Keeping Tabs on Biden’s Policy Plans to Invest in Medicaid HCBS

As a critical component of Biden's Build Back Better Plan, investment in home-and-community-based-services (HCBS) proposes to create a robust caregiving system while also driving sustainable economic growth and meeting the health care needs of people with disabilities.

The House Energy and Commerce Committee has proposed some major Medicaid provisions to the $1.9 trillion relief package making its way through Congress. If enacted, the measures would benefit HCBS providers across the U.S., however, only in the short term. The draft legislation includes a two-year, 5 percent Federal Medical Assistance Percentage (FMAP) boost for states that recently expanded their Medicaid programs. It also contains a 7.35 percent rate increase for states to enhance HCBS during the public health emergency specifically.

The legislation provides for flexibility on how state Medicaid programs participate and where to use the additional funding. States are directed to work with HCBS providers to identify the areas of the greatest need. The increase in Medicaid rates would be crucial for HCBS providers for the following reasons:

• For cash-strapped providers dealing with an ongoing pandemic and the added inherent expenses, such as costly personal protective equipment (PPE) and hazard pay for workers handling the front lines.
• For the many states dealing with budget deficits forcing them, in some cases, to uniformly decrease funding for a variety of programs, including Medicaid.
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However, even though the 7.35 percent increase would be very positive news for all HCBS providers, it is not a final or complete solution to all state budget problems.

The proposed boosts to state Medicaid programs are meant to supplement existing funding. The supplemental funding can be used to purchase PPE, enable hazard pay, recruit new workers, or support appropriate time off for front-line workers, and help states shift more individuals out of facility-based settings back into their homes and communities.

Despite those benefits, the increase’s interim nature should raise some concern. As the longstanding $15 minimum wage debate continues, HCBS providers should keep tabs on the issue of reimbursement and whether it will match a mandated wage increase. The additional, temporary FMAP payment for HCBS cannot be considered a full solution to address the minimum wage issue.

The temporary funding increase for HCBS services needs to be more specific and permanent to address a potential federal minimum wage increase. Otherwise, it will limit both access to care delivery and limit HCBS providers' ability to recruit workers.