	Introduction

Medicaid plays a key role in covering long-term services and supports (LTSS) to eligible aged and disabled individuals. As the largest single payer of LTSS in the United States, Medicaid LTSS spending in 2015 (combined federal and state) totaled $149.4 billion and accounted for 42.5% of all LTSS expenditures ($351.8 billion). LTSS are also a substantial portion of spending within the Medicaid program relative to those served. In 2015, Medicaid LTSS accounted for 31% of all Medicaid spending despite the fact that LTSS recipients represent a relatively small share of the total Medicaid population. An estimated 4.1 million Medicaid beneficiaries (or 5.9%) of the 68.5 million total enrolled Medicaid population received LTSS in FY2013. Medicaid funds LTSS for eligible beneficiaries in both institutional settings and home and community-based settings, though the portfolio of services offered differs substantially by state. In more recent decades, federal Medicaid statutory authority has expanded to assist states in increasing and diversifying their Medicaid LTSS coverage to include optional HCBS. As a result, states have a broad range of coverage options to select from when designing their LTSS programs. Moreover, the share of Medicaid LTSS spending for HCBS has nearly tripled over time, from 18% of Medicaid LTSS spending in FY1995 to over half (53%) of total Medicaid LTSS spending in FY2014. 111-148 , as amended) further added to the range of options available to states that want to pursue HCBS coverage expansion. In FY2016 and FY2017, a majority of states reported activities to expand HCBS in 46 and 47 states, respectively. Most states reported using Section 1915(c) HCBS waiver programs or the Section 1915(i) HCBS state plan option to expand their HCBS offerings (42 states in FY2016 and 41 states in FY2017). This report provides a description of the various statutory authorities and other legislative provisions that either require or otherwise allow states to cover LTSS under Medicaid. The report's Appendix A provides a brief legislative history of Medicaid LTSS from Medicaid's enactment and initial coverage requirements for institutional care through the evolution of HCBS options available to states. A discussion of ACA's changes to Medicaid law with respect to Medicaid LTSS coverage options is also provided. The Appendix B tables provide state information about coverage of Medicaid state plan optional benefits and certain grant programs to expand Medicaid HCBS. States are required to offer certain Medicaid institutional services. In general, Medicaid law provides states with two broad authorities, which either cover certain LTSS as a benefit under the Medicaid state plan or cover home and community-based LTSS through a waiver program which permits states to waive certain Medicaid requirements to allow the provision of these services. Over time, states were authorized to cover other types of home and community-based services (HCBS) as optional benefits under the Medicaid state plan. The Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act (ACA, P.L.
Long-term services and supports (LTSS) refer to a broad range of health and health-related services and supports needed by individuals who lack the capacity for self-care due to a physical, cognitive, or mental disability or condition. Often the individual's disability or condition results in the need for hands-on assistance or supervision over an extended period of time. Medicaid plays a key role in covering LTSS to aged and disabled individuals. As the largest single payer of LTSS in the United States, federal and state Medicaid spending accounted for $149.4 billion or 42.5% of all LTSS expenditures in 2015 ($351.8 billion). LTSS are also a substantial portion of spending within the Medicaid program relative to the population served, accounting for 31% of all Medicaid spending in 2015. Of the 68.5 million total enrolled Medicaid population, an estimated 4.1 million (or 5.9%) received LTSS in FY2013.
Medicaid funds LTSS for eligible beneficiaries in both institutional and home and community-based settings, though the portfolio of services offered differs substantially by state. Moreover, states are required to offer certain Medicaid institutional services to eligible beneficiaries, while the majority of Medicaid home and community-based services (HCBS) are optional for states. In recent decades, federal authority has expanded to assist states in increasing and diversifying their Medicaid LTSS coverage to include HCBS. As a result, the share of Medicaid LTSS spending for HCBS has nearly tripled, accounting for 18% of Medicaid LTSS spending in 1995 to over half (53%) of total Medicaid LTSS spending in FY2014.
States now have a broad range of coverage options to select from when designing their LTSS programs. In general, Medicaid law provides states with two broad authorities, which either cover certain LTSS as a benefit under the Medicaid state plan or cover home and community-based LTSS through a waiver program which permits states to disregard certain Medicaid requirements in the provision of these services, subject to approval. The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) established or extended several Medicaid state plan options and grant activities to enhance or expand states' LTSS delivery systems. Given the range of available coverage options, states continue to enhance or expand their LTSS delivery systems to cover additional services or target services to specific populations with a focus on HCBS. In FY2016 and FY2017, most states reported activities to expand HCBS (46 and 47 states, respectively), which include expanding Section 1915(c) HCBS waiver authority programs or the Section 1915(i) HCBS state plan option, among other programmatic changes.
This report provides a description of the various statutory authorities that either require or otherwise allow states to cover LTSS under Medicaid. Appendix A provides a brief legislative history of Medicaid LTSS from Medicaid's enactment and initial coverage requirements for institutional care through the evolution of HCBS options available to states. A discussion of changes to Medicaid made by the Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) with respect to LTSS coverage options is also provided. The tables in Appendix B provide state information about coverage of Medicaid state plan optional benefits.