A new federal program designed to expand community living options for people with disabilities is one step closer to reality this week with the first state cleared to take part.

The Centers for Medicare and Medicaid Services said Tuesday that California will be the first to participate in the Community First Choice Option. The program, established as part of the Affordable Care Act, offers states more Medicaid dollars for community living in exchange for agreeing to eliminate caps on the number of people served in the community.

“Thanks to the Affordable Care Act, seniors and persons with disabilities in California will have better options that will help them get the care they need in their own homes and communities, rather than institutions like a nursing home,” said Marilyn Tavenner, acting administrator of CMS.

Under rules issued earlier this year for the Community First Choice Option, states can qualify for a 6 percentage point bump in funding to provide attendant services and supports in the community for Medicaid beneficiaries who would otherwise require care in an institution. People with disabilities who are served under the program must receive supports in accordance with their preferences under a so-called “person-centered plan.”

For California, committing to the initiative will mean an added $258 million in the first year alone. The extra funds will continue for as long as the state elects to remain in the program, CMS officials said.

Self-advocates lobbied for years for federal legislation that would have required all states to follow the tenets of the Community First Choice Option. They ultimately won a partial victory when the initiative was included as an optional component of the health care reform law.

“To see the first state eliminate the institutional bias and know that others… are in the pipeline is an amazing feeling,” said Bruce Darling, a member of the disability rights group ADAPT, which has advocated for the initiative for two decades. “I look forward to the day when community living is so much the norm that people will look back thinking they couldn’t imagine it any other way… much the same way that young folks look at me in disbelief when I say we used to fight to put lifts on buses.”

Darling indicated that efforts are underway in New York, Maryland, Alaska, Arkansas, Washington and Rhode Island to follow California’s lead.