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The Mental Health Waiver System for Home and Community-based Services

Written By:

Lacey Lyons

 Mental health has been at the forefront of discussions throughout the COVID pandemic. However, mental health challenges were a common experience long before quarantine, social distancing, and masking took a toll on the mental health of Americans. The National Alliance on Mental Illness data states that 21 percent of adults in the United States, or approximately 52.9 million people, experienced mental illness in 2020.1 Compared to 51.5 million adults in 2019, the COVID pandemic contributed to an increase in the prevalence of mental illness.1 To meet this tremendous need for supports for people with mental illness, states often rely on long-term services and supports funded by Medicaid. These supports are funded through Medicaid waivers, and there are several waivers that states use for mental health services and supports.2,3 Data reported by the Kaiser Family Foundation from November 19, 2021, showed that 38 states approved section 1115 Medicaid waivers for behavioral health.4 These waivers allow states to use and distribute federal Medicaid funding for new and experimental approaches to meet the healthcare needs of Medicare recipients in that given state.2,3 Approval by the Centers for Medicare and Medicaid Services is pending in 14 more states.4 David Hughes, president of the Human Services Research Institute, a research group that uses data to improve services for people with disabilities, said that waiver programs are helpful tools in keeping people with mental health challenges or other disabilities in their communities.

“The pandemic exposed issues with the way that we over-utilize nursing facilities,” he said. “Now, we’re seeing that people are reluctant to go to nursing facilities, given that they were such a hotspot during the onset of the COVID-19 pandemic. If the predictions are correct and there is another, similar pandemic, that will increase. Training of loved ones in the care of individuals is important so they can help you at home.”5

The pandemic exposed issues with the way that we over-utilize nursing facilities.

David Hughes, President of Human Services Research Institute

Another choice for mental health supports comes from home and community-based services (HCBS) waivers. The CMS 1915(c) HCBS waivers allow states to target services to people who need long-term services and supports and are Medicaid-eligible based on their individual needs.2,3,4 In addition, enrollees in 1915(c) waivers must “otherwise qualify for an institutional level of care.”2,3,4 This means that the state must decide that the recipients need such significant long-term support, that they would need to be served in an institution or covered by certain HCBS waivers.2,3,4 In contrast, 1915(i) amendments, which also target specific populations, do not require individuals to meet an institutional level of care.2,3,4 Hughes summarizes the differences like this:

“1915(c) waivers are meant for people with higher-level needs than Medicaid could support. The goal is for them to stay in their communities, rather than shift to an institution-type setting.”5

Bevin Croft, director of the behavioral health team at HSRI, said there is no easy answer for the question of why quality mental health care through the waiver system varies from state to state. She also explained that “Many people with significant behavioral health-related needs do not require an institutional level of care. Some states have been slow to adopt 1915(i) services.”5

Human Services Research Institute (HSRI) consults with states to develop strategies that improve the systems that address the needs of their residents with mental and behavioral health challenges. Services like crisis response, the interaction between people with adverse mental or behavioral health challenges and the justice system, and ways in which to increase psychiatric bed counts, are some of systems they seek to strengthen.5 According to the Treatment Advocacy Center, the number of beds available for in-patient psychiatric treatment fell by 97% from 1955 to 2016.6 Hughes advocates 1915(i) amendments as “sustainable paths forward” for states.5

High quality, person-centered services are vital to assure that people live the lives they want in their communities.

Allen Heinemann, Director of the Center for Rehabilitation Outcomes Research

The Kaiser Family Foundation estimates that 81,000 people nationwide were enrolled in 1915(i) amendment plans in 2018, and 1.8 million people were enrolled in 1915(c) waivers that same year.7 For the fiscal year 2018, 11 states used 1915(c) waivers to serve approximately 25,000 people with mental health needs.7 However, states have been making changes since then, especially in light of additional funding related to the pandemic. 1915(c) waivers have been used to target specific disorders, like mental health challenges and disabilities, but not every state uses them in this way.7

Hughes said the “vision” of individual state leaders determines how a state uses its waiver programs or whether a state adopts a 1915(i) amendment. “There’s a business case to be made for providing these services,” he said. “When a patient’s physical health needs are being met, he or she doesn’t require as many ER visits for mental health reasons. We want to do everything we can to avoid those treatments that have their trauma,” he said.5

Allen Heinemann, Director of the Center for Rehabilitation Outcomes Research, adds: “High quality, person-centered services are vital to assure that people live the lives they want in their communities. The work of our collaborative agreement with the National Institute on Disability, Independent Living, and Rehabilitation Research focuses on developing outcomes measures that reflect the benefits of person-centered home and community-based services funded via a Medicaid waiver.”  Examples of these important services to support enrollees in waiver programs to live full lives includes services like housing support, peer support, respite care, and transportation access. “There are key things almost all of us want,” Hughes said. “We want stable, comfortable housing, we want competitive employment, and we want community connection. We want meaningful, healthy lives.”5 One silver lining of the pandemic is that it has forced states to re-evaluate their systems for mental health. Their actions might make more resources available to support the needs of this population.

Sources:

  1. National Alliance on Mental Illness. “Mental Health by the Numbers.” National Alliance on Mental Illness, 2021.
  2. Dorn, Stan et. al. “The Use of 1915(i) Medicaid Plan Option for Individuals with Mental Health and Substance Use Disorders.” Office of the Assistant Secretary for Planning and Evaluation. 30 Nov. 2016,
  3. The United States, Centers for Medicare & Medicaid Services. State Medicaid Plans and Waivers, 21 Oct. 2021,
  4. Kaiser Family Foundation. “Medicaid Waiver Tracker: Approved and Pending Section 1115 Waivers by State.” Kaiser Family Foundation, 17 Nov. 2021,
  5. Hughes, David. Interview. By Lacey Lyons. 9 Nov. 2021.
  6. Treatment Advocacy Center. “Psychiatric Bed Shortages.” Treatment Advocacy Center, 2021.
  7. O’Malley Watts, Molly, et al. “Medicaid Home and Community-Based Services Enrollment and Spending.” Kaiser Family Foundation, February 2020,
Allen Heinemann, PhD

Allen Heinemann, PhD

Director, Center for Rehabilitation Outcomes Research Professor, Department of PM&R, Feinberg School of Medicine, Northwestern

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