Deficit Reduction Act of 2005
The Money Follows the Person Demonstration was created by section 6071 of the Deficit Reduction Act of 2005 (P.L. 109-171) (“DRA”) to support State efforts to “rebalance” their long-term support systems by offering $1.75 billion over 5 years in competitive grants to States. Specifically, the Demonstration supports State efforts to:
- Rebalance their long-term support system so that individuals have a choice of where they live and receive services;
- Transition individuals from institutions who want to live in the community; and
- Promote a strategic approach to implement a system that provides person centered, appropriate, needs based, quality of care and quality of life services and a quality management strategy that ensures the provision of, and improvement of such services in both home and community-based settings and institutions.
For more than a decade, States have been asking for the tools to modernize their Medicaid programs. With the enactment of the DRA, States now have new options to rebalance their long-term support programs to allow their Medicaid programs to be more sustainable while helping individuals achieve independence. The DRA reflects a growing consensus that long-term supports must be transformed from being institutionally-based and provider-driven to “person-centered” and consumer-controlled. The DRA provisions reflect a long-awaited commitment to independence, choice, and dignity for countless Americans who want to have control of their lives, and it gives States many of the tools they need to “rebalance” their long-term support programs.
To assist individuals with disabilities and older individuals in need of longer term care services and supports, through the DRA and other initiatives, a State now can:
- Expand coverage for individuals with disabilities by allowing families with disabled children to purchase Medicaid and by adopting health coverage options for working individuals with disabilities.
- Increase access to community supports so that disabled and elderly individuals have true choice of a range of quality options by offering HCBS without waivers; applying for grants to “rebalance” their long-term support systems; and applying for demonstration projects to offer home and community-based alternatives to psychiatric residential treatment facilities for children.
- Promote personal responsibility, independence and choice by offering a State plan benefit for self-directed personal care services without a waiver; and opting to participate in the State Long-Term Care Term Care Partnership Program.
The MFP Rebalancing Demonstration is a part of a comprehensive, coordinated strategy to assist States, in collaboration with stakeholders, to make widespread changes to their long-term care support systems. With the history and strength of the Real Choice Systems Change grants as a foundation, this initiative will assist States in their efforts to reduce their reliance on institutional care while developing community-based long-term care opportunities, enabling seniors and people with disabilities to fully participate in their communities.