Variation by disability in state predictors of Medicaid 1915c waiver use and expenditures

States are increasingly using the Medicaid 1915c waiver program to provide community-based long-term care. A substantially greater share of long-term-care dollars supports community-based care for individuals with intellectual and developmental disabilities, relative to older and working-age persons with primarily physical disabilities.

We used state-level data for the period from 1992 to 2001 to estimate fixed-effects panel models. We compared state predictors of waiver utilization and expenditures for waivers serving both older and working-age individuals (O/WAIs) relative to waivers serving individuals with intellectual and developmental disabilities (IDDs).

We found community-based-care capacity to predict use and expenditures for both target groups. Although regulation of institutional supply was positively related to expenditure measures for IDDs, it was not related to use or expenditures for O/WAIs. Demand variables (e.g., the size of a state's African American population) predicted use and expenditures for IDD waivers, but they were less consistent for O/WAI waivers. State resources were a robust predictor of use and expenditures for both groups.

Increased community-based-care capacity appears to be an important factor in efforts to expand the availability of Medicaid community-based care. Federal policies that address state resource issues may also spur growth in community-based long-term care.