In Olmstead v. L.C., the United States Supreme Court held that Title II of the Americans with Disabilities Act of 1990 (ADA) requires the placement of persons with disabilities in community settings, rather than in institutions, when:

1. the state’s treatment professionals determine that such a placement is appropriate,
2. the transfer is not opposed by the individual,
3. the placement can be reasonably accommodated given the resources available to the state and its obligation to provide for the needs of others with mental disabilities.

In its analysis, the Court first found that that unjustified institutionalization of people with disabilities is indeed a type of discrimination prohibited by Title II. As explained by the Court, unnecessary institutionalization “perpetuates unwarranted assumptions” that people with disabilities “are incapable or unworthy of participating in community life.” Also, being confined to an institution “severely diminishes … everyday life activities,” including family and social relationships, work options, education, and cultural enrichment.

The Olmstead decision requires a state or local government to “administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities.” A second provision of the regulation, a state or local government must “make reasonable modifications in policies, practices, or procedures when the modifications are necessary to avoid discrimination on the basis of disability.”

Nonetheless, unnecessary institutionalization is still a routine problem for too many older adults and people with disabilities, especially those with lower income.  Limitations in the current system are largely attributable to Medicaid’s bias (intended or not) toward institutions over HCBS. While Medicaid is the single greatest source of coverage for home and community based services, Medicaid’s statutory framework generally makes coverage for institutional care easier for people to attain.

Based on progress made to date, along with remaining problems and limitations, there are specific steps that federal and state governments can take to reduce the incidence of unnecessary institutionalization:

1. End Medicaid’s bias toward institutional care
2. Improve community based quality of care
3. Enhance state commitment to participate in expanded home and community based options
4. Improve coordination of programs and services at the state and federal level