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

Pressures to turn over responsibility for long-term care to the states will exacerbate the already sizable difference in such efforts. This article describes the nature of the interstate variation in the types and amounts of long-term care provided under Medicaid. The average Medicaid long-term care expenditure on persons sixty-five years and older varies from $2,720 in New York to $380 in Arizona. Likewise, payments for home and community-based services (HCBS) vary from $1,180 in New York to $29 in Mississippi. Only a modest portion (28 percent) of the variance in total long-term care expenditures appears to be related to differences in population characteristics, and even less (7 percent) appears to be related to differences in HCBS expenditures. When supply factors (e.g., nursing home beds) are added, the explained variance increases to 52 percent and 17 percent, respectively. Medicare replaces some--but not most--of the difference in Medicaid home and community-based services payments.