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TITLE: Medicaid and the Uninsured- The Interaction of the Americans with Disabilities Act and Medicaid June 2004 http://www.kff.org/medicaid/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=38408

Author: Kaiser Family Foundation (Katherine Cargill-Willis 7/13/04)

Olmstead: With the Olmstead decision, the Supreme Court ruled that:

Unjustified institutional isolation of people with disabilities is a form of discrimination.
States are required to provide community-based services for those who would otherwise be entitled to institutional services when:

The state’s treatment professionals reasonably determine that community placement is appropriate;

The person does not oppose such placement; and,

The placement can reasonably be accommodated, taking into account resources available to the state and the needs of others receiving state-supported disability services.

The "state’s responsibility is not boundless", noting that the needs of persons who require institutional services have to be weighed against those who reside in the community. The Court also noted that nothing in the ADA condones termination of institutional settings for persons unable to handle or benefit from community settings.
The ADA’s reasonable-modifications standard does not require states to make "fundamental alterations" in their services or programs. The Court specifically stated that states can balance the aggregate needs of the population of people with mental disabilities, and are not required to consider the cost of institutional care versus the cost of providing services in the community on an individual basis.
If a state has a comprehensive, effectively working plan for placing qualified individuals in less restrictive settings, and a waiting list moving at a reasonable pace that is not controlled by a state’s efforts to keep its institutions fully populated, the reasonable modifications standard would be met.

Medicaid Coverage and Financing for Long-Term Services and Supports: Medicaid is the major source of public financing for long-term services and supports for people with disabilities. In 2002, Medicaid provided coverage to more than eight million non-elderly people with disabilities and an additional five million seniors, many with disabilities. Medicaid eligibility is based on income and most recipients are not employed.
- Seventy-eight percent of Medicaid beneficiaries with disabilities qualify through SSI.
- The majority (68%) of Medicaid long-term service spending remains institutionally based, while only 32% of Medicaid long-term services spending is directed to the community.
- Nearly 1.5 million people with disabilities and seniors receive institutional services under Medicaid and just over 2 million receive services in their homes or communities.
The Medicaid law requires state Medicaid programs to provide institutional services to all eligible individuals as a mandatory benefit, and permits (but does not require) states to make services available in the community; this is the institutional bias. There are three ways state Medicaid programs can provide home and community-based services:
1. Through the home health benefit;
2. Through one of several optional state plan services; and
3. Through home and community-based services waivers.
Home health is a mandatory benefit that has been used to provide skilled, medically oriented services in the home. States have the discretion to cover a number of therapeutic services, but whatever services they do provide must be provided on a statewide basis to all beneficiaries for whom they are medically necessary. States can also provide community-based services through 1915(c) home and community-based services (HCBS) waivers that allow states to target specific populations and geographic locations. Unlike mandatory or optional state plan services, HCBS waivers can cap enrollment and must be budget neutral. As a result, waiting lists for HCBS waivers are long, and in some cases persons can be forced to wait for several years. In 2002, at least 150,000 people with disabilities were on HCBS waiver waiting lists.
The Impact of the Olmstead Decision on Medicaid: Although the Olmstead decision established that requiring individuals to receive services in segregated institutions is illegal discrimination under the ADA, the Court did not order an immediate end to institutional isolation or end the institutional bias. The decision has not led to a rapid expansion of Medicaid community-based long-term services. The recent state fiscal crisis has meant that states’ economic conditions have been a barrier to states implementing their own Olmstead compliance plans. The Olmstead decision has led to policy responses:
Federal Responses
- The Center for Medicaid and State Operations and the Office for Civil Rights issued five joint letters·
- Real Choice
- Systems Change Grants
- New Freedom Initiative
State Responses: Twenty-nine states have issued Olmstead-related plans or reports and ten states have issued or are working on follow-up reports that update, revise and prioritize their original plans. One example is the Indiana plan which assigns recommendations to one of three categories: those that should be implemented quickly with little or no fiscal impact or regulatory requirements; those that should be implemented quickly with fiscal or regulatory changes; and, those that are more costly or difficult to implement. The National Council on Disability has identified several issues associated with Olmstead implementation. They have noted that state budgets often do not reflect Olmstead planning goals and plans do not consistently provide for opportunities for life in the most integrated setting as people with disabilities define "most integrated setting." In addition, the majority of states have not planned to identify or provide community placement to all institutionalized persons who do not oppose community placement and few plans identify systemic barriers to community placement.

Disability Community Responses: As of May 2004, an estimated 627 Olmstead-related complaints have been filed with the HHS Office for Civil Rights (OCR), which has responsibility for enforcing Title II of the ADA and ensuring compliance with the Olmstead decision; 459 were resolved or closed and 168 were still open. Many people with disabilities have also filed suit against states seeking a court order requiring enforcement of the Olmstead mandate. In some cases, the initiation of a lawsuit has led to the individual and the state signing a settlement agreement spelling out detailed steps the state will take to increase funding for Medicaid home and community-based services. At least 20 such agreements have been signed and a recent review of these settlements indicates that, as a result, hundreds of people with disabilities will begin receiving services in the community. The disability community has also been active in advocating for programs to assist in transitioning people out of institutions.
Challenges to Ending Medicaid’s Institutional Bias: In most cases home and community-based services are less expensive on an individual basis. However, in the absence of new resources, barriers to the full community integration of people with disabilities include:

Financial Constraints on Medicaid - Ending the institutional bias by creating a new entitlement to community living services has the potential to incur substantial new costs for federal and state governments.

Affordable Housing - Low-income people with disabilities receiving Medicaid rely on government assistance in obtaining affordable and accessible housing. Medicaid funds generally cannot be used for housing.

Labor Shortages - There is a shortage of direct care workers who are trained and willing to provide community-based personal assistance and other long-term services.

Political Pressure - Institutions are often large employers, especially in small towns where shifting resources from institutions to the community could lead to lost jobs and an economic drain for the community.

Evolving Views of Disability

Colonial America - People with disabilities were viewed primarily in terms of their dependency. For people with no family support, colonial governments established "poor laws" to provide subsistence to people who were poor, elderly, or had disabilities.

1820s - State and local governments began constructing large almshouses in which people who were poor, old, sick, disabled, or simply idle drifters, were given a disciplined daily regimen and an exacting routine.

1830s - States began to erect asylums to "cure" people from mental illness by depriving them of stimulus or emotion.

Late 1800s - Despite various reform movements during the 1800s, people with disabilities were living in yet more almshouses, which they shared with abandoned children, drifters, petty criminals, and a growing number of poor immigrants.

End of World War I - In 1918, Congress enacted the Smith-Sears Veteran’s Rehabilitation Act. Two years later, Congress enacted the Smith-Fess Act, which extended vocational rehabilitation programs to civilians with physical disabilities.

1950s - For persons who could not be rehabilitated into the workforce, the government began providing income support to people with disabilities through the enactment of the Social Security Disability Insurance (SSDI) program in 1956.

1960s - The medical, rehabilitation and support models of disability began to be challenged as the civil rights movements for African Americans and women gathered momentum and the "independent living" movement began. 1970s—In 1972, Congress established the Supplemental Security Income (SSI) to provide income support to low income people with disabilities. Unlike SSDI, eligibility for SSI is not tied to past employment. In 1973, Congress enacted the Rehabilitation Act requiring executive branch departments to develop an affirmative action program for the hiring, placement, and advancement of people with disabilities.

1990s - Congress enacted the Americans with Disabilities Act in 1990 establishing a comprehensive prohibition of discrimination on the basis of disability.

Disability-Related Civil Rights Laws

Americans with Disabilities Act of 1990 (ADA)

Air Carrier Access Act of 1986

Architectural Barriers Act of 1968

Civil Rights of Institutionalized Persons Act (1980)

Fair Housing Amendments Act of 1988

Individuals with Disabilities Education Act Amendments of 1997

National Voter Registration Act of 1993

Rehabilitation Act Amendments of 1998

Telecommunications Act of 1996

Voting Accessibility for the Elderly and Handicapped Act of 1984

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