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This paper presents results of a descriptive analysis of the effects of nursing home use of Medicaid eligibility status. Data from the 1982 and 1984 National Long-Term Care Surveys were used to "track" a cohort of disabled elderly persons residing in the community in 1982 over the following two years. While 12% of the cohort spent some time in nursing homes between 1982 and 1984, about 40% were for short stays. In contrast to persons who did not use nursing homes, persons who entered nursing homes had a four to five-fold risk of spending down to Medicaid eligibility. Implications of these results for long-term care research and policies are discussed. [22 PDF pages]