Between Fiscal Year (FY) 1993 and FY 2004, the average per person annual expenditure for Medicaid long-term service and supports (LTSS) provided to persons with intellectual and developmental disabilities (ID/DD) through the Medicaid Intermediate Care Facility (ICF/MR) and Home and Community-Based Services (HCBS) programs grew from $48,505 per person to $51,826 per person. Per person LTSS expenditures were computed by dividing total LTSS expenditures for the fiscal year by the total service recipients on June 30 of that year. The 6.8% increase in average per person Medicaid LTSS expenditures between FY 1993 and FY 2004 was less than one quarter of the 28.0% increase in the Consumer Price Index (CPI). It was about one eighth of the 54% growth in Medical Care Index reported by the Bureau of Labor Statistics (U.S. Bureau of the Census, 2005). In CPI-adjusted dollars, the annual cost per Medicaid LTSS recipient with ID/DD decreased by 23.9%. The 1993 average per person Medicaid LTSS expenditure of $48,505, when adjusted for CPI inflation, equals $68,096 in 2004 dollars ($48,505 × 1.2802) as compared with the average per person expenditure of $51,826 in FY 2004.

As shown in Figure 1, between FY 1993 and FY 2004, the average per person Medicaid expenditure for both the ICF/MR and HCBS programs increased. The average ICF/MR expenditures increased from $62,180 to $114,132 (83.6%). Average per person HCBS expenditures increased from $25,176 to $36,497 (45.0%). What caused the low rate of growth in average per person Medicaid LTSS expenditures was the notable shift from the ICF/ MR to HCBS as the primary Medicaid LTSS program for persons with ID/DD. In 1993, 63.0% of 234,333 Medicaid LTSS recipients with ID/DD were enrolled in the more costly ICF/MR option; by 2004 only 19.7% of the 529,381 total ICF/MR and HCBS recipients were residing in ICFs/MR.

Table 1 presents statistics from FY 1993 and FY 2004 on the individual states' ICF/MR and HCBS service users and expenditures and average per person expenditures for Medicaid LTSS (fiscal year expenditures divided by service recipients on June 30). Between 1993 and 2004, 16 states had decreases in their average per person Medicaid LTSS expenditures and 23 additional states had increases that were less than the rate of inflation (i.e., decreases in “real dollar” expenditures). A number of factors affect the noted patterns, including (a) the decreasing numbers of ICF/MR recipients living in public institutions that have substantially higher per person expenditures (on average $138,996 in FY 2004), (b) an estimated 43% of HCBS recipients living with family members who participate in providing needed supports (an intended benefit of HCBS), (c) contributions to room and board expenses of HCBS recipients by Social Security Act programs other than Medicaid, and (d) flexibility within HCBS to base services and supports on individuals' needs rather than on universal facility standards.

Sources: Prouty, R. W., Smith G., & Lakin, K. C. (Eds.). (2005). Residential services for persons with developmental disabilities: Status and trends through 2004. Minneapolis: University of Minnesota, Research and Training Center on Community Living. (available at and U.S. Bureau of the Census (2005). Statistical abstract of the United States, 2004–2005. Washington, DC: US Government Printing Office. (Available at http://