Most States Plan Cuts in Programs for Elderly, Disabled: AARP Study

A new AARP report documents how the recession continues to have negative impacts on state programs for older individuals and adults with physical disabilities even as demand for publicly funded services has grown. (See: http://www.aarp.org/health/health-care-reform/info-10-2010/health-panel-10201.html.) States have used many administrative tools to curtail expenditures, and resources—including staff—are stretched thin. According to the 50-state study, 31 states cut aging and disability services programs (non-Medicaid) in FY 2010, and 28 states were expecting to cut these programs in FY 2011.

Major revenue sources—personal income, corporate, and sales taxes—for 2011 are expected to be below pre-recession levels for most states, according to the report. States are also contending with increasing service demands, forcing many to impose new limits on non-Medicaid long-term services and supports (LTSS). The study found that states are “holding steady” with Medicaid LTSS because funding from the ARRA stimulus funds requires them to maintain eligibility. However, many states expect they will need to make additional cuts in LTSS when the funds phase down and expire in June 2011.

The report also found that many states are using the economic downturn as an opportunity to shift services from institutional to non-institutional settings. The Affordable Care Act provides states with new opportunities to expand home and community-based services, yet many states are reluctant to commit to these programs until further federal guidance is issued.