Shifting care patterns: How Medicaid policies shape family and formal care use

Medicaid programs can support aging in place by paying for care provided by direct care workers (i.e., formal care) and providing financial support, education, and training to otherwise unpaid family members and friends (i.e., family care).

We used nationally representative data of adults 70 years and older with functional limitation(s)-and the subsamples with dementia, enrolled in Medicaid, or rural residents-and multinomial regressions to estimate the relationship between Medicaid waivers paying family caregivers and the types of care received.

Adjusting for demographics and family structure, living in a state with waiver payments for family caregivers decreased the probability of receiving formal care alone and increased the probability of receiving family care among persons living with dementia, Medicaid beneficiaries, and rural residents.

Understanding how policies incentivize caregiving has implications for broader discussions to (1) address workforce supply concerns and (2) mitigate economic consequences of family caregiving.

Medicaid Home and Community-Based Services (HCBS) play a critical role in addressing the care needs of community-dwelling older adults. Medicaid programs paying family members for care reduced use of formal care. The relationship was strongest among persons with dementia, Medicaid, and rural residents. These findings have implications for workforce shortages and supports for caregivers.