Michigan's home and community-based Medicaid Waiver program (MIChoice) has been criticized for enrolling people who are relatively high functioning. This study examined the physical and cognitive function of a 2000-2001 cohort of MIChoice enrollees and found that about 10% can be considered high functioning, 32% medium functioning, and 58% low functioning. Much of the controversy over MIChoice can be traced to contradictions inherent in the payment system and the fundamental premise that drives the program.