Variation in state spending for long-term care: factors associated with more balanced systems

Area of Science:

• Health Services Research
• Public Policy
• Gerontology

Background:

• Medicaid is a primary payer for long-term care services in the United States.
• Significant interstate disparities exist in Medicaid long-term care provision and expenditure.
• Increasing pressure to devolve long-term care responsibility to states may worsen these variations.

Purpose of the Study:

• To analyze the nature and extent of interstate variation in Medicaid long-term care.
• To identify factors contributing to these differences in expenditures.
• To examine the role of home and community-based services (HCBS) within this variation.

Main Methods:

• Comparative analysis of Medicaid expenditure data across states.
• Statistical examination of factors influencing long-term care spending, including population characteristics and supply-side factors (e.g., nursing home beds).
• Assessment of Medicare's impact on Medicaid HCBS payments.

Main Results:

• Average Medicaid long-term care expenditure for individuals aged 65+ varied dramatically, from $2,720 in New York to $380 in Arizona.
• Payments for home and community-based services (HCBS) showed extreme variation, from $1,180 in New York to $29 in Mississippi.
• Population characteristics explained only 28% of total long-term care expenditure variance and 7% of HCBS variance. Including supply factors increased explained variance to 52% (total) and 17% (HCBS).

Conclusions:

• Interstate variations in Medicaid long-term care spending are substantial and not solely driven by population differences.
• Supply-side factors, such as nursing home bed availability, play a significant role in explaining expenditure disparities.
• Medicare offsets only a portion of the differences in state-level Medicaid home and community-based services payments.