Medicaid Home- and Community-Based Services Rebalancing Is Concentrated in Large Urban Areas

In aggregate, state Medicaid programs spend more on home- and community-based services (HCBS) than institutional long-term services and supports (LTSS). However, there are well-established differences in LTSS use across states. Rural-urban variation in LTSS use is less understood, particularly following changes to HCBS spending under the Affordable Care Act and American Rescue Plan. We examine differences in the probability of receiving HCBS among Medicaid LTSS users by rurality at both the state and national level.

Observational study.

Individuals dually eligible for Medicaid and Medicare across 40 states in 2022.

Using county-level Medicaid user counts, we calculated the percentage of dual-eligibles using any LTSS and the percentage of dual-eligible LTSS users receiving HCBS by rural categories. We explored variation in HCBS penetration by rural-urban status within states and nationally across 6 more granular categories of rurality.

The percentage of dual-eligible LTSS users receiving HCBS decreased as rurality increased, declining from 82% of users in large central metropolitan counties to <70% for all other urban counties. Dual-eligible LTSS users in the most remote rural counties (noncore) had the lowest percentage of HCBS use at 63%. In 33 of 40 states, rural counties (noncore and micropolitan) had lower HCBS penetration than urban counties. Within state rural-urban differences ranged from 23 percentage points lower HCBS penetration in Hawaii to 7 percentage points higher HCBS penetration in Arizona (state median, -5.8 percentage point difference).

The rebalancing of Medicaid LTSS toward home- and community-based services appears to be concentrated in larger cities, with other areas, particularly rural, lagging behind. Given challenges with nursing home closures and workforce shortages, more attention on rural access to HCBS is needed amid efforts to rebalance toward noninstitutional LTSS.