In May 2024, the Centers for Medicare and Medicaid Services (CMS) finalized regulations intended to ensure access to Medicaid services. One provision has remained under the radar: requiring states every year to publicly report the number of people on waiting lists for home and community-based services (HCBS), along with average wait times, beginning in July 2027. States also must describe how they maintain their waiting lists, including whether and when people are screened for eligibility.
HCBS — used by older adults and people with disabilities — include services like home health aides, personal care attendants, homemaker services (e.g., help with laundry and preparing meals), supportive housing, adult day health services, and supported employment. These services allow people with physical, cognitive, intellectual, and mental health disabilities to live independently outside of nursing homes or other institutions. HCBS are difficult to afford out of pocket; one year of homemaker services costs nearly $70,000. HCBS are not typically covered by private insurance, and people often are surprised to learn that Medicare doesn’t cover long-term care. Medicaid is the primary payer for HCBS, financing more than two-thirds of services in 2020.
State Medicaid programs don’t have to offer HCBS. However, all states have at least one HCBS “waiver,” under which CMS lets states receive federal Medicaid funds to provide HCBS to people who would otherwise live in institutions. Waivers let states expand Medicaid financial eligibility and target services to a particular population, such as people with intellectual or developmental disabilities. Unlike other Medicaid services, which must be provided when medically necessary to all enrollees, states can limit the number of people served through waivers. These enrollment limits can result in waiting lists. About 2.6 million people nationwide received Medicaid HCBS waiver services in 2021. The best data available reveal that another 692,679 people in 38 states were on waiting lists, with a 36-month average wait time.
Current waiting list data are not standardized and difficult to compare across states. To qualify for HCBS, people must meet financial (i.e., income and asset limits) and functional (i.e., amount of help needed with self-care and independent living tasks) criteria. Because these criteria vary across states, a person might qualify for HCBS in one state but not another. Consequently, in states that define HCBS “need” more restrictively (e.g., people need more help with more activities), some people aren’t included in enrollment and waiting lists, even though their needs are similar to those who receive HCBS elsewhere.
Additionally, waiting lists may include people who aren’t currently eligible for HCBS. While most states determine eligibility before placing individuals on waiting lists, six states don’t do this. Over half of the waiting-list population, about 385,000 people, lives in these six states, making it difficult to determine the current unmet need for HCBS. This issue particularly affects individuals with intellectual or developmental disabilities, who make up 72 percent of waiting lists nationally, and 88 percent of waiting lists in the nonscreening states, with an average wait exceeding five years. This may reflect parents anticipating future needs by placing young children on waiting lists. Moreover, waiting lists don’t indicate whether enrollees receive other services while they wait. People on waiting lists frequently receive unpaid family caregiver support. They also may receive Medicaid state plan services, which can cover some HCBS, or services from a waiver with a limited benefit package.
One potential shortcoming of the final rule is that it does not define waiting list. Public commenters raised concerns that this could lead some states to report that they don’t have a waiting list, despite maintaining a “registry” or “interest list” of people seeking HCBS. CMS clarified that the new reporting requirement “applies to all states that maintain a list of individuals interested in enrolling in an HCBS waiver.” However, CMS also reaffirmed that states aren’t required to maintain waiting lists at all. This could result in people with unmet needs missing from the new data.
The new rule marks the first time CMS will require states to report on waiting lists since the authority to limit HCBS waiver enrollment was added to federal Medicaid law more than 40 years ago. CMS characterizes the rule as a “first step” and acknowledges it doesn’t require any substantive state policy changes; rather, it seeks to “document unmet needs” and find strategies that “could . . . improve waiting list processes.” The need for HCBS will increase in the coming years with the aging of the population and medical advances that allow people with disabilities to live longer and independently. States have observed increasing HCBS needs given longer lifespans among people with intellectual or developmental disabilities and a trend of new enrollees requiring more services (e.g., a greater number of hours and/or more complex services). However, states lack funding to increase waiver capacity and the provider workforce to address this need. What would have been an historic investment in HCBS was omitted from COVID relief legislation; other proposals have not advanced in the current Congress. The new reporting rule will be meaningful only if the new data collected lead to efforts to expand HCBS access and assuage unmet needs.
