In August 1981, Congress created an alternative program of Medicaid Home and Community-Based Services (HCBS) Waiver for persons who might otherwise be at risk of placement in a Medicaid-funded institution. In Fiscal Year (FY) 2001, for the first time since its creation 20 years earlier, Medicaid HCBS Waiver programs for persons with intellectual and developmental disabilities had federal and state expenditures that exceeded those for Medicaid Intermediate Care Facilities for Persons with Mental Retardation (ICFs/MR). As summarized in Tables 1 and 2, in FY 2001, states reported a total of 10.9 billion federal and state dollars spent for services in the HCBS program to serve an end of year (June 30, 2001) total of 327,713 people. In FY 2001, a reported total of 10.3 billion dollars in federal and state expenditures was spent for ICF/MR services for a reported 113,907 ICF/MR residents. In FY 2001, there was continuing rapid increase in HCBS recipients (+12.6%) and expenditures (+13.2%) compared to FY 2000, and a more than doubling of service recipients (+119.7%) and near tripling of expenditures (+194.2%) since FY 1995. The combined total of HCBS and ICF/MR recipients on June 30, 2001 (441,620) was more than twice the number (+111.6%) of just 9 years earlier (June 30, 1992). In June 2001, HCBS recipients made up 74.2% of the combined total of HCBS and ICF/MR program participants as compared with just with 19.8% in 1992. Only Illinois, Indiana, Louisiana, Ohio, Mississippi, Texas, and the District of Columbia had more ICF/MR residents and HCBS recipients for FY 2001.

In June 2001, the combined HCBS and ICF/MR programs had 155.1 program participants per 100,000 of the United States resident population. State participation rates varied from 59.8 per 100,000 in Kentucky to 411.7 in North Dakota. Total expenditures divided by the estimated annual service recipients yielded an average annual expenditure of $34,297 for HCBS recipients, $89,300 for ICF/MR recipients, and $48,019 for both programs combined. State average expenditures for the combined programs ranged from a low of $23,858 per person in California to a high of $79,547 in Delaware. In FY 2001, HCBS and ICF/MR expenditures equaled $73.37 per United States resident. Within the states the average per state resident costs varied from lows of $23.25 in Nevada and $27.59 in California to highs of $169.51 in Connecticut and $203.10 in New York.

Source: Prouty, R., Lakin, K. C., & Smith, G. (Eds.). (2002), Residential services for persons with developmental disabilities: Status and trends through 2001. Minneapolis: University of Minnesota, RTC on Community Living/Institute on Community Integration.