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house Bill H.R. 259

Should a Program Supporting the Use of Medicaid for Home- and Community-Based Long-Term Care be Extended?

Argument in favor

The Money Follows the Person demonstration is a key Medicaid program supporting the effort to rebalance long-term services and supports (LTSS) towards home- and community-based, rather than institutional, settings. This is better for — and preferred by — many people in need of long-term care, and deserves the federal government’s continued support.

Argument opposed

Many states have already planned for the Medicaid Money Follows the Person’s demonstration program’s end. It’s unnecessary to keep funding this program when states are already prepared to make their Medicaid budgets work without this funding source.

What is House Bill H.R. 259?

This bill would extend the Medicaid Money Follows the Person (MFP) Rebalancing demonstration project in order to extend protections for Medicaid recipients of home and community-based services against spousal impoverishment.  The bill specifies that states couldn’t be prohibited from disregarding an individual’s spousal income and assets under a state waiver or plan amendment for the purposes of making determinations of eligibility for home and community-based services or home and community-based attendant services and supports. This bill would fund the MFP with $112 million in fiscal year 2019, and extend the program to September 30, 2021.

Out of the funds appropriated under this bill, $500,000 would be made available to the Health and Human Services (HHS) Secretary to carry out quality assurance, improvement, technical assistance, and oversight actions.

Beginning on January 1, 2021, states found to be out of compliance with their asset verification program requirements would have their federal medical assistance percentage (FMAP) reduced by the following amounts:

  • 0.12 percent for calendar quarters in 2021 and 2022;

  • 0.25 percent for calendar quarters in 2023;

  • 0.35 percent for calendar quarters in 2024; and

  • 0.5 percent for calendar quarters in 2025 and each year thereafter


Eligible Medicaid beneficiaries; state Medicaid programs; HHS; and the HHS Secretary.

Cost of House Bill H.R. 259

A CBO cost estimate is unavailable.

More Information

In-DepthRep. Frank Pallone (D-NJ) introduced this bill to extend the Money Follows the Person (MFP) Rebalancing Demonstration Grant, which helps states rebalance their Medicaid long-term care systems. The National MLTSS Health Plan Association, which supports the MFP Demonstration, calls the program essential for supporting long-term services and supports in home- and community-based settings:

“The Money Follows the Person Rebalancing Demonstration (MFP) has been a key program in the effort to rebalance long-term services and supports (LTSS) towards home- and community-based services (HCBS). MFP will become even more important as states implement the 2014 Settings Rule and attempt to transition even more individuals to integrated care settings.”

The Aging and Disability Advocacy Work Group (ADAG), Center on Budget and Policy Priorities (CBPP), National Association of Medicaid Directors (NAMD), National Association of State Directors of Developmental Disabilities Services (NASDDDS), National Association of States United for Aging and Disabilities (NASUAD), and National Association of Area Agencies on Aging (n4a) support the MFP program’s reauthorization. In support of its position, n4a says:

“This valuable program not only improves lives of individuals who participate, allowing them to live in the setting of their choice, but also saves, on average, more than 20 percent in federal Medicaid spending per beneficiary by reducing the use of institutional care.i When people have access to less-expensive HCBS instead of institutional services, both state and federal governments save money.”

In a 2017 report to the president and Congress, DHS reported that the MFP Demonstration Program was largely successful, even though analysis of its cost savings was difficult to near-impossible on some measures:

“The national evaluation found positive signs that the demonstration was effective. Since 2012, MFP grantee states have transitioned more than 10,000 beneficiaries on an annual basis and by the end of December 2015, the grantee states transitioned a cumulative total of 63,337 Medicaid beneficiaries from long-term institutional care to community-based LTSS. When MFP participants transitioned to community living, Medicaid programs experienced cost savings. The national evaluation estimated that the MFP participants transitioned through 2013 generated $978 million in cost savings during the first year after the transition to home and community- based LTSS. However, this is an upper-bound on cost savings because it assumes that the entire decrease is attributable to the MFP program.”

This bill has one cosponsor, Rep. Greg Walden (R-OR).

Of NoteThe MFP Demonstration, launched in 2007, is a large federal initiative to help states reduce their reliance on institutional care for people in need of long-term care, and to help expand options for elderly people and individuals with disabilities to receive care in their communities. It’s the largest demonstration of its kind in Medicaid’s history, and assists states with developing systems and services to help long-term residents of nursing facilities, intermediate intermediate care facilities for individuals with intellectual disabilities, and psychiatric hospitals who want to move back to home or community-based settings.  

The MFP Rebalancing Demonstration has four stated purposes:

  • Rebalancing — Increasing the use of home- and community-based, rather than institutional, long-term care services;

  • Money Follows the Person — Eliminating barriers or mechanisms that prevent or restrict the flexible use of Medicaid funds to enable Medicaid-eligible individuals to receive support for appropriate and necessary long-term services in their settings of choice;

  • Continuity of Service — Increasing state Medicaid programs’ abilities to assure continued provision of home- and community-based long-term care services to eligible individuals who choose to transition from an institutional to a community setting; and

  • Quality Assurance and Quality Improvement — Ensuring that procedures are in place to provide quality assurance for eligible individuals receiving Medicaid home- and community-based long-term care services, and providing for continuous quality improvement in such services

At the end of calendar year 2015, MFP demonstration program grantee states had transitioned 63,337 Medicaid beneficiaries from long-term institutional care to community residences and home- and community-based LTSS. This represented a 23 percent increase in the cumulative number over the previous year.


Summary by Lorelei Yang

(Photo Credit: / vgajic)


Medicaid Extenders Act of 2019

Official Title

To extend the Medicaid Money Follows the Person Rebalancing demonstration, to extend protection for Medicaid recipients of home and community-based services against spousal impoverishment, and for other purposes.

bill Progress

  • EnactedJanuary 24th, 2019
    The President signed this bill into law
  • The senate Passed on a voice vote
  • The house Passed on a voice vote
      house Committees
      Committee on Energy and Commerce
    IntroducedJanuary 4th, 2019
    Patients do better at home in familiar surroundings and the cost is lower. Its a win-win.
    Like (1)
    I know 2 people who should Qualify for Medicaid that are found Not eligable currently I have a Disability and recieve Medicaid other Benefits and it is a Blessing Im grateful for each Day !
    The U.S. doesn’t do enough for its aging population. Older people are undervalued. There is great learning potential there. It is an untapped resource. God knows the younger generations need all the help they can get. Wonder what the chances are for tapping those resources?