White Paper:  Examining the Need for a Rate Increase to IDD Community-Based Providers

White Paper: Examining the Need for a Rate Increase to IDD Community-Based Providers

Click here to read the entire White Paper.

I. Background

Medicaid Overview

With a total FY 2018-2019 biennial appropriation of $61.8 billion all funds (AF), the Medicaid program makes up just over 28% of the entire state budget.[i]And, because the program is an entitlement with open-ended funding, and is largely ruled by federal laws and regulations, the state has limited control in curbing Medicaid population growth and costs. In State Fiscal Year (SFY) 2017, Texas Medicaid served just over 4 million low-income, elderly, and individuals with disabilities.[ii]The program funds about 53% of all births in Texas, and covers 62% of all nursing facility residents.[iii]

Even though our state has one of the nation’s largest Medicaid programs,[iv]Texas largely covers only mandatory populations required by the federal government. The table below shows the population groups that are covered by Texas’ program, and which are mandatory versus optional.


Although the majority of individuals covered by Medicaid are “acute” care populations (mostly children)- meaning they do not meet a functional need of ongoing long-term services and supports- this population does not make up the majority of program expenditures. Rather, the “age and disability-related population,” formerly referred to as the Aged/Blind/Disabled- or ABD- population comprises only about a quarter of Texas Medicaid’s population, but is responsible for more than 60 percent of total costs. The following graphic depicts how caseload and costs are spread across major population categories in the Texas Medicaid program.



Age & Disability-Related Population

Within the “age & disability-related” category are different populations with distinct needs and challenges who may have physical, mental or developmental disabilities. Unlike acute care Medicaid, where individuals must meet a single set of linear eligibility criteria, age and disability-related individuals may qualify based on eligibility criteria for various programs, which contain a financial (means-tested) component and a functional (level of need) component. The same program may serve individuals of varying diagnoses, needs, and levels of acuity. The “age & disability-related” category includes:

  • Supplemental Security Income: Supplemental Security Income (SSI) is a federal cash assistance program that, in Texas, is accompanied by automatic Medicaid enrollment. Eligibility criteria for this program is established and determined by the federal Social Security Administration (SSA). Low-income individuals with disabilities and low-income individuals age 65 and older may qualify for SSI.[i]
  • Medicaid for the Elderly and People with Disabilities (MEPD): Individuals with disabilities and individuals age 65 and older who do not qualify for SSI may be eligible for MEPD. MEPD enrollment is achieved through the facility serving these individuals and includes:
    • Nursing facilities (NF),
    • Intermediate care facilities for individuals with an intellectual disability or related condition (ICF/IID), and
    • Community programs serving individuals in their homes.[ii]
  • Medicaid Buy-In Program: This program allows two populations to “buy-in” to Medicaid coverage:
    • Children- The Medicaid Buy-In Program for Children (MBIC) allows the family of a child with a disability at or below 300% of the federal poverty level (FPL) to pay a monthly sliding scale premium to buy in to Medicaid coverage. The premium is waived for children at or below 150% FPL.[iii]
    • Workers with Disabilities- This Medicaid Buy-In (MBI) program allows individuals with disabilities who are working to buy in to Medicaid coverage. To qualify for MBI these individuals must have incomes below 250% FPL and no more than $5,000 in resources.[iv]
  • People Eligible for Medicare and Medicaid– These individuals, known as “dual eligibles,” are enrolled in both the Medicare and Medicaid programs. In general, Medicare covers acute care (i.e. physician services, hospital care, and prescription drug coverage) for these enrollees, while Medicaid is responsible for any wrap-around services and out-of-pocket costs not covered by Medicare, as well as long-term care services.[v]

Although Medicaid caseloads have grown significantly over the past decade,[vi]primarily due to mandatory eligibility changes brought about by the Affordable Care Act (ACA), the age & disability-related population has experienced the smallest growth rate. The table below displays the 10-year caseload growth trends of Medicaid client categories, as well as the average per member per month (PMPM) cost of each category.



Medicaid Long-Term Services and Supports

Medicaid long-term services and supports (LTSS) may be provided in a home or community-based setting or in a long-term care facility, such as a nursing home or state supported living center. Federal Medicaid policy requires nursing facility care for individuals age 21 and over as a mandatory benefit, while other LTSS are provided through waivers.[i]

In Texas, home and community services are provided through waivers. Waivers allow the state to “waive” off of regular federal Medicaid laws and regulations and provide services that would not normally be covered by Medicaid (i.e. providing LTSS in the home or community instead of in an institution). Because a waiver service is not an entitlement, HHSC explains that “the demand for some waivers programs exceeds capacity, and therefore, the programs maintain interest lists. People who may require these services can add their name to the appropriate list at any time. Enrollment into the waiver is based on available [state] resources.”[ii]Moving off of the list into a waiver is often described as being given a “waiver slot,” and HHS budget decisions generally include discussion of reducing these interests lists by funding additional slots.


Click here to read the entire White Paper.