​Medicaid cuts would be devastating to individuals with intellectual and developmental disabilities (ID/DD) and those who care for them. Virtually all 55,000 individuals with disabilities residing in the nation’s 5,300 intermediate care facilities (ICF) are on Medicaid.

ICFs provide active treatment and services for people with significant support needs. They offer 24-hour supervision, health care, therapies, activities, and training to maximize residents’ autonomy and independence. 

Despite being the backbone of ID/DD care, Medicaid reimbursement rates often fall short of covering the actual cost of care, regardless of any future cuts. This underfunding has led to longer waitlists for home and community-based services programs, facility closures, and reduced access to timely, essential support that individuals desperately need.

The drop in ICFs, which has declined by more than 16 percent over the last 10 years, compounds the problem. Furthermore, newer facilities are not being built and certified at nearly the same pace as closures. This ultimately leads to fewer active Intermediate Care Facilities for Individuals with Intellectual and Developmental Disabilities (ICFs/IID) and patients seeking care elsewhere or not at all.

Data show ICFs/IIDs are performing well. Centers for Medicare and Medicaid Services (CMS) survey ICFs/IIDs for regulatory compliance. Over 90 percent of surveys conducted in 2024 found zero condition-level deficiencies and demonstrated a commitment to quality care. 

Medicaid Doesn’t Cover Enough

Medicaid does not fully cover the cost of care for individuals with intellectual and developmental disabilities. Access to quality long-term services and supports (LTSS) is at risk without adequate funding.

Provider taxes are one solution to expand services and support high-quality care. For more than 40 years, provider assessments (also called provider taxes) have helped states stabilize Medicaid funding and maintain care for vulnerable populations. There are 49 states and Washington, D.C., that rely on provider taxes to ensure that providers can continue serving Medicaid beneficiaries, and 32 of such states and D.C. apply these assessments for ICFs/IID.

Some federal budget proposals aim to lower the “Safe Harbor” limit on provider taxes from the current 6 percent, limiting states’ ability to use provider taxes. This would cut Medicaid funding without a replacement solution and reduce access to essential care for ID/DD populations while undermining efforts to recruit and retain much-needed stay in care facilities.

Medicaid is a lifeline for individuals with intellectual disabilities, especially those children and adults receiving 24-hour specialized care in ICFs/IIDs,” said Jamie L. Anthony, LSW, executive director, Developmental Options, a small non-profit organization located in Southeastern Idaho.

“ICFs provide essential access to health care, support services, and community resources, ensuring the individuals served receive necessary care and support to lead fulfilling lives and promote their independence and social inclusion,” Anthony said. “Without Medicaid, many would face significant barriers to essential services, limiting their opportunities for growth and well-being.”

Forced to Reduce Services

“The ICF industry has been plagued with funding challenges for over a decade, doing more with less, resulting in a significant decline in facilities nationwide,” Anthony said. “ICF providers rely upon Medicaid dollars for operation, allowing the industry to continue to survive for those individuals who benefit from the high-quality, individualized care plans and services.”

Anthony added, “Without Medicaid, or with significant cuts to Medicaid, they could face closure or be forced to reduce services. This would leave individuals with intellectual and developmental disabilities without access to critical care, potentially leading to institutionalization, neglect, or a lack of proper support in the community. Families may struggle to find alternative care options, and the overall quality of care could diminish.”

“We have reached a point where there are no further expense areas to reduce without significantly impacting essential services or operations, said Anthony. “Every line item has been carefully evaluated, and additional cuts would compromise the program’s core functions, quality of service, or overall sustainability. At this stage, the budget is already operating at minimal levels, and any additional reductions would harm the provider's ability to meet its goals.”

Hiring Challenges Are Persistent

Debbie Jenkins, advocacy director, Ohio Health Care Association, said that for a long time, ICF members have struggled to attract and retain the direct support professionals (DSPs), nurses, and other staff needed to care for their residents.

“For several years, they had to turn away people needing services because they couldn’t find enough staff to care for them,” Jenkins said.

In July 2023, the Ohio legislature passed HB 33, which invested significantly in ICF services to help increase wages. “This investment has stabilized most of our ICF providers' workforces,” Jenkins said. She said that during the past year and a half, her members told her that they have been able to adequately staff their current residents and take on a few new residents.

“However, challenges remain for serving people with significant needs requiring higher staffing ratios,” Jenkins said. “If Medicaid reimbursement for services is cut, any progress made in Ohio in the past year and a half would be lost. Providers would not be able to continue supporting their current wages, much less keep up with any future inflation.”

Additionally, Ohio has a pending provision in its budget bill that would eliminate the expansion population if the FMAP is reduced from the current 90 percent. 

“Our rates do not cover these employees' full health insurance costs,” Jenkins said. Many DSPs are on Medicaid through the expansion population eligibility. If that goes away, we anticipate some DSPs will leave ICFs to find employment that includes health insurance benefits. These cuts would devastate the ICF workforce and leave many residents without care.”

Wages a Key Determinant for Care

Developmental Options has been actively working to raise wages for direct support staff to close the gap on open positions and attract reliable, dedicated caregivers. 

“These efforts are critical to ensuring individuals receive the high-quality care they need,” Anthony said. “However, the uncertainty surrounding Medicaid funding has slowed this progress. Without stable and predictable funding, making the necessary wage adjustments and retaining staff is difficult, ultimately hindering the ability to fill positions and maintain consistent care for those who rely on these services.”

Technology a Possible Solution

Anthony said that better use of technology, such as artificial intelligence, could help to solve some of the funding and hiring gaps.

“It is important for our company and the industry to look for ways in which technology and AI can help us achieve more with fewer resources, allowing us to meet the regulations’ intent while maintaining high-quality programs,” Anthony said. “For example, finding software solutions that automate routine workflows reduce the time staff spends documenting while capturing critical data and allow agencies to make data-driven decisions can help improve compliance without adding staff.”

“However, a hurdle regarding software solutions is that many systems only focus on a single function (billing or scheduling, for example) and don't truly integrate tools and solutions that align with the ICF/IID regulations or program structure,” said Anthony.

Paul Bergeron is a freelance writer based in Herndon, VA.