Medicaid rules need rewrite

This month marks the 12th anniversary of the Supreme Court’s landmark decision in Olmstead v. L.C., ruling that the needless institutionalization of people with disabilities is illegal discrimination.  Despite that decision, misguided Medicaid rules continue to force millions of people with disabilities to remain in nursing homes, against their wishes and at a much greater cost to taxpayers than many home- and community-based alternatives.

Today, as we seek ways to reduce budget deficits, we must seize on the opportunity to make our Medicaid dollars go further while finally giving millions of individuals with disabilities one of the most fundamental of rights: the choice to live independently.

The Olmstead decision is sometimes called the Brown v. Board of Education for people with disabilities. It questioned the widespread practice of forcing people with disabilities to live in segregated settings in order to receive services, and it opened the door for people with disabilities to live full lives and participate in their communities.

Adhering to the ADA’s “integration mandate” not only allows people to live the same kinds of lives that the rest of us do, but actually saves money.

For example, the average national Medicaid cost to serve a person with an intellectual disability in an institution in 2009 was approximately $137,000, compared to an average of $44,000 to serve the same person in the community. Yet states have continued to spend a large portion of Medicaid dollars on unnecessary and expensive institutional settings.

In 2009, 17.4 percent of all national Medicaid expenditures went to serve people in institutions. Our continued heavy reliance on outdated and expensive institutions to serve people with disabilities reflects inertia and politics rather than the needs of people with disabilities.

The over-reliance on institutions has led to a significant number of Olmstead lawsuits. In a case settled just last week that was brought by thousands of individuals with intellectual disabilities against the state of Illinois, that state agreed to offer community services to all residents of private institutions for people with intellectual disabilities.  Illinois and the federal government were spending approximately $192,000 per year in Medicaid dollars to serve these individuals in institutions, compared to an average of $32,000 to serve similar individuals in community settings.

A case that San Francisco settled several years ago involved federal, state and local payments of over $180,000 per year for each resident of a large, county-run nursing home; under the settlement, hundreds of residents of this nursing home have been successfully served in their own homes at a fraction of that cost.

Olmstead is now more important now than ever, as states tighten their belts and cut essential community services that help thousands of people with disabilities stay out of institutions.

These cuts have typically been shortsighted. Rather than taking steps to reduce wasteful spending on institutional settings, many states have cut the services that keep people with disabilities in their own homes and communities. Courts have found that many of these service cuts violate Olmstead, because they are likely to force people with disabilities into nursing homes and other institutions, at greater expense to the state and federal government. Federal judges in California have issued preliminary injunctions stopping cuts to in-home support services and adult day health services designed to keep people with disabilities out of institutions. Other courts have stopped similar cuts, including federal courts in North Carolina, Tennessee and Florida.

Modernizing Medicaid’s approach to supporting people with disabilities can save money and bring people a better quality of life.  It would also promote compliance with the ADA and the Olmstead decision.  If Medicaid cuts are not done in a thoughtful manner, however, they will have disastrous consequences and will lead to systemic civil rights violations.

On this 12th anniversary of Olmstead, let’s redouble our bipartisan efforts to give people with significant disabilities an opportunity to experience the same freedom and dignity as other Americans.  Providing this option is good for the federal budget, it’s good for people with disabilities, and it helps America live up to its highest ideals.