One way to provide for the financial security of someone with a disability without jeopardizing 

government benefits is by using a trust. Trusts hold money or property that the grantor (the 

person who sets up the trust) leaves for the benefit of another person (the beneficiary). Unlike a 

gift or inheritance through a will, a trust usually contains carefully written instructions on when 

and how to use the trust’s assets. Trusts may be designed to distribute assets to one or more 

beneficiaries at certain times or under certain conditions. Some trusts make distributions to the 

beneficiary (or beneficiaries) over time. Others instruct the trustee to distribute only the trust’s 

earnings (from interest or investments) or the amount the trustee thinks the beneficiary needs. 
476 

Some trusts may require the accumulation of all income for distribution at a future time.989, 990

Supplementary discretionary trusts are designed so that the principal (the amount put in the trust 

account) and its earnings (from interest or investments) supplement the beneficiary’s basic care 

and do not replace the public funds required to pay for this care. This kind of trust is good for the 

SSI and Medicaid recipient whose assets may not exceed a specific level. The trust grantor can 

carefully direct that the trust not pay for services covered by Medicaid or other benefits received 

as a result of the child’s disability. Instead, the trust would require the trustee to provide funds 

for certain items, services, or other expenses not covered by SSI and Medicaid. These types of 

trusts may also be set up for someone who is not on SSI and Medicaid. 

Two federal laws support trusts for individuals with disabilities who receive Medicaid and SSI. 

The Omnibus Budget Reconciliation Act of 1993 (OBRA 93) is a federal law that affects how 

people with disabilities can have a trust and still qualify for Medicaid. The Foster Care 

Independence Act of 1999 is a federal law that affects how people with disabilities can have a 

trust and still qualify for SSI. Both laws allow many people with disabilities to place their own 

money into a trust and become (or remain) eligible for Medicaid and SSI. 

Program Description 

Pooled trust programs enable families or other caregivers, and in some cases individuals with 

disabilities, to establish relatively inexpensive and effective trust accounts that provide 

supplemental funds for the person with a disability while protecting him or her from losing 

important government benefits. In lieu of establishing an individual trust account, families set up a 

subaccount with a trust program.991 Pooled trust programs provide a convenient and economical 

way to have trust funds administered for people with disabilities that will supplement the benefits 

offered by entitlement programs. These programs normally use a discretionary irrevocable trust for 

supplemental needs. The assets placed in the trust by parents or others are allocated to a separate 

subaccount. The assets from all subaccounts are pooled to be invested and managed as one larger 

amount. Records are maintained of the amount of each person’s trust and the amount spent for that 

individual. The program divides the trust earnings among the individual subaccounts in shares 

equal to the amount that each subaccount has in the pooled amount. 
477 

Using a pooled trust program offers many advantages. Parents may not have or know someone 

who is willing to be a trustee. Trust programs usually have knowledgeable staff and volunteers 

who will serve as the trustee or manager of the trust. An individual trustee could die, move away 

or not fulfill the trustee role for some other reason. Trust programs offer continuity, as the 

program does not depend on just one individual. The trust document used by programs usually 

has been developed and reviewed by attorneys with expertise in this area of law. There is also the 

likelihood that publicly funded agencies have reviewed the trust document for compliance with 

their agency regulations. Banks and trust companies will not accept or manage a trust that is not 

funded at a threshold amount. Depending on the bank, the trust account may have to be several 

hundred thousand dollars or more. Parents who cannot afford to fund a large trust are often able 

to fund an adequate account in a pooled trust program. Pooled trust program staff or volunteers 

often have expertise and experience with people who have disabilities. The volunteer board of 

the program may also include legal and financial experts, family members of people with 

disabilities, and advocates. Trust programs usually work closely with banks and trust companies 

to maintain trust accounts and can tap the expertise of financial institutions. This relationship can 

help maintain good financial accountability without incurring high fees for the beneficiaries. One 

of the most significant advantages of using a pooled trust program is the expertise brought to 

managing the trust and making the required reports after it begins to make disbursements. 

Core Program Elements 

Staffing 

A pooled trust program usually undertakes the daily management of the trust subaccounts. This 

includes handling requests for and expediting disbursements, maintaining each subaccount’s 

records, reporting to various agencies that might be affected by disbursements, preparing 

necessary reports (e.g., tax-related reports), and generally managing the program. Many trust 

program representatives also spend considerable time meeting with families about the program 

and assisting families and others with future planning. Pooled trust programs are set up as or 

administered by a nonprofit organization. They may be under the auspices of or closely 

connected to one or more disability-related organizations. Groups like state and local chapters of 

The Arc, Goodwill, the National Alliance for the Mentally Ill (NAMI), and others have been 

active in establishing pooled trust programs. 
478 

Some pooled trust programs include direct care coordination services for their beneficiaries or 

contract with care coordinators to provide services. Services vary depending on the agency and the 

services provided, but the care coordinator may visit the beneficiary, be present at meetings about 

the individual, advocate on the individual’s behalf, and provide related services as needed. Usually 

the costs of these services are covered by the individual’s trust funds and are charged hourly. 

Funding and Expenditures 

Pooled trust programs typically work closely with a bank, trust company, or other financial 

institution. Some pooled trust programs have banks serve as the trustee for the program’s funds, 

while other pooled trust programs are their own trustees and may use the bank as an investment 

manager or a co-trustee. 

Pooled trust programs usually must charge fees for their services. However, compared with 

managing an individual trust, by pooling resources for investment and management, pooled trust 

programs can minimize costs, so that fees are usually reduced considerably. 

Lessons Learned and Accomplishments 

As one of its projects, the Rehabilitation Research and Training Center on Aging with 

Developmental Disabilities, in conjunction with The Arc, conducted a study to identify, develop, 

and evaluate techniques that assist individuals with developmental disabilities and their families 

to plan for future needs, including future financial needs. This included research to determine the 

best practices in pooled trust programs.992, 993, 994 The project used a community-based model of 

aging-in-place for families of people with intellectual and developmental disabilities. The aims 

of the project were to increase understanding of quality practices in pooled trust programs; to aid 

families in using trust programs or alternatives; and to increase the family’s ability to develop 

effective future plans that address financial, legal, and service/support areas. The study had three 

research questions: What information do families and individuals need to make an informed 

choice about using pooled trust programs? How are pooled trust programs organized and what 

services do they offer? What are the experiences and levels of satisfaction of families who have 

used pooled trust programs? Three studies were conducted to answer the research questions. 
479 

The research conducted on best practices in pooled trust programs identified the following key 

findings and potential implications. Families’ needs for information on guardianship and 

alternatives, trusts, and planning for supports and services are well documented. However, early 

studies indicate that few families conduct financial planning for a family member with a 

disability. Heller and Factor995, 996 found that only 31 percent of families in their study contacted 

an attorney to initiate planning. The survey (study 3) conducted by this project heard primarily 

from families that were engaged in future planning. Seventy-four percent of the 223 respondents 

had a financial plan in place for their family member with a disability. Only 5 percent of these 

respondents used a pooled trust. Many of the 26 percent who had not developed a financial plan 

assumed that such planning for the relative with a disability was just for people who are wealthy. 

This supports the importance of educating families about options other than a trust established 

with a financial institution. The use of a pooled trust is one option; however, it is not universally 

available, as only 22 states are known to have pooled trusts operating, and not all of these are 

available to families statewide. 

Pooled Trust Program Spotlight: Enhanced Life Options, Bedford, New Hampshire997, 998

The Enhanced Life Options Group, established in 1993, is a nonprofit organization that develops 

and carries out enhanced life option plans for people with disabilities. It provides information, 

consulting, advocacy, mentoring, and trust-related services for the disabilities community, 

including special needs trusts, supplemental needs trusts, pooled trusts, and trusts for independent 

living. There are nine directors, most of whom have a person with disabilities in their family. 

Board members also have professional skills, including law enforcement and banking. Board 

members have been active professionally in New Hampshire’s disability community for many 

years, working for nonprofit organizations such as NAMI New Hampshire and the Parent Training 

and Information Center. The Enhanced Life Options Group is a member of the New Hampshire 

Brain Injury Association, NAMI New Hampshire, The Arc national organization, Planned Lifetime 

Assistance Network (PLAN), and the National Guardianship Association. 

The Enhanced Life Options Group offers two different types of pooling arrangements: (1) 

individually tailored trusts with pooling provisions; and (2) a master trust arrangement in which 

the family does not create the trust but joins a trust already created. In addition to providing trust 
480 

services, the group participates with the New Hampshire Community Loan Fund in 

MoneyWorks in a program that makes Individual Development Accounts (IDAs) available. 

MoneyWorks IDAs are matched savings accounts designed to help eligible low-income people 

with disabilities accumulate resources for education, homeownership, and small business 

development in the Manchester and Portsmouth, New Hampshire, areas. The Enhanced Life 

Options Group has also participated with Project Dollars and Sense in a study of work incentives 

in the disabilities community, which was funded in part by the U.S. Social Security 

Administration, to provide Individual Career Account (ICA) demonstration projects in the 

Manchester and Keene, New Hampshire, areas. Project Dollars and Sense ICAs are microgrants 

designed to help remove work-related financial barriers for people with disabilities. 

Child Trust Fund—United Kingdom 

Background 

The British government believes that saving and asset ownership are an important complement 

to the three main pillars of its welfare strategy: work and skills, income, and public services. 

Regular savings provide individuals with a pool of financial assets for times of adversity, for 

planning for retirement, or to enhance long-term independence and opportunity. The government 

has implemented several programs to extend the benefits of saving and asset ownership through 

Individual Savings Accounts, Stakeholder Pensions, and the Pension Credit. But there is strong 

evidence to suggest that lower-income households are not saving enough for themselves, or their 

children, to enjoy the benefits and opportunities of asset ownership.999, 1000

The British government looked at a number of ideas to ensure that the benefits of saving are more 

widely available. One possible vehicle that was explored for delivering the government’s 

objectives was the Child Trust Fund (CTF). A CTF would be a universal account, opened for all 

children at birth, with an endowment paid in by the government, based on the principle of 

progressive universalism—every baby would receive an endowment, but those in families on 

lower incomes would receive a larger lump sum. A CTF would meet the government’s objectives 

for saving and widening opportunity by ensuring that all young adults, regardless of their families’ 

circumstances, begin their adult lives with some level of assets. This would provide all children 
481 

with the benefits of having savings (i.e., security, opportunity, long-term independence), with those 

children most in need receiving the most help from the government.1001

Program Description 

In April 2003, Gordon Brown, MP, chancellor of the Exchequer, announced the CTF for all 

children born on and since September 1, 2002. The CTF, which became operational in April 

2005, represents a long-term savings and investment account opened for each child, into which 

the government will make an initial payment of either £250 or £500 (approximately $465 or 

$930, respectively), depending on the family’s gross income. Children from lower-income 

families—those below the Child Tax Credit (CTC) limit—will receive an additional £250, 

because the government believes that children from higher-income families are more likely to 

have their funds supplemented by parents and grandparents. This additional amount will be 

added to the account once the CTF award for that year is confirmed. About a third of the children 

will be eligible to receive the additional contribution. This ensures that the CTF is both a 

universal and progressive policy—helping to extend opportunity to all while targeting support at 

those most in need.1002, 1003, 1004, 1005, 1006

The saving ethic across the United Kingdom as a whole is low, and it is hoped that the launch of 

the CTF will reverse this trend. The goal is to ensure that every child, no matter what family 

circumstances it is born into, will have a nest egg for the future, which each child will be 

encouraged to take an active interest in. The main aim for the CTF is to educate parents and 

children about the importance of saving from an early age, to provide for the future, to establish 

a saving habit, and to aid in the financial education of young people. To date, nowhere else in the 

world has a government committed its resources to such a program. It represents a public-private 

partnership in that it relies on private sector financial institutions as the vehicle to achieve 

universal asset-building goals. 

Entitlement to a CTF account will automatically be linked with entitlement to child benefit, 

which reaches virtually all children living in the United Kingdom. The notice of the child 

benefit award will automatically trigger issuance of the CTF voucher. In addition, the 

government is putting in place special arrangements to ensure that CTF accounts will be 
482 

opened for children looked after by local authorities or under equivalent arrangements in 

Scotland, who do not qualify for child benefits. From early 2005, the government will begin to 

send out the vouchers to the parent/guardian to open a CTF plan from an approved provider. 

Before the dissemination of the vouchers, the government will be contacting parents and 

guardians to confirm their child’s eligibility. 

CTF accounts are owned by the child and in the child’s name. Annual statements will be sent to 

the child throughout the 18 years the CTF account is open. The CTF account will not affect any 

CTC benefits the family receives, and neither the parent/guardian nor the child will pay tax on 

income and gains in the account. However, there may be fees associated with the provider’s 

administration charges. Private contributions may be made to the account up to £1,200 

(approximately $2,200) per year after taxes, and account holders may transfer their accounts 

among providers at any time and as many times as desired at no charge. The plan will mature on 

the child’s 18th birthday, at which time the child will receive the assets; there will be no 

restrictions on what the money can be spent on. The funds are not accessible until age 18. 

Financial institutions are not required by law to offer CTF accounts. However, those that wish 

to—including banks, brokers, investment managers, and life insurers—must be approved as 

accepted providers by the Financial Services Authority (FSA, the independent industry 

regulator). The government wants to ensure the development of a competitive CTF market that 

provides simple, good value, and accessible CTF accounts with adequate incentives to save. 

While children are eligible who were born beginning September 1, 2002, the CTF did not 

become operational until April 2005. Therefore, if a child was born between September 1, 2002, 

and April 4, 2005, he or she will receive slightly more, because the child was eligible prior to the 

issuance of the voucher. The CTF vouchers issued to children before the operational date in 2005 

will have a higher value than the standard voucher to recognize this fact. Each child will receive 

a second, as yet undetermined, payment on his or her seventh birthday. As well as helping the 

accounts to grow, these age-related payments will be a useful reminder of the CTF account. As 

with the additional contribution, a flat rate payment will be distributed to all children, and an 

additional payment will be made to children in lower-income families. In the exceptional cases 
483 

in which a parent or guardian chooses not to claim the child benefit, the child will not be eligible 

for a CTF account. 

Core Program Elements 

Technical Assistance 

The design of the CTF—including an additional government contribution to the account at the 

age of seven, annual statements issued by providers to all children, teaching and learning 

resources for use in the classroom, and a dedicated Web site—will help children engage with 

their accounts and make the best use of the assets at account maturity. The government also 

wants parents to actively engage with the CTF and will provide resources to ensure that parents 

are helped to make choices about their child’s CTF, including an information pack to be issued 

alongside the CTF voucher, and will work with the FSA to ensure that consumer information 

activity includes the CTF.1007 The detailed information packet for parents will include such 

information as a full explanation of the CTF rules; details of all CTF providers; an explanation of 

the different types of accounts available; a step-by-step guide to opening an account; and sources 

for further information and guidance. In addition, the packet will include illustrations showing 

the impact of a range of investment choices and contribution levels on account growth and the 

risks associated with these choices. 

The CTF, by linking with the school curriculum, will build on financial education by ensuring 

that every young person has access to a financial asset, increasing the relevance of financial 

education for all and helping young people understand the advantages of saving. To support 

learning through the CTF and related topics in the classroom, the government will commission 

the development of a range of CTF teaching and learning resources. The resources will help 

children improve their financial capability and will be clearly linked in different parts of the 

curriculum. These resources will be designed to meet the child’s needs at different ages, 

beginning with an introduction to the basic concepts of saving and moving toward guidance on 

possible uses of financial assets, including continuing to save, as the young person’s CTF nears 

maturity. The government will promote and make available these resources to all schools.1008 
484 

Lessons Learned and Accomplishments 

It is too early to highlight any lessons learned and accomplishments; however, enhanced 

functional literacy is being documented as a byproduct for both children and families as a result 

of implementation of the CTF. As a universal benefit, the CTF provides opportunities to devise 

new teaching and learning materials, using the fund as a tangible example of a 

savings/investment product.1009, 1010 The CTF provides an opportunity to promote financial 

awareness among children and young adults and to give them a real-life savings vehicle that can 

be associated with financial education. Schools will be able to use the CTF as an example in their 

financial education work, and this in turn could encourage children’s and young people’s interest 

in their accounts. According to the FSA, there are various ways in which children and their 

families could be encouraged to be involved with their CTFs. Saving could be encouraged at 

school. Many schools operate school banks (in some cases this is a credit union). Teenagers ages 

15–17 who have a maturing CTF could be encouraged to make decisions about its use and be 

given the necessary understanding to make informed decisions. This could happen as part of 

existing work done in schools and colleges; for example, as part of work-related learning, as part 

of career education, when considering options for higher education (and how that might be 

funded), or when considering training or self-employment options. Various government 

initiatives dealing with young people can incorporate the CTF concept into their programs. 

While there are no known outcomes, it is a good practice, and the U.S. government could benefit 

from the approach the British government is taking through this public-private partnership of 

universal asset building. In the United States, a similar strategy with restricted use of funds for 

children determined to have a certain level of need for future LTSS might be evaluated as an 

alternative (supplemental or complementary) financing strategy to current college 529 plans or 

individual retirement accounts. A 2004 Aspen Institute Brief1011 evaluates the approach the 

British government has taken and discusses some issues and implications for a similar child 

account policy for the United States. According to the brief, while the CTF represents a 

significant advance in savings structures, government-provided matching funds through direct 

payment or refundable tax credits would be an even more effective incentive to encourage 

families in lower-income brackets to save. A drawback to the CTF is that its incentives to save 

do not expand on existing tax-based incentives to the full extent possible. A policy created in the 
485 

United States could be designed specifically to stimulate asset acquisition, limiting the use of 

funds to investment in higher education or a small business, a down payment on a house, or a 

retirement account. In addition to stimulating asset acquisition, such restrictions would also be 

consistent with existing U.S. asset-building and long-term saving policies. Further, according to 

the brief, a hybrid system in which accounts are offered by a government-sponsored entity and 

by private financial institutions would maximize consumer protection and the quality of product 

offerings. Access to a government-sponsored account would give families the choice of a basic 

account with low costs and good service. The private sector financial institutions’ product design 

expertise and marketing creativity would raise the accounts’ visibility, thereby stimulating 

greater participation and higher account balances. An additional benefit of the hybrid system is 

that the existence of quality low-cost government accounts would stimulate competition among 

private sector providers. 
486 

Part II 

Conclusion 

LTSS reform requires leadership, creativity, capital, and risk-taking. The waters of reform are 

rough and costly. It is clear that states cannot take on the burden of reform without substantial 

federal involvement. There is, however, a growing recognition that a fundamental shift in values 

is occurring as states move services and supports to the community and home and out of the 

institutions. Individuals with disabilities are being provided with more choices to live 

independently. The shift to a system that is not anchored by a medical model and an institutional 

bias requires fresh, creative thinking that reanalyzes the use of public and private resources. 

The examples provided of realignment of service and financial relationships at an individual and 

community level recognize the importance of consumer choice and direction. The two examples 

of cooperative organizational structures that provide places to live that are affordable and that 

improve support workers’ level of compensation and job satisfaction offer viable options to 

respond to the current and growing imbalance of demand versus system capacity to respond to 

need. The three examples related to management of assets—pooled trusts, support corporations, 

and CTFs—raise important questions about public versus private responsibility to create and 

manage a social safety net for individuals deemed in greatest need of long-term support. 

These experiments in progress challenge society and policymakers to offer a new role as 

resource managers to individuals and families who traditionally have been the consumers of 

social services. The CTF offers the boldest experiment in redefining public responsibility to all 

children and families regardless of where they live, their economic status, and immediate needs. 

It also raises new questions about traditional policymaking that has defined and calculated need 

based on economic status. Access to supports and services as an entitlement has historically been 

means tested for individuals under the age of 65. The CTF offers a new approach to the social 

contract between a nation and its citizens that places enhanced value on asset development as a 

foundation for future public policy development. 
487 

The Time Bank exchange of value offers further opportunities to rethink the value and purpose 

of a community to support all its members with an exchange of resources to respond to defined 

needs. Proponents of the Time Bank exchange are quick to point out that it cannot replace 

government intervention. However, it can be a cost-effective approach to augment and 

complement a social safety net that responds to needs in a way that recognizes disability as part 

of the human experience to be embraced by community inclusion. 

What is most refreshing about all the identified examples of local and individual strategies is that 

they do not begin with the assumption that the existing framework of government resources is 

the essential building block for the delivery of LTSS. These strategies do not start with Medicaid 

or Social Security to build and design a community-based system. However, each example of 

community and family development strategies embraces three fundamental principles to help 

design the ship that may offer safe passage in the future: 

1. Consumer choice and direction is an essential design principle that must rebalance risk and 

responsibilities between government and the target audience. 

2. Communities should be supported by government through tax and social policy to support 

formal and informal caregiving, recognizing the value of cooperative principles of 

ownership to improve affordability and worker and consumer satisfaction. 

3. Asset development is a lifespan challenge that should be a fundamental principle of all 

future policymaking, which should reward all children and families for saving for the future 

to respond to planned and unexpected needs as a result of disability as a natural part of the 

human experience. 

Although each of these selected individual and local strategies has promising early evidence of 

success, as a group they represent works in progress that deserve the increased attention of 

policymakers to expand replication options and continue the collection of data to further test 

results over a longer period of time. The challenge for future policymakers is to identify ways to 

embrace these concepts and nontraditional system approaches in the design of the future system. 
488 
489 

Chapter 6 

Recommendations for Incremental and 

Clean Slate Reform
490 
491 

Table of Contents: 

Chapter 6 

Page 

Part I 

Introduction to Incremental Reform .......................................................................................493 

Part II 

Moving Forward—Improving the Current LTSS Ship .........................................................494 

Part III 

The New Millennium LTSS Model...........................................................................................508 

Part IV 

Ameriwell—The New Millennium LTSS Model.....................................................................511
492 
493 

Part I 

Introduction to Incremental Reform 

The recommendations offered are anchored by the original set of assumptions that emphasizes 

the value of consumer choice and direction, the importance of access and sustainability both 

programmatically and financially, the preference for home- and community-based long-term 

services and supports (LTSS), and the necessity of federal leadership, financial investment, and 

oversight. The original assumptions have been sustained and correlated by the research and 

supported by experts across the diverse spectrum of stakeholders: government, policy analysts, 

service providers, people with disabilities, and families. 

The recommendations have been divided into two parts. The first set of recommendations represents 

a comprehensive set of strategies that would move the ship of LTSS forward at a slower pace. 

The second set of recommendations would establish a new millennium policy with multiple 

financing streams to sustain LTSS for Americans with disabilities across the age span, regardless 

of geography, level of personal resources, and family support. The second set of recommendations 

represents the construction of a new ship to navigate the rough waters expected. 

Both sets of recommendations recognize that there is no single or simple policy solution to the 

challenges documented in this report. Both sets of recommendations identify specific agencies 

and committees within the executive and legislative branches of the Federal Government that 

would have the lead role to move forward with implementation and, where appropriate, 

additional research. Although there may be disagreements about which path will increase the 

probability of the LTSS ship’s safe passage through troubled waters, there is strong, 

overwhelming support for focusing on these issues now rather than later. With the perfect storm 

ahead, Congress and the executive branch cannot afford to keep missing the boat. LTSS 

comprehensive policy development will define us as a nation. It is imperative that the United 

States retool its programmatic and financial infrastructure to protect and promote individual 

dignity and independence within the context of supportive families and communities to meet its 

growing economic and demographic challenges. 
494 

Part II 

Moving Forward—Improving the Current LTSS Ship 

1. Increase policymaker knowledge and understanding of public and private costs and 

benefits of LTSS for people with disabilities under age 65 and their families. 

 Implementation Lead: 

• Office of Assistant Secretary for Planning and Evaluation, Department of Health 

and Human Services (HHS) 

• Congressional Budget Office (CBO) 

• General Accountability Office (GAO) 

The lack of data presenting a complete and accurate picture of the costs for LTSS for families 

with children with disabilities and adults with disabilities was a key finding by NCD researchers. 

Despite multiple studies by CBO and other federally sponsored research centers on the costs of 

long-term care (LTC) for seniors, the younger population with disabilities under age 65 has not 

been a priority. The traditional definition of LTC identified acute care needs as well as 

nonmedical services and supports for seniors. Today’s definition of LTC has changed to reflect 

the ongoing growth and integration of disability into mainstream culture. LTSS for people 65 

years and younger is about many nonmedical services and supports, such as personal assistance, 

assistive technology, financial management, housing, transportation, and nutrition. How a person 

is assisted in compensating for loss of activities of daily living (ADLs) will define their future 

earnings potential and economic independence. 

Cost studies are needed that evaluate, in a systematic and comprehensive manner, the extra costs 

of raising a child with a disability and continued support of the person as an adult. Such studies 

should examine differences of support needs reflected by cost for individuals with a range of 

functional limitations in family settings and other home, community-based, and more restrictive 

skilled nursing environments. Other differences to be analyzed should relate to diversity of race, 

ethnic background, gender, disability, and geography. Protocols should examine the costs to 

consumers and families as well as the costs to government (with specific government funders 
495 

identified and quantified) and other institutional payers as part of the evaluation of different 

program models. Administrative versus direct service costs should be scrutinized. As 

recommended by the NCD report “Consumer-Directed Health Care: How Well Does It Work?” 

(October 2004), well-defined guidelines are needed to accurately capture the role of families and 

individuals in paying for LTSS to avoid the risk of cost-shifting to families as supports and 

services move from institutional to community-based settings. 

More needs to be learned about the cost benefits of consumer-directed services and support plans 

and improved coordination and collaboration in the delivery of services through Aging and 

Disability Resource Centers (ADRCs). 

An additional area of focus is to increase understanding of the cost benefits of LTSS insurance 

products as they are brought to market and customized to respond to the needs of individuals 

with disabilities under age 65. Finally, the CBO should be tasked with projecting the costs of 

LTSS for individuals with disabilities under age 65 over the next 30 years based on a consumerdirected service delivery model and alternative options for public and shared private 

responsibility for costs without current impoverishment rules. CBO should also investigate the 

impact on public costs of making available comprehensive community-based LTSS, with 

particular attention to possible reduced demand and costs for nursing home placements. 

All three agencies should be charged with preliminary reports ready for the next term of 

Congress in January 2006 and complete reports by the end of the year. 

2. Design and implement a multifaceted action plan of monitoring and oversight of state 

activities to meet their Americans with Disabilities Act (ADA) obligations as a result of 

the Olmstead Supreme Court decision. 

 Implementation Lead: 

• Office for Civil Rights, Department of Health and Human Services 

• Civil Rights Division, Department of Justice 
496 

The Olmstead Supreme Court decision in 1999 provides important legal support for states’ 

current efforts to rebalance their LTSS systems toward home- and community-based settings. 

The Administration, through an Executive Order and grant activities, has taken seriously the 

Court’s decision and mandated a state planning process to improve and expand communitybased choices for people with disabilities. Over $200 million has been awarded by the Centers 

for Medicare and Medicaid Services (CMS) to states on a competitive basis to promote system 

changes. Despite these efforts, litigation continues to expand in class action suits. In more than 

25 states, individuals with disabilities have been frustrated with the pace of change and the slow 

movement of funding away from nursing homes and institutional settings to communities. 

The Office for Civil Rights at HHS and the Justice Department have the responsibility to monitor 

and oversee Olmstead state plan implementation. As both agencies have done on numerous 

occasions in the past related to ADA, there is an opportunity to be proactive and design and 

implement an action plan that evaluates individual state efforts to meet the Olmstead community 

imperative mandate. Each state should be rebalancing its financing, reducing the number of 

individuals with disabilities residing in nursing homes, diverting people from entering nursing 

homes, and putting in place the infrastructure for expanded home- and community-based 

supports for individuals with disabilities. The action plan should require site visits in all states 

within the next 24 months; consumers and other interested stakeholders should be provided with 

notice of the state visit and offered an opportunity to meet with federal officials. State status 

reports on current efforts should be made public and available for comment. Federal monitoring 

reports would also be made public. Annually, both agencies would submit to Congress a report 

on their monitoring and oversight activities. Both the House and Senate Judiciary Committees 

should hold annual oversight hearings to monitor federal and state activities and hear from 

people with disabilities and their families. 

3. Decouple eligibility for home- and community-based services (HCBS) under an HCBS 

waiver from a determination of nursing home eligibility. 

 Implementation Lead: 

• Senate Finance Committee 
497 

• House Energy and Commerce Committee 

• Centers for Medicare and Medicaid Services 

There are multiple suggestions from the Expert Panel and other key stakeholders as to how to 

amend current public policy to remove the institutional bias in the Medicaid program. All 

amendments would give Medicaid beneficiaries greater choice in how financial assistance is 

provided to cover a range of LTSS. The clear majority of stakeholders recognize the 

overwhelming consumer preference for HCBS. Two complementary options deserve immediate 

attention from Congress and bipartisan support. The first option is to shift the HCBS program 

from its current waiver status to a state plan requirement. Eligibility would be delinked from 

nursing home eligibility, and states would receive an increased federal match under their state 

cost-sharing agreements for services provided in this category as part of their Medicaid 

reimbursement for authorized expenditures. CMS would set guidelines for a functional 

assessment process and the minimum threshold of services to be covered, including personal 

assistance services. 

The second, complementary, option would be that federal funding follows the person from a 

nursing home to a community setting as part of a person-centered plan and self-directed budget. 

The Money Follows the Person (MFP) option would continue for a three-year period to help 

support successful community transition. Both options are currently part of legislative proposals 

before Congress. MFP and the Medicaid Community Attendant Services and Supports Act 

(MiCASSA) deserve to be the focus of hearings before the end of the year. 

4. Increase support for families and significant others in their role as informal and 

unpaid caregivers for individuals with disabilities over and under the age of 65. 

 Implementation Lead: 

• Office on Disability, Department of Health and Human Services 

• Administration on Aging, Department of Health and Human Services 
498 

• House Ways and Means Committee 

• Senate Finance Committee

Eligibility for LTSS, and the scope and intensity of covered services, varies significantly from 

state to state. States have considerable discretion in determining whom their Medicaid programs 

will cover. Despite state variability in criteria for Medicaid eligibility and scope of benefits, in all 

states, individuals with disabilities are dependent on informal caregivers, including parents, 

family members, and significant others. The estimated benefit of informal caregiving exceeds 

$200 billion annually. Services should be designed to support, not supplant, the role of the family 

and actions of informal caregivers. Increased support for informal caregiving could be achieved 

through implementation of a complementary set of recommendations. Address the lack of 

portability from state to state for Medicaid LTSS. 

• Enact the Lifespan Respite Care Act to award grants or cooperative agreements to 

develop statewide lifespan respite care programs. Lifespan respite care is a coordinated 

system of accessible community-based respite care services for family caregivers, 

regardless of the individual’s age, race, ethnicity, or special need. 

• Establish a National Resource Center on Lifespan Respite Care to maintain a national 

database and provide training, technical assistance, and information. 

• Amend the tax code to allow an additional standard deduction for any family who spends in 

excess of $2,000 for the care of a family member with a disability. The deduction would be 

allowed for costs related to personal assistance services, technology-related assistance, 

transportation, respite care, medication, and adult day programs or workplace supports. 

Expenses would be disqualified if they are reimbursed by insurance or a public resource. 

• Authorize a study, coordinated by the Departments of Labor and HHS, to determine the 

costs to the economy—in terms of education, employment, income forgone, and transfer 

payments—as a result of the demands of family caregiving for parents, family members, 

and significant others. 
499 

• Pilot test and evaluate the use of Time Banks as a nontraditional strategy at the community 

level to enhance opportunity and consumer satisfaction with informal caregiving. 

• Increase by 20 percent the funding level for the National Family Caregiver Support 

Program to expand respite care options and improve training and support for caregivers. 

Require improved coordination of program activities with other similar program efforts 

directed to support caregivers for individuals with disabilities under age 65. 

5. Improve the supply, retention, and performance of direct support workers to meet 

increasing demand. 

 Implementation Lead: 

• U.S. House of Representatives, Committee on Education and the Workforce 

• Senate Committee on Health, Education, Labor, and Pensions 

• Departments of Labor, Health and Human Services, and Agriculture 

As demand grows for in-home and community-based support workers, and as informal 

caregivers become less available, public policy must pay increasing attention to critical 

challenges that relate to direct care/support employment. NCD researchers documented 

numerous state efforts to raise wages, improve quality through education and training, and 

change the nature of the relationship between consumer and caregiver. 

The supply, retention, and performance of direct support workers can be enhanced by 

implementation of the following set of recommendations: 

• As part of the Olmstead guidance, CMS should issue an advisory letter to state Medicaid 

directors directing corrective action to achieve parity of compensation across the 

environments where direct support workers are employed. Home- and community-based 

workers must earn wages that are comparable to those of workers who perform similar 

duties in other care settings. 
500 

• Continue to fund demonstration projects by CMS to allow states to test innovative 

strategies to improve the recruitment, supply, retention, and performance of direct 

support workers. 

• Authorize funding for demonstration projects between the Departments of Labor and 

HHS that promote collaboration between community colleges and disability-related 

organizations to develop a high-quality set of competencies to be taught in a new support 

worker certificate program that expands supplies of quality workers to meet market 

demand in home- and community-based settings. 

• Pilot test the establishment of additional worker cooperatives with the assistance of 

the Departments of Agriculture, Labor, and HHS, to explore improved consumercaretaker relationships.

6. Mandate coordination and collaboration among federal agencies to align public policy 

and transform infrastructure to be responsive to consumer needs and preferences for a 

comprehensive system of LTSS. 

 Implementation Lead: 

• Centers for Medicare and Medicaid Services 

• Department of Housing and Urban Development (HUD) 

• Senate Finance Committee 

• Senate Committee on Banking, Housing, and Urban Affairs 

• House Subcommittee on Health and Environment 

• Department of Transportation 

• Social Security Administration 

• House Committee on Education and Workforce 

Although Medicaid and Medicare dominate the landscape of funding authorities for LTC and 

LTSS, NCD researchers documented the complexity and fragmentation of multiple systems with 

different rules of eligibility and lack of information on access to and availability of resources. 
501 

The fragmentation and coordination challenges carry over from the executive branch to the 

legislative branch, where different committees in the Senate have different controlling authority 

than committees in the House of Representatives. Although Program Assessment Rating Tool 

(PART) reviews by the Office of Management and Budget (OMB) are incorporating common 

performance measures across agencies and programs, there is no focus on cross-department 

and agency collaboration. The nature of LTSS requires more than a dozen programs and 

agencies to improve the coordination of resource at the community level, where it will benefit 

the end-user. No single recommendation can respond to this significant challenge. NCD 

recommends that the appropriate agencies and congressional committees implement the 

following set of recommendations: 

• Hold congressional hearings to evaluate possible options for improvement of collaboration 

across multiple departments to provide access to information and supports and services to 

meet the long-term needs of people with disabilities under and over age 65. 

• Require HUD and HHS to document current efforts and future plans to improve and 

expand the availability of affordable accessible housing coordinated with services and 

supports when needed. Establish an Interagency Council on Meeting the Housing and 

Service Needs of Seniors and Persons with Disabilities.1012 The council’s role would be 

as follows:1013 “(4) To improve coordination among the housing and service-related 

programs and services of federal agencies for persons with disabilities and seniors and to 

make recommendations about needed changes with an emphasis on (a) maximizing the 

impact of existing programs and services; (b) reducing or eliminating areas of overlap 

and duplication in the provision and accessibility of such programs and services; and (c) 

making access to programs and services easier for persons with disabilities and seniors 

around the country; (5) To increase the efficiency and effectiveness of existing housing 

and service related programs and services which serve the target populations; (6) To 

establish an ongoing system of coordination among an within such agencies or 

organizations so that the housing and service need are met in a more efficient manner. 

MEMBERSHIP: The council shall be composed of the following: (1) the Secretary of 

Housing and Urban Development or a designee of the Secretary; (2) the Secretary of 

Health and Human Services or a designee of the Secretary; (3) the Secretary of 
502 

Agriculture or a designee of the Secretary; (4) the Secretary of Transportation or a 

designee of the Secretary; (5) the Secretary of Labor or a designee of the Secretary; (6) 

the Secretary of Veterans Affairs or a designee of the Secretary; (7) the Secretary of the 

Treasury or a designee of the Secretary; (8) the Commissioner of the Social Security 

Administration or a designee of the Commissioner; (9) the Administrator of the Centers 

for Medicare and Medicaid Services or a designee of the Administrator; (10) the 

Administrator of the Administration on Aging or a designee of the Administrator; (11) 

the head (or designee) of any other federal agency as the council considers appropriate; 

(12) state and local representatives knowledgeable about the needs of the target 

population. CHAIRPERSON: The chairperson of the Council shall alternate between the 

Secretary of Housing and Urban Development and the Secretary of Health and Human 

Services on an annual basis. The Council shall prepare an annual status report on 

activities to the President and Congress with policy recommendations.” 

• Add to the PART performance criteria indicators that will evaluate documented outcomes 

from intra-agency and cross-agency collaboration to meet the LTSS needs of people with 

disabilities. Consider possible financial incentives for agencies that document valued 

outcomes from LTSS system collaboration. Report annually to Congress on individual 

agency performance in this area. 

• Issue a new Executive Order to charge CMS to chair a time-limited workgroup (six 

months) on LTSS that includes representation by HUD, HHS, Social Security 

Administration (SSA), Education, Labor, Justice, Transportation, Treasury, and Agriculture 

to identify policy barriers and facilitators to an improved comprehensive coordinated 

system of LTSS for people with disabilities under and over age 65 that maximizes 

interagency collaboration, promotes consumer direction, and increases consumer choice 

and access to affordable supports and services in home- and community-based settings. The 

final report to the President would include recommendations for policy and practice 

changes and any appropriate program consolidation. 
503 

7. Improve and hold states accountable for rebalancing their system to support LTSS. 

 Implementation Lead: 

• Centers for Medicare and Medicaid Services 

• Congressional Budget Office 

• General Accountability Office 

Selected states are having success with a global budgeting approach to move their LTSS systems 

from an institutional bias to be anchored by home- and community-based services and supports. 

CMS Real Choice Systems Change Grants have accelerated the pace of change in a number of 

states that recognize the changing expectations of the consumer population to have more control 

and independence with access to appropriate supports. The consumer population in each state 

wants more information on the progress their state is making to rebalance the system and expand 

their choices in the most independent setting possible. 

• Develop a template, in consultation with states, to be used to evaluate and measure the 

states’ current expenditures for LTSS in institutional versus home- and community-based 

settings. Such a template would be developed jointly by CMS and CBO to allow for 

consistent comparative benchmarking from year to year within a state and among states. 

CMS would require an annual updated report that would identify expenditures by cost 

category in terms of services/supports, funding streams, and populations. States would be 

expected to achieve an agreed-upon level of improvement annually, related to negotiated 

indicators. A system of rewards would be considered that would allow up to a 5 percent 

increase in federal matching funds under the Medicaid program for certain agreed-upon 

LTSS expenditures. CMS would make available on its Web site the comparative analysis 

of state expenditures, according to agreed-upon benchmarks. 

8. Increase understanding of the possible relationship between an LTSS insurance 

product and publicly financed LTSS. 

 Implementation Lead: 

• Centers for Medicare and Medicaid Services 
504 

• Assistant Secretary for Planning and Evaluation, Department of Health and 

Human Services 

Congressional interest remains high to understand and explore further the possible relationship 

between the current market for LTC insurance products and a reduced dependence on Medicaid 

and Medicare for long-term support needs. With the growing cost of Medicaid and Medicare 

documented by NCD researchers, there is growing interest in forging a new level of partnership 

with the insurance industry that explores both the expansion of product options and the possible 

cost savings to the public system. For people with disabilities under age 65, no such insurance 

product yet exists and little is known about the risk factors in terms of potential utilization by the 

target population and how to achieve affordable pricing. Even with adoption of several of the 

other major recommendations proposed in this report, it is unlikely that a revised Medicaid 

program will ever meet the needs of all persons who seek LTSS. 

• Conduct a feasibility study of possible new insurance products and options regarding 

their relationship to the Medicaid program to evaluate possible strategies to partner an 

LTSS insurance product with supplementary Medicaid coverage for people with 

disabilities under age 65. Consider price, benefit coverage, caps in coverage, and 

eligibility for Medicaid LTSS, as well as project market demand and needed incentives to 

share risk among stakeholders: the government, the consumer, and the insurance industry. 

The possible collaboration would include APSE at HHS, CMS, and a private insurer. 

• Pilot test such a product or products to evaluate cost benefits to all critical stakeholders. 

Such a pilot must recognize that LTSS must be individualized to accommodate the needs 

and desires of the individuals receiving assistance and that the services and supports must 

reflect consumer preference for noninstitutional settings. Such an insurance product must 

achieve several objectives: be affordable, be flexible, respond to consumer needs and 

preferences, and be sustainable over time with federal oversight.

9. Improve consumer understanding, knowledge, and skills to develop a person-centered 

plan and self-direct an individual budget. 
505 

 Implementation Lead: 

• Centers for Medicare and Medicaid Services 

• Administration on Aging 

• Administration on Developmental Disabilities 

• Social Security Administration 

The Cash and Counseling Demonstrations and the Independence Plus waivers have produced early 

positive findings of increased consumer satisfaction with the self-direction of individual budgets, 

the selection of support providers, and increased choice in the development of person-centered 

plans. Individuals with disabilities and their families should be given the opportunity to plan, 

obtain, control, and sustain the services that are best for them in preferred home- and communitybased settings. For people with disabilities who have been given few choices in the past regarding 

services, supports, and service delivery options, consumer self-direction requires information, 

education, and training to build the critical skills needed to make informed decisions. 

Access to information about service options, streamlined procedures for determining eligibility 

for various public benefits, and new infrastructure will need to be developed to assist with 

programmatic and financial management. 

The following set of recommendations recognizes the principles of individual self-direction and 

responsibility for prudent and effective management of public resources as critical to the 

development of the LTSS system of the future. 

• Continue to provide competitive grants that establish Aging and Disability Resource 

Centers (ADRCs) in all 50 states that provide one-stop access to information and 

individualized advice on long-term support options, as well as streamlined eligibility 

determinations for all publicly funded programs. With joint funding from CMS and the 

Administration on Aging, the ADRCs should provide education and training to 

individuals with disabilities on informed decision making in the development of personcentered plans and the management of individual budgets. 
506 

• Establish, with funding from CMS, a National Resource Center on Consumer SelfDirection that identifies and disseminates best practice information on person-centered 

plan development, self-directed management of individual budgets, and examples of 

multiple funders braiding funds within an individual budget to achieve common 

negotiated performance objectives. The center should also provide assistance to states on 

methodology for development of individual budgets and strategic alliance options with 

financial institutions for the effective and efficient management of resources that have 

been allocated on an individualized basis. 

• Require states as part of their HCBS waiver implementation to provide education and 

training to eligible Medicaid beneficiaries on effective and meaningful participation in 

person-centered planning, management of individual budgets, and negotiation with 

service and support providers. 

• Establish a cross-agency workgroup including CMS, the Administration on Aging, SSA, 

the Administration on Developmental Disabilities, HUD, the Office of Special Education 

and Rehabilitative Services at the Department of Education, and the Department of Labor 

to accelerate options for states to bundle or braid public funds within a self-directed 

individual budget with streamlined and accelerated eligibility procedures. Findings and 

recommendations shall be made to the President and Congress within 90 days, with the 

report to be made public for review and comment. 

10. Continue to educate people with disabilities, their families, and other critical 

stakeholders about LTSS challenges in public policy and practice and document 

further consumer needs, costs, and preferences for a comprehensive, accessible, and 

affordable system. 

 Implementation Lead: 

• National Disability Institute/NCB Development Corporation 

• A major insurance company 

• A major financial service company 

• National disability organizations 
507 

• American Association of Retired Persons 

• National Council on Disability 

This report documents the current crisis and the impending perfect storm. It is a complex and 

confusing picture, not easy to grasp and even more difficult to change as we move forward. NCD 

must continue to put the spotlight on this critical set of challenges that, in the next 20 years, may 

touch over half the population of our country. For people with unmet LTSS needs today, NCD 

must continue the public education process through outreach activities and direct discussion with 

the disability community and policymakers. 

• Conduct a series of audio conferences and a national summit of key leaders and 

stakeholders to continue to document the findings and build consensus on possible policy 

and practical solutions. 

The focus of the discussion must be based on a core set of principles identified by the Expert 

Panel reflecting the following: 

• Individual authority—the ability to manage, direct, and control the nature and delivery 

of supports received. 

• Personal choice—the freedom to choose the services and the provider that best meet the 

person’s needs. 

• Individual support—the resources to enable people with disabilities, as well as families 

and seniors, to make informed decisions regarding the services received. 

• Productivity—the focus of LTSS must be on giving people the assistance they need to 

live full and productive lives. 

• Participation—people receiving support need to be involved at all levels of the decisionmaking process, from policy to implementation. 
508 

Part III 

The New Millennium LTSS Model 

Year 2049 

The United States successfully built a health care and LTSS ship through an array of publicprivate funding mechanisms. Many of the demographic predictions made by economists and 

policymakers at the beginning of the 21st century did come true. There were fewer workers and 

more retirees and fewer federal resources to cover promised benefits. It became evident by the 

middle of the 2010s that reform was necessary in Social Security, Medicare, Medicaid, civil 

service pensions, and military pensions. The United States had committed $25 trillion in future 

benefits that were unfunded. Japan, Italy, and Spain experienced population declines that 

affected everyone’s international trade markets and increased global workforce shortages. 

Business leaders in the United States began to see their profit margins eroded with the rising 

costs of health care and were concerned that their ability to compete globally would decline 

unless the problem was solved. Although disability advocates and researchers and policymakers 

had tried to put the issue of LTSS and health care on the national agenda for decades, it was the 

business community that actually positioned it for reform. 

Today, in 2049, 50 percent of Americans are nonwhite and a majority are low-income workers. 

The overall health of Americans is better and many people are living longer, including people 

with lifelong disabilities such as Down syndrome, cerebral palsy, and intellectual impairments. 

Life expectancy has increased and, although there are different configurations of the “family 

unit,” families continue to play an important role in the care and housing of their members—

young and old. The nursing home facility of the mid- and late 20th century is all but obsolete, 

and housing with variations in services is mostly community based and provided by family 

members and a new cadre of professionals. Although the movement in the late 20th century was 

toward consumer-directed care in the community, the challenge of finding affordable housing for 

many retired Americans and Americans with disabilities, including appropriate and affordable 

services and supports, remained a large barrier. Many Americans had not saved or insured 
509 

adequately against the costs of aging, retirement, or disability. In 2005, LTSS public policy 

depended on many variables falling into place. Even if an individual or family met the income 

and disability eligibility criteria for LTSS, many states could not afford to offer the necessary 

services and supports because of budget deficits. Because Medicaid programs were statespecific, many people with disabilities could not move their LTSS benefit from one state to 

another. The country was not prepared to address the health and service and support needs of its 

fast-growing demographics, which included more working individuals under the age of 65 with 

disabilities and the doubling of its senior population. Many middle-income seniors had nowhere 

to turn but to Medicaid, and state and federal spending fast became unsustainable. 

Disability rates did decline for the senior population, as predicted in 2005. Even for those 85 

and older, modern medicine and technology began to eradicate diseases associated with aging, 

such as Alzheimer’s, visual and hearing impairments, and other physical conditions that once 

limited mobility. Scientific breakthroughs for diabetes, obesity, and mental illness helped to 

decrease the incidence of chronic disabilities in the under-65 population as well. The incidence 

of lifelong disabilities, such as cerebral palsy and Down syndrome, were unchanged, but new 

insurance products became available and through shared risk pools were helpful in defraying 

the costs of living with a lifelong disability. Individuals with disabilities were no longer 

expected to live in impoverishment to receive assistance for the additional costs associated 

with compensating for limitations in ADLs. Unemployment for people with disabilities 

declined as increased services and supports were provided. The workplace became more 

accessible for people with disabilities as technology increased its accessibility and employers 

became adept at providing the necessary accommodations. 

Today, in 2049, health care policy is universal and includes a basic menu of services focused 

primarily on prenatal care, prevention services, routine checkups, prescription drug management, 

and nonmedical services and supports. Healthy environments and healthy behaviors are considered 

the centerpiece for a healthy country. All Americans now have access to an array of basic health 

services that are mandatory, similar to the requirement that all drivers had automobile insurance 

during the second half of the 20th century. The disproportionate costs for health services for the 

uninsured declined as the new system focused on quality outcomes and cost management and 
510 

universal coverage. However, boutique health care continued to grow and is now a popular 

alternative for many Americans with private resources; it includes personalized health services 

from spa membership to monthly plastic surgery treatments to home visits by a physician. 

HCBS replaced the institutional nursing home model of the mid-20th century and regional 

centers provided neighborhood triage and mobile units to reduce the costs of transportation and 

manage costs and outcomes. Housing for seniors and people with disabilities emerged that linked 

independent living with choice and new options. Group homes were converted into cooperatives, 

and individuals with disabilities became shareowners in an array of alternative housing models 

that promoted equity. Unemployment for people with disabilities declined and, for the first time 

in a century, working Americans included many individuals with disabilities. 

The movement toward health care reform, including LTSS, began in 2005 as a small group 

of researchers and policymakers unveiled a new model for the LTSS ship “AmeriWell,” 

which provided a new roadmap for innovative funding and product development for people 

with disabilities. 
511 

Part IV 

AmeriWell—The New Millennium LTSS Model 

 Implementation Lead: 

• Center for Medicaid Services 

• Congressional Committee on LTSS 

• Wall Street investment firms 

• Major health insurance companies 

• National Academy of Science 

• AmeriWell is a prefunded, mandatory LTSS system that provides all Americans of any 

age with coverage from birth based on criteria of risk and functioning and not category of 

disability. AmeriWell delinks LTSS from Medicaid and Medicare, creating its own 

governing agency, regulations, oversight, and congressional committee. 

• The AmeriWell Center is the third division of CMS and is required to produce an 

annual report to the President and Congress that provides an update on fiscal and 

programmatic status. 

• AmeriWell Part A begins with a individual/family account established at birth for all 

Americans. AmeriWell Part A provides LTSS for all Americans of all ages based on 

criteria of risk and functioning and not ability to pay. AmeriWell Part A is funded 

through individual/family contributions made to individual/family-assigned accounts 

beginning at birth with premiums paid by wage earners on a sliding scale and assessment 

of functioning and risk. A basic LTSS menu provides services and supports most desired 

and utilized by people with disabilities, whether working or retired. 

• AmeriWell Part B will provide LTSS and health care and prescription drugs for 

individuals who are both Medicare and Medicaid eligible because of poverty and 

disability status. 
512 

• Every American has an AmeriWell Account Plan (AWAP) that is an actuarially agreedupon amount adjusted for inflation over time based on the cost projections of a specific 

lifelong disability, such as cerebral palsy, Down syndrome, or a physical impairment. In 

addition, an individual is assessed as to risk and functioning over time for any benefit 

adjustment. For example, a person with cerebral palsy who needs help with two ADLs 

but is functioning well on his or her own is given the necessary services and supports for 

work. Assuming that this person is not considered at immediate risk or need of other 

services, he or she is assigned a capped amount based on this data. 

• Each child is given an AmeriWell account at birth, funded by the parent wage earner. If a 

child is born with a significant disability, the parental account that has accrued over time 

will be opened and used for the child. If a child has no parents, AmeriWell Part B will kick 

in and provide a defined amount of services and support based on the individual’s AWAP. 

• The AmeriWell premiums are set aside in an AmeriWell Trust Fund that has publicprivate oversight and provides a financial pool to cover LTSS. 

• Individuals and families also have the option to create private AmeriWell Freedom 

Accounts that are tax deductible up to $10,000 per year. These accounts are similar to the 

college 529 plans, and each state has the option of teaming up with private investment 

firms to offer choices regarding investment options, flexible and guaranteed rate of 

return, and/or annuities. 

• AmeriWell Part B raises revenue through a sales commission levied on daily stock 

transactions to create a fund (Penny Pool) to defray the disproportionate share of care 

provided to uninsured/underinsured, dual-eligible persons (those who receive both 

Medicare and Medicaid). The Penny Pool helps states meet the needs of impoverished 

individuals with disabilities and the aging. 

• AmeriWell allows Medicaid to stay true to its original mission to serve as a safety net for 

low-income mothers, children, and people under age 65 and provides a buy-in option for 

individuals who are working with a disability, who are working but do not have insurance 

on the job, or who lose coverage because of a lost job. All aging and disability 

populations (30% of the Medicaid caseload in 2005) have been moved into AmeriWell. 
513 

• AmeriWellPlus is a program for Social Security Disability Insurance beneficiaries and 

dependent recipients who previously fell under Medicare. This account provides LTSS, 

health insurance, and prescription drugs, and its funding is shared with Medicare and the 

Penny Pool. 

• AmeriWell is a national program and provides LTSS portability from one state to another. 
514 

2005 

Medicaid 

Children & Moms 

People with Disabilities and Aged

LTSS and Health Care

Medicare 

Seniors 

SSDI Recipients (<65) 

Low-income people 

receiving both 

Medicare & Medicaid

AmeriWell

POPULATIONS

All Americans 

Medicaid Eligible 

Population: 

 Disability and Aging 

 Low-Income People Receiving 

Both Medicare and Medicaid 

SSDI <65 Receiving Medicare 

FUNDING 

LTSS Life Accounts at 

Birth 

“Penny Pool” 

Penny tax on each stock 

transaction 

Penny Pool and Medicare 

LTSS and Health Care 

2049 

Medicare 

Seniors 70+ 

Medicaid 

Children & Moms

Safety Net 
515 

References 

1

 O’Shaughnessy, C. (2003). Long-Term Care Chart Book: Persons Served, Payers and 

Spending. Congressional Research Service: The Library of Congress (RS21518). P. 3 

2

 Finding added and not part of main body of research. Government Accountability Office. (June 

2005). Federal Disability Assistance: Wide Array of Programs Needs To Be Examined in Light 

of 21st Century Challenges. Washington, DC: GAO (GAO-05-626). P. 5. 

3

 Medicaid Reform A Preliminary Report from the National Governors Association. June 15, 

2005. 

4

 Finding added and not part of main body of research. Refers to Office of Management and 

Budget Circular A-87 that establishes cost principles for federal grants to state governments. 

April 2005. Department of Health and Human Services: Office of the Inspector General. Review 

of the Oklahoma Department of Human Services’ Medicaid Administrative Costs. A-06-03-

00046. 

5

 Language added to U.S. Senate Bill, 109th Congress—S.B. 705 to include people with 

disabilities: Establish an Interagency Council on Meeting the Housing and Service Needs of 

Seniors, April 5, 2005, to include people with disabilities. 

6

 Checkland, P.B. (1999). Soft Systems Methodology: A 30- Year Retrospective. Toronto: John 

Wiley & Son, Ltd. 

7

 Checkland, P.B. (1981). Systems Thinking, Systems Practice. Toronto: John Wiley & Sons, Ltd. 

8

 Ausubel, D.P. (2000). The Acquisition and Retention of Knowledge: A Cognitive View.

Dordrecht, Netherlands: Kluwer Academic Publishers. 

9

 Senge, P., Kleiner, A., Roberts, C., Ross, R., & Smith, B. (1994). The Fifth Discipline 

Fieldbook: Strategies and Tools for Building a Learning Organization. New York: Doubleday. 

10 Lakdawalla, D., Bhattacharya, J., & Goldman, D. (2001). Are the Young Becoming More 

Disabled? National Bureau of Economic Research. 

11 O’Shaughnessy, C. (2003). Long-Term Care Chart Book: Persons Served, Payers and 

Spending. Congressional Research Service: The Library of Congress (RS21518). P. 3. 

12 Longman, P. (2004). The Empty Cradle: How Falling Birthrates Threaten World Prosperity 

and What to Do About It. New America Book published by Basic Books: New York. P. 154. 

13 Walker, D. (2004). The National Growing Fiscal Imbalance. Comptroller General of the 

United States, U.S. Government Accountability Office. 
516 

 

14 Congressional Budget Office. (April 2004). Financing Long-Term Care for the Elderly. The 

U.S. Congress. 

15 National Endowment for Financial Education. (2002). Long-Term Care: Our Next National 

Crisis? A Meeting Sponsored by the National Endowment for Financial Education, Scottsdale, 

Arizona, May 6–8, 2001. 

16 Ibid. 

17 American Association of Homes and Services for the Aging. (October 18, 2002). Public 

Policy: Issue Updates. (Contact Lousie Maus, AAHS Public Policy Associate at 

Lmaus@aahsa.org for a copy.) Washington, DC: American Association of Homes and Services 

for the Aging. 

18 Ibid. 

19 National Governors Association. (August 13, 2004). A Lifetime of Health and Dignity: 

Confronting Long-Term Care Challenges in America. P. 3. www.subnet.nga.org.ci.2-

financial.hgtml. 

20 McCall, N., Korb, J. (2001). Chapter 8: What Have We Learned from the Partnership for 

Long-Term Care? In Ed. McCall, Who Will Pay for Long-Term Care: Insights from the 

Partnership Programs. Chicago: Health Administration Press. 

21 Ibid., 178 

22 A Profile of Older Americans: 2000. Administration on Aging, U.S. Department of Health and 

Human Services. P. 9. 

23 Ibid., 4. 

24 Ibid. 

25 American’s Health Insurance Plans: 2004. Post-Election Survey Regarding Health Care Issues: 

Ayres, McHenry & Associates, Inc. Pp. 1–2. 

26 Durenberger, D. (2003). Long-Term Care Policy in the New Reality. In Eds. Blumental, 

Moon, Washawsky, & Boccuti, Long-Term Care and Medicare Policy – Can We Improve the 

Continuity of Care? National Academy of Social Insurance. Brookings Institution Press. Pp. 

120–128. 

27 Ibid., 2. Quoting Kaiser Commission on Medicaid and the Uninsured, January 2003. 

28 Ibid., 2. 
517 

 

29 Durenberger, D. (2003). Long-Term Care Policy in the New Reality. In Eds. Blumental, 

Moon, Washawsky, & Boccuti, Long-Term Care and Medicare Policy – Can We Improve the 

Continuity of Care? National Academy of Social Insurance. Brookings Institution Press. Pp. 

120–126. 

30 Press Release, January 11, 2005. Governor Bush announces plan to transform Medicaid: 

Proposals to put patients first. Empowered care – putting patients first. 

www.empoweredcare.com/press01112005.aspx 

31 Stone, R. (2003). Reality of Caring for the Long-Term Care Population. In Eds. Blumental, 

Moon, Washawsky, & Boccuti, Long-Term Care and Medicare Policy – Can We Improve the 

Continuity of Care? National Academy of Social Insurance. Brookings Institution Press. Pp. 40–

47. 

32 Silberner, J. (2003). Comment on Part Three: Prospects for Long-Term Care Policymaking at 

State and Federal Levels. In Eds. Blumental, Moon, Washawsky, & Boccuti, Long-Term Care 

and Medicare Policy – Can We Improve the Continuity of Care? National Academy of Social 

Insurance. Brookings Institution Press. Pp. 127–128. 

33 Velgouse L., & Dworken, M. (2002). Olmstead Update. An Update on Activities Related the 

Olmstead Decision: Olmstead State Plans Real Systems Change Grants. New Freedom Initiative: 

AAHSA Collaborations and Activities. 

34 National Council on Disability. (August 19, 2003). Olmstead: Reclaiming Institutionalized 

Lives. Washington, DC. 

35 Hudson, R.B. (1997). The Future of Age-Based Public Policy. Baltimore and London: The 

Johns Hopkins University Press. 

36 Kane, R. (2001). Long-Term Care and a Good Quality of Life: Bringing Them Closer 

Together. The Gerontologist, 41(3): 293–304. Stanford, CA: Stanford University. 

37 Kane, R.A., & Kane, R. L. (1987). Long-Term Care: Principles, Programs, and Policies. New 

York: Springer Publishing Company. 

38 Mahoney, K.J., & Simon-Rusinowitz, L. (1997). Cash and Counseling Demonstration and 

Evaluation: Start-Up Activities. Journal of Case Management, 6: 25–31. 

39 Kane, R. (2001). Long-Term Care and a Good Quality of Life: Bringing Them Closer 

Together. The Gerontologist, 41, 3, 293–304. Stanford, CA: Stanford University. 

40 Nerney, T., & Shumaway, D. (1996). Beyond Managed Care: Self-determination for People 

with Disabilities. Concord, NH: Institute on Disability, University of New Hampshire. 
518 

 

41 Assisted Living Workgroup. (April 2003). Assuring Quality in Assisted Living: Guidelines for 

Federal and State Policy, State Regulation, and Operations. Report to the U.S. Senate Special 

Committee on Aging, Washington, DC. 

42 Longman, P. (2004). The Empty Cradle. How Falling Birthrates Threaten World Prosperity 

and What to Do About It. New York: Basic Books. 

43 Jonas, S., & Kovner, A.R. (2003). Health Care Delivery in the United States. Seventh Edition. 

New York: Springer Publishing Company. P. 461. 

44 Ibid., 135. 

45 Ibid. 

46 Longman, P. (1996). The Return of Thrift: How the Coming Collapse of the Middle-Class 

Welfare State Will Reawaken Value in America. New York: The Free Press. 

47 Rosner, D. (1982). Health Care for the “Truly Needy”: Nineteenth-Century Origins of the 

Concept. Milbank Memorial Fund Quarterly: Health and Society, 60(Summer): 355. 

48 Jonas, S., & Kovner, A.R. (2003). Health Care Delivery in the United States. Seventh Edition. 

New York: Springer Publishing Company. Pp. 124–125. 

49 Lundberg, G.D. (2002). Severed Trust. Why American Medicine Hasn’t Been Fixed. New 

York: Basic Books. P. 57. 

50 Young, I.M. (1990). Justice and the Politics of Difference. New Jersey: Princeton University 

Press. 

51 Hartnett, J.T. (1999). Toward a Philosophy of Difference: An Analysis of Vermont’s 

Obligations to Establish Entitlement for Adults with Developmental Disabilities. University of 

Vermont. 

52 Ibid. 

53 Young, I.M. (1990). Justice and the Politics of Difference. New Jersey: Princeton University 

Press. P. 6. 

54 Bringewatt, R. (2003). Long-Term Care and Medicare Policy: Can We Improve the Continuity 

of Care? Eds. Blumental, Moon, Warshawsky, & Boccuti. Comment Paper on How Might We 

Meet Tomorrow’s Needs for Chronic and Long-Term Care? Pp. 232–235. 

55 Consortium of Citizens with Disabilities. (March 10, 2004). Letter to U.S. Senators. www.c-cd.org/2005Medicaid.htm. 
519 

 

56 Buhler-Wilkerson, K. (2003). No Place Like Home: A History of Nursing and Home Care in 

the United States. Baltimore: John Hopkins University Press. 

57 Gray, P. (1969). The Enlightenment. New York: W.W. Norton & Company. 

58 Ibid., 33. 

59 Starr, P. (1982). The Social Transformation of American Medicine. New York: 

Basic Books. 

60 Hartnett, J.T. (1992). The Funeral an Endangered Tradition: Making Sense of the Final 

Farewell. Vermont: Good Mourning Press. 

61 Buhler-Wilkerson, K. (2003). No Place Like Home: A History of Nursing and Home Care in 

the United States. Baltimore: John Hopkins University Press. 

62 Jonas, S., & Kovner, A.R. (2003). Health Care Delivery in the United States. Seventh Edition. 

New York: Springer Publishing Company. P. 147. 

63 Aries, P. (1975). Western Attitudes toward Death. Baltimore: John Hopkins University Press. 

64 Nord, W.A. (1995). Religion and American Education. Rethinking a National Dilemma.

Chapel Hill & London: The University of North Carolina Press. 

65 Jonas, S., & Kovner, A.R. (2003). Health Care Delivery in the United States. Seventh Edition. 

New York: Springer Publishing Company. Pp. 246–252. 

66 DeSpelder, L.A., & Strickland, A.L. (1997). The Last Dance. Mountain View, CA: Mansfield 

Publishing Company. 

67 Jonas, S., & Kovner, A.R. (2003). Health Care Delivery in the United States. Seventh Edition. 

New York: Springer Publishing Company. 

68 D’Agostino, L. (1948). The History of Public Welfare in Vermont. Winooski, VT: St. 

Michael’s College Press. 

69 Stone, D. (1983). The Disabled State. Philadelphia: Temple University Press. 

70 Carlisle, L.B. (1965). Mental Retardation in Vermont, A Chronology of Changing Attitudes. 

Vermont Mental Retardation Planning Report, Pavilion Hotel: Montpelier, VT. 

71 D’Agostino, L. (1948). The History of Public Welfare in Vermont. Winooski, VT: St. 

Michael’s College Press. 

72 Jonas, S., & Kovner, A.R. (2003). Health Care Delivery in the United States. Seventh Edition. 

New York: Springer Publishing Company. 
520 

 

73 Ibid. 

74 Buhler-Wilkerson, K. (2003). No Place Like Home: A History of Nursing and Home Care in 

the United States. Baltimore: John Hopkins University Press. 

75 Jonas, S., & Kovner, A.R. (2003). Health Care Delivery in the United States. Seventh Edition. 

New York: Springer Publishing Company. P. 252. 

76 Lacey, D. (1999). The Evolution of Care: A 100-Year History of Institutionalization of People 

with Alzheimer’s Disease. Journal of Gerontological Social Work, 31(3/4). 

77 Stone, Julie Lynn. (July 5, 2002). Medicaid: Eligibility for the Aged and Disabled. 

Washington, DC: Congressional Research Service (CRS RL31413). 

78 Kassner, Enid, & Bectel, R.W. (1998). Midlife and Older Americans with Disabilities: Who 

Gets Help? A Chartbook. The Public Policy Institute, Research Group: American Association of 

Retired Persons. 

79 Stone, Julie Lynn. (July 5, 2002). Medicaid: Eligibility for the Aged and Disabled. 

Washington, DC: Congressional Research Service (CRS RL31413). 

80 Ibid., 8. 

81 AARP. (2004). Long-Term Services and Supports. The Policy Book, Chapter 7: AARP Public 

Policies. Washington, DC: AARP. 

82 O’Shaughnessy, C. (2003). Long-Term Care Chart Book: Persons Served, Payers and 

Spending. Congressional Research Service: The Library of Congress (RS21518). 

83 Congressional Budget Office. (2004). Financing Long-Term Care for the Elderly. Congress of 

the United States. 

84 Redfoot, D.L., & Pandya, S.M. (2002). Before the Boom: Trends in Long-Term Supportive 

Services for Older Americans with Disabilities. Washington, DC: AARP Public Policy Institute. 

85 O’Shaughnessy, C. (2003). Long-Term Care Chart Book: Persons Served, Payers and 

Spending. Congressional Research Service: The Library of Congress (RS21518). 

86 Lakdawalla, D., Bhattacharya, J., & Goldman, D. (2001). Are the Young Becoming More 

Disabled? National Bureau of Economic Research. 

87 Burwell B.O., & Jackson, B. (1994). The Disabled Elderly and Their Use of Long-Term Care. 

U.S. Department of Health and Human Services, Washington, DC. 

88 Hudson, R.B. (1997). The Future of Age-Based Public Policy. Baltimore and London: The 

Johns Hopkins University Press. 
521 

 

89 Kane, R. (2001). Long-Term Care and a Good Quality of Life: Bringing Them Closer 

Together. The Gerontologist, 41, 3, 293–304. Stanford, CA: Stanford University. 

90 Kane, R.A., & Kane, R.L. (1987). Long-Term Care: Principles, Programs, and Policies. New 

York: Springer Publishing Company. 

91 Jonas, S., & Kovner, A.R. (2003). Health Care Delivery in the United States. Seventh Edition. 

New York: Springer Publishing Company. P. 200. 

92 Ibid. 

93 Stone, Julie Lynn. (July 5, 2002). Medicaid: Eligibility for the Aged and Disabled. 

Washington, DC: Congressional Research Service (CRS RL31413). 

94 Ibid. 

95 Ibid. 

96 Ibid. 

97 American Health Care Association – Health Services Research and Evaluation. (June 2003). 

Nursing Facility Total, Average and Median Number of Patients per Facility and ADL 

Dependence. Available at www.ahca.org. Washington, DC: American Health Care Association. 

98 2001 Urban Institute Long-Term Care Chart Book.

99 Stone, Julie Lynn. (July 5, 2002). Medicaid: Eligibility for the Aged and Disabled. 

Washington, DC: Congressional Research Service (CRS RL31413). 

100 Ibid. 

101 See footnote 26. 

102 Hudson, R.B. (1997). The Future of Age-Based Public Policy. Baltimore and London: The 

Johns Hopkins University Press. 

103 Kane, R. (2001). Long-Term Care and a Good Quality of Life: Bringing Them Closer 

Together. The Gerontologist, 41, 3, 293–304. Stanford, CA: Stanford University. 

104 Stapleton, D.C., & Burkhauser, R.V. (2003). The Decline in Employment of People with 

Disabilities: A Policy Puzzle. Kalamazoo, Michigan: Upjohn Institute for Employment Research. 

Chapter 6: Employment and the Changing Disability Population. Ed. H. Stephen Kaye. P. 217–

55.

105 Ibid., 229. 
522 

 

106 Regulations currently define SGA for both the SSDI and SSI programs as employment that 

produces countable earnings of more than $810 a month for nonblind disabled individuals. The 

SGA level is indexed to the annual wage index. The SGA level for SSDI blind individuals, set by 

statute and also indexed to the annual wage index, is currently defined as monthly countable 

earnings that average more than $1,350. 

107Government Accountability Office. (2002). SSA and VA Disability Programs: Reexamination of Disability Criteria Needed to Help Ensure Program Integrity. Washington, DC: 

GAO (GAO 02-597). 

108 Sweeney, E. (2004). How Do the EITC and CTC Interact with Public Benefits? Center on 

Budget and Policy Priorities. 

109 Title II of the Social Security Act is administered by the Social Security Administration. Title 

II appears in the United States Code as §§401-433, subchapter II, chapter 7, Title 42. 

110 42 U.S.C. § 401 (1994) (amended 1999). 

111 Social Security Disability Planner Home Page. Accessed 2004. Available at 

www.ssa.gov/dibplan/index.htm. 

112 Catalog of Federal Domestic Assistance. General Services Administration, Office of 

Governmentwide Policy, Office of Acquisition Policy, Regulatory and Federal Assistance 

Publication Division. www.cfda.gov. 

113 Ibid., 217. 

114 Ibid., 341–42 

115 Title XVI appears in the United States Code as §§1381 note-1385 note, subchapter XVI, 

chapter 7, Title 42. 

116 42 U.S.C. §§ 1381-1383c (1994) (§§ 1382-1382b, 1382d, 1382e, 1383, 1383b amended 1999; 

§ 1382c amended 1997; § 1383c amended 1996). 

117 Supplemental Security Income Home Page. Accessed 2004. Available at 

www.ssa.gov/notices/supplemental-security-income/. 

118 Ibid. 

119 Catalog of Federal Domestic Assistance. General Services Administration, Office of 

Governmentwide Policy, Office of Acquisition Policy, Regulatory and Federal Assistance 

Publication Division. www.cfda.gov. 

120 Ibid. 
523 

 

121 Gold, S. (2005). Social Security Debate and People with Disabilities. Information Bulletin 

No. 77. 

122 Tu, H.T. (2004). Rising Health Costs, Medical Debt and Chronic Conditions. Center for 

Studying Health System Change. Issue Brief. No. 88. 

123 Eichner, J., & Blumenthal, D., Eds. (2003). Medicare in the 21st Century: Building a Better 

Chronic Care System. Washington, DC: National Academy of social Insurance. 

124 Ibid. 

125 Ibid. 

126 Ibid., 27. 

127 Menton, K.G. (2004). Forecasting the Nursing Home Population. Medical Care, 41(1): 221–

24. 

128 Miller, E. (2001). Federal and State Initiatives to Integrate Acute and Long-Tem Care: Issues 

& Profiles. Washington, DC: Congressional Research Service (RL30813). P. 4. 

129 Ibid. 

130 Tritx, K., & Lindley, M. (2004). Dual Eligibles: Medicaid Expenditures for Prescription 

Drugs and Other Services. Washington, DC: Congressional Research Service (RL31987). 

131 Ibid. 

132 Rizzolo, M., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the Stats 

in Developmental Disabilities. Department of Psychiatry and Coleman Institute for Cognitive 

Disabilities: The University of Colorado; Washington, DC: American Association on Mental 

Retardation. 

133 Ibid., 31. 

134 Mendelsohn, S. (2005). Asset Accumulation and People with Disabilities: The Role and 

Potential of the Income Tax Law. [Pending publication]. 

135 Honeycutt, A., Grosse, S., Dunlap, L., Schendel, D., Chen, H., Brann, E., & al Homsi, G. 

(2002). Economic Costs of Mental Retardation, Cerebral Palsy, Hearing Loss, and Vision 

Impairment. National Center on Birth Defects and Developmental Disabilities, Centers for 

Disease Control and Prevention, Atlanta, GA. 

136 Mendelsohn, S. (2005). Asset Accumulation and People with Disabilities: The Role and 

Potential of the Income Tax Law. [Pending publication]. 
524 

 

137 Ibid., 6. 

138 Ibid. 

139 Larson, S., Lakin, C., & Huang, J. (2003). Service Use by and Needs of Adults with 

Functional Limitations or ID/DD in the NHIS-D: Difference by Age, Gender, and Disability. DD 

Data Brief. University of Minnesota: Research and Training Center on Community Living, 

Institute on Community Integration. 

140 Ibid., 21. 

141 Ibid. 

141 Ibid., 22. 

142 Ibid. 

143 The Henry J. Kaiser Family Foundation. (December 2003). Understanding the Health-Care 

Needs and Experiences of People with Disabilities. 

144 National Endowment for Financial Education. (2002). Long-Term Care: Our Next National 

Crisis? A Meeting Sponsored by the National Endowment for Financial Education, Scottsdale, 

Arizona, May 6–8, 2001. P. 3. 

145 Ibid. 

146 Neal, M.B., & Wagner, D.L. (2001). Working Caregivers: Issues, Challenges, and 

Opportunities for the Aging Network. NFCSP Issue Brief. 

147 Stone, R.I. (August 2000). Long-Term Care for the Elderly with Disabilities: Current Policy, 

Emerging Trends, and Implications for the Twenty-First Century. Available at: 

www.milbank.org/reports/008stone/index.html). New York, NY: Milbank Fund. P. 11.

148 Ibid. 

149 Ibid. 

150 Ibid., 9. 

151 Lechner, V. (1993). Racial Group Responses to Work and Parent Care. Families in Society. 

Journal of Contemporary Human Services, 74: 93–103. 

152 See footnote 20, Neal and Wagner. (2001).

153 American Association for Homes and Services. (2002). Issue Updates. Washington, DC. 
525 

 

154 National Alliance for Caregiving and AARP. (2004) Caregiving in the U.S. Available at: 

www.caregiving.org/04finalreport.pdf. (Last viewed: January 19, 2005.) 

155 Arno, P.S. (February 2004). Caregiving in the U.S. Presented at Economic Value of Informal 

Caregiving. Annual meeting of the American Association of Geriatric Psychiatry, Orlando, FL. 

156 National Alliance for Caregiving and AARP. (2004) Caregiving in the U.S. Available at: 

www.caregiving.org/04finalreport.pdf. (Last viewed: January 19, 2005.) 

157 Ibid., 9. 

158 Ibid. 

159 National Alliance for Caregiving and AARP. (2004) Caregiving in the U.S. Available at: 

www.caregiving.org/04finalreport.pdf. (Last viewed: January 19, 2005.) 

160 Ibid., 14. 

161 Ibid., 44. 

162 Ibid., 47. 

163 Government Accountability Office. (1994). Long-Term Care: Diverse, Growing Population 

Includes Millions of Americans of All Ages. Washington, DC: GAO (GAO/HEHS 95-26). 

164 Altman, B.M., Cooper, P.F., & Cunningham, P.J. (1999). The Case of Disability in the 

Family: Impact on Health Care Utilization and Expenditures for Non-disabled Members. 

Milbank Quarterly, 77(1): 39–75. 

165 National Alliance for Caregiving and Brandeis University National Center on Women and 

Aging. (1999). The MetLife Juggling Act Study: Balancing Caregiving with Work and the Costs 

Involved. Westport, CT: MetLife Mature Market Institute. 

166 Abelson, A.G. (1999). Economic Consequences and Lack of Respite Care. Psychological 

Reports, 85: 880–82; Sherman, B.R. (1995). Impact of Home-Based Respite Care on Families of 

Children with Chronic Illnesses. Children’s Health Care, 24(1): 33–45; Theis, S.L., Moss, J.H., 

& Pearson, M.A. (1994). Respite for Caregivers: An Evaluation Study. Journal of Community 

Health Nursing, 11(1): 31–34; and Zarit, S.H., Parris Stephens, M.S., Townsend, A., & Greene, 

R. (1998). Stress Reduction for Family Caregivers: Effect of Adult Day Care Use. The Journal of 

Gerontology, 53B(5): S267–S277. 

167 Feinberg, L.F., Newman, S.L., & Van Steenberg, C. (2002). Family Caregiver Support: 

Policies, Perceptions and Practices in 10 States Since Passage of the National Family Caregiver 

Support Program. San Francisco: Family Caregiver Alliance. 
526 

 

168 ASPE, CMS, HRSA, DOL Office of the Assistant Secretary for Policy; BLS & ETA. (2003). 

Future Supply of Long-term Care Workers in Relation to the Aging Baby Boom Generation: 

Report to Congress. Washington, DC: ASPE. 

169 Feinberg, L., Horvath, J., Hunt, G., Plooster, L., Kagan, J. Levine, C., Lynn, J., Mintz, S., & 

Wilkinson, A. (December 1, 2003). Family Caregiving and Public Policy Principles. Bethesda, 

MD: National Alliance for Caregiving. Available at 

www.caregiver.org/caregiver/jsp/content/pdfs/op_2004_principles.pdf. (Last viewed: January 

19, 2005.)

170 Results of the 2003 National Survey of State Initiatives on the Long-Term Care Direct-Care 

Workforce. (March 2004). New York: Paraprofessional Healthcare Institute & North Carolina 

Department of Health and Human Services’ Office of Long-term Care. 

171 Ibid., 5. 

172 Donelan, K., et al. (2002). Challenged To Care: Informal Caregivers in a Changing Health 

Care System. Health Affairs, (July/August): 222–31. 

173 Ibid. 

174 HHS Launches Demonstrations to Recruit and Retain Personal Assistance Workers to Help 

People with Disabilities. (October 2, 2003). Available at: 

www.hhs.gov/news/press/2003pres/20031002.html. (Last viewed: January 19, 2005.) 

175 Paraprofessonal Healthcare Institute & North Carolina Department of Health and Human 

Services’ Office of Long-Term Care. (March 2004). Results of the 2003 National Survey of State 

Initiatives on the Long-Term Care Direct-Care Workforce. Bronx, NY: Paraprofessional 

Healthcare Institute. 

176 Ibid. 

177 Ibid.

178 Holzer, H. (2003). Modeling the Future Supply and Demand for Long-Term Care Workers. 

Washington, DC: American Association of Home and Services for the Aging. 

179 New Freedom Initiative. (2001). “Fulfilling America’s Promise to Americans with 

Disabilities.” Available at: www.hhs.gov/newfreedom. (Last viewed: January 19, 2005.) 

180 Memorandum from Thomas M. Reilly to the Performance Measurement Advisory Council 

(February 11, 2003). Available at: www.whitehouse.gov/omb/budintegration/pmac_3-3-

03draft.html. (Last viewed: January 19, 2005.) 

181 Ibid. 
527 

 

182 President’s Committee on People with Intellectual Disabilities. (2004). A Charge We Have to 

Keep: A Road Map to Personal and Economic Freedom for People with Intellectual Disabilities 

in the 21st Century. Washington, DC: PCPID. 

183 Ibid., 19. 

184 Weiner, W. (2003). Long-Term Care and Medicare Policy: Can We Improve the Continuity 

of Care? Eds. Blumental, Moon, Warshawsky, & Boccuti. Comment paper on How Might We 

Meet Tomorrow’s Needs for Chronic and Long-Term Care? 

185Stone-Axelrad, J. (2004). Long-Term Care Insurance Partnership Program. CRS Report to 

Congress. Washington, DC: Congressional Research Service (RL32610). 

186 The Long-Term Care Insurance Partnership Program provides that people who have 

exhausted (or used a least some of) their private long-term care insurance benefits may qualify 

for Medicaid, including its coverage for long-term care benefits, without having to meet the same 

means-testing requirements applicable to other groups of Medicaid eligibles. See footnote 152, 

P. 25. 

187 Ibid., 1. 

188 The Fiscal Survey of States. (December 2003). National Governors Association and National 

Association of State Budget Officers. 

189 National Governors Association. (August 13, 2004). A Lifetime of Health and Dignity: 

Confronting long-term care challenges in America. Available at: www.subnet.nga.org.ci.2-

financial.hgtml. 

190 Ku, L., & Nimalendran, S. (December 22, 2003). Losing Out: States Are Cutting 1.2 to 1.6 

Million Low-Income People from Medicaid, SCHIP and Other State Health Insurance 

Programs. Center on Budget and Policy Priorities.

191 Coleman, B., Fox-Grage, W., & Folkemer, D. (2003). State Long-Term Care: Recent 

Developments and Policy Directions – 2003 Update. National Conference of State Legislatures. 

192 Ibid., 1. 

193 Hoffman, E., Klees, B, & Curtis, C. (2003). Brief Summaries of Medicare & Medicaid: Title 

XVII and Title XIX of the Social Security Act as of November 1, 2003. Office of the Actuary: 

Centers for Medicare & Medicaid Services, Department of Health and Human Services. 

194 42 U.S.C. § 1396 (1994). 

195 Feder, J., Komisar, H., & Niefeld, M. (2000). Long-Term Care in the United States: An 

Overview. Health Affairs, 19(3): 40–56. 
528 

 

196 Wacker, R.R, Roberto, K.A., & Piper, L.E. (1998). Community Resources for Older Adults: 

Programs and Services in an Era of Change. Thousand Oaks, CA. 

197 Brief Summaries of Medicare & Medicaid: Title XVIII and Title XIX of the Social Security 

Act as of November 1, 2003. Prepared by Earl Dirk Hoffman, Jr., Barbara S. Klees, and 

Catherine A. Curtis. Office of the Actuary, Centers for Medicare & Medicaid Services, 

Department of Health and Human Services. 

198 Ibid. 

199 Ibid. 

200 Ibid. 

201 Ibid. 

202 Smith, G., Doty, P., and O’Keeffe, J. (2000). Consumer-Directed Home and Community 

Services. Understanding Medicaid Home and Community Services: A Primer. Washington, DC. 

203 CMS program data, May 2004. Available at: 

www.cms.hhs.gov/researchers/walletcard/04cmsprogramdata.pdf. 

204 2004 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal 

Supplementary Medical Insurance Trust Funds. Centers for Medicare & Medicaid Services. 

Accessed 2004. Available at: www.cms.hhs.gov/publications/trusteesreport/2004/. 

205 42 U.S.C. § 1396n(c) (1994) (amended 1999). 

206 Tritz, K. (2004). Long-Term Care: Consumer-Directed Services Under Medicaid. 

Washington, DC: Congressional Research Service (CRS RL32219). 

207 Brief Summaries of Medicare & Medicaid: Title XVIII and Title XIX of the Social Security 

Act as of November 1, 2003. Prepared by Earl Dirk Hoffman, Jr., Barbara S. Klees, and 

Catherine A. Curtis. Office of the Actuary, Centers for Medicare & Medicaid Services, 

Department of Health and Human Services. 

208 Summer, L. (May 2003). Medicaid and Long-Term Care. Washington, DC: Georgetown 

University Long-Term Care Financing Project, fact sheet. 

209 Ibid. 

210 HCFA 64 data, Center for Medicaid and State Operations, Division of Financial Management, 

Available at: http://aspe.hhs.gov/daltcp/reports/stateltc.htm. (Last viewed January 27, 2005.) 
529 

 

211 Brief Summaries of Medicare & Medicaid: Title XVIII and Title XIX of the Social Security 

Act as of November 1, 2003. Prepared by Earl Dirk Hoffman, Jr., Barbara S. Klees, and 

Catherine A. Curtis. Office of the Actuary, Centers for Medicare & Medicaid Services, 

Department of Health and Human Services. 

212 Ibid. 

213 Ibid. 

214 2004 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal 

Supplementary Medical Insurance Trust Funds. Centers for Medicare & Medicaid Services. 

Accessed 2004. Available at: www.cms.hhs.gov/publications/trusteesreport/2004/. 

215 Ibid. 

216 Ibid. 

217 CMS program data, May 2004. Available at: 

www.cms.hhs.gov/researchers/walletcard/04cmsprogramdata.pdf. 

218 2004 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal 

Supplementary Medical Insurance Trust Funds. Centers for Medicare & Medicaid Services. 

Accessed 2004. Available at: www.cms.hhs.gov/publications/trusteesreport/2004/. 

219 Brief Summaries of Medicare & Medicaid: Title XVIII and Title XIX of the Social Security 

Act as of November 1, 2003. Prepared by Earl Dirk Hoffman, Jr., Barbara S. Klees, and 

Catherine A. Curtis. Office of the Actuary, Centers for Medicare & Medicaid Services, 

Department of Health and Human Services. 

220 Ibid. 

221 2004 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal 

Supplementary Medical Insurance Trust Funds. Centers for Medicare & Medicaid Services. 

Accessed 2004. Available at: www.cms.hhs.gov/publications/trusteesreport/2004/. 

222 National Governors Association. (2005). Governors Urge Congress, President to Reform 

Medicaid Aging Population and Increased Number of Low Income Families are Driving up 

States’ Medicaid Costs. Washington, DC: NGA. Available at: 

www.nga.org/nga/legislativeUpdate/1,1169,C_ISSUE_BRIEF^D_7813,00.html. (Last viewed: 

January 26, 2005.) 
530 

 

223 Disability advocates and housing professionals agree that this figure underestimates the 

number of people with disabilities with worst-case housing needs, because it is based solely on 

those people with disabilities receiving SSI and does not include other low-income people with 

disabilities. 

224 Office of Policy Development and Research. (December 2003). Trends in Worst Case Needs 

for Housing, 1978-1999: A Report to Congress on Worst Case Housing Needs. Plus Update on 

Worst Case Needs in 2001. Office of Policy Development and Research, U.S. Department of 

Housing and Urban Development. 

225 Burt, M., Aron, L.Y., & Lee, E. (2001). Helping America’s Homeless: Emergency Shelter or 

Affordable Housing. Washington, DC: The Urban Institute. 

226 Priced Out in 2002. (2003). Technical Assistance Collaborative and Consortium for Citizens 

with Disabilities Housing Task Force. 

227 Government Accountability Office. (June 30, 2003). Transportation-Disadvantaged 

Populations: Some Coordination Efforts Among Programs Providing Transportation Services, 

But Obstacles Persist. Washington, DC: GAO (GAO-03-697). 

228 CTAA is a national professional membership association that conducts research and provides 

technical assistance for community transportation providers. 

229 Community Transportation Association of America. (March 2002). Building Mobility 

Partnerships: Opportunities for Federal Investment. Washington, DC: CTAA. 

230 Government Accountability Office. (February 24, 2004). Transportation-Disadvantaged 

Populations: Federal Agencies Are Taking Steps to Assist States and Local Agencies in 

Coordinating Transportation Services. Washington, DC: GAO (GAO-04-420R). 

231 Ibid. 

232 Ibid. 

233 United We Ride Program Home Page. Federal Transit Administration of the Department of 

Transportation. Accessed 2004. Available at: www.fta.dot.gov/CCAM/www/index.html. 

234 White House. (February 26, 2004). Executive Order 13330—Human Services Transportation 

Coordination. 69 FR 9185. Available at: 

www.whitehouse.gov/news/releases/2004/02/20040224-9.html. 
531 

 

235 Ibid. 

236 Centers for Disease Control, www.cdc.gov/nchs. 

237 USDA Report to Congress. (December 1999). Promoting Healthy Eating: An Investment in 

the Future. Prepared by the Food and Nutrition Service, Alexandria, VA. 

238 Kerschner, H., & Pegues, J.M. (1998). Productive Aging: A Quality of Life Agenda. Journal 

of the American Dietetic Association, 98: 1445–448. 

239 The American Dietetic Association. (1998). Position of The American Dietetic Association: 

The Role of Nutrition in Health Promotion and Disease Prevention Programs. Journal of the 

American Dietetic Association, 98: 205–08. 

240 The American Dietetic Association. (2004). Position of the American Dietetic Association: 

Providing Nutrition Services for Infants, Children and Adults with Developmental Disabilities 

and Special Health Care Needs. Journal of the American Dietetic Association, 104(1): 97–107. 

241 Committee on Nutrition Services for Medicare Beneficiaries, Food and Nutrition Board. 

(1999). The Role of Nutrition in Maintaining Health in the Nation’s Elderly: Evaluating 

Coverage of Nutrition Services for the Medicare Population. Washington, DC: Institute of 

Medicine. 

242 Jensen, G.L., Kita, K., Fish, J., Heydt, D., & Frey, C.. (1997). Nutrition Risk Screening 

Characteristics of Rural Older Persons: Relation to functional limitations and health care 

charges. American Journal of Clinical Nutrition, 66: 819–28. 

243 The American Dietetic Association. (1995). Position of The American Dietetic Association: 

Cost-effectiveness of Medical Nutrition Therapy. Journal of the American Dietetic Association, 

95: 88–91. 

244 Gallagher-Allred, C.R., Voss, A.C., Finn, S.C., & McCamish, M.A. (1996). Malnutrition and 

Clinical Outcomes: The Case for Medical Nutrition Therapy. Journal of the American Dietetic 

Association, 96: 361–369. 

245 Chima, C.S., Barco, K., Dewitt, M.L., Maeda, M., Teran, J.C., & Mullen, K.D. (1997). 

Relationship of Nutritional Status to Length of Stay, Hospital Costs, and Discharge Status of 

Patients Hospitalized in the Medical Service. Journal of the American Dietetic Association, 97: 

975–978. 

246 29 U.S.C. Sec 2202(2). 

247 Assist Guide 1999-2003. 

248 Ibid. 
532 

 

249 National Council on Disability. (2000). Federal Policy Barriers to Assistive Technology. 

Washington, DC: NCD. Available at: 

www.ncd.gov/newsroom/publications/2000/pdf/assisttechnology.pdf. (Retrieved: October 4, 

2004.) 

250 U.S. Department of Health and Human Services. (August 27, 2003). Administration on Aging 

Fact Sheet: Assistive Technology. Washington, DC: HHS. 

251 The Federal Alternative Financing Program. (November 2002). First Year Analysis of the 

First Year of Operation of the Federal Alternative Financing Program for Individuals with 

Disabilities - Providing Low Cost Loans for the Purchase of Assistive Technology. Accessed 

2004. Available at: www.resna.org/AFTAP/library/AFPreport.txt. 

252 Alternative Financing Programs At-A-Glance FY2003 Grantees. (Draft October 2003). 

Produced by RESNA/AFTAP, 1700 North Moore Street, Suite 1540, Arlington, VA 22209, 703-

524-6686 (V), 703-524-6639 (TDD), 703-524-6630 (Fax). Available at: www.resna.org/AFTAP. 

253 See the U.S. Department of Health and Human Services. (2002). Delivering on the Promise: 

Compilation of Individual Federal Agency Reports to Eliminate Barriers and Promote 

Community Integration. 

254 Smith, G., Doty, P., & O’Keefe, J. (2000). Supporting Informal Caregiving. In Understanding 

Medicaid Home and Community Services: A Primer. U.S. Department of Health and Human 

Services, Office of the Assistant Secretary for Planning and Evaluation, Washington, DC. 

255 Lutzky, S., Alexcih, L., Duffy, J., & Neill, C. (2000). Review of the Medicaid 1915(c) Homeand Community-Based Services Waiver Program literature and program data. Final report 

prepared for the Department of Health and Human Services, Health Care Financing 

Administration. Falls Church, VA: The Lewin Group. 

256 Ibid. 

257 Ibid. 

258 Milne, D., Change, D., & Mollica, R. (January 2004). State Perspectives on Medicaid LongTerm Care: Report from a July 2003 State Forum. Portland, ME: National Academy for State 

Health Policy. 

259 Ibid. 

260 Ibid. 

261 Monks, J. (September 24, 2001). Testimony to the Commission on Affordable Housing and 

Health Facility Needs for Seniors in the 21st Century. Washington, DC: U.S. House of 

Representatives. Available at: www.seniorscommission.gov/pages/hearings/010924/monks.html. 

(Last viewed: January 25, 2005.) 
533 

 

262 NCB Development Corporation. (2005). About Us. Washington, DC: NCBDC. Available at: 

www.ncbdc.org. (Last viewed: January 26, 2005.) 

263 Foster, L., Brown, R., Phillips, B., Schore, J., & Carlson, B.L. (March 2003). Does Consumer 

Direction Affect the Quality of Medicaid Personnel Assistance in Arkansas? Princeton, NJ: 

Mathematica Policy Research. Available at: www.mathematicampr.com/publications/PDFs/condirect.pdf. (Last viewed: January 21, 2005). 

264 For additional information, visit www.cashandcounseling.org/index.html. (Last viewed: 

January 21, 2005). 

265 Williams, B. (2003). Consumer-Directed Services: Improving Medicaid Beneficiaries’ Access 

to Quality Care: Testimony before the House Committee on Energy and Commerce, 

Subcommittee on Health. Washington, DC: U.S. House of Representatives. 

266 Wisconsin Department of Health and Family Services. (2005). Aging and Disability Resource 

Centers. Madison, WI: Wisconsin DHFS. Available at: 

www.dhfs.wisconsin.gov/ltcare/generalinfo/rcs.htm. (Last viewed: January 21, 2005.) 

267 Centers for Medicare and Medicaid Services. (September 2004). Real Choice Systems 

Change Grant Program: Second Year Report. Baltimore, MD: CMS. 

268 Ibid. 

269 Ibid. 

270 National Council on Disability. (October 26, 2004). Consumer-Directed Health Care: How 

Well Does It Work? Washington, DC: NCD. 

271 Centers for Medicare and Medicaid Studies. (2004). Opening Doors to Independence: CMS 

Accomplishments in Support of the Presidential New Freedom Initiative. Baltimore, MD: CMS. 

Available at: www.cms.hhs.gov/independenceplus/. (Last viewed: January 21, 2005.) 

272 Centers for Medicare and Medicaid Studies. (2004). HHS Approves California Plan for SelfDirected Home Care. Baltimore, MD: CMS Press Releases. Available at: www.hhs.gov/news. 

(Last viewed: January 21, 2005.) 

273 Ibid. 

274 Ibid. 

275 Congressional Research Service. (February 6, 2004). Long-term Care: Consumer-Directed 

Services Under Medicaid. Washington, DC: Congressional Research Service. 
534 

 

276 Crisp, S., Eiken, S., Gerst, K., & Justice, D. (2004). Money Follows the Person and Balancing 

Long-Term Care Systems: State Examples. Washington, DC: Medstat, Research and Policy 

Division. 

277 President’s Committee for People with Intellectual Disabilities. (2004). A Charge We Have to 

Keep: A Road Map to Personal and Economic Freedom for Persons with Intellectual Disabilities 

in the 21st Century. 

278 Americans with Disabilities Act, 42 U.S.C. §§ 12131-12165 (2004). 

279 Rehabilitation Act of 1973, 29 U.S.C. §§ 701-796l (2004). 

280 Taylor Burke, J.D., & Sara Rosenbaum, J.D. (July 2004). The Meaning of Community 

Integration: Exploring the ADA Legal Standard Within a Broader Social Context. Funded by the 

Center for Health Care Strategies, Inc. under The Robert Wood Johnson Foundation’s Medicaid 

Managed Care Program. 

281 Rehabilitation Act of 1973, U.S. Department of Education. Available at: 

www.ed.gov/policy/speced/reg/narrative.html?exp=0. Accessed December 13, 2004. 

282 42 U.S.C. § 12101(a)(8) (2004). 

283 42 U.S.C. § 12132 (2004). 

284 28 C.F.R. § 35.130 (b)(7), (d)-(e)-1 (2004). 

285 28 C.F.R. pt 35, App. A. (2004). 

286 Olmstead v. L.C., 119 S.Ct. 2176 (1999). 

287 National Low-Income Housing Coalition. (2002). The Olmstead Factor: Integrating Housing 

for People with Disabilities. Washington, DC: LIHIS. 

288 The Olmstead decision interpreted Title II of the ADA and its implementing regulations, 

which oblige states to administer their services, programs, and activities “in the most integrated 

setting appropriate to the needs of qualified individuals with disabilities.” (28 C.F.R. 35.130(d) 

(2004)). 

289 28 C.F.R. 35.130(b)(7) (2004). 

290 New Freedom Initiative. (2001). Retrieved on April 27, 2002. Available at: 

www.hhs.gov/newfreedom. 

291 White House. (2002). New Freedom Initiative. 
535 

 

292 New Freedom Initiative. (2001).”Fulfilling America’s Promise to Americans with 

Disabilities.” Available at: www.hhs.gov/newfreedom/. 

293 Executive Order No. 13217, §§1(a)-(c). 

294 See the U.S. Department of Health and Human Services. (2002). Delivering on the Promise: 

Compilation of Individual Federal Agency Reports to Eliminate Barriers and Promote 

Community Integration. 

295 New Freedom Initiative. (2001). The President’s New Freedom Initiative for People with 

Disabilities: The 2004 Progress Report. Available at: 

www.whitehouse.gov/infocus/newfreedom/toc-2004.html. (Last viewed January 26, 2005.) 

296 See Letters to State Medicaid Directors. Available at: www.cms.hhs.gov/states/letters/. See, 

for example, Promising State Practices, SMDL#-02-012. Available at: 

www.cms.hhs.gov/states/letters/smd81302.pdf. (Last viewed January 18, 2005.); Olmstead

Update Number 3 (HCFA Update). Available at: www.cms.hhs.gov/states/letters/smd725a0.asp. 

(Last viewed January 18, 2005); Olmstead Update Number 2 (Questions and Answers). 

Available at: www.cms.hhs.gov/states/letters/smd72500.asp. 

297 Smith, G. (December 2004). Status Report: Litigation Concerning Home and Community 

Services for People with Disabilities. Portland, OR: Human Services Research Institute. 

298 Olmstead v. L.C. by Zimring, 527 U.S.C. 581, 144 L. Ed. 2d 540, 119 S. Ct. 2176 (1999). 

299 Merlis, M. (October 2004). Medicaid Reimbursement Policy: CRS Report to Congress. 

Washington, DC: Congressional Research Service. 

300 Ibid.

301 O’Brien, E., & Elias, R. (May, 2004). Medicaid and Long-term Care. Washington, DC: Henry 

J. Kaiser Foundation. 

302 Ibid. 

303 Mollica, R. (December, 2004). Making Medicaid Work for the 21st Century. Issue Brief No. 

5. Washington, DC: National Academy for State Health Policy. Available at: 

www.hcbs.org/files/57/2816/IssueBrief5.pdf. (Last viewed: January 18, 2005.) 

304 Merlis, M. (October, 2004). Medicaid Reimbursement Policy: CRS Report to Congress. 

Washington, DC: Congressional Research Service. 

305 Ibid. 
536 

 

306 Center for Health Policy and Research. (October 8, 2004). Promising Practices: Managing 

the Care of People with Disabilities. Shrewsbury, MA: University of Massachusetts Center for 

Health Policy and Research. 

307 Congressional Research Service. (October 25, 2004). CRS Report for Congress: Medicaid 

Reimbursement Policy. Washington, DC: CRS (Order Code RL32644). 

308 U.S. Department of Justice. (August 3, 2004). Justice Department Finds State of California 

Contributes to Unnecessary Institutionalization at Laguna Honda Nursing Home. Washington, 

DC: U.S. Department of Justice. Available at: 

www.usdoj.gov/opa/pr/2004/August/04_crt_537.htm. (Last viewed: January 18, 2005.) 

309 Ibid. 

310 U.S. Department of Justice. (August 3, 2004). Letter to the Governor of California re: Laguna 

Honda Hospital and Rehabilitation Center. Washington, DC: U.S. Department of Justice. 

Available at: http://www.usdoj.gov/crt/split/documents/laguna_honda_findlet_aug3.pdf. 

311 Ibid. 

312 Smith, G. (December 2004). Status Report: Litigation Concerning Home and Community 

Services for People with Disabilities. 

313 197 F. 3d 611 (2d Cir. 1999), cert denied, 121 S. Ct. 156 (2000), 23 MPDLR 878. 

314 Ibid., 613-14. 

315 Ibid., 619. 

316 527 U.S. at 603, n.14. 

317 Rodriguez, 197 F. 3d at 619. 

318 527 U.S. at 603-07. 

319 Fisher v. Oklahoma Health Care Authority, 335 F. 3d 1175 (10th Cir. 2003). 

320 Ibid., 1181.

321 Ibid., 1182. 

322 Ibid.

323 Ibid., 

324 Ibid., 1181. 
537 

 

325 Ibid., 1182. 

326 Ibid. 

327 Ibid. 

328 Ibid., 1183. 

329 United States District Court of Arizona, No. Civ. 00-0067-TUC-EHC (August 12, 2004). 

330 Ibid. 

331 Ibid. 

332 Ibid., quoting, 42 C.F.R. § 447.204 (2004). 

333 Ibid. 

334 Smith, G. (December 2004). Status Report: Litigation Concerning Home and Community 

Services for People with Disabilities. 

335 Hoving, T. (1978). The Untold Story. New York: Simon and Schuster. 

336 Ibid., 369. 

337 Scanlon, W. (2003). Long-Term Care and Medicare Policy: Can We Improve the Continuity 

of Care? Eds. Blumental, Moon, Warshawsky, & Boccuti. Comment Paper. 

338 Schalock, R. (2004). The Emerging Disability Paradigm. Journal of Disability Policy Studies

14(4). 

339 National Council on Disability. (2004). Report on Consumer-Directed Health Care: How 

Well Does It Work? Washington, DC: NCD. 

340 Estes, C.L., & Linkins, K.W. (1999). Devolution and Aging Policy: Racing to the Bottom In 

Long-Term Care. In Eds. Minkler & Estes, Critical Gerontology: Perspectives from Political 

and Oral Economy. New York: Baywood. 

341 Niebuhr, R. (1956). An Interpretation of Christian Ethics. New York: Meridian Books. 

342 Please refer to Hartnett, J., & Morris, M. (2005). State of 21st Century Long-Term Services 

and Supports Financing and Systems Reform for Americans with Disabilities. See Chapter 1 for 

an explanation of the rich picture methodology. P. 4. 

343 Government Accountability Office. (February 2005). 21st Century Challenges: Reexamining 

the Base of the Federal Government. Washington, DC: GAO (GAO-05-325SP). 
538 

 

344 Ibid., 15. Adaptation of Table 1. Government Accountability Office. (February 2005). 21st

Century Challenges: Reexamining the Base of the Federal Government. Washington, DC: GAO 

(Illustrative GAO-05-325SP). P. 35. Generic Reexamination Criteria. 

345 Government Accountability Office. (February 2005). 21st Century Challenges: Reexamining 

the Base of the Federal Government. Washington, DC: GAO (GAO-05-325SP). 

346 Blumenthal, D., Moon, M., Warshawsky, M., & Boccuti, C., Eds. (2003). Long-Term Care 

and Medicare Policy. Can We Improve the Continuity of Care? National Academy of Social 

Insurance. Brookings Institution Press. 

347 Kotlikkoff, L.J., & Burns, S. (2005). The Coming Generational Storm: What You Need to 

Know About America’s Economic Future. Cambridge Massachusetts: MIT Press. 

348 Congressional Budget Office. (February 9, 2005). The Director of the Congressional Budget 

Office in Testimony on Social Security Reform before the Committee on the Budget, U.S. House 

of Representatives. 

349 Longman, P. (2004). The Empty Cradle. How Falling Birthrates Threaten World Prosperity 

and What to Do About It. New York: New America Book: Basics Publisher. 

350 Government Accountability Office. (2005). Long-Term Care Financing. Growing Demand 

and Cost of Services Are Straining Federal and State Budgets. Washington, DC: GAO (GAO-05-

564T). 

351 Congressional Budget Office. (February 9, 2005). The Director of the Congressional Budget 

Office in Testimony on Social Security Reform before the Committee on the Budget, U.S. House 

of Representatives. 

352 Produced by the Consortium for Citizens with Disabilities, 1660 L Street NW, Suite 701, 

Washington, DC 20036. www.c-c-d.org. CCD, a coalition of over 100 national consumer, 

provider, and advocacy organizations, advocates for national public policy to ensure the selfdetermination, independence, empowerment, integration, and inclusion of the 54 million children 

and adults with disabilities living in the United States. 

353 The National Center for Health Statistics defines a person as disabled if he or she has 

“specific physical, functional, or mental/emotional disability or limiting condition, has a lot of 

difficulty performing daily self-maintenance activities, uses special equipment or devices such as 

a wheelchair or breathing aid, and is limited in a major or other life activity due to physical, 

mental, or emotional problems.” Kaiser Commission on Medicaid: Medicaid’s Role for Persons 

with Disabilities. P. 10. 

354 Ibid. Defined as a disabling condition or impairment that has already lasted or is expected to 

last for at least one year. 
539 

 

355 Kaiser Commission on Medicaid and the Uninsured. (August 2003). Medicaid’s Role for 

Persons with Disabilities. 

356 O’Shaughnessy, C. (2003). Long-Term Care Chart Book: Persons Served, Payers and 

Spending. Congressional Research Service: The Library of Congress (RS21518). 

357 Kaiser Commission on Medicaid and the Uninsured: Medicaid’s Role for Persons with 

Disabilities. August 2003. P. 10. 

358 Williams, B., Claypool, H., & Crowley, J.S. (2005). Navigating Medicare and Medicaid, 

2005. A Resource Guide for People with Disabilities, Their Families, and Their Advocates. The 

Henry J. Kaiser Family Foundation. 

359 GAO-05-282SP. The Long-Term Fiscal Challenge. February 2005. Comptroller General’s 

Forum. Government Accountability Office. 

360 Ibid., 5. 

361 Ibid., 6 

362 Ibid., 6 

363 Blumenthal, D., Moon, M., Warshawsky, M., & Boccuti, C., Eds. (2003). Long-Term Care 

and Medicare Policy. Can We Improve the Continuity of Care? National Academy of Social 

Insurance. Brookings Institution Press. 

364 Smith, V., & Moody, G. (2005). Medicaid in 2005: Principles & Proposals for Reform. 

Health Management Association. Prepared for the National Governors Association. 

365 O’Shaughnessy, C. (2003). Long–Term Care Chart Book: Persons Served, Payers and 

Spending. Congressional Research Service: The Library of Congress (RS21518). 

366 Smith, V., & Moody, G. (2005). Medicaid in 2005: Principles & Proposals for Reform. 

Health Management Association. Prepared for the National Governors Association. P. 13 

367 Ibid. 

368 Sachs, J.D. (2005). The End of Poverty. Economic Possibilities for Our Time. New York: 

Penguin Press. 

369 Hagen, S. (2004). Financing Long-Term Care for the Elderly. Washington, DC: 

Congressional Budget Office. 

370 The Henry J. Kaiser Family Foundation. (2003). Understanding the Health-Care Needs and 

Experiences of People with Disabilities. 
540 

 

371 The risk of disability is as great as or greater than other risks that are routinely insured, but 

workers and employers are far more likely to consider health, life, and dental insurance before 

giving thought to disability income. The public overestimates the help that is available from 

public disability insurance programs, which do no pay enough to maintain the standard of living 

for those who do qualify. The Actuarial Foundation. (2004). Disability Insurance: A Missing 

Piece in the Financial Security Puzzle: Society of Actuaries Disability Chart Book Task Force: 

The Actuarial Foundation: America’s Health Insurance Plans. 

372 The Actuarial Foundation. (2004). Disability Insurance: a Missing Piece in the Financial 

Security Puzzle: Society of Actuaries Disability Chart Book Task Force: The Actuarial 

Foundation: America’s Health Insurance Plans. 

373 Purushotham, M. (2004). Individual Disability Income Insurance Lapse Experience. A Joint 

Study by LIMRA International and the Society of Actuaries. 

374 Dorn, S. (2004). Towards Incremental Progress: Key Facts About Groups of Uninsured. 

Economic and Social Research Institute. Washington, DC. Employers of Small Business. 

375 Davis, K. (2004). Transformational Change: A Ten-Point Strategy to Achieve Better Health 

Care for All. The Commonwealth Fund. New York. 

376 Paraprofessional Healthcare Institute. (2004). Results of the 2003 National Survey of State 

Initiatives on the Long-Term Care Direct-Care Workforce. North Carolina Department of Health 

and Human Services, Office of Long-Term Care. 

377 Levine, L. (2003). Family Caregiving to the Elderly by Employed Persons: The Effects on 

Working Caregivers, Employers, and Federal Policy. Congressional Research Services: The 

Library of Congress (RL31755). 

378 Data Profile. (2005). A Decade of Informal Caregiving. Are today’s informal caregivers 

different than informal caregivers a decade ago? Center on an Aging Society, Georgetown 

University. 

379 World Health Organization. (2002). Toward a Common Language for Functioning, Disability 

and Health. 

380 National Council on Disability. (2004). Request for Proposal: Long-Term Services and 

Supports Financing and Systems Reform for Americans with Disabilities. 

381 AARP. (2004). The Policy Book: AARP Public Policies: Long-Term; and O’Shaughnessy, C. 

(2003). Long-Term Care Chart Book: Persons Served, Payers and Spending. Congressional 

Research Service: The Library of Congress (RS21518). Services and Supports. 

382 Ibid., 3. 
541 

 

383 Tritz, K. (2004). Long-Term Care: Consumer-Directed Services Under Medicaid. 

Congressional Research Service. The Library of Congress (RL32219). P. 10. 

384 Ibid. 

385 Honeycut, A.A., Grosse, S.D., Dunlap, L.J., Schendel, D.E., Chen, H., Brann, E., & Homsi, 

G. (2002). Economic Costs of Mental Retardation, Cerebral Palsy, Hearing Loss, and Vision 

Impairment. National Center on Birth Defects and Developmental Disabilities, Centers for 

Disease Control and Prevention, Atlanta, GA. 

386 Hagen, S. (2004). Financing Long-Term Care for the Elderly. Congressional Budget Office. 

See p. 16, box 2-1, Long-Term Care Expenditures for None Elderly People. 

387 2005 OASDI Trustee Report. Assumptions About the Future. Part II. Overview. Available at: 

www.ssas.gov/OACT/TR/TR05/II_assump.html. 

388 Spector, W.D., Fleishman, J.A., Pezzin, L.E., & Spillman, B.C. (2004). The Characteristics of 

Long-Term Care Users. Agency for Healthcare Research and Quality. U.S. Department of Health 

and Human Services. 

389 Ibid., 5. 

390 Ibid. 

391 Ibid. 

392 Spector, W.D., Fleishman, J.A., & Pezzin, L.E. (1994) The Characteristics of Long-term Care 

Users. AHRQ Report. Publication No. 00-0049. 

393 Spector, W.D., Fleishman, J.A., & Pezzin, L.E. (1994). The Characteristics of Long-term 

Care Users. AHRQ Report. Publication No. 00-0049; Disability Supplement to the National 

Health Interview Survey (NHIS-D) Phase 1 and the National Long-Term Care Survey (NLTCS). 

394 The Kaiser Commission on Medicaid and the Uninsured. (2004). Medicaid’s Role for People 

with Disabilities. P. 17. 

395 Williams, B., Claypool, H., & Crowley J.S. (2005). Navigating Medicare and Medicaid, 2005. 

A Resource Guide for People with Disabilities, Their Families, and Their Advocates. The Henry 

J. Kaiser Family Foundation. 

396 Robert Wood Johnson Foundation. (January 2000). Health and Health Care 2010, The 

Forecast, the Challenge. The Institute for the Future. P. 17. 

397 The Kaiser Commission on Medicaid and the Uninsured. (2004). Medicaid’s Role for People 

with Disabilities. P. 18. 
542 

 

398 Disability: Federal Survey Definitions, Measurements, and Estimates. Data Digest. Public 

Policy Institute. AARP. DD Number 98. 

399 Rowe, J.W., & Kahn, R.L. (1998). Successful Aging. New York: Random House. 

400 Tilly, J., Goldenson, S., Kasten, J., O’Shaughnessy, C., Kelly, R., & Sidor, G. (2000). LongTerm Care Chart Book. Persons Served, Payers and Spenders. Congressional Research Service: 

The Library of Congress. 

401 U.S. Department of Health and Human Services. (February 2003). Changes in Elderly 

Disability Rates and the Implications for Health Care Utilization and Cost. Washington, DC: 

HHS Assistant Secretary for Planning and Evaluation Office of Disability, Aging and LongTerm Care Policy. P. ii. 

402 U.S. Department of Health and Human Services. (February 2003). Changes in Elderly 

Disability Rates and the Implications for Health Care Utilization and Cost. Washington, DC: 

HHS Assistant Secretary for Planning and Evaluation Office of Disability, Aging and LongTerm Care Policy. 

403 U.S. Department of Health and Human Services. (November 1996). Beyond the Water’s 

Edge: Charting the Course of Managed Care for People with Disabilities—Conference Resource 

Book. Washington, DC: HHS. 

404 Ibid. 

405 Ibid. 

406 Ibid. 

407 LaPlante, M.P., Harrington, C., & Kang, T. (2004). Unmet Need for Personal Assistance 

Services. Estimating the shortfall in hours of help and adverse consequences. Journal of 

Gerontology, 59: 98–108. 

408 Ibid. 

409 LaPlante, M.P., Harrington, C., & Kang, T. (2002). Estimating Paid and Unpaid Hours of 

Personal Assistance Services in Activities of Daily Living Provided to Adults Living at Home. 

Health Services Research, 37(2): 397–415. 

410 Burwell, B., Crown, T., & Drabek, J. (November 1997). Children with Severe Chronic 

Conditions on Medicaid. U.S. Department of Health and Human Services. 

411 Ibid. 

412 Adler, M. (January 1995). ASPE Research Notes. 
543 

 

413 Ibid. 

414 Urban Institute. (2003). Long-Term Care. Consumers, Providers, and Financing. A Chart 

Book. Washington, DC: Urban Institute. 

415 Adler, M. (January 1995). ASPE Research Notes. 

416 Administration on Aging. (2000). A Profile of Older Americans: 2000. Administration on 

Aging, U.S. Department of Health and Human Services. 

417 Ibid. 

418 Ibid. 

419 Weeks, J. (2004). The Second Longitudinal Study of Aging. Centers for Disease Control and 

Prevention National Center for Statistics. 

420 Administration on Aging. (2000). A Profile of Older Americans: 2000. Administration on 

Aging, U.S. Department of Health and Human Services. 

421 Ibid. 

422 Ibid. 

423 Ibid. 

424 Ibid. 

425 Ibid. 

426 U.S. Census Bureau. (2004). Projections of the Total Resident Population by 5-year Age 

Groups. U.S. Census Bureau, Washington, DC. 

427 Spillman, B.C. (February 3, 2003). Changes in Elderly Disability Rates and Implications for 

Health Care Utilization and Cost. U.S. Department of Health and Human Services. 

428 Stone, R.I. (August 2000). Long-Term Care for the Elderly with Disabilities. Current Policy, 

Emerging Trends and Implications for the Twenty-First Century. New York: NY: Milbank 

Memorial Fund. 

429 Tu, H. (September 2004). Rising Health Costs, Medical Debt and Chronic Conditions. Center 

for Studying Health Care Change. 

430 Chronic Disease Overview. (2004). National Center for Chronic Disease Prevention and 

Health Prevention. 
544 

 

431 U.S. Department of Health and Human Services. (January 2000). Healthy People 2010: 

Understanding and Improving Health. Washington, DC: HHS. 

432 Yach, D., et al. (June 2, 2004). The Global Burden of Chronic Diseases. Overcoming 

Impediments to Prevention and Control. JAMA, 291(21). 

433 Chronic Disease Overview. (2004). National Center for Chronic Disease Prevention and 

Health Prevention. 

434 Wagner, E. (2004). Improving the Care of the Chronically Ill. MacColl Institute for Health 

Care Innovation. Group Health Cooperative. 

435 Berwick, D. (March 2004). Designing a 21st Century Health Care System. Institute for 

Healthcare Improvement. 

436 McGlynn, T., et al. (June 26, 2003). The Quality of Health Care Delivered to Adults in the 

U.S. NEJM, 348: 2635–645. 

437 Tu, H. (September 2004). Rising Health Costs, Medical Debt and Chronic Conditions. Center 

for Studying Health Care Change. 

438 Ibid. 

439 Ibid. 

440 Ibid. 

441 Feinberg, L.F., Newman, S.L., & Van Steenberg, C. (November 2002). Family Caregiver 

Support; Policies, Perceptions and Practices in 10 States Since Passage of the National Family 

Caregiver Support Program. Family Caregiver Alliance. P. 9. 

442 Ibid., 1. 

443 Spector, W.D., Shaffer, T.J., Hodlewsky, R.T., De La Mare, J.J., & Rhoades, J.A. (June 

2000). Future Directions for Community-Based Long Term Care Health Services Research. P. 6. 

444 U.S. Department of Health and Human Services. (January 2000). Healthy People 2010: 

Understanding and Improving Health. Washington, DC: HHS. 

445 The Henry J. Kaiser Family Foundation. (March 2005). Race, Ethnicity and Health Care. 

March 2005. 

446 Newacheck, P.W., Stein R.E.K., Bauman, L., & Hung, Y., (2003). Disparities in the 

Prevalence of Disability Between Black and White Children. Pediatric Adolescent Medicine, 

157: 244–48. 
545 

 

447 The Henry J. Kaiser Family Foundation. (March 2005). Race, Ethnicity and Health Care. 

Policy Challenges and Opportunities in Closing the Racial/Ethnic Divide in Health Care. 

448 Kijakazi, K. (2003). GAO Report Shows Social Security is Favorable to People of Color But 

Some Changes in It Could Harm Minority Communities. Reference made to GAO—03-387. 

449 Ibid. 

450 Tritz, K. (2004). Dual Eligibles: Medicaid Expenditures for Prescription Drugs and Other 

Services. CRS Report to Congress. Congressional Research Service: The Library of Congress 

(RL31987). 

451 Social Security Amendments of 1965 (P.L.89-97). 

452 Herz, E., Hearne, J., Stone-Axelrad, J. Tritz, K., Baumrucker, E., Scott, C., Peterson, C., 

Grady, A., & Rimkunas, R. (2005). How Medicaid Works: Program Basics. CRS Report for 

Congress. Congressional Research Service: The Library of Congress (RL32277). P. 2. 

453 Scott, C. (2004). Medicaid and the Current State Fiscal Crisis. CRS Report for Congress. 

Congressional Research Services : The Library of Congress (RL31773). 

454 Ibid., 1. 

455 Crowley, J. S., & Elias, R. (2003). Medicaid’s Role for People with Disabilities. The Kaiser 

Commission on Medicaid and the Uninsured. 

456 Administration on Aging. (2000). A Profile of Older Americans: 2000. Administration on 

Aging, U.S. Department of Health and Human Services. The 10 areas with the highest poverty 

rates for the elderly over the period of 1997 to 1999 were Mississippi 19.1 percent; Louisiana 

17.1 percent; the District of Columbia 16.5 percent; Arkansas 15.8 percent; West Virginia 15.1 

percent; New Mexico 14.8 percent; Texas 14.4 percent; Alabama 13.3 percent; New York 13.2 

percent, and North Carolina 12.7 percent. 

457 Mandatory LTC benefits include nursing facility service for individuals 21 or over and home 

health care service for individuals entitled to nursing facility care through HCBS. Optional LTC 

benefits include ICF/MR services; inpatient facility services for mental diseases for people 65 

and over; inpatient psychiatric hospital services for individuals under age 21; and home health 

care services.457 Under HCBS, Medicaid also provides optional services such as case 

management services, respiratory care services for ventilator-dependent individuals, personal 

care services, private duty nursing services, hospice services, services under a PACE program, 

and HCBS. 

458 The Kaiser Commission on Medicaid and the Uninsured. (2003). Medicaid’s Role for People 

with Disabilities. P. 17. 
546 

 

459 Williams, B., Claypool, H., & Crowley, J.S. (2005). Navigating Medicare and Medicaid, 

2005. A Resource Guide for People with Disabilities, Their Families, and Their Advocates. The 

Henry J. Kaiser Family Foundation. 

460 Ibid., see P. 40 for detailed list of services under this category. 

461 Ibid., see P. 40 for detailed list of services under this category. 

462 Williams, B., Claypool, H., & Crowley, J.S. (2005). Navigating Medicare and Medicaid, 

2005. A Resource Guide for People with Disabilities, Their Families, and Their Advocates. The 

Henry J. Kaiser Family Foundation. 

463 Herz, E., Hearne, J., Stone-Axelrad, J., Tritz, K., Baumrucker, E., Scott, C., Peterson, C., 

Grady, A., & Rimkunas, R. (2005). How Medicaid Works: Program Basics. CRS Report for 

Congress. Congressional Research Service: The Library of Congress (RL32277). P. 2. 

464 Ibid., 10. 

465 Ibid., 2. 

466 Ibid.,12 

467 Congressional Budget Office. (2004). Financing Long-Term Care. Washington, DC: CBO. P. 

1. 

468 Smith, V.K., & Moody, G. (2005). Medicaid in 2005: Principles and Proposals for Reform. 

Prepared for the National Governors Association. P. 2 

469 Ibid. 

470 Holahan, J., & Ghosh, A. (2005). Understanding the Recent Growth in Medicaid Spending 

2000–2003. Urban Institute Health Policy Center. Washington, DC. 

471 The Kaiser Commission on Medicaid and the Uninsured. (August 2003). Medicaid’s Role for 

People with Disabilities. P. 35. 

472 Ibid. 

473 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

States in Developmental Disabilities. Department of Psychiatry and Coleman Institute for 

Cognitive Disabilities, The University of Colorado. P. 48. 

474 Grady, A., Hearne, J. Herz, E., Scott, C., Stone-Axelrad, J., & Tritz, K. (2005). Medicaid and 

SCHIP: The President’s 2005 Budget Proposals. 

475 Ibid., 5–10. 
547 

 

476 Herz, E., Hearne, J., Stone-Axelrad, J., Tritz, K., Baumrucker, E., Scott, C., Peterson, C., 

Grady, A., & Rimkunas, R. (2005). How Medicaid Works: Program Basics. CRS Report for 

Congress. Congressional Research Service: The Library of Congress (RL32277). 

477 Ibid. 

478 The Kaiser Commission on Medicaid and the Uninsured. (August 2003). Medicaid’s Role for 

People with Disabilities. P. 13. 

479 Ibid. When work income exceeds SSI eligibility rules and a person is no longer receiving SSI 

cash benefits but is still considered a “qualified severely impaired individual,” the person may 

still receive Medicaid if he or she meets four criteria: (1) continues to be blind or have a 

disabling impairment; (2) meets all other SSI eligibility requirements except for earnings; (3) 

would be seriously inhibited from continuing to work by the termination of eligibility for 

Medicaid services; and (4) earnings are not sufficient to provide a reasonable equivalent to the 

benefits available if he or she did not have SSI, state supplementary payments (where 

applicable), medical care, and publicly funded personal care. 

480 Government Accountability Office. (June 2003). Medicaid and Ticket to Work. States’ Early 

Efforts to Cover Working Individuals with Disabilities. Washington, DC: GAO (GAO-03-587). 

481 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

States in Developmental Disabilities. Department of Psychiatry and Coleman Institute for 

Cognitive Disabilities, The University of Colorado. P. 30. 

482 Ibid., 10. 

483 Ibid., 15. 

484 Ibid., 16 

485 Eiken, S., & Burwell, B. (2004). Medicaid HCBS Waiver Expenditures, FY 1995 through FY 

2001. Medstat Group, Inc. Cambridge, Massachusetts. 

486 Ibid. 

487 Ibid., 2. 

488 Ibid., 24. 

489 Ibid., 24. 

490 Ibid., 27. Refers to research from Mank, D., Rhodes, E., & Bellamy, T. (1986). Four 

Supported Employment Alternatives. In Eds. W.E. Kiernan & J.A. Stark, Pathways to 

Employment for Adults with Developmental Disabilities. Baltimore: Brookes. 
548 

 

491 Ibid., 28, Table 9. 

492 Ibid., 31. 

493 Ibid., 31. 

494 Ibid., 31. 

495 Herz, E., Hearne, J., Stone-Axelrad, J., Tritz, K., Baumrucker, E., Scott, C., Peterson, C., 

Grady, A., & Rimkunas, R. (2005). How Medicaid Works: Program Basics. CRS Report for 

Congress. Congressional Research Service: The Library of Congress (RL32277). Table 8. Total 

State and Federal Medicaid Payments by Basis of Eligibility, Type of Service, and as a 

Percentage of Total Payments, FY2002. P. 26. 

496 Ibid. Payments by Basis of Eligibility, Type of Service, and as a Percentage of Total 

Payments, FY2002. P. 26. 

497 Tritz, K. (2004). Dual Eligibles: Medicaid Expenditures for Prescription Drugs and Other 

Services. CRS Report for Congress. Congressional Research Services: The Library of Congress 

(RL31987). 

498 McKinsey Global Institute. (2005). The Coming Demographic Deficit: How Aging 

Populations Will Reduce Global Savings. McKinsey Global Institute, McKinsey & Company. P. 

4. 

499 Ibid. 

500 Peterson, P. (2004). Running on Empty: How the Democratic and Republican Parties Are 

Bankrupting Our Future and What Americans Can Do About It. New York: Farrar, Straus and 

Giroux. P. xi. 

501 Government Accountability Office. (February 2005). 21st Century Challenges: Reexamining 

the Base of the Federal Government. Washington, DC: GAO (GAO-05-325SP). 

502 2005 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance 

and Disability Insurance Trust Funds. Annual costs will exceed tax income starting in 2017, at 

which time the annual gap will be covered with cash from redeeming special obligations of the 

Department of Treasury, until these assets are exhausted in 2041. The open group unfunded 

obligation of Old-Age and Survivors Insurance and Disability Insurance over the 75-year period 

is $4 trillion in present value, $0.3 trillion more than the unfunded obligation estimated a year 

ago. (P. 2). 

503 Peterson, P. (2004). Running on Empty: How the Democratic and Republican Parties Are 

Bankrupting Our Future and What Americans Can Do About It. New York: Farrar, Straus and 

Giroux 
549 

 

504 The Kaiser Commission on Medicaid and he Uninsured. (2003). Medicaid’s Role for People 

with Disabilities. P. 10. 

505 Kotlikoff, L.H., & Burns, S. (2005). The Coming Generational Storm. What You Need to 

Know about America’s Economic Future. Cambridge, Massachusetts: MIT Press. P. 236. 

506 www.who.int/inf-pr-2000/en/pr2000-life.html. 

507 U.S. Department on Aging. (2000). A Profile of Older Americans: Administration on Aging. 

U.S. Department on Aging, U.S. Department of Health and Human Services. 

508 U.S. Department of Health and Human Services. (January 2000). Healthy People 2010: 

Understanding and Improving Health. Washington, DC: HHS. 

509 O’Shaughnessy, C. (2003). Long-Term Care Chart Book: Persons Served, Payers and 

Spending. Congressional Research Service: The Library of Congress (RS21518). 

510 Government Accountability Office. (April 27, 2005). Long-Term Care Financing: Growing 

Demand and Cost of Services Are Straining Federal and State Budgets. Washington, DC: GAO 

(GAO-05-564T). 

511 Ibid., 7. 

512 Ibid., 8. 

513 Ibid., 10. 

514 O’Shaughnessy, C. (2003). Long-Term Care Chart Book: Persons Served, Payers and 

Spending. Congressional Research Service: The Library of Congress (RS21518). P. 3. 

515 Herz, E., Hearne, J., Stone-Axelrad, J., Tritz, K., Baumrucker, E., Scott, C., Peterson, C., 

Grady, A., & Rimkunas, R. (2005). How Medicaid Works: Program Basics. CRS Report for 

Congress. Congressional Research Service: The Library of Congress (RL32277). 

516 NCB Development Corporation. (2004). Improving Long-term Care in America. Washington, 

DC: NCBDC. 

517 Allen, K.G. (2005). Long-Term Care Financing: Growing Demand and Cost of Services Are 

Straining Federal and State Budgets. Testimony before the Subcommittee on Health, Committee 

on Energy and Commerce, House of Representatives (GAO-05-564T). P. 6. 

518 Ibid., 6. 

519 Government Accountability Office. (February 2005). 21st Century Challenges: Reexamining 

the Base of the Federal Government. Washington, DC: GAO (GAO-05-325SP). 
550 

 

520 Ibid. 

521 Holtz,-Eakin, D. (April 19, 2005). CBO Testimony. The Cost and Financing of Long-Term 

Care Services before the Subcommittee on Health Committee on Ways and Means U.S. House of 

Representatives, Congressional Budget Office. P. 4. 

522 Government Accountability Office. (February 2005). 21st Century Challenges: Reexamining 

the Base of the Federal Government. Washington, DC: GAO (GAO-05-325SP). 

523 O’Shaughnessy, C. (2003). Long-Term Care Chart Book: Persons Served, Payers and 

Spending. Congressional Research Service: The Library of Congress (RS21518). Pp. 3–5. 

524 Government Accountability Office. (February 2005). 21st Century Challenges: Reexamining 

the Base of the Federal Government. Washington, DC: GAO (GAO-05-325SP). 

525 Herz, E., Hearne, J., Stone-Axelrad, J., Tritz, K., Baumrucker, E., Scott, C., Peterson, C., 

Grady, A., & Rimkunas, R. (2005). How Medicaid Works: Program Basics. CRS Report for 

Congress. RL32277. Congressional Research Service: The Library of Congress. P. 24. 

526 Tritz, K., & Lindley, M.(2004). Dual Eligibles: Medicaid Expenditures for Prescription Drugs 

and Other Services. CRS Report to Congress. Congressional Research Services. RL31987. 

527 Peterson, C.L. (2004). Medicaid/SCHIP as Primary Source of Health Insurance During the 

Year. CRS Report for Congress. Congressional Research Service: The Library of Congress 

(RL32555). 

528 Ibid. 

529 Ibid., 7. The drop in wages was due to either having a wage reduction in their current job or 

taking a different job with a lower wage. Only 39 percent were linked to policyholders who 

worked for the entire year and did not experience a wage drop. 

530 Ibid. Estimates used in this report are based on monthly Medicaid/SCHIP enrollment reported 

in the 2001 Medicaid Expenditure Panel Survey (MEPS). 

531 Shaprio, T.M. (2004). The Hidden Cost of Being African American. How Wealth Perpetuates 

Inequality. New York: Oxford University Press. 

532 Employee Benefit News. (February 2, 2003). A Federal Case for Long Term Care. 

533 Testimony of Buck Stinson, President, Genworth Financial Inc., Long-Term Care Division. 

(April, 19, 200[?]). U.S. House of Representatives Subcommittee on Health of the Committee on 

Ways and Means Long-Term Care Hearing. 
551 

 

534 Peterson, C.L. (2004). Medicaid/SCHIP as Primary Source of Health Insurance During the 

Year. CRS Report for Congress. Congressional Research Service: The Library of Congress 

(RL32555). Quoted from Employer Health Benefits: 2003 Annual Survey. The Kaiser Family 

Foundation and Health Research and Educational Trust, 2003, P. 2. 

535 Dorn, S. (2004). Towards Incremental Progress: Key Facts About Groups of Uninsured. 

Economic and Social Research Institute. Washington, DC: Employers of Small Business. 

536 Ibid. Fact Sheet: 2004. $15,670 a year for a family of three—over half are uninsured (51.3%). 

537 Stone, J.L. (2002). Long-Term Care: Nursing and Paraprofessional Workforce Issues. CRS 

Report to Congress. Congressional Research Service: The Library of Congress (RL31090). 

538 Stinson, B. (April 19, 2005). Testimony in the U.S. House of Representatives: Subcommittee 

on Health of the Ways and Means Long-Term Care Hearing. Genworth Financial, Inc., LongTerm Care Division. 

539 Long-Term Care Division. (2005). Genworth Long-Term Care and Alzheimer’s Disease in 

America: A Retrospective: Long-Term Care Insurance Products are Underwritten by General 

Electric Capital Assurance Company and, in New York, by GE Capital Life Assurance Company 

of New York. Richmond, VA: Long-Term Care Division. 

540 Stinson, B. (April 19, 2005). Testimony in the U.S. House of Representatives: Subcommittee 

on Health of the Ways and Means Long-Term Care Hearing. Genworth Financial, Inc., LongTerm Care Division. 

541 Ibid., 6. 

542 Trautwein, J. (April 19, 2005). Testimony from the National Association of Health 

Underwriters to the United States House of Representatives. Ways and Means Committee. 

Arlington, VA. 

543 Meiners, M.R. (2005). Testimony before the Subcommittee on Health of the House 

Committee on Ways and Means. Hearing on Issues Relating to Long-Term Care. George Mason 

University. Center for Health Policy, Research and Ethics. 

544 Ibid., 3–10.

545 Society of Actuaries Disability Chart Book Task Force. (2004). Disability Insurance: A 

Missing Piece in the Financial Security Puzzle. America’s Health Insurance Plans. The Actuarial 

Foundation. 

546 Feder, J. (2005). Testimony before the Subcommittee on Health, Committee on Ways and 

Means, U.S. House of Representatives. Long-Term Care. 
552 

 

547 Congressional Budget Office. (November 2004). Disability and Retirement: The Early Exit of 

Baby Boomers from the Labor Force. Washington, DC: CBO. 

548 Society of Actuaries Disability Chart Book Task Force. (2004). Disability Insurance: A 

Missing Piece in the Financial Security Puzzle. America’s Health Insurance Plans. The Actuarial 

Foundation. 

549 Stone, J.L. (December 18, 2002). Long-Term Care: Nursing and Paraprofessional Work Force 

Issues. Congressional Research Service. P. 3. 

550 National Clearinghouse on Direct Care. (September 2004). Who are direct-care workers? 

National Clearinghouse on Direct Care Workforce Fact Sheet. P. 1. 

551 Turnham, H. (May 2004). Supporting the In-Home Workforce. National Governors 

Association’s Aging with Health and Dignity Forum. P. 1. 

552 Holzer, H. (December 2002). Modeling the Future Supply and Demand for Long Term Care 

Workers. Institute for the Future of Aging Services. P. 3. 

553 Friedman, R.B. (July 2004). Caregivers and Long-Term Care Needs of the 21st Century: Will 

public policy meet the challenge? Long-Term Care Project, Georgetown University. P. 1. 

554 Ibid., 6. 

555 Holzer, H. (December 2002). Modeling the Future Supply and Demand for Long Term Care 

Workers. Institute for the Future of Aging Services. P. 1. 

556 National Clearinghouse on Direct Care. (September 2004). Who are direct-care workers? 

National Clearinghouse on Direct Care Workforce Fact Sheet. P. 1. 

557 Holzer, H. (December 2002). Modeling the Future Supply and Demand for Long Term Care 

Workers. Institute for the Future of Aging Services. P. 2. 

558 Stone, J.L. (December 18, 2002). Long-Term Care: Nursing and Paraprofessional Work Force 

Issues. Congressional Research Service. P. 4. 

559 Ibid., 5. 

560 National Clearinghouse on Direct Care. (September 2004). Who are direct-care workers? 

National Clearinghouse on Direct Care Workforce Fact Sheet. P. 2. 

561 Holzer, H. (December 2002). Modeling the Future Supply and Demand for Long Term Care 

Workers. Institute for the Future of Aging Services. P. 2. 

562 National Clearinghouse on Direct Care. (September 2004).Who are direct-care workers? 

National Clearinghouse on Direct Care Workforce Fact Sheet. P. 2. 
553 

 

563 Ibid. 

564 Holzer, H. (December 2002). Modeling the Future Supply and Demand for Long Term Care 

Workers. Institute for the Future of Aging Services. P. 8. 

565 Ibid., 8. 

566 Ibid. 

567 National Council on Disability. (2005). Consumer-Directed Health Care: How Well Does It 

Work? Washington, DC: NCD. P. 10. 

568 Lutzky, S., Alecxih, L.M., Duffy, J., and Neill, C. (June 15, 2000). Review of the Medicaid 

1915(c) Home- and Community- Based Services Waiver Program Literature and Program Data. 

The Lewin Group. P. 24. 

569 National Council on Disability. (2005). Consumer-Directed Health Care: How Well Does It 

Work? Washington, DC: NCD. P. 10. 

570 Tritz, K. (February 27, 2004). Long-Term Care: Consumer Directed Services under Medicaid. 

P. 10. 

571 Ibid., 7. 

572 National Council on Disability. (2005). Consumer-Directed Health Care: How Well Does It 

Work? Washington, DC: NCD. P. 74. 

573 Tritz, K. (February 27, 2004). Long-Term Care: Consumer Directed Services under Medicaid. 

P. 26. 

574 Ibid., 27. 

575 Ibid., 31. 

576 Lutzky, S., Alecxih, L.M., Duffy, J., and Neill, C. (June 15, 2000). Review of the Medicaid 

1915(c) Home and Community Based Services Waiver Program Literature and Program Data. 

The Lewin Group. P. 26. 

577 Spector, W.D., Shaffer, T.J., Hodlewsky, R.T., De La Mare, J.J., & Rhoades, J.A. (June 

2000). Future Directions for Community-Based Long Term Care Health Services Research. P. 

2–3. 

578 United Cerebral Palsy Research and Educational Foundation. (May 2004). Evaluation of the 

Child Suspected of Having Cerebral Palsy. 
554 

 

579 United Cerebral Palsy Research and Educational Foundation. (October 2002). Cerebral Palsy 

– Facts and Figures. 

580 United Cerebral Palsy Research and Educational Foundation. (May 2004). Evaluation of the 

Child Suspected of Having Cerebral Palsy. 

581 Estimate by Supervisor in the Bennington, VT, Office of Economic Services based on twoperson family with no income. 

582 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

State in Developmental Disabilities. American Association on Mental Retardation. P. 25. 

583 Bascom, J.E. (January 2004). Annual Report 2004. Vermont Department of Developmental 

and Mental Health Services. 

584 Estimate by Supervisor in the Bennington, VT, Office of Economic Services based on twoperson family with no income and no consideration of other expenses. 

585 Ireys, H., Anderson, G., Han C., and Neff, J. (May 22, 1996). Cost of Care for Medicaid 

Enrolled Children with Selected Disabilities. Johns Hopkins University, U.S. Department of 

Health and Human Services. P. 8. 

586 SSA estimated childhood benefit would be just for Crystal and would reduce her TANF 

benefits total, because it is a similar benefit to SSI. 

587 United Cerebral Palsy Research and Educational Foundation. (September 2004). Aging with 

Cerebral Palsy III. 

588 Honeycutt, A., et al. (January 2004). Economic Costs Associated with Mental Retardation, 

Cerebral Palsy, Hearing Loss and Vision Impairment – United States, 2003. National Center on 

Birth Defects and Developmental Disabilities, CDC. 

589 National Institute of Mental Health (NIMH). (2002). Schizophrenia. 

590 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

States in Developmental Disabilities. American Association on Mental Retardation. 

591 Ibid. 

592 Wisconsin Department of Health and Family Services. (2004). Wisconsin’s Adult Mental 

Health Plan. P. 69. 

593 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

States in Developmental Disabilities. American Association on Mental Retardation. P. 11. 
555 

 

594 Crowley, J., & Elias, R. (August 2003). Medicaid’s Role for People with Disabilities. The 

Kaiser Commission on Medicaid and the Uninsured. P. 13. 

595 National Center for Health Statistics. (2002). Health, United States, 2002. National Center for 

Health Statistics, CDC. P. 293. 

596 Department of Health and Family Services. (2004). Wisconsin’s Adult Mental Health Plan. P. 

69. 

597 Ibid., 69. 

598 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

States in Developmental Disabilities. American Association on Mental Retardation. P. 11. 

599 Crowley, J., & Elias, R. (August 2003). Medicaid’s Role for People with Disabilities. The 

Kaiser Commission on Medicaid and the Uninsured. P. 13. 

600 National Center for Health Statistics. (2002). Health, United States, 2002. National Center for 

Health Statistics, CDC. P. 293. 

601 American Association on Mental Retardation Web site, www.aamr.org. 

602 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

States in Developmental Disabilities. American Association on Mental Retardation. P. 24. 

603 Massachusetts Department of Education. (August 27, 2004). School Finance: Statistical 

Comparison. Available at: www.finance1.doe.mass.edu. 

604 Crowley, J., & Elias, R. (August 2003). Medicaid’s Role for People with Disabilities. The 

Kaiser Commission on Medicaid and the Uninsured. P. 13. 

605 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

States in Developmental Disabilities. American Association on Mental Retardation. P. 11. 

606 National Center for Health Statistics. (2002). Health, United States, 2002. National Center for 

Health Statistics, CDC. P. 11. 

607 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

States in Developmental Disabilities. American Association on Mental Retardation. P. 26. 

608 Ibid. 

609 Karan, O., el al. (1992). Supported Living: Rethinking the rules of residential services. 

AAMR News and Notes. P. 5. 
556 

 

610 Rizzolo, M.C., Hemp, R., Braddock, D., & Pomeranz-Essley, A. (2004). The State of the 

States in Developmental Disabilities. American Association on Mental Retardation. P. 32. 

611 Ibid., 28. 

612 Ibid., 11. 

613 Honeycutt, A., et al. (January 2004). Economic Costs Associated with Mental Retardation, 

Cerebral Palsy, Hearing Loss and Vision Impairment – United States, 2003. National Center on 

Birth Defects and Developmental Disabilities, CDC. 

614 National Institute of Neurological Disorders and Stroke. (July 2001). NINDS Spinal Cord 

Injury Information Page. Available at: www.ninds.nih.gov. 

615 Spinal Cord Injury Information Network. (August 2004). National Spinal Cord Injury 

Database. Available at: www.spinalcord.uab.edu. 

616 Colorado Department of Human Services. (November 2003). Department Strategic Plan FY 

2004–05. 1-2-25. 

617 Ibid., 1-2-87. 

618 Social Security Administration Research and Statistics data. www.ssa.gov

619 Ibid. 

620 Colorado Division of Vocational Rehabilitation. (July 2004). State Plan Updates 2005. 

Attachment 4.12(a). P. 3. 

621 Colorado Department of Human Services. (November 2003). Department Strategic Plan FY 

2004–05. 1-2-86. 

622 Ibid., 1-2-87. 

623 National Center for Health Statistics. (2002). Health, United States, 2003. National Center for 

Health Statistics, CDC. P. 11. 

624 Spinal Cord Injury Information Network. (August 2004). National Spinal Cord Injury 

Database. Available at: www.spinalcord.uab.edu. 

625 Ibid. 

626 Social Security Online, Disability Planner, Estimated Benefits, Quick Calculator, 

www.socialsecurity.gov. 

627 Crowley, J., & Elias, R. (August 2003). Medicaid’s Role for People with Disabilities. The 

Kaiser Commission on Medicaid and the Uninsured. P. 13. 
557 

 

628 Miller, E.A. (January 22, 2001). Federal and State Initiatives to Integrate Acute and Long 

Term Care: Issues and Profiles. CRS Report to Congress. Washington, DC: Congressional 

Research Service (RL30813). P. 4. 

629 Lutzky, S., Alecxih, L.M., Duffy, J., and Neill, C. (June 15, 2000). Review of the Medicaid 

1915(c) Home and Community Based Services Waiver Program Literature and Program Data. 

The Lewin Group. P. 12. 

630 Social Security Administration, Research and Statistics. www.ssa.gov. 

631 State Health Facts. www.statehealthfacts.org. 

632 Congressional Budget Office (April 2004). Financing Long Term Care for the Elderly. 

Congressional Budget Office Paper. P. iii. 

633 Ibid., 34. 

634 Alzheimer’s Disease.com. (2004). Stages of Alzheimer’s Disease. 

635 Ibid. 

636 Long-Term Care Report. (June 2004). Report to the U.S. Senate Special Committee on 

Aging. 81-752. 

637 Ibid. 

638 Boyle, R., Pande, N., & Lynch, L. (2004). The Guide to Medi-Cal Programs. Second Edition. 

Oakland, CA: California HealthCare Foundation. 

639 Alzheimer’s Disease.com. (2004). Stages of Alzheimer’s Disease. 

640 MS State Department of Health. (2002). 

641 Ibid. 

642 Economic Costs of Diabetes in the U.S. in 2002. Diabetes Care. 26: 917-932. 2003. 

643 Ibid. 

644 Mississippi Division of Medicaid. (September 2004). 

645 U.S. Department of Health and Human Services. (2000). Health Care Financing Review. 

Medicare and Medicaid Statistical Supplement. Washington, DC: HHS. P. 332. 

646 Ibid., 332. 
558 

 

647 Congressional Budget Office. (October 13, 2004). An Analysis of the Literature on Disease 

Management Programs. Washington, DC: CBO. 

648 National Cooperative Bank–Development Corporation. (August 12, 2004). Federal Health 

Programs Grid. 

649 Government Accountability Office. (June 2003). Long-Term Care: Federal Oversight of the 

Growing Medicaid Home- and Community-Based Waivers Should Be Strengthened. 

Washington, DC: GAO. P. 5. 

650 Ibid., 6. 

651 Tritz, K. (February 27, 2004). Long-Term Care: Consumer Directed Services under Medicaid. 

P. 14. 

652 National Council on Disability. (2005). Consumer-Directed Health Care: How Well Does It 

Work? Washington, DC: NCD. P. 69. 

653 Roig-Franzia, M. (April 1, 2005). Long Legal Battle Over as Schiavo Dies. Washington Post, 

A1, A13. 

654 Smith, V., Kaye, N., Chang, D., Bonney, J., Milligan, C., Milne, D., Mollica, R., & Shirk, C. 

(2005). Making Medicaid Work for the 21st Century. Portland, ME: National Academy of State 

Health Policy. 

655 Ibid., 13. 

656 Ibid., 13. 

657 Ibid., 15. 

658 Ibid., 20. 

659 Ibid., 30. 

660 Ibid., 34. 

661 Ibid., 35. 

662 Ibid., 35. 

663 Ibid., 55. 

664 Ibid., 56. 

665 Ibid., 77. 
559 

 

666 National Governors Association. (Adopted 2003). Chairman’s Message. Retrieved August 13, 

2004. Available at: www.subnet.nga.org/ci/message.html. 

667 Ibid. 

668 Ibid. 

669 National Governors Association. (Adopted Winter Meeting 2003; Revised Winter Meeting 

2005 (formerly Policy HR-43)). Policy Position Detail; HHS-27. Medicaid Reform Principles 

Policy. Retrieved August 13, 2004. Available at: 

www.nga.org/nga/legislativeUpdate/1,1169,C_POLICY_POSITION^D_5113,00.html. 

670 Ibid. 

671 Ibid. 

672 Executive Office of the United States. (2004-6). President’s Budget Proposals FY 04, 05, 06. 

Retrieved April 1, 2005. Available at: www.gpoaccess.gov/usbudget/browse.html. 

673 Smith, V.K., & Moody, G. (February 2005). Medicaid in 2005: Principles & Proposals for 

Reform. Prepared for the National Governor’s Association. Retrieved April 11, 2005. Available 

at: www.nga.org/cda/files/0502MEDICAID.pdf. 

674 Ibid., 9. 

675 Ibid., 9. 

676 Ibid., 10. 

677 National Governor’s Association. (2004). A Lifetime of Health and Dignity: 20 Actions 

Governors Can Take. Retrieved August 13, 2004. Available at: www.subnet.nga.org/ci/5-

top20.html. 

678 Ibid. 

679 National Council on Disability. (2004). Livable Communities Report. 

680 IRS.gov and Mastermymoney.org. 

681 www.careeronestop.org. 

682 Eichner, J., & Blumenthal, D., Eds. (2003). Medicare and Chronic Care in the 21st Century: 

Building a Better Care System. Washington, DC: National Academy of Social Insurance. P. 1. 

683 Ibid., 2. 

684 Ibid., 2. 
560 

 

685 Ibid., 9. 

686 Ibid., 8. 

687 Ibid., 12. 

688 Ibid., 49. 

689 Ibid., 50. 

690 Ibid., 50. 

691 CMS Medicare Modernization Update Web site. Available at: 

www.cms.hhs.gov/mmu/default.asp. 

692 Ibid., 51. 

693 Ibid., 53. 

694 Ibid., 54. 

695 Ibid., 55. 

696 Ibid., 56. 

697 Ibid., 56. 

698 Congressional Budget Office. (2004). Financing Long-Term Care for the Elderly. 

Washington, DC: Government Printing Office. P. 1. 

699 Ibid., 2. 

700 Ibid., 2. 

701 Ibid., 16. 

702 Ibid., 16. 

703 Ibid., 23. 

704 Ibid., 27. 

705 Ibid., 27. 

706 Stone-Axelrad, J. (2004). Long-Term Care Insurance Partnership Program. CRS Report to 

Congress. Congressional Research Service: The Library of Congress (RL32610). 
561 

 

707 Ibid., 30. 

708 Ibid. 29. 

709 Ibid., 31. 

710 Ibid., 31. 

711 Ibid., 24. 

712 Ibid., 24. 

713 Ibid., 25. 

714 ADAPT. Why direct action? Retrieved April 8, 2005. Available at: www.adapt.org/back.htm. 

715 40 B.C.L.Rev. 1221, Boston College Law Review, September, 1999, Note, *1221 “Don’t 

Tread on the ADA”: Olmstead v. L.C. Ex Rel. Zimring and the Future of Community Integration 

for Individuals with Mental Disabilities, Joanne Karger. 

716 S.971, introduced May 1, 2003. 

717 Ibid.

718 Section 1935. 

719 Ibid.

720 Ibid. 

721 Ibid.

722 Section 101. 

723 Ibid. 

724 American Association of Retired Persons (2005). The Policy Book. Washington, DC. P. 7-1. 

725 Ibid., 7-1. 

726 Ibid., 7-2. 

727 Ibid., 7-3. 

728 Ibid., 7-4. 

729 Ibid., 7-15. 
562 

 

730 Ibid., 7-16. 

731 Ibid., 7-16. 

732 Ibid., 7-19. 

733 Ibid., 7-27. 

734 Ibid., 7-27. 

735 Ibid., 7-28. 

736 Ibid., 7-28. 

737 Ibid., 7-31. 

738 Ibid., 7-33. 

739 Ibid., 7-37. 

740 Ibid., 7-74. 

741 Ibid., 7-75. 

742 Ibid., 7-76. 

743 Ibid., 7-87. 

744 Ibid., 7-88. 

745 Ibid., 9-1. 

746 Ibid., 9-9. 

747 Ibid., 9-9. 

748 Government Accountability Office. (February 2005). 21st Century Challenges: reexamining 

the base of the federal government. Washington, DC: U.S. Government Printing Office. P. 10. 

749 Ibid., 5. 

750 Ibid., 12. 

751 Ibid., 11. 

752 Ibid., 11. 
563 

 

753 Ibid., 12. 

754 Ibid., 12. 

755 Ibid., 11. 

756 These programs allow states to waive usual Medicaid rules about eligibility “entitlement” for 

Medicaid services. Rather than having to provide HCBS services to any person who meets 

Medicaid eligibility requirements, a state may create a program for specific populations, such as 

aged people, traumatic brain injury individuals, or people with MR/DD who meet the income 

eligibility. 

757 Information was collected from state agency Web sites, planning documents, Olmstead and 

task force reports, and legislative budget and research documents. Additional information was 

obtained from state agency officials through telephone and e-mail communications. Many states 

have created task forces to consider strategies for addressing concerns raised by the 1999 

Supreme Court Olmstead decision that inappropriate institutionalization of people with 

disabilities constitutes discrimination as defined by ADA. Telephone interviews were conducted 

with several key stakeholders in each state. (Names and titles of these stakeholders are provided 

in Appendix 4.A). Selected comments from these interviews appear in the state case studies. The 

views and recommendations of these stakeholders on needed federal reforms are also 

summarized in the conclusion to this chapter. 

758 Mollica, R. (November 2003). “Building Nursing Home Transition into a Balanced Long 

Term Care System: The Washington Model.” National Academy for State Health Policy for the 

Community Living Exchange Collaborative. 

759 Department of Social and Health Services. (September 2002). Facing the Future: The State of 

Human Services in Washington: Part 2. 

760 U.S. Census Bureau. Census 2000 Summary File 1; 1990 Census of Population. General 

Population Characteristics, United States. Also, Census Bureau. 2004 State and County Quick 

Facts. Washington Quick Facts. 

761 Washington Quick Facts.

762 Personal communication with staff, Aging and Disability Services Administration, June 2004. 

763 RDA Client Services Database, Research and Data Analysis. Department of Social and 

Health Services, January 2004. Personal communications with department staff, June 2004. 

764 U. S. Centers for Medicare and Medicaid Services. (January 2003). Promising Practices in 

Home- and Community-Based Services. “Washington: Facilitating Nursing Facility to 

Community Transitions.” Washington, DC: CMS. 
564 

 

765 Mollica, R. (November 2003). “Building Nursing Home Transition into a Balanced Long 

Term Care System: The Washington Model.” National Academy for State Health Policy for the 

Community Living Exchange Collaborative. 

766 Personal communication with staff, Aging and Disability Services Administration, June 2004. 

767 Human Services Research Institute. (2004). “Home and Community Services Litigation 

Status Report: October 2004.” 

768 Ibid.

769 Developmental Disabilities Strategies for the Future Stakeholder Workgroup. (December 

2002). “Developmental Disabilities Strategies for the Future: Long Range Plan. Phase 3, Final 

Report.” 

770 Joint Legislative Audit and Review Committee. (April 21, 2004). “DSHS Responses to 

JLARC Studies of the Division of Developmental Disabilities.” Status Report 04-07. 

771 Department of Social and Health Services Report to the Legislature. (December 2003). “The 

Impact of the Creation of the Aging and Disability Services Administration.” 

772 “Facing the Future: Part 3.” 

773 National Conference of State Legislatures. (2003). “The States’ Response to the Olmstead 

Decision: Washington.” 

774 Joint Legislative Audit and Review Committee. (January 29, 2004). “DSHS Mental Illness 

Prevalence Study: Follow-Up to JLARC 2000 Mental Health System Performance Audit.” 

Report 04-1. 

775 Adair, T., & Toulon, A. (March 2003) “Assessing System of Care for Older Adults and 

Adults with Co-Occurring Medical and Behavioral Disorders Currently in Washington State 

Psychiatric Hospitals or at Risk of Hospitalization.” Systems Change Grant Report. 

776 Ibid. 

777 Mollica, R. (2002). “State Assisted Living Policy: 2002.” National Academy for State Health 

Policy. 

778 Government Accountability Office. (April 30, 2004). “Assisted Living: Examples of State 

Efforts to Improve Protections.” Washington, DC: GAO (GAO-04-684). 

779 Ibid. 

780 National Conference of State Legislatures. (2003). “The States’ Response to the Olmstead 

Decision: Washington.” 
565 

 

781 Joint Legislative Audit and Review Committee. (April 21, 2004). “Home Care Quality 

Authority Performance Measures and Data Collection Plan.” 

782 Thomas, R. (March 22, 2004). “Home-Care Union Blended Force, Finesse to Win Gains.” 

The Seattle Times. 

783 Aging and Adult Services Administration. (January 2004). “Fact Sheet: Informal/Family 

Caregivers.” Department of Social and Health Services. 

784 Feinberg, L.F., et al. (November 2002). “Family Caregiver Support: Policies, Perceptions and 

Practices in 10 States Since Passage of the National Family Caregiver Support Program.” 

785 Joint Legislative Audit and Review Committee. (January 7, 2004). “Washington Medicaid 

Study.” Washington Legislature. 

786 Ibid. Department of Social and Health Services. (Spring 2003). “The Medicaid Integration 

Partnership: An Update.” 

787 www1.dshs.wa.gov/olmstead/index.htm 

788 Profile of General Demographic Characteristics for the United States: 1999-2001; poverty 

data is from the Current Population Survey, U.S. Bureau of the Census. 

789 Wasserman, J. (January 2004). “Shaping the Future of Long Term Care and Independent 

Living, 2003-2013.” Department of Aging and Disabilities. 

790 This history is described in “Vermont’s Home- and Community-Based Services System.” 

Medstat. 2003. 

791 Vermont Agency of Human Services. (February 20, 2004). February Reorganization Report. 

792 Vermont Agency of Human Services. (January 2004). Reorganization Report. 

793 Vermont Agency of Human Services. (May 24, 2004). Request for No-Cost Extension. Real 

Choice System Change Grant. 

794 Medstat.

795 Ibid. 

796 Wasserman, J. (January 2004). “Shaping the Future of Long Term Care.” 

797 Ibid. 

798 The University of Minnesota Research and Training Center on Community Living and The 

Lewin Group. (August 21–25, 2000). “Medicaid Home and Community-Based Services in 

Vermont.” Site visit. 
566 

 

799 Bascom, J.E. (January 2004). Annual Report 2004. Vermont Department of Developmental 

and Mental Health Services. 

800 Department of Developmental and Mental Health Services. (July 2003).The Statewide 

System of Care Plan for Adult Mental Health in Vermont, Update: Fiscal Years 2003–04. 

801 Ibid. 

802 The material on housing options is from J. Wasserman (2004), “Shaping the Future of Long 

Term Care.” 

803 National Conference of State Legislatures. (April 19, 2004). “Better Jobs, Better Care: 

Retaining Long-Term Care Workers.” State Health Notes. 

804 “Wage pass-through” refers to a legislative action that provides increased reimbursement for 

nursing homes but mandates that part or all of the increase be spent on increased wages or 

benefits for workers. 

805 A four-year, $15.5 million research and demonstration program funded by the Robert Wood 

Johnson Foundation and the Atlantic Philanthropies 

806 “Results of the 2003 National Survey of State Initiatives.” 

807 “Vermont Consumer Advocates Align the Stars for Direct Care Worker Advances.” Insights. 

Better Jobs/Better Care newsletter, 4(Summer 2004). 

808 Bascom, J.E. (January 2004). Annual Report 2004. Vermont Department of Developmental 

and Mental Health Services. 

809 Medstat. (2003). “Vermont’s Home and Community Based Service System.” 

810 Medicaid rules prohibit paying spouses and parents of minor children in consumer-directed 

programs. 

811 Department of Aging and Disabilities. (October 1, 2003). “Vermont Long-Term Care Plan.” 

812 The one exception is that participants who choose home care may retain up to $10,000 in 

assets. 

813 Bascom, J.E. (January 2004). Annual Report 2004. Division of Developmental Services, 

Department of Developmental and Mental Health Services. 

814 U.S. Centers for Medicare and Medicaid. (March 24–28, 2003). “Home- and CommunityBased Waiver Review: Vermont. Target Group: Individuals with Mental Retardation and 

Developmental Disabilities.” Onsite Review. (#0047.90.R3). 
567 

 

815 Intermediate Care Facility for Persons with Mental Retardation/Developmental Disabilities. 

816 Wasserman, J. (January 2004). “Shaping the Future of Long Term Care.” 

817 The U.S. Supreme Court ruled in 1999 that states would be violating ADA if they provide 

care to people with disabilities in institutional settings when they could be more appropriately 

served in home- or community-based settings. Most states have responded, at least initially, by 

preparing plans that lay out goals and actions for expanding HCBS for people with disabilities 

818“Vermont’s Response to Questions from 1115 Federal Review Team: Responses to December 

2003 Questions from CMS.” Available at: www.dad.state.vt.us/1115waiver/11204Responsespdf. 

819 Instrumental activities of daily living, such as shopping or telephoning. 

820 Minnesota Department of Human Services. (2004). “Status of Long-Term Care in Minnesota, 

2003.” 2004 Legislative Reports. 

821 Minnesota Department of Administration. Minnesota State Demographic Center. (February 

2004). “Elderly Minnesotans: A 2000 Census Portrait.” Population Notes. 

822 U.S. Census Bureau 2000 population. 

823 www.budget.state.mnus/budget/profiles/230482.pdf. 

824 Minnesota Department of Human Services. (July 2003). “DSH Priorities.” 

825 Minnesota Department of Human Services. (2004). “Status of Long-Term Care in Minnesota, 

2003.” 2004 Legislative Reports. 

826 Ibid. 

827 Personal communication with Department of Human Services staff, June 2004. 

828 State of Minnesota Long-Term Care Task Force. (January 2001). “Reshaping Long-Term 

Care in Minnesota.” Final Report. 

829 Ibid. 

830 It should be noted that the task force’s work and its subsequent recommendations were 

directed at issues affecting the elderly, not all people with disabilities 

831 Fox-Grage, W., et al. (2003). “States’ Response to the Olmstead Decision: How Are States 

Complying?” National Conference of State Legislatures. 

832 State of Minnesota Long-Term Care Task Force. (February 2002). “Keeping the Vision.” 

Report to the Minnesota Legislature: Progress on Reshaping Long-Term Care in Minnesota. 
568 

 

833 Services that are beyond the scope or variety of those available under the state’s traditional 

Medicaid State Plan. 

834 Punelli, D. (February 2004). “Medicaid Home and Community-Based Waiver Programs.” 

Information Brief. Minnesota House of Representatives Research Department. 

835 Ibid. 

836 Minnesota Department of Human Services. (2004). “Status of Long-Term Care in Minnesota, 

2003.” 2004 Legislative Reports. 

837 Punelli, D. (February 2004). “Medicaid Home and Community-Based Waiver Programs.” 

Information Brief. Minnesota House of Representatives Research Department. 

838 Medicaid Home Program Evaluation Division. Minnesota Office of the Legislative Auditor. 

(February 18, 2004). “Medicaid Home and Community-Based Waiver Services for Persons with 

Mental Retardation and or Related Conditions. 

839 Ibid. 

840 Punelli, D. (February 2004). “Medicaid Home and Community-Based Waiver Programs.” 

Information Brief. Minnesota House of Representatives Research Department. 

841 Ibid. 

842 Personal communication with Mental Health Division officials. 

843 Department of Human Services Web site. “Adult Mental Health Initiatives: Focusing on the 

Community.” Available at: 

www.dhs.state.mn.us/main/groups/disabilities/documents/pub/dhs_id_000085.hcsp. 

844 Ibid. 

845 Minnesota Department of Human Services. (2004). “Status of Long-Term Care in Minnesota, 

2003.” 2004 Legislative Reports. Personal communication with Department of Human Services 

staff, June 2004. 

846 Ibid. 

847www.dhs.state.mn.us/main/groups/economic_support/documents/pub/DHS_id_026695.pdf. 

848 State of Minnesota Long-Term Care Task Force. (January 2001). “Reshaping Long-Term 

Care in Minnesota.” Final Report. 
569 

 

849 Minnesota Department of Human Services. (2004). “Status of Long-Term Care in Minnesota, 

2003.” 2004 Legislative Reports. Personal communication with Department of Human Services 

staff, June 2004. 

850 Centers for Medicare and Medicaid Services. U.S. Department of Health and Human 

Services. (October 2003). Real Choice Systems Change Grant Program: First Year Report. 

(October 1, 2001–September 30, 2002). 

851 Minnesota Department of Human Services. (September 7, 2004). “Implementation of 

Consumer-Directed Supports Across All Waivers, MSHO and MnDHO.” Bulletin #04-56-07. 

852 Ibid. 

853 Compendium of the Systems Change Grants for Community Living. Community-Integrated 

Personal Assistance Services and Supports Grants: Minnesota. Home and Community Based 

Services Resources Network. www.hcbs.org/systems_change/minnesota.htm.

854 Anderson, W., Wiener, J., Greene, A., and O’Keeffe, J. (April 2004). “Direct Service 

Workforce Activities of the Systems Change Grantees: Final Report.” U.S. Centers for Medicare 

and Medicaid. 

855 Minnesota Department of Human Services. (2004). “Status of Long-Term Care in Minnesota, 

2003.” 2004 Legislative Reports. 

856 Ibid. 

857 Minnesota Department of Human Services. (October 2003). “Minnesota Long-Term Care 

Reform: Maximizing Non-Governmental Resources.” Fact Sheet. 

858 Minnesota Department of Human Services. (2004). “Status of Long-Term Care in Minnesota, 

2003.” 2004 Legislative Reports. 

859 Testimony of Paul Strebe, Minnesota Department of Employee Relations. (2004). Summary 

of March 5, 2004, Briefing. Series of Policy Briefings. Department of Human Services. 

860 Minnesota Department of Employee Relations. (2004). “Long-Term Care Insurance Options.” 

861 Defined as Medicaid funding following an individual who moves from a nursing facility into 

the community. 

862 U.S. Census Bureau. (2004). 2004 State and County Quick Facts. Texas Quick Facts. 

863 Health and Human Services Commission. (November 3, 2003). H.B. 2292 Transition Plan. 

864 Ibid. 
570 

 

865 To avoid confusion, this report will use the former names of the Texas agencies that operate 

services for people with disabilities, when appropriate, because much of the material in the report 

will apply to those agencies. 

866 Ibid. 

867 Ibid. 

868 Texas Health and Human Services Commission. (June 2004). “Texas Medicaid in 

Perspective.” Fifth Edition. Available at: 

www.hhsc.state.tx.us/medicaid/reports/PB5/PinkBookhtml. 

869 Tilly, J., O’Shaughnessy, C., & Weissert, R. (May 1, 2003). “A CRS Review of 10 States: 

Home- and Community-Based Services—States Seek to Change the Face of Long-Term Care: 

Texas.” Congressional Research Service Report for Congress and Texas Department of Human 

Services. Budget and Data Management. “2003 Reference Guide.” Available at: 

www.bms.dhs.statetx.us. 

870 Texas Health and Human Services Commission. (June 2004). “Texas Medicaid in 

Perspective.” Fifth Edition. 

871 Human Services Research Institute. (October 2004). “Home and Community Services 

Litigation Status Report.” 

872 www.dshs.statetx.us/mhprograms/ACT/shtm. 

873 Texas Mental Health and Mental Retardation Board. Office of Program Statistics and 

Planning. (April 12, 2002). “Report Update for State Mental Health Facilities: Final Report.” 

874 Interagency Task Force on Appropriate Care Settings for Persons with Disabilities Report. 

(November 2003). S.B. 367 

875 Texas Department of Housing and Community Affairs. “HOME Program Funds for the 

Olmstead Set Aside Still Available.” Texas state Web site. Available at: 

www.tdhca.state.tx.us/olmstead.htm. 

876 Texas Department of Housing and Community Affairs. (January 2004). “Breaking Ground” 

newsletter. 

877 S.B. 367. Interagency Task Force. 

878 Texas Department of Human Services. “2003 Reference Guide.” 
571 

 

879 Texas Health and Human Services Commission. (February 1, 2004). “Effectiveness of 

Consumer Directed Services: First Annual Update.” Report to the 78th Texas Legislature. And 

Texas Health and Human Service Commission press release. (October 31, 2002). “Waiver 

approved by CMS.” 

880 Ibid. 

881 Medicare+Choice plans offer more benefits generally than fee-for-service Medicare coupled 

with capitated payments and beneficiary premiums. 

882 When Rider 37 expired, the 2003 legislature enacted Rider 28 to continue the program. 

883 Klein, J., et al. (February 2004). “Strategies and Challenges in Promoting Transitions from 

Nursing Facilities to the Community for Individuals with Disabilities: A Pilot Study of the 

Implementation of Rider 37 in Texas.” Community Living Exchange Collaborative at ILRU. 

884 Ibid. 

885 Center for Long-Term Care Integration. (2004). “STAR+PLUS 101.” Texas Health and 

Human Services Commission. And “Texas STAR+PLUS-State Access Reform-PLUS Long 

Term Care.” Medicare/Medicaid Integration Program, University of Maryland Center on Aging. 

886 Fox-Grage, W., et al. (2003). “States’ Response to the Olmstead Decision: How Are States 

Complying?” National Conference of State Legislatures. 

887 Indiana Family and Social Services Administration press release. (October 14, 2003). 

“Indiana receives federal grant to help seniors and people with disabilities.” 

888 Census 2000. U.S. Census Bureau. 

889 Indiana Family and Social Services Administration Web site. wwwin.gov/fssa. 

890 Indiana Family and Social Services Administration. (2002). Statewide IN-Home Services: 

2002 Annual Report. 

891 Estate recovery refers to the right of a state to file a claim against the estate of a Medicaid 

nursing home resident after the death of that resident so the state can be reimbursed for the 

services it provided. In 1993, Congress passed legislation specifically precluding states from 

protecting assets from recovery, but exempted the four states that had already set up the 

Partnership programs under Robert Wood Johnson Foundation demonstration grants. 

892 www.longtermcareinsurance.IN.gov. 

893 Family and Social Services Administration Web site. (2004). “Indiana Long-Term Insurance 

Program.” Available at: www.in.gov/fssa 
572 

 

894 Burwell, B. (May 25, 2004). Medicaid Long Term Care Expenditures in FY 2003. The 

MEDSTAT Group, Inc. 

895 Family and Social Services Administration. (June 30, 2003). Governor’s Commission on 

Home and Community-Based Services. June 2003 Report. 

896 www.state.in.us/fssa/servicedisabl/olmstead/comprehensive.html. 

897 Family and Social Services Administration. (June 30, 2003). Governor’s Commission on 

Home and Community-Based Services. 

898 Senate Enrolled Act No. 493. (May 6, 2003). An Act to Amend the Indiana Code Concerning 

Human Services. Available at: www.in.gov/legislative/bills/2003/SE/SE0493.1.html. 

899 Burwell, B. (May 25, 2004). Medicaid Long Term Care Expenditures in FY 2003. The 

MEDSTAT Group, Inc.; Indiana Family and Social Services Administration. (2002). Statewide 

IN-Home Services: 2002 Annual Report. 

900 Braddock, D., & Hemp, R. (Spring 2004). “Developmental Disabilities Services in Indiana: 

2004 Progress Report. Reported in The ARC News in Indiana. Coleman Institute, University of 

Colorado. 

901 Indiana S.B. 317 Task Force. (July 1998). “Comprehensive Plan for the Design of Services 

for People with Developmental Disabilities.” Family and Social Services Administration. 

902 Indiana Family and Social Services Administration. Mentally Retarded/Developmentally 

Disabled Commission Report. (November 6, 2003). “Implementation of 317 Plan.” 

903 Ibid. 

904 Braddock, D., & Hemp, R. (Spring 2004). “Developmental Disabilities Services in Indiana: 

2004 Progress Report. Reported in The ARC News in Indiana. Coleman Institute, University of 

Colorado. 

905 Family and Social Services Administration press release. (July 28, 2003). “Transitions from 

institutions to community easier, thanks to FSSA.” 

906 Governor’s Council for People with Disabilities. (July 2003 update). Third Edition of the 

Consumer Guide to Medicaid Waiver Home and Community Based Services. 

907 FSSA Fact Sheet. (2003). “Total Persons Served in the Community by Population and State 

Fiscal Year.” Family and Social Services Administration. 

908 Family and Social Services Administration. (June 30, 2003). Governor’s Commission on 

Home and Community-Based Services.
573 

 

909 Ibid. 

910 Indiana Family and Social Services Administration. (2002). Statewide IN-Home Services: 

2002 Annual Report. 

911 Ibid. 

912 Medstat. (May 16, 2003). “Indiana—Coalition of Organizations with Resources about Home 

Ownership and Rental.” Promising Practices in Home and Community-Based Services. Medstat 

for the U.S. Centers for Medicare and Medicaid Services. 

913 Ibid. 

914 Governor’s Commission on Long Term Caregivers. Report and recommendations. Family 

and Social Services Administration. (2002). Available at: 

www.in.gov/fssa/community/pdf/LTCreport.pdf.

915 Family and Social Services Administration. (June 30, 2003). Governor’s Commission on 

Home and Community-Based Services.

916 Family and Social Services Administration. (2002). Grant narrative. Federal Community 

Personal Assistance Services and Supports. 

917 Administrative Rules Oversight Committee. (August 19, 2004). “Report of the Indiana 

Family and Social Services Administration on the Implementation of SEA 493.” 

918 Family and Social Services Administration. (June 30, 2003). Governor’s Commission on 

Home and Community-Based Services.

919 National Council on Disability. (September 2003). Report to the President and Congress on 

Olmstead. 

920 Family and Social Services Administration Web site. (June 2002). Real Choice Systems 

Change Grant Project Narrative. 

921 These provisions allow the spouse of a person receiving Medicaid-covered services to retain a 

certain amount of income and assets for expenses of living in the community. 

922 Family and Social Services Administration press release. (October 14, 2003). “Indiana 

receives federal grant to help seniors and people with disabilities.” 

923 The Management Group, Inc. for Waushara County Department of Human Services. (June 

2003). Cooperative Care: The First Year. An Evaluation and Analysis of the Waushara County 

Care Workers Cooperative. Madison, WI. 
574 

 

924 Bau, M., & Harrington, D. (May/June 2003). “House Calls,” Rural Cooperatives. Rural 

Business-Cooperative Service, U.S. Department of Agriculture, 70:3. 

925 The Management Group, Inc. for Waushara County Department of Human Services. (June 

2003). Cooperative Care: The First Year. An Evaluation and Analysis of the Waushara County 

Care Workers Cooperative. Madison, WI. 

926 Bau, M., & Harrington, D. (May/June 2003). “House Calls,” Rural Cooperatives. Rural 

Business-Cooperative Service, U.S. Department of Agriculture, 70:3. 

927 Bau, M., Cooperative Development Specialist, USDA Rural Development – Wisconsin. 

(2004). Delivering Co-op Development Technical Assistance. The Story of Cooperative Care, A 

Worker-owned Co-op of Home Care Providers. Accessed 2004. Available at: 

www.wisc.edu/uwcc/ace/04/bau/bau.pdf. 

928 Practice Profile Database on the National Clearinghouse on the Direct Care Workforce Web 

site. Available at: www.directcareclearinghouse.org/. 

929 Bau, M., & Harrington, D. (May/June 2003). “House Calls,” Rural Cooperatives. Rural 

Business-Cooperative Service, U.S. Department of Agriculture, 70:3. 

930 The Management Group, Inc. for Waushara County Department of Human Services. (June 

2003). Cooperative Care: The First Year. An Evaluation and Analysis of the Waushara County 

Care Workers Cooperative. Madison, WI. 

931 Bau, M., Cooperative Development Specialist, USDA Rural Development – Wisconsin. 

(2004). Delivering Co-op Development Technical Assistance. The Story of Cooperative Care, A 

Worker-owned Co-op of Home Care Providers. Accessed 2004. Available at: 

www.wisc.edu/uwcc/ace/04/bau/bau.pdf. 

932 The Management Group, Inc. for Waushara County Department of Human Services. (June 

2003). Cooperative Care: The First Year. An Evaluation and Analysis of the Waushara County 

Care Workers Cooperative. Madison, WI. 

933 Ibid. 

934 National Time Bank Network. (2000). Intervention 4. Issue Papers – People’s Health 

Movement PHM. 

935 New Economics Foundation. (July 2001). Time Banks: A Radical Manifesto for the UK. 

936 Cahn, E.S. (undated). The Non-Monetary Economy. Found on the Time Dollar USA Web 

site. Available at: www.timedollar.org/documents/Non-MonetaryEconomy.pdf. 

937 National Time Bank Network. (2000). Intervention 4. Issue Papers – People’s Health 

Movement PHM. 
575 

 

938 Time Dollar Institute. (undated). “The Time Dollar How-To Manual: A comprehensive guide 

to starting and running your time dollar exchange,” 

939 Time Dollar USA Web site: www.timedollar.org/. 

940 Boyle, D. (undated). The New Philanthropy. The New Economics Foundation, London 

England. 

941 Boyle, D. The Co-Production Principle and Time Dollars. The Time Dollar USA Web site. 

Available at: www.timedollar.org/documents/Co-ProductionPrinciple.pdf. 

942 Time Dollar Institute. Time to Unite: Third International Time Banking Congress Report 

Autumn 2004. Available at: 

www.timedollar.org/documents/Congressreportfinalforweb_000.pdf. 

943 Time Dollar USA Web site: www.timedollar.org/. 

944 Time Dollar Institute. Time to Unite: Third International Time Banking Congress Report 

Autumn 2004. Available at: 

www.timedollar.org/documents/Congressreportfinalforweb_000.pdf. 

945 The Co-Production Principle and Time Dollars. A report by David Boyle. Found on the Time 

Dollar USA Web site: www.timedollar.org/documents/Co-ProductionPrinciple.pdf. 

946 Time Dollar USA Web site: www.timedollar.org/. 

947 Boyle, D. The Co-Production Principle and Time Dollars. The Time Dollar USA Web site. 

Available at: www.timedollar.org/documents/Co-ProductionPrinciple.pdf. 

948 New Economics Foundation. (July 2001). Time Banks: A Radical Manifesto for the UK. 

949 Time Dollar Institute. (undated). “The Time Dollar How-To Manual: A comprehensive guide 

to starting and running your time dollar exchange,” 

950 Time Dollar USA Web site. Available at: www.timedollar.org/. 

951 Maine Time Dollar Network Web site. Available at: www.NETEN.org. 

952 Time Dollar Institute. (undated). “The Time Dollar How-To Manual: A comprehensive guide 

to starting and running your time dollar exchange,” 

953 Root Cause Institute. (August 2004). Improving Efficiency & Sustainability – Summary 

Report of Interviews with Local Time Banks. Time Banks International Conference. 
576 

 

954 Recent data shows that more than 5.8 million (18 percent) of people age 65 and older who did 

not reside in institutions such as nursing facilities had difficulty performing either ADLs or 

IADLs without assistance. Seniors’ Commission Report, p. 26. 

955 Disability advocates and housing professionals agree that this figure underestimates the 

number of people with disabilities with worst-case housing needs, because it is based solely on 

those people with disabilities receiving SSI and does not include other low-income people with 

disabilities. 

956 U.S. Department of Housing and Urban Development. (December 2003). Trends in Worst 

Case Needs for Housing, 1978-1999: A Report to Congress on Worst Case Housing Needs. Plus 

Update on Worst Case Needs in 2001. Office of Policy Development and Research, HHS. 

957 National Council on Disability. (December 2, 2004). Livable Communities for Adults with 

Disabilities. Washington, DC: NCD. 

958 Roundtable for a New Initiative in Affordable Cooperative Ownership. Held at the Ford 

Foundation in New York City, October 27, 2004. Hosted by the National Cooperative Bank and 

NCB Development Corporation. 

959 Ibid. 

960 Barnette, M. (October 2004). Creating Multifamily Homeownership at Scale: Affordable 

Housing Cooperatives in New York City, Washington, DC, and Chicago. A publication of the 

Pratt Institute Center for Community and Environmental Development. Prepared for NCB 

Development Corporation. 

961 Cooperative Housing Coalition. (2002). People Building Communities: Affordable 

Cooperative Housing. Washington, DC. 

962 Lewis, T., & Higgins, L.R. (October 2004). The Advantages and Disadvantages of 

Cooperative Housing as an Affordable Alternative. A paper prepared for NCB Development 

Corporation. 

963 NCB Development Corporation. (January 2004). Creating Affordable Cooperative 

Homeownership. Case Statement—Together We Can. Washington, DC: NCBDC. 

964 Cooperative Housing Coalition. (2002). People Building Communities: Affordable 

Cooperative Housing. Washington, DC. 

965 NCB Development Corporation. (January 2004). Creating Affordable Cooperative 

Homeownership. Case Statement—Together We Can, January 2004. Washington, DC: NCBDC. 

966 NCB Development Corporation. (Revised September 2003). Together We Can: Affordable 

Cooperative Homeownership Initiative. Washington, DC: NCBDC. 
577 

 

967 Together We Can, a program of the NCB Development Corporation, Web site. Available at: 

www.ncbdc.org/ (link to “Together We Can Program” under Affordable Co-op Housing). 

968 Asset Building Initiatives for People with Cognitive Impairments. Fact Sheet, No Place Like 

Home Communities, Robbinsdale, Minnesota. 

969 Housing Choice Summary, September 2004. Fact Sheet, No Place Like Home Communities, 

Robbinsdale, Minnesota. 

970 No Place Like Home Communities Web site. Available at: www.nplhc.org. 

971 NPLHC’s Needs for Technical Assistance. (November 9, 2004). Discussion Paper. 

972 Saegart, S., & Benitez, L. (forthcoming). “Limited Equity Housing Cooperatives: Defining a 

Niche in the Low-Income Housing Market.” Journal of Planning Literature. 

973 NCB Development Corporation. (January 2004). Creating Affordable Cooperative 

Homeownership. Case Statement—Together We Can. Washington, DC: NCBDC. 

974 NPLHC’s Needs for Technical Assistance. (November 9, 2004). Discussion Paper. 

975 Wetherow, D., & Wetherow, F. (Revised August 2004). Microboards and Microboard 

Association Design, Development and Implementation. Found on the Community Works Web 

site. Available at: www.communityworks.info/articles/Microboard.htm. 

976 Vela Microboard Association of British Columbia Web site. Available at: 

www.Microboard.org/. 

977 National Council on Disability. (December 2, 2004). Livable Communities for Adults with 

Disabilities. Washington, DC: NCD. 

978 Offner, R.B., Cameron, C.T., and Golden, J. (July 2001). The Self-Directed Support 

Corporation (SDSC) Model. A working paper of the Inclusion Research Institute. 

979 Self-Directed Support Corporations. A Power Point presentation of the Inclusion Research 

Institute. 

980 Self-Directed Support Corporations Web site. Inclusion Research Institute. Available at: 

www.self-determined.org/. 

981 Self-Directed Support Corporations. A Power Point presentation of the Inclusion Research 

Institute. 

982 Self-Directed Support Corporations-A self-determination model. (February 9, 2004). Monday 

Morning in Washington, DC. (Inclusion Research Institute, 2002). 
578 

 

983 O’Brien, J. (1999). Community Engagement: A Necessary Condition for Self-Determination 

and Individual Funding. Paper presented at the meeting of the Community Engagement Working 

Group, Pickering, Ontario, Canada.

984 Moseley, C., & Nerney, T. (1998). Emerging Best Practice in Self-Determination. Common 

Sense, New Hampshire: Publication of the National Program Office on Self-Determination. 

985 Moseley, C. (1999). Making Self-Determination Work. New Hampshire: Publication of the 

National Program Office on Self-Determination. 

986 Self-Directed Support Corporations Web site. Inclusion Research Institute. Available at: 

www.self-determined.org/. 

987 Meet Joshua! Texas Self-Determination Symposium. Found on the Employment for All Web 

site. Available at: www.employmentforall.org/articles/articles.html. 

988 Golden, J. (2004). What a Difference an SDSC Can Make: Joshua’s House Incorporated! by 

Jackie Golden. Available at: www.bridges4kids.org/pdf/Golden-Microboards.pdf. 

989 Davis, S., Ed. (2003). A Family Handbook on Future Planning, (2003). Produced by The Arc 

of the United States and the RRTC on Aging with Developmental Disabilities. 

990 Pooled Trust Programs for People with Disabilities: A guide for families. The Arc of the 

United States (2002). 

991 Ibid. 

992 Heller, T., & Factor, A. (1991). Permanency Planning for Adults with Mental Retardation 

Living with Family Caregivers. American Journal on Mental Retardation, 96: 163–76. 

993 Heller, T., & Factor, A. (1993, a). Aging Family Caregivers: Changes in burden and 

placement desire. American Journal on Mental Retardation, 98: 417–26. 

994 Davis, S., & Berkobien, R. (2003). Best Practices in Pooled Trust Programs. The Arc of the 

United States and the RRTC on Aging with Developmental Disabilities. More information 

available at: www.uic.edu/orgs/rrtcamr/research3_2.htm. 

995 Heller, T., & Factor, A. (1991). Permanency Planning for Adults with Mental Retardation 

Living with Family Caregivers. American Journal on Mental Retardation, 96: 163–76. 

996 Heller, T., & Factor, A. (1993, a). Aging Family Caregivers: Changes in burden and 

placement desire. American Journal on Mental Retardation, 98: 417–426. 

997 Enhanced Life Options. Developing enhanced life options for people with disabilities Web 

site. Available at: www.elonh.org/. 
579 

 

998 Family Reference Materials. Enhanced Life Options Trust Program. This article is posted on 

the Web site with the permission of the author and the publisher, and is based on information 

presented at the December 6, 2002, New Hampshire Bar Association Continuing Legal 

Education Program, Bedford, New Hampshire, and also at the 2003 New Hampshire Family 

Support Conference, Conway, New Hampshire. Available at: www.elonh.org/frm/frm1.html. 

999 HM Treasury. (April 2001). Saving and Assets for All: The Modernisation of Britain’s Tax 

and Benefit System. 

1000 HM Treasury and Inland Revenue. (October 2003). Detailed proposals for the Child Trust 

Fund, 

1001 HM Treasury. (April 2001). Saving and Assets for All: The Modernisation of Britain’s Tax 

and Benefit System. 

1002 Child Trust Fund Your Questions Answered. Child Trust Fund – CTF – UK Government 

Child Trust Funds for children. Homeowners Friendly Society Web site. Accessed 2004. 

Available at: www.homeowners.co.uk/ctf_faq.htm. 

1003 HM Treasury and Inland Revenue. (October 2003). Detailed proposals for the Child Trust 

Fund. 

1004 Frequently Asked Questions about the F&C Child Trust Fund. First in Investment Trust Web 

site. Accessed 2004. Available at: www.fandc.com/en/uk/pi/promotions/ctffaq.asp. 

1005 Introducing the Child Trust Fund. Inland Revenue. Child Trust Fund Web site. Accessed 

2004. Available at: www.childtrustfund.gov.uk/assetRoot/04/00/24/44/04002444.pdf. 

1006 Introduction to the Child Trust Fund. Child Trust Fund Homepage – The Child Trust Fund 

Web site. Accessed 2004. Available at: www.childtrustfund.gov.uk/Homepage/fs/en. 

1007 HM Treasury and Inland Revenue. (October 2003). Detailed proposals for the Child Trust 

Fund. 

1008 Hind, G., Consumer Education Services, FSA. (February 25, 2003). Financial Education and 

The Child Trust Fund. Paper presented at IPPR seminar on “The Role of Financial Education in 

Asset-based Policies.” 

1009 HM Treasury and Inland Revenue. (October 2003). Detailed proposals for the Child Trust 

Fund. 

1010 HM Treasury. (April 2001). Saving and Assets for All: The Modernisation of Britain’s Tax 

and Benefit System. 
580 

 

1011 Mensah, L., Schneider, R., & Aboulfadl, M. (June 2004). The Child Trust Fund: A Universal 

Long-Term Savings Policy. Aspen Institute, Initiative on Financial Security. Accessed 2004. 

Available at: www.aspeninstitute.org/. 

1012 Language added to U.S. Senate Bill, 109th Congress - S.B. 705: Establish an Interagency 

Council on Meeting the Housing and Service Needs of Seniors, April 5, 2005, to include people 

with disabilities. 

1013 Ibid.