DOJ May Be Stepping Back from Olmstead. States Shouldn’t.
Even if federal enforcement retreats, federal disability laws still stand — and states should keep helping people with disabilities live in their communities.
Authors: Patti Boozang and Jocelyn Guyer
Editor: Amanda Eisenberg
tl;dr
The Department of Justice (DOJ) has issued an advisory opinion arguing that the Americans with Disabilities Act (ADA) and the Rehabilitation Act do not require states to provide community-based services to people with mental disabilities in the way courts have interpreted for more than 25 years.
This opinion does not change federal disability law or overturn Olmstead v. L.C., the landmark 1999 Supreme Court decision holding that people with disabilities generally should not be forced to live in institutions when they can be served appropriately in the community. In fact, the DOJ itself acknowledged that its interpretation is “out of step” with the common understanding of Olmstead adopted by nearly every federal court to consider the issue.
Even as federal enforcement of Olmstead becomes less aggressive, home and community-based services (HCBS) remain one of Medicaid’s best investments. They are what people want, produce better outcomes and frequently cost less than institutional care. Regardless of the DOJ’s position, private plaintiffs and disability rights organizations can continue bringing Olmstead lawsuits until the courts or Congress say otherwise.
The 80 Million Impact
For decades, bipartisan federal policy has steadily moved toward helping older adults and people with disabilities receive services at home safely and whenever possible instead of inside institutions. Medicaid became the engine of that transformation, financing HCBS that allow millions of Americans to live, work and participate in their communities.
Medicaid is the largest payer of long-term care, including HCBS and facility-based care like nursing homes and intermediate care facilities, for individuals with physical, developmental or mental health disabilities. The Centers for Medicare & Medicaid Services (CMS) has long encouraged states to “rebalance” their Medicaid spending on long-term services from institutional care (a required Medicaid service) to HCBS (a largely optional benefit).
That evolution was driven not only by economics, but also by civil rights. The Olmstead decision recognized that unnecessary institutionalization is a form of discrimination under the ADA, giving rise to what has become known as the “integration mandate.” In the years after Olmstead, many states developed or updated “Olmstead plans” and related community-integration strategies to describe how they would expand access to services in integrated settings, reduce unnecessary institutionalization, prevent people from entering institutions when community-based supports are appropriate, and track progress through goals, timelines, agency responsibilities and service-system data.
In short, states increasingly rebalanced long-term care away from institutions, consistent with CMS direction.
Now, the DOJ is signaling that it no longer agrees with this longstanding ruling, at least for individuals with mental disabilities. It’s a stunning position, but it does not mean the integration mandate has disappeared. (It hasn’t.)
What Does the DOJ Opinion Change?
The DOJ Office of Legal Counsel opinion takes a much narrower view of federal disability law. It says the law bars states from keeping people in institutions without justification but does not require states to provide community-based services in the most integrated setting for people with mental disabilities.
In practical terms, the DOJ is saying it plans to pull back from enforcing existing Olmstead settlements and try to repeal federal rules that have helped carry out the integration mandate, at least for people with mental health disabilities. The opinion says it is limited to that group. But some of DOJ’s reasoning could be used later to challenge protections for people with physical and developmental disabilities too, putting the broader integration mandate on shakier ground.
Importantly, DOJ’s legal opinion does not change the law itself. The DOJ cannot amend the ADA, rewrite the Rehabilitation Act, or overrule Olmstead precedent through an internal memorandum. Indeed, the opinion expressly concedes that its interpretation is “out of step” with the common understanding of Olmstead adopted throughout the federal courts. In other words, the Trump administration is announcing the legal position it intends to advocate — not announcing that the law has changed.
States Shouldn’t Retreat
The larger danger to this opinion is that states facing extraordinary Medicaid budget pressure due to the $1 trillion federal funding cut under H.R. 1, among other federal actions, may interpret DOJ’s retreat as permission — or even encouragement — to scale back HCBS investments. That would undermine decades of bipartisan policy progress toward community integration and risk returning people with disabilities and their families to a system in which the price of needed care is isolation, loss of autonomy, separation from community, stigma, and greater risk of abuse and neglect.
People overwhelmingly prefer receiving services in their homes and communities whenever it is safe and appropriate. Decades of disability policy have reflected that simple principle, and Medicaid has increasingly evolved to support it.
HCBS is good fiscal policy. While costs vary by population and service, supporting individuals in community settings is frequently less expensive than institutional care. Numerous evaluations of the Money Follows the Person program have also found that transitioning individuals from institutions to community settings can improve quality of life while reducing long-term Medicaid spending.
Finally, states remain legally exposed even if DOJ steps back. Olmstead has never depended exclusively on federal enforcement. Individuals and disability rights organizations have long brought successful lawsuits directly against states, and those private enforcement actions remain available unless courts narrow existing precedent. Federal enforcement may become less frequent; private litigation very likely will not.
The Bottom Line
Community-based services remain one of Medicaid’s strongest investments. The DOJ opinion comes at a consequential moment for states. Medicaid leaders are already facing difficult budget choices, and HCBS — still optional in many cases — will be vulnerable.
The administration’s legal position may provide more cover for HCBS cuts, but it does not make those cuts good policy. Retreating from HCBS investment now would weaken Medicaid’s long-term care infrastructure and shift costs onto providers and state systems. Worse, it would risk dragging us back into one of the ugliest, most dishonorable chapters of our history. The United States has a long, shameful record of over-institutionalization, and we do not want to return to a time when people with mental disabilities were treated as pariahs to be hidden away in places where they all-too-often faced abuse and neglect.
DOJ may step back from defending and enforcing the integration mandate. But unless Congress changes the law or the Supreme Court overturns decades of precedent, Olmstead remains the governing framework and states can and should keep building systems rooted in community integration.