Medicaid community living services and the stimulus
Bob Williams1


Providing Adequate Funding for
State Medicaid Health and Community Living Services:
Medicaid provides a vital health coverage safety net to nearly 50 million Americans, funded jointly by the federal government and the states. In doing so, the program plays an especially indispensable role in providing comprehensive health care coverage to roughly 10 million children, adults and older Americans with disabilities daily. This maybe particularly true with regard to the estimated 3.3 million of those that rely on it for long term services -- over one half of who live in their homes and communities. Medicaid carries out what many considered being its most essential roles, however, in bad times like these when it must expand to provide coverage to increasing numbers of unemployed and uninsured individuals and families. All of which comes at a time when states are low on revenue and must cut other services to grow the safety net.

In other words, the Medicaid program is “countercyclical”. States must expand the number of those it covers and the costs of doing so at the very times when they are least able to afford it. In past recessions, this invariably has led states to reduce or at least curtail the expansion of services that enable people with disabilities to live and work in their community. The Wall Street Journal recently reported the same pattern is already emerging today. It noted that a recent survey found that 41 states already face current or looming budget deficits and have already made Medicaid cuts or are considering them.

The WSJ further found that at least one third of all states, in fact, are currently targeting cuts in personal care and other community living services for people with disabilities.
More may follow suit when the recession worsens. Still others maybe forced to abandon or postpone plans to reduce long waiting lists for such services. Over 250 thousand people with a wide range of developmental, intellectual, mental, physical and often multiple disabilities are currently consigned to wait for services for periods ranging from several months to a year or more. Thousands more who could and desperately want to move back into their community from a nursing home or another institution likely will be forced to remain needlessly institutionalized instead.

Cuts and delays that states feel they must make in Medicaid community living services to deal with budget short falls, therefore, will undermine the health and independence of those with disabilities and their families that rely on them most. It undermines the basic liberty of these Americans and their right to live in the community under the Americans with Disabilities Act and the U.S. Supreme Court’s 1999 Olmstead decision. Furthermore, these types of cuts will invariably lead to the lay off or at least the reduction in work for community living paraprofessionals. Ironically, many family members also likely will be forced to reduce their work hours in order to make up for these cuts in services by providing needed assistance to a child, a spouse, a parent or a brother or sister with a significant disability. In other words, such cuts will have a far-reaching domino effect. Further imperiling the human and economic well being of all those involved.

In 2003, when states faced the largest budget deficits since the 1930’s, Congress approved $20 million in aid to them; including $10 billion in the form of a “temporary” increase in the federal Medicaid match (FMAP). While this action came after most states had made deep cuts in Medicaid and other critical services, many experts credit it with averting far more dire cuts and human consequences. In a meeting with the President-elect, the Nation’s Governors stressed that one of the most effective ways to “hasten the recovery” is to fund states to “reduce or avoid cuts in … FMAP…; infrastructure investments that create jobs; and safety net programs that assist people in the greatest need.”

Similar increases in FMAP will be needed to weather this crisis as well. In the past, such increases have been designed to meet the needs of states to extend Medicaid coverage to growing numbers unemployed and uninsured working families. While this will be still necessary to do, emphasis also should be placed on assuring that states have adequate funding to provide and increase the availability and quality of community living services.
The Americans with Disabilities Act and subsequent U.S. Supreme Court’s Olmstead decision require states to take effective steps to prevent and eliminate the unjustified institutionalization and isolation of people with disabilities. For over a decade, states have steadily increased access to Medicaid community living services in order to comply with this vital civil rights obligation. However, the current economic crisis and resulting Solomonic “choices” facing Governors and state legislatures will most certainly stymie, if not reverse, many of these gains. For all of these reasons, therefore, the Obama-Biden recovery package, therefore, needs to be designed to lessen the effects of these types of cyclic problems both now and in times of future economic turmoil.

POLICY OPTION(S): To the extent that states are provided a higher federal Medicaid match (FMAP) – whether on a temporary or permanent basis – such funding could be structured to assure that states which expand community living services in good times are not “left holding the bag” for doing so when the economy declines. This might be done, for example, by rewarding states in one of at least two ways. States that create “rainy day funds” or designated taxes for the specific purpose of expanding community living services during good times and maintaining them in bad times could: (a) receive a slightly increased – e.g., a three to five percentage point higher – FMAP for doing so; and/or, (b) access such funding far earlier during periods of future economic downturns.

In addition to providing a higher match to address the immediate need for states to expand the Medicaid rolls during this recession, consideration also could be given to providing states with a 10 to 15 percent higher FMAP for making certain community living services innovations and enhancements. The higher match could be made available for and gradually phrased out over a 10 to 15 year period, which is patterned after similar provisions in Senator Harkin and Representative Davis’ Community Choice Act (S.799/HR1621) as well as the Money Follows the Person Demonstration Grant Program. This higher FMAP could be used by states for specific activities, including:

· Assessing the unmet needs for such services among persons with the full range of significant disabilities in both institutional and community settings
· Reducing reliance on institutional LTS
· Reducing waiting lists for such services among those in both institutional and community settings
· Demonstrating effective strategies for better coordinating the delivery of primary care and community living services
· Developing and implementing rational cost sharing among public and private insurers
· Phasing in effective financing strategies for managing the woodwork effect or increased demand for community living services over a 10 to 15 year period.

The Obama-Biden Administration and Congress should take advantage of the enormous potential that federal and state Medicaid funding has for creating good paying American jobs that will never be able to be out moved off shore.

Priming the Economic Engine of Medicaid Community Living Service:
A strong symbiotic relationship exists between people with significant disabilities and community living services living services (CLS) paraprofessionals. For their part, such workers play a pivotal role in enhancing the health, independence and economic security of these individuals and their families. On the other hand, these workers are heavily reliant on the relative health of Medicaid and other funding sources for their own livelihoods, personal independence and economic security. Moreover, community living jobs are expected to grow significantly over the next 20 years due in large part to the aging of the baby boom. Indeed, jobs such as personal assistants/home care workers and home health care aides are already the second and third fastest growing occupations in the U.S. economy. Some three million people are employed in these types of positions nationwide. These jobs generate a combined $56 billion in personal income for these workers, who plow most of their wages back into their local economies. The aging of the baby boom – combined with the fact that persons aged 85 years old and over who have the most need for such assistance is the fastest growing age group in America – is projected to lead to the creation of 1.6 million new LTS paraprofessional jobs between 2006-2016 or by 35 percent increase during this period. Indeed, roughly one out of every two jobs created in the entire health care sector during this same timeframe will be those of these types of paraprofessionals.

At present, however, the contributions these paraprofessionals make to people with significant disabilities, families and the common good are only marginally rewarded. In fact, the support these workers offer to assist individuals to eat, dress, go to the bathroom and other everyday necessities are still largely viewed as menial, degrading and the “lowest” form of work that anyone can perform and as a result are compensated accordingly. In fact, 40 percent of these paraprofessionals have been found to live in households that rely on Medicaid, food stamps or similar benefits. Similarly, the vast majority of these workers make under $10 an hour and nearly one third are uninsured. They also lack of stable hours and limited opportunity for advancement, which fuels extremely low morale and high turn over. Factors like these can pit the interests of people with significant disabilities against those of the workers’ they rely on most. Under the worst of scenarios, this can lead such persons to being abused, neglected and having their most basic needs, rights and abilities discounted. Even in the majority of cases, however, when workers are highly committed and support people well, many feel similarly exploited and misused due to the relatively low wages, lack of benefits and others working conditions that they experience. This, in turn, drives high rates of overtime, burn out and staff turn over, further undercutting the quality of the services and supports that they can provide.

The expected cuts in Medicaid services will further exacerbate the situation. As a nation, we are at a moral and economic crossroads with respect to this issue. We can continue to devalue these paraprofessionals or we can value the importance of their labor and those that they support. The policy choice is clear. The development of a highly motivated and growing cadre of committed community living paraprofessionals, who are valued and well compensated for the work they do is essential not just to people with significant disabilities and their families but to the future of the country that we seek to become. It is critical, therefore, that the Obama-Biden Administration include in its recovery plan, targeted strategies to improve the standard of living, working conditions and future prospects of community living paraprofessionals.

POLICY OPTION(S): As part of recovery or other vehicles, the new Administration should strongly consider providing states, localities and other community organizations funding to assist community living paraprofessionals to escape poverty by increasing their standard of living and health benefits; as well as their access to educational, career advancement and affordable housing opportunities. Targeted job and economic development federal funding could be provided and used to:

· Increase wages and benefits for these paraprofessionals.
· Invest in scholarship and loan repayment programs for such workers.
· Leverage the Workforce Investment Act to build and strengthen this workforce.
· Spur the start up of community living services small businesses and cooperatives owned and controlled by such workers, people with significant disabilities and their families.

The funds also could spur public and private sector investments in broader affordable workforce housing strategies that benefit a wide range of low to moderate income public service workers, including nurses, police officers, teachers and community living paraprofessionals. These approaches could yield multiple benefits: Rewarding workers, ensuring greater stability and fewer turnovers as well as increasing the supply of affordable housing.

Additionally, the new Administration could significantly improve the lot of community living paraprofessionals by:

· Extending federal wage and hour protection to all of these workers.
· Establishing minimum standards for these paraprofessionals’ wages and benefits for services, they provide that are paid for Medicaid and other public programs.
· Ensuring that public funds are used in ways that strengthens the stability of this vital work force.


During the campaign, the Obama-Biden team further proposed to:

· Increase the minimum wage
· Expand the use of the EITC by low-income workers
· Create Promise Neighborhoods to provide comprehensive services in impoverished areas in 20 American cities
· Invest $1 billion over five years in transitional jobs and career pathway programs that implement proven methods of helping low-income Americans succeed in the workforce
· Create a Green Jobs Corps to employ disadvantaged youth in energy jobs to in their communities and provide them with valuable skills in a high-growth career field

All of these initiatives have tremendous implications and potential benefits for the community living paraprofessional workforce.

POLICY OPTION(S): The new Administration could design and carry out their anti-poverty and economic development initiatives in ways that consciously advances the rights and interests of both Americans with significant disabilities and community living paraprofessionals. Toward this end, the Promise Neighborhoods initiative could be designed and carried out in a manner that would benefit both groups. This is particularly important to do given the high correlation between disability and poverty among those living in urban and rural America. The same basic principle also applies to any transitional jobs/career pathways initiatives that the new Administration might pursue. For example, an American Livable Communities Corps analogous to the Green Jobs Corps could be created to -- among other things -- provide educational, employment and career advancement opportunities to disadvantaged youth, people with disabilities and others in high growth allied health, human services and community living fields.