Hawaii is the first state where Medicaid covers comprehensive palliative care. That's good news for older adults.

For adults 65 and older, health care spending has been increasing for decades, with per capita spending on aging people growing 4.5% between 2018 and 2020, compared with a 2.6% growth rate from 2016 to 2018. Now one state is making it easier for older adults and others to get care for serious conditions outside of a hospital. 

This spring, Hawaii became the first state to provide Medicaid coverage for palliative care in non-hospital settings under its state plan amendment. The change has the potential to reduce costs and improve health outcomes and quality of life for patients—and to serve as a model for other states. 

Palliative care involves managing a patient’s pain or symptoms from a serious illness, such as cancer, kidney failure, Parkinson’s disease and other conditions. It differs from hospice care, which offers end-of-life care for people with terminal illnesses. Many palliative care patients are older adults, but it can also be utilized at any point in life for patients with chronic or debilitating conditions.

While Medicaid, Medicare and private payers do cover some parts of palliative care, said Allison Silvers, chief healthcare transformations officer at the Center to Advance Palliative Care, it’s often limited to providers in medical settings like doctors or nurse practitioners and doesn’t cover the rest of the team needed to provide holistic palliative care. Hawaii’s plan allows Medicaid benefits to cover the work of health and social services providers like community health workers, mental health professionals and others. 

An interdisciplinary team, Silvers said, can improve care coordination and communication across providers, administer or manage medications, offer support for families grappling with a loved one’s declining health, and help patients develop care management plans that meet their physical, mental or spiritual needs. 

The state’s plan also defines palliative care as a preventative service, which means that Medicaid will cover comprehensive assessments, such as screening for diseases and psychological, neuropsychological and cognitive testing, to determine their care needs. 

“One of the most important questions that will be asked in the assessment is: What are your goals?” said Joy Soares, a policy analyst at the state’s Medicaid agency. Health assessments often prioritize information like a patient’s diabetes level, she said, but a comprehensive assessment looks to identify an individual’s personal health goals, such as being able to play with their grandchildren or walk their child down the wedding aisle. 

Palliative care’s focus on identifying and managing patients’ wide-ranging physical, emotional and mental health needs helps reduce health care spending, Silvers said. Continued and consistent care, for example, can lead to fewer emergency department visits, hospitalizations or emergency procedures if patients’ conditions are effectively managed before reaching crisis levels. 

According to a 2022 cost analysis conducted by the health care consulting firm CBIS Optumas, for instance, administration of palliative care under Medicaid could reduce costs for patients by between $231 and $1,165 per enrollee per month. And researchers found that implementing a palliative care program would be cost neutral to states but show significant improvements to patients’ and their families’ wellbeing. The analysis was based on medical claims data from 2018 and 2019 across three unnamed states, considering services like advanced care planning, pain and symptom management, and initial health screenings.

“In a lot of states, people can access services that fall under the umbrella of palliative care,” said Ella Taggart, a senior research analyst at the National Academy for State Health Policy, known as NASHP, but with the state plan amendment, Hawaii “is able to comprehensively offer … the whole host of [palliative care] services.” 

Other states are considering increased palliative care coverage. California has required managed care organizations to cover it since 2014 legislation. 

Now six states—Colorado, Maine, Maryland, Ohio, Texas and Washington—are now working with NASHP and The John A. Hartford Foundation to develop palliative care-related policies and systems. 

The participating states will draw on Hawaii’s and California’s efforts to inform their design and development of palliative care programs and benefits, said Hemi Tewarson, executive director of NASHP. 

Given Hawaii’s unique geography and population spread across the islands and rural, urban and suburban settings, Soares said officials intentionally used broad language throughout the plan to allow maximum flexibility in the implementation of benefits. Other states should consider finding the balance between prescriptive program description and broader language “to really meet the needs of your particular population,” she said. 

Across the U.S., Tewarson said, “there is continued interest in [palliative care]” among state officials “as states are trying to provide more options for people who really want to have care in their home.”