Year of Publication



Martin School of Public Policy and Administration

Executive Summary

The Problem

In early 2003, the Kentucky Cabinet for Health Services, faced with a $450 million Medicaid shortfall, implemented several cost-cutting measures to the Medicaid program. The most visible measure included new stricter medical eligibility requirements for long-term care programs. As a result of these new requirements, approximately 2,813 elderly and disabled Kentuckians were denied services in Kentucky’s Aged/Disabled Home and Community-Based Waiver Program, a Medicaid program that provides long-term care services in people’s homes and in community-settings. The Cabinet for Health Services claimed that those who lost home and community-based Medicaid services could receive care through alternative state programs.


The main purpose of this study to determine the adequacy of the alternative long-term care services when the Medicaid safety net failed for the 2,813 people denied Medicaid Home and Community-Based Waiver services. The objectives of the study are to describe the types of alternative home and community-based long-term care services that are offered in Kentucky and to understand the extent of service coverage and availability. Furthermore, this study will attempt to understand how the demand for these services changed after the Medicaid regulation changes took effect, and to determine if these agencies were prepared to provide services to the population that lost HCB Waiver services.

Surveys were sent to the fifteen Area Agencies on Aging around the state. The surveys asked coverage and availability questions about three of their long-term care programs: the Homecare Program, the Adult Day/Alzheimer’s Respite Program, and Title III Supportive Services. Fourteen of the fifteen agencies responded to the survey. This study uses geographical information systems methods, descriptive statistics, and budgetary analyses to answer its research questions.


This study found that alternative services were inadequate to provide immediately available services to those persons who lost Medicaid services. In addition, this study has the following findings:

  • Overall, agencies rely heavily on federal and state funding to run their programs rather than local sources of funds. In addition, variations in agencies’ funding structures lead to funding inequities throughout the state.
  • Service coverage is comprehensive in the Homecare Program, but is less so in the Adult Day Care and Title III Programs.
  • Overall, service availability in state-funded programs is limited due to high demand and is highly variable both across types of services and across programs.
  • On average, clients wait longer to receive services through the Homecare Program than through the Adult Day Care and Title III Programs.
  • Agencies that serve urban areas display higher availability on average than agencies serving predominantly rural areas.
  • Almost all program administrators received requests for some type of service for recipients who were recently denied Medicaid Home and Community-Based Waiver Services. Homemaker services were the most requested service among this population.
  • Most administrators stated that their agency was very unprepared to serve the HCB Waiver population in the area of funding, but felt more prepared to serve this population in the areas of program staffing and provider cooperation.


Policymakers should analyze alternative care arrangements and their availability before making cuts to the Medicaid program. Such an analysis would have provided policymakers with better information to make hard decisions. While Medicaid is attractive for Kentucky due to the leveraging of federal funds, policymakers should consider moving away from their heavy reliance on Medicaid alone to fund long-term care. Other options for funding long-term care may include encouraging Kentuckians to purchase private long-term care insurance and making structural changes to the long-term care delivery system. In addition, policymakers may want to consider a single point of entry to streamline the fragmented long-term care system. Such a mechanism would allow easier movement between long-term care programs and would enable programs to keep track of people who are denied services.

The State Office on Aging may want to sponsor a study to understand what accounts for the lower service availability in rural regions of the state. These disparities may be due to funding, agency capacity, or the characteristics of the elderly in different regions of the state. In addition, the State Office on Aging should find ways to assist Area Agencies on Aging to aggressively seek out local sources of funding for their programs in order to increase service availability.