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Appendix F. Disability-Related Medicaid Service Coverages

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The Medicaid program offers a wide array of services to people with disabilities, although service coverages vary considerably from state to state. It is important to note that the Medicaid program—unlike Medicare and the vast majority of commercial health programs—offers long-term services and support to people with chronic illnesses and disabilities.

Covered Services

Congress has acted on numerous occasions over the past 30 years to expand the types of HCB long-term services and supports available to Medicaid recipients who require assistance in activities of daily living (ADLs) as well as instrumental ADLs. These statutory provisions, along with judicial rulings and administrative initiatives, have resulted in a steady increase in the proportion of Medicaid expenditures devoted to HCB services versus institutional services, especially since the mid-1990s. As a share of overall LTSS expenditures, noninstitutional services have increased from 18 percent of total expenditures in 1995 to 44 percent in FY 2009. [i]

Improved access to HCB services has occurred through the establishment and expanded utilization of both Medicaid state plan services and several types of waiver services. In the area of state plan services, the most commonly used HCB service options are personal care services, home health services, rehabilitative services, and clinic services. Over the past 20 years, however, states have relied heavily on secretarial waivers granted under the authority of Section 1915(c) of the Social Security Act to finance HCB services to low-income senior citizens and people with physical, intellectual, developmental, and other types of disabilities. [ii] In addition, many states have used either the rehabilitative service option or the Section 1915(b) waiver authority, or both, to finance behavioral health services for low-income people with severe, chronic mental illnesses and substance use disorders, including offering intensive case management, assertive community treatment, crisis intervention services, peer support, and various types of residential supports.

Generally, federal laws and regulations afford states considerable latitude in determining medical necessity and establishing limits on the amount, duration, and scope of a covered service. Thus, for example, a state may choose to limit the number physical therapy sessions Medicaid will pay for per month on behalf of eligible recipients, or restrict the circumstances under which housekeeping services may be claimed as part of a personal assistance service. Early and Periodic Screening, Diagnostic and Treatment (EPSDT) services for children under 21 years of age are an exception to the general policy. States are required to cover any service specified in federal Medicaid law (including optional services not otherwise offered under the state’s Title XIX plan) if it is needed “to correct or ameliorate defects and physical and mental illnesses and conditions.” Dental services, for example, must be made available as part of a state’s EPSDT coverage even if such services are not made available to qualified adults under the state’s Medicaid plan.

Coordination with Other Human Services Programs

There are numerous intersections between Medicaid coverage and other federal and federal-state programs to assist people with disabilities. Here are a few of many such connections:

  • The federal Individuals with Disabilities Education Act requires states to ensure that all children with disabilities between the ages of 3 and 21 receive a “free, appropriate public education.” Medicaid programs in many states, however, reimburse public schools for the cost of furnishing health-related services (e.g., physical, occupational, and speech therapy) to Medicaid-eligible children with disabilities. School-based health providers, however, meet the same licensure requirements as other Title XIX providers of the same service.
  • A case manager for a Medicaid beneficiary may be reimbursed under Medicaid’s Targeted Case Management state plan option for assisting beneficiaries to develop individual plans of care and helping beneficiaries to access appropriate services consistent with the plan. But the case manager also may be reimbursed for assisting the same beneficiary to access non-Medicaid-reimbursable services, such as applying for food stamps or enrolling in adult education classes.
  • Under various statutory authorities, a state Medicaid agency may purchase, on behalf of eligible people with disabilities, a wide range of HCB services; but room and board expenses may not be included in the cost of such services.
  • For years, state Medicaid agencies have collaborated with state and local housing authorities to ensure that Medicaid beneficiaries gain access to government-subsidized low-income housing. In fact, the U.S. Department of Housing and Urban Development recently announced that it was making $85 million available to state housing agencies to provide affordable supportive housing for extremely low-income people with disabilities. For the first time, housing agencies will be required to partner with state health and human services agencies, including state Medicaid agencies, to qualify for funding. [iii]
  • A state Medicaid agency is required by law to maintain a memorandum of agreement with the state maternal and child health agency, and often state Medicaid agencies maintain similar collaborative agreements with the state vocational rehabilitation, developmental disabilities, and mental health agencies.

This web of interagency collaborations is yet another indication of the wide-ranging service and support needs of Medicaid beneficiaries who qualify on the basis of disability.


[i]. Eiken et al., Medicaid Expenditures for Long-Term Services and Supports.

[ii]. Instrumental activities of daily living are functions performed by a person living independently in a community setting during the course of a normal day, such as money management, shopping, telephone use, personal travel, preparation of meals, housekeeping, and taking medications in accordance with instructions.

[iii]. U.S. Department of Housing and Urban Development, “HUD Makes Available $85 Million to Fund Housing for Extremely Low-Income Persons with Disabilities,” Press Release, May 15, 2012.