Within broad  federal guidelines, states have considerable flexibility in determining who  is eligible and what services to cover in their Medicaid program. Limits may  also be placed on the costs of services that will be covered by Medicaid. Medicare  spending accounted for 14 percent (about $19 billion) of total long-term  care expenditures in 2000. Selected States Varied in Expenditures for and Design of Medicaid Home and Community Services

The four states we reviewed allocated different proportions of Medicaid  long-term care expenditures for the elderly to federally required long-term  care services, such as nursing facilities and home health, and to state  optional home and community-based care, such as in-home personal  support, adult day care, and care in alternate residential care settings. The  number of hours of in-home care that the case managers offered and the  types of residential care settings recommended depended in part on the  availability of services and the amount of informal family care available. States differed,  however, in how they designed their Medicaid programs to offer home and  community-based long-term care options for elderly individuals and the  level of resources they devoted to these services. As a result, as  demonstrated by the care plans developed by case managers for our  hypothetical elderly individuals in four states, the same individual with  certain identified disabilities and needs would often receive different types  and intensity of home and community-based care for his or her long-term  care needs across states and even within the same community. These  differences often stemmed from case managers’ attempts to leverage the  availability of both publicly-financed long-term care services as well as the  informal care and support provided to individuals by their own family  members.
Why GAO Did This Study

As the baby boomers age, spending on long-term care for the elderly could quadruple by 2050. The growing demand for long-term care will put pressure on federal and state budgets because long-term care relies heavily on public financing, particularly Medicaid. Nursing home care traditionally has accounted for most Medicaid long-term care expenditures, but the high costs of such care and the preference of many individuals to stay in their own homes has led states to expand their Medicaid programs to provide coverage for home- and community-based long-term care.

What GAO Found

GAO found that a Medicaid-eligible elderly individual with the same disabling conditions, care needs, and availability of informal family support could find significant differences in the type and intensity of home and community-based services that would be offered for his or her care. These differences were due in part to the very nature of long-term care needs--which can involve physical or cognitive disabling conditions--and the lack of a consensus as to what services are needed to compensate for these disabilities and what balance should exist between publicly available and family-provided services. The differences in care plans were also due to decisions that states have made in designing their Medicaid long-term care programs and the resources devoted to them. The case managers GAO contacted generally offered care plans that relied on in-home services rather than other residential care settings. However, the in-home services offered varied considerably.