New federal funds spur expansion of home care services for the elderly and disabled

by Selena Simmons-Duffin

Expanded funds for in-home care can help seniors and disabled Americans stay in their homes. Here, Lidia Vilorio, a home health aide, gives her patient Martina Negron her medicine and crackers for her tea in May in Haverstraw, N.Y.

Michael M. Santiago/Getty Images

For older people and people with disabilities, solving everyday practical problems can be the difference between being able to live at home or being forced to move to an institution. Sometimes people need help getting dressed or making meals. Sometimes they need help managing medications or shopping for groceries.

Originally, these things weren't paid for by Medicaid, the federal health care program that many low-income and disabled Americans rely on. In recent years, the program has worked to expand coverage of home-based care but it's still optional for states. Some states have adopted it widely, while in others, more care still happens in nursing homes and other institutions.

In April, the Biden administration rolled out funding from the American Rescue Plan to help states boost these services. And Thursday, the federal Department of Health and Human Services unveiled every state's plan for how they'll use the funds. An estimated $12.7 billion dollars in federal matching funds are available to "encourage states to expand home and community-based services and strengthen their programs," according to an agency press release. 

"More and more people are saying, if I need care, I'd like it to be done at home or here in my community versus an institution or a hospital or a nursing home," says Health Secretary Xavier Becerra. "In the 21st century, we're moving closer to a care model that's based on giving people services in their home."

Becerra adds that his own father spent his last few months in hospice at home. "When he passed, he was in my home, he was surrounded by family," he says.

Medicaid recently surpassed 80 million beneficiaries — the most ever since the program was created in the 1960s. It is the primary provider of long-term care services for older people, since these are not covered by Medicare or private insurance.

The move towards home- and community-based care has been gradual since Medicaid started, says MaryBeth Musumeci, an associate director at the Kaiser Family Foundation's program on Medicaid and the uninsured. "This is really the first new funding that we're seeing for home and community based services really since the Affordable Care Act in 2010," she says.

"Back in 1965, the world was very different, societal expectations were different," she explains. "For example, if you had a child born with a significant disability, it was much more likely that you might institutionalize that child from a very young age. Medical science and technology had also not advanced to the point where it is now."

These days, it's both possible and preferable for everyday help to be provided to people at home, she says.

There are a lot of reasons why the shift towards home-based care is a good thing, says Jack Rollins, director of federal policy at the National Association of Medicaid Directors.

For someone who needs these services, "you can get care from your family [or] from people that you trust in the community who can come into your home," he says. "It generally costs less than providing these services in the nursing home. Folks that receive [these services] are generally happier with them — they prefer it."

He adds that regardless of where states are now in terms of offering these services, this new funding will help move them further along. For instance, he says, "one of the things that generally Medicaid can't directly pay for is internet connectivity — with these dollars, it looks like we can." That means people could get consistent broadband internet access, he explains, which could allow them to use telehealth services.

There's a time limit to this funding boost, though. The money provided by the American Rescue Plan to shore up these services "is a meaningful amount, but the challenging part is it's limited to 12 months," explains Musumeci.

Many Medicaid advocates are hoping that more permanent support for these services will come through in the budget bill getting hashed out in Congress.

"We do remain hopeful that that investment gets through in some form or fashion," says Rollins. "We think it's important."

The health secretary says he thinks so, too. "We're hoping that Congress will continue to provide additional resources so we can make those increased services in home and community based settings permanent," Becerra says. Through the COVID-19 pandemic, he adds, "Medicaid proved its value."

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New federal funds spur expansion of home care services for the elderly and disabled

Many seniors who qualify for home-based care under Medicare aren’t receiving it. Why?

One of the greatest gaps in Medicare coverage is that it does not help to pay for home-based care unless such care is requested by a physician as medically necessary. Medicaid will cover such long-term custodial care for people with little to no income or assets. But Medicaid covers fewer than one in five of the roughly 55 million people on Medicare, leaving the rest to fend for themselves or, for a small group of mostly better-off folks, purchase private long-term care insurance.

Now, it appears that even Medicare’s limited home-based coverage benefits for those with medical needs are also not possible for many people. The nonprofit Center for Medicare Advocacy says it been researching the availability of Medicare-covered home-based care in response to a worrisome and growing volume of complaints from Medicare enrollees that they are being denied home-based care even though they are qualified to receive it and it is covered by Medicare.

Like nearly everything about Medicare, this is a complex topic. But it appears that Medicare is not keen to encourage use of allowable home care benefits. Home care providers don’t much like this benefit either. They don’t make much money on it, and under new Medicare rules, they can actually lose money providing such care.

Let’s begin with the benefit itself. According to the Center for Medicare Advocacy, Medicare will pay for up to 35 hours a week of home-based care — provided by nursing and home health aids — to people who are housebound and for whom such care is prescribed as medically necessary by their doctor or another authorized caregiver. The home health benefit also includes physical, occupational or speech-language therapy.

READ MORE: Does Medicare pay for a home health care provider?

Skilled nursing care is covered on an “intermittent” and “part-time” basis and also for home-based medical social services and for home health aides, who are allowed to perform certain personal services that stem from the patient’s underlying medical needs, but which are not the same as custodial care, which is not covered by Medicare.

These last two coverage categories, while part of Medicare’s benefits, merit only a footnote on the Medicare website. And when Medicare updated its home health care brochure last March, it was full of errors about the nature of available coverage, according to Center for Medicare Advocacy associate director Kathleen Holt.

Holt says the allowable benefits are thus broader than people realize. However, she adds, it looks like it doesn’t matter what’s actually covered, because home health agencies routinely decline to provide even the skimpier services that Medicare publicizes to Medicare enrollees who request them.

Significantly, Medicare will only pay insurance claims to home health agencies who are registered and approved by Medicare. Ostensibly to help consumers, it has developed an extensive quality rating system, so consumers can find the most qualified agency. However, there apparently is no requirement that an agency actually provide home health services when Medicare enrollees request them.

The reasons why these agencies turn away business, Holt claims, stem partly from Medicare’s increasing emphasis on paying for health care that actually helps patients get better. This is an admirable goal, but what it means is that home health agencies are rewarded for treating patients who are likely to get better.

Supporting care that cures people, while understandable, is not a requirement Medicare insists on for covering most health care. Therapy that maintains a person’s ability to function, or even that slows the pace of decline, is a perfectly good goal for treatment and one that many older Americans and their families embrace.

However, Medicare and Congress have supported the shift from fee-for-service health care to fee-for-results care. In this situation, home health agencies face a carrot-and-stick financial incentive system based on measurable patient improvement. That’s all fine and dandy, but what this means is that agencies are effectively discouraged from treating people with long-term chronic conditions who may be qualified for services, but are unlikely to get better.  (Click to Continue)

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Many seniors who qualify for home-based care under Medicare aren’t receiving it. Why?