The lack of resources to provide a comprehensive network of support services to mentally retarded persons living in the community is a serious obstacle to deinstitutionalization. In the past, most federal funds allocated for services to the mentally retarded were used for institutional care. However, recent changes in Medicaid funding policies allow states the option of applying for a waiver that would enable them to use Medicaid funds to provide services in the community to individuals who, without these services, are at risk of institutionalization. This article describes the rationale and provisions of this new policy, the Medicaid Home and Community-Based Care Waiver Authority. It also discusses the current status of waiver applications and the potential impact of the waiver on community service development.
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