Overview of Home and Community-Based Services
“Home and community-based services” refers to a set of benefits
that are designed to assist individuals with alternatives to institutional care. The individuals require assistance with activities
of daily living (ADLs) and may receive therapies to manage and
treat chronic conditions. The required intensity of services will
vary depending on the degree of an individual’s disability. In
the Medicaid program, this service array has traditionally been
provided under parameters set forth in Section 1915(c) of the
SSA, which requires that an individual satisfy state-established
institutional level of care criteria in order to become eligible for
the HCBS waiver services. As a result, the majority of historical
Medicaid experience for HCBS reflects the cost profile of a long-term care or nursing home population (i.e., those who meet the
state-established institutional level of care criteria).
The 1915(i) state plan option offers an alternative method
of providing HCBS through the Medicaid program. Recently,
many states have been exploring this option and are interested
in understanding the fiscal impact of 1915(i) implementation.
When using historical experience to project expenditures for a
1915(i) state plan option, actuaries and states need to consider
the varying risk profile of the targeted population, particularly
for services that may already be provided under a 1915(c) waiver.
The cost of services as part of a waiver may not be fully comparable to the cost for a population targeted for the 1915(i) state
plan option, given the eligibility requirements that may vary
between the 1915(c) waivers and the 1915(i) state plan option.
The table in Figure 1 provides a comparison of the key policy
issues between 1915(c) waivers and the 1915(i) state plan option.
The sections that follow provide additional detail and describe
the evolution of the 1915(i) state plan option, from its roots in the
Deficit Reduction Act to modification under the ACA.
The Deficit Reduction Act and 1915(i)
Section 1915(i) of the SSA was established under Section 6086
of the Deficit Reduction Act of 2005 (DRA), which discussed
“Expanded Access to Home and Community-Based Services for
the Elderly and Disabled.” Effective Jan. 1, 2007, this version of
Section 1915(i) afforded states the flexibility to add certain home
and community-based services to the Medicaid state plan.
to the DRA, these services had to be included as part of a 1915(c)
waiver program and could only be offered to individuals who
met institutional level of care criteria.
In order for individuals to be eligible for benefits under the
1915(i) state plan option, the Medicaid program had to establish
needs-based criteria, which were required to be less stringent
than those defined for institutional level of care. The more relaxed needs-based eligibility definition could result in escalating
program costs. As a result, states were given the option to limit
the number of people receiving the service package and establish waiting lists, to recognize budget constraints that could be
present with implementing the 1915(i) state plan option.
Other significant aspects of the 1915(i) state plan option as
presented in the DRA include the following:
■ ■ States did not have to demonstrate cost neutrality compared
with institutional expenditures for the eligible population:
This is primarily because there would be no comparable
institutional cost for individuals who do not have to meet institutional level of care criteria for 1915(i) eligibility.
■ ■ Income eligibility threshold at 150 percent of FPL: In addition
to meeting the needs-based criteria with a less restrictive definition than institutional level of care, an individual’s income
must be no higher than 150 percent of the federal poverty
level to be eligible for the 1915(i) service package.
■ ■ Comparability requirement had to be met: Any Medicaid-cov-ered individual who met the medical necessity criteria could
utilize the HCBS package offered under 1915(i) (
■ ■ Statewide application requirement was waived: States were
permitted to limit the geographic scope of the 1915(i) state
plan option. Under the ACA, states are no longer permitted
to waive the statewide application requirement for services
provided through the 1915(i) state plan option.
Figure 1: High-Level Comparison of 1915(c)
Waivers and 1915(i) State Plan Option
` 1915(c) Waivers
1915(i) State Plan
Option (after ACA
Service array Home and community-
based services outlined
under Section 1915(c)( 4)
(b) of the SSA. Examples:
as 1915(c). Service
offerings are not limited
to the services provided
provided they are within
the parameters outlined
in Section 1915(c)( 4)(b)
of the SSA.
300 percent of
Income Federal Benefit
150 percent of FPL.*
institutional level of
criteria that are less
stringent than 1915(c)
with two activities of
Permitted to be waived. Not permitted to be
Permitted. Not permitted.
Required. Not required.
*The income threshold for 1915(i) may vary, as explained later in this article.
**Needs-based criteria will vary with the income threshold for 1915(i).