A service of the California Health Care Foundation

California One of Two States Cashing In on New ACA Long-Term Care Funding

California is one of two states taking advantage of a new financing option made available under the Affordable Care Act to support community-based, long-term care services.

The Community First Choice Option, or CFCO, allows participating states to secure an increase of six percentage points in the federal share of the federal-state Medicaid funding partnership for home- and community-based attendant services to beneficiaries who otherwise would need institutional care.

California was the first state to adopt CFCO last fall. Oregon followed suit a few months ago, and six other states have either submitted plans to participate or intend to submit plans by the end of fiscal year 2014.

In California, officials are using the new financing authority to draw down increased federal matching funds for the In-Home Supportive Services program.

Diane Justice, senior program director for the National Academy for State Health Policy, said CFCO was a natural fit for California because the state did not need to significantly modify IHSS to capture the enhanced federal match. She said IHSS “really didn’t have to make any major changes at all in the types of services they provided or the way that they provided them.”

Like California, Oregon had an existing long-term care infrastructure that facilitated the adoption of CFCO. Oregon previously used waivers as a primary financing vehicle for home- and community-based support services. To draw down the higher matching funds through CFCO, Oregon simply rolled over some of its existing waiver services to a new program.

With the federal government offering a higher Medicaid matching rate, why aren’t more states taking advantage of CFCO?

Justice said many states are concerned about the cost of such programs. However, she noted that disability advocates are hopeful that the data collected through CFCO will demonstrate that home- and community-based services are less costly in the long run than institutional care.

In addition, Justice noted that California and Oregon are unique in having such a robust infrastructure for attendant services and supports. For states without that infrastructure, “it’s going to be a heavy lift,” she said.

Categories: Capitol Desk