Oregon officials outline long-term services and supports funding, roll out OPI Medicaid and warn of rising nursing-facility costs

The Joint Ways and Means Human Services Subcommittee held an informational hearing on Senate Bill 5526 on long-term services and supports, where agency officials outlined current spending, eligibility limits and the phased rollout of Oregon Project Independence Medicaid.

The Office of Aging and People with Disabilities (APD) director, Dr. Nikisha Knight Coyle, told the panel that APD serves most Oregonians in home and community-based settings and that “almost 90% of those that we serve are served in home and community based environments.” She said that approach both honors individual choice and saves the state money compared with nursing-facility care.

Why it matters: APD officials told lawmakers that state and federal funding streams, growing caseload forecasts and new federal Home and Community‑Based Services (HCBS) rules will change how the agency assesses needs and pays providers. Those factors, plus a statutory nursing-facility payment formula, are driving projected cost increases that will affect the state budget.

APD’s overview and scale APD told the subcommittee that between July 2021 and June 2023 roughly 57,000 individuals received Medicaid long-term services and supports in Oregon. The agency described a mix of funding and program options: Medicaid services, the Older Americans Act programs, Oregon Project Independence (OPI) Classic (state‑funded) and OPI Medicaid, plus noncare programs such as SHIBA (Senior Health Insurance Benefits Assistance) and disability determination services.

APD said funding is distributed roughly evenly across three setting types—home, community-based care and nursing facilities—while a majority of consumers (the agency’s stated figure: nearly 90%) receive services at home. APD noted that nursing-facility care remains the highest-cost setting on a per-case basis.

Nursing-facility caseloads and rates Janellen Weidance, APD deputy director of policy, said the nursing-facility caseload has declined over many years, with a deeper dip during the COVID-19 pandemic and a partial rebound afterward. She described APD work to “divert and transition” people away from nursing facilities when appropriate and noted practical barriers such as provider capacity and regulatory requirements that can slow transitions back to the community.

On provider rates, APD told the committee that the Medicaid nursing-facility rate methodology is set in state statute and pays to the 63rd percentile of reported facility costs. As facility costs rise, that statutory approach increases the average payment. APD presented an estimate that the average monthly cost per nursing‑facility case could more than double from about $9,830 in state fiscal 2021 to more than $20,000 by state fiscal 2027, driven by cost increases reported by providers and the statutory rate formula.

Eligibility, private-pay gaps and asset limits APD staff explained that Medicaid long-term services and supports are an entitlement and that eligibility is tied both to Medicaid medical eligibility and to assessment-based need. Case managers assess activities of daily living (ADLs) and assign a Service Priority Level (SPL); APD said Medicaid serves SPLs 1–13 (higher-need levels). APD also noted longstanding financial eligibility limits: since 1987 individuals cannot have more than $2,000 in countable assets for Medicaid long-term services, and for those over 55 the state may pursue estate recovery after death.

APD highlighted private-pay costs reported by Portland State University work for the agency: average base monthly charges for assisted living and residential care were above $5,000 with average total monthly charges above $6,600, and private-pay rates have risen substantially since 2016. APD emphasized that many older adults earn more than the Medicaid income limits (APD cited a median older‑adult income near $5,000 per month and stated a Medicaid income limit figure of $2,742 per month), creating a coverage gap where individuals are neither able to pay privately nor eligible for Medicaid without “spending down.”

Oregon Project Independence Classic and OPI Medicaid rollout Dr. Knight Coyle and Janellen Weidance described two OPI tracks: OPI Classic (state‑funded in‑home supports, about 1,800 people served in 2024) and OPI Medicaid, an 1115 demonstration/waiver‑style Medicaid option launched in 2024 to expand eligibility and services. APD said OPI Medicaid has served more than 700 people since its launch and that the first phase moved roughly 700 of the 1,800 OPI Classic participants to OPI Medicaid. APD opened public enrollment March 1 and is processing an “interest list” of nearly 2,000 people for eligibility determinations. APD projected serving roughly 4,500 people annually in the program in the five‑year horizon, subject to enrollment and billing patterns.

Janellen Weidance said OPI Medicaid includes additional services not available under OPI Classic, including more service hours, assistive technology, home modifications and supports for unpaid caregivers; it also has higher income and resource limits than traditional Medicaid long-term services, which will allow more people to qualify.

Respite, adult day services and consumer choice In response to questions from legislators, APD staff explained that Oregon does not operate a distinct Medicaid “respite” benefit under federal definitions but uses a suite of home‑ and community‑based services (including adult day services and paid in‑home caregivers funded through 1915(k) options) to provide family caregivers temporary relief. Janellen Weidance said those services are funded partly through state plan options that enhance federal match (1915(k)‑style provisions) and that Medicaid is payment in full for enrolled beneficiaries (providers cannot bill Medicaid recipients for additional charges under contract).

Provider workforce and supply issues APD said the state licenses thousands of direct-care workers: APD cited more than 20,000 home‑care workers and about 125 in‑home care agencies (figures provided by the agency). APD also reported about 567 assisted living or residential-care facilities (agency slides) and 1,220 adult foster homes, and it described a decline in adult foster-home numbers attributed to provider retirements, rising housing costs and insufficient recruitment of new providers.

Federal rules, match rates and budget risk APD warned lawmakers that federal funding match (FMAP) levels fluctuate with the economy and that proposed or recently issued federal policy changes could affect Oregon’s funding. APD highlighted (1) new Centers for Medicare & Medicaid Services HCBS Access Rule requirements that expand reporting, incident definitions and assessment items; (2) revised Older Americans Act regulations; and (3) new National Adult Protective Services regulations. APD said states must implement parts of these changes by 2026 and 2028 and fully by a later federal deadline, and that compliance will require infrastructure, staffing and rate transparency changes.

Lawmakers’ questions and next steps Legislators pressed APD on how the state diverts people from nursing facilities, how out‑of‑pocket private-pay rates compare with average incomes, whether adult‑day and assisted‑living sites accept pets, and where wait lists remain. APD said many assisted‑living and residential‑care providers accept small pets and that pet concerns often factor into consumer choices. APD offered to provide further data on applications denied for income/resource reasons and on regional provider capacities.

APD said the agency will return for an additional day of hearings focused on safety and regulatory oversight and to wrap up budget testimony. No formal votes or motions were recorded during the informational hearing.