Formerly IGSW News | VOLUME 20 | MARCH-APRIL 2013

Issues and Views

What is Money Follows the Person?

A Popular Incentive for Community-Based Care

By Robert Applebaum

BobDramatic changes in how long-term services are provided in the United States have occurred in the past two decades. Now, with virtually every state in the nation operating a home- and community-based Medicaid waiver program, the proportion of older people receiving long-term services at home has reached 50 percent in many states, a number unheard of even a decade ago. One such program, the Money Follows the Person demonstration, has emerged as a popular model for moving older adults and people with disabilities out of institutions and back to the community.

Money Follows the Person (MFP) is a federal initiative that provides an incentive to states to help long-term nursing home residents make this transition. For each Medicaid beneficiary in a participating state who moves from an institution to a community-based setting, the demonstration program provides the state with enhanced federal matching funds for a period of 12 months. Congress first authorized the program in 2006 as part of the Deficit Reduction Act, and the Affordable Care Act extended it through 2016.

A recent survey of state MFP programs by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured found that from 2006 to 2011, some 17,000 people had made the transition, with 8,000 more doing so between 2011 and August 2012. A total of 45 states have received federal grant money from the program.

The initial effort to expand home and community-based services in the United States was driven by a desire to control Medicaid expenditures and limit the growth of nursing home use. A second push to the expansion of in-home services was inspired in large part by the U.S. Supreme Court's Olmstead decision (in 1999), which highlighted the rights of individuals with disability to live in the setting of their choice and renewed emphasis on helping nursing home residents return to their homes or community-based facilities.

The Obama administration cites both cost savings and individual preference as reasons for its strong support of community living in general and MFP in particular. So, it looks like this popular model can continue to help create a system where individuals are in the setting of their choice. Just as the long-term system is evolving, so will the MFP effort.

Robert Applebaum is director, Ohio Long-Term Care Research Project, Scripps Gerontology Center, and professor, Department of Sociology and Gerontology, Miami University, Oxford, Ohio.

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Copyright © 2013 Trustees of Boston University. All rights reserved. This article may not be duplicated or distributed in any form without written permission from the publisher: Center for Aging & Disability Education & Research, Boston University School of Social Work, 264 Bay State Road, Boston, MA 02215, U.S.A.; e-mail: