Many Tennesseans require assistance with the tasks and chores of daily life, such as eating, bathing, and taking medications. These long-term services and supports (LTSS) are often expensive and rarely covered by private health insurance. Low-income Tennesseans who are elderly or have a disability may be eligible for LTSS through TennCare, our state’s Medicaid program.

TennCare primarily funds long-term services and supports through three programs:

• The CHOICES program provides LTSS to about 30,000 elderly Tennesseans and Tennesseans with physical disabilities via both home- and community-based services (HCBS) and nursing home care. (1) (2)

• The Tennessee Department of Intellectual and Developmental Disabilities (DIDD) provides home- and community-based services to nearly 8,000 Tennesseans with intellectual and developmental disabilities. Often called the “DIDD waivers,” this program closed to new enrollment in July 2016. (3)

• The new Employment and Community First (ECF) CHOICES program provides home- and community-based LTSS to about 1,700 Tennesseans with intellectual and developmental disabilities. (4)

Under both of the CHOICES programs, private health insurance companies contract with TennCare to coordinate all LTSS services. These insurers are known as managed care organizations or MCOs, and this method of delivery is sometimes referred to as managed LTSS or mLTSS.

Costs of TennCare Long-Term Services and Supports

Individuals who receive long-term services and supports often have complex medical conditions and tend to be some of TennCare’s most expensive enrollees. For example, while about 10% of TennCare enrollees have disabilities, their medical and CHOICES LTSS expenses represent 35% of TennCare’s medical services spending. (5) (1) Medical services (including drug costs) per TennCare enrollee with a disability cost about 4.5 times the average for all other enrollees. CHOICES LTSS per-enrollee costs are about 17 times other enrollees’ medical costs (Figure 1).

Private insurance plans rarely cover long-term services and supports. (6) Nationwide, Medicaid programs are the largest payer for LTSS. (5) Because these services can be so costly, few if any current TennCare enrollees could likely afford to pay for LTSS out of pocket. (6)

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Figure 1

TennCare’s Use Of Optional Coverage

TennCare has expanded its coverage of long-term services and supports beyond what federal Medicaid law requires. Tennessee’s use of optional eligibility and benefits reflects a nationwide effort to prevent people from going into nursing homes and to “rebalance” the site of care for the elderly and individuals with disabilities. Optional LTSS coverage offered by TennCare includes:

• Coverage of home- and community-based services. Federal law generally only requires that states cover nursing home care.

• Coverage for seniors and individuals with disabilities who have incomes up to 224% of the federal poverty line (FPL). Federal law only requires coverage for seniors and individuals with disabilities receiving Supplemental Security Income, which has an annual income limit of about 74% of FPL.

• Coverage for individuals who are at-risk for needing a level of care traditionally provided in a nursing home. Federal law only requires coverage for eligible individuals who need a nursing home level of care.

Table 1 provides a detailed comparison of TennCare’s LTSS coverage with what is required and optional under federal law.

We estimate about 22,000 Tennesseans (elderly and/or with disabilities) received optional TennCare-funded home- and community-based LTSS in state FY 2015-2016. This includes all enrollees in the DIDD waivers and ECF CHOICES. It also includes about 42% of CHOICES enrollees who received home- and community-based LTSS. (2)

Of note: Tennessee’s use of optional LTSS eligibility criteria also makes many individuals with disabilities eligible for TennCare coverage of medical services.

Controlling TennCare LTSS Costs with HCBS and Managed Care

Long-term services and supports are generally far less expensive when delivered as home- and community-based services than in nursing homes. HCBS may also be less disruptive to daily life because enrollees can continue living in their own homes and communities. Over the last decade, Tennessee has worked to control its LTSS costs by:

• Shifting individuals who need nursing home care into home- and community-based services. TennCare spends an average of $60,000 per year on LTSS at nursing homes for an individual needing a nursing home level of care. When the same individual receives services in a home- and community-based setting, the average cost drops to $17,000 per year.

• Covering home- and community-based services for individuals at risk of needing nursing home care. (5) TennCare’s average annual cost to provide HCBS for seniors at risk of needing a nursing home level of care is just $8,000. (10) (5)

Over the last decade, Tennessee has reduced the proportion of LTSS enrollees in nursing home care from almost 97% to about 60% while increasing the proportion receiving HCBS from 3% to 40%. (11)

Additionally, Tennessee has transitioned to using managed care companies to more cost-effectively manage home- and community-based services for individuals with intellectual disabilities. Under the DIDD waivers, the state directly manages HCBS for individuals with intellectual disabilities. Under the new ECF CHOICES program, managed care organizations manage and administer benefits. Under the DIDD waivers, TennCare spends nearly twice the national average on individuals with intellectual disabilities. By using MCOs under the new program, the state believes that services will be more cost-effective and, as a result, available to more individuals than under the state-administered DIDD program. (12)

Additional information about TennCare’s coverage of LTSS can be found on TennCare’s Long-Term Services and Supports homepage.

Related Work by The Sycamore Institute

Medicaid Eligibility in Tennessee
(August 30, 2017) A summary of how TennCare eligibility is determined.

Understanding Medicaid and TennCare: Key Concepts and Context to Know
(June 1, 2017) An overview of the program’s goals, history, function, structure, funding, and cost drivers.

The American Health Care Act: Rural Health and Tennesseans with Disabilities
(June 22, 2017) An analysis of the trade-offs of the AHCA for Tennessee’s 1.5 million rural residents and the 150,000 with disabilities on TennCare.

References

Featured Image at top by MyFuture.com / CC BY-ND 2.0