An Investigation of Interstate Variation in Medicaid Long-Term Care Use and Expenditures Across 40 States in 2006. B. Interstate Differences

07/01/2013

Across the 40 study states, there were about 40 million enrollees eligible for full Medicaid services in 2006. About seven percent were aged or eligible for Medicaid on the basis of disability and used any FFS LTC services -- almost 5 percent used HCBS, and 3 percent used institutional care (Table II.1). (See Appendix Table D.1 for state-level detail.)

TABLE II.1. Number of Enrollees Who Were Aged or Eligible on the Basis of Disability Using Medicaid FFS LTC Services Compared with the Total Number of Full-Benefit Enrollees in 2006
Measure   All Full-Benefit  
Medicaid Enrollees
Aged or Disabled
  with Any FFS LTC  
Aged or Disabled
  with Any FFS HCBS  
Aged or Disabled
  with any FFS ILTC  
Number, in thousands 40,394 2,904 1,852 1,232
Percentage of all full-benefit Medicaid enrollees   100.0 7.2 4.6 3.0
SOURCE: Mathematica analysis of 2006 MAX data for 39 states and the District of Columbia with representative FFS LTC data (excludes data from Arizona, Maine, Massachusetts, Michigan, Minnesota, Montana, New Hampshire, Oregon, Pennsylvania, Rhode Island, and Texas).
NOTES: HCBS include 1915(c) waiver services and state plan services for personal care, residential care, home health, adult day care, and private duty nursing. ILTC includes services provided in nursing homes, ICFs/IID, mental hospitals for the aged, and inpatient psychiatric facilities for people under age 21.

Although they represent a small share of enrollees, Medicaid spent $77 billion (about 39 percent of total Medicaid expenditures) on LTC services for these enrollees in 2006 (Table II.2). (See Appendix Table D.2 to view the information from Table II.2, ordered alphabetically by state.) About 41 percent of these expenditures were allocated to HCBS, ranging from 73 percent in Alaska to 11 percent in Mississippi, with a median of 38 percent across states.

As reported in our previous study, the percentage of LTC recipients using HCBS exceeded the percentage of expenditures used for HCBS.8 Overall, only 41 percent of LTC expenditures in the 40 states were for HCBS whereas 64 percent of LTC users utilized HCBS.9 However, we found wide variation across the states -- 87 percent of the LTC recipients in Alaska used HCBS, compared with just 33 percent of those in Indiana.

Per-user expenditures for HCBS ($17,000) were on average less than half of per-user expenditures for institutional care (46 cents on HCBS for every dollar on institutional care). This ratio also varied substantially by state, with Tennessee spending more per user on HCBS than per user on institutional care ($1.11 for every dollar spent per user of institutional care, or $37,500 per user). At the other extreme, Mississippi spent only 19 cents on HCBS for every dollar spent per user of institutional care. Both these states have fewer numbers of Medicaid HCBS users relative to ILTC users than most other states. Note that some states with particularly high housing costs, such as Alaska and New York, show relatively low ratios of HCBS to institutional care spending even though HCBS spending per-capita is higher than in other states. This likely is due to particularly high room and board costs for institutional care in these states.

TABLE II.2. Expenditures and Utilization-Based Measures of LTC System Performance Among Enrollees Who Were Aged or Had Disabilities and Were Eligible for Full Medicaid Benefits in 2006, Ranked by HCBS Share
State Rank States Ranked by Percentage
of LTC $ for HCBS
States Ranked by the Percentage
of LTC Users Receiving HCBS
States Ranked by the Ratio of Per-User $
on HCBS Relative to Per-User $ on ILTC
$ # Ratio State Total LTC $ % of Medicaid LTC
$ Allocated to HCBS
State Total LTC Users % of LTC
Users Receiving HCBS
State Per-User $ on HCBS HCBS $ Per User/
ILTC $ Per User
1 1 16 Alaska 284,916,040 72.7 Alaska 7,591 87.0 Tennessee 37,521 1.112
2 5 4 New Mexico 687,375,842 70.3 California 578,611 82.5 Wisconsin 26,260 0.927
3 3 12 Washington 1,510,683,980 65.2 Washington 75,694 78.5 Wyoming 26,045 0.838
4 9 6 Vermont 257,050,002 57.8 Kentucky 50,373 77.5 New Mexico 25,725 0.827
5 16 3 Wyoming 176,243,168 57.0 New Mexico 24,595 76.4 Indiana 25,979 0.815
6 2 37 California 9,878,514,101 54.7 Idaho 17,227 72.9 Vermont 22,928 0.765
7 14 10 Kansas 840,599,103 52.5 North Carolina 145,432 72.2 South Dakota 18,956 0.707
8 8 20 Colorado 1,019,876,958 50.7 Colorado 42,632 69.8 Utah 23,234 0.689
9 10 21 New York 17,776,758,555 45.3 Vermont 9,493 68.2 Nebraska 19,410 0.649
10 31 2 Wisconsin 1,764,144,875 44.5 New York 385,991 68.2 Kansas 16,645 0.644
11 7 36 North Carolina 2,701,905,573 43.3 Iowa 51,128 68.1 Louisiana 18,253 0.644
12 15 26 Nevada 306,338,277 43.3 Missouri 90,743 66.4 Washington 16,570 0.644
13 22 14 Maryland 1,768,700,598 42.8 Virginia 52,361 65.6 Delaware 32,215 0.608
14 6 34 Idaho 371,132,820 42.6 Kansas 40,507 65.4 Maryland 25,675 0.604
15 13 15 Virginia 1,421,468,659 42.6 Nevada 12,164 64.2 Virginia 17,618 0.589
      All 40 states 76,879,134,892 40.8 All 40 states 2,904,883 63.8 Alaska 31,371 0.561
16 12 29 Missouri 1,466,773,653 40.7 Wyoming 6,059 63.6 Oklahoma 13,902 0.551
17 19 17 Oklahoma 1,012,058,004 40.5 Alabama 59,526 61.6 Georgia 14,636 0.537
18 30 8 Utah 334,796,035 38.9 South Carolina 43,085 60.2 Hawaii 23,187 0.531
19 23 19 Hawaii 329,343,209 38.5 Oklahoma 50,793 58.0 Colorado 17,375 0.514
20 21 23 West Virginia 734,425,562 38.0 New Jersey 99,441 57.7 New York 30,580 0.498
21 28 9 Nebraska 562,110,501 37.4 West Virginia 25,825 57.1 Ohio 18,044 0.497
22 11 32 Iowa 1,157,728,242 37.2 Maryland 52,081 56.7 West Virginia 18,914 0.494
23 39 1 Tennessee 1,854,934,959 37.0 Hawaii 9,711 56.3 Connecticut 23,454 0.483
24 33 7 South Dakota 251,692,447 35.9 Ohio 163,699 55.3 North Dakota 18,943 0.478
25 18 31 South Carolina 909,136,545 34.6 Connecticut 56,805 53.1 Nevada 16,978 0.473
26 32 13 Delaware 301,695,573 34.0 Illinois 153,120 52.2 Illinois 12,256 0.472
27 24 22 Ohio 4,884,852,294 33.5 Arkansas 40,947 51.4 Florida 14,924 0.462
28 25 24 Connecticut 2,238,931,231 31.6 Nebraska 21,186 51.1 All 40 states 16,914 0.458
29 20 33 New Jersey 3,447,275,904 31.2 Florida 153,416 50.9 Missouri 9,908 0.442
30 29 28 Florida 3,747,337,138 31.1 Utah 11,264 49.8 District of Columbia 20,620 0.398
31 26 27 Illinois 3,176,627,446 30.8 Wisconsin 61,721 48.4 South Carolina 12,107 0.374
32 36 18 Georgia 1,493,201,190 28.4 Delaware 6,662 47.9 Iowa 12,375 0.364
33 38 11 Louisiana 1,525,871,254 27.5 South Dakota 10,327 46.2 New Jersey 18,755 0.359
34 40 5 Indiana 1,828,498,633 27.3 District of Columbia 7,841 45.3 Idaho 12,601 0.348
35 17 38 Alabama 1,130,404,702 27.2 North Dakota 9,380 44.3 Arkansas 10,165 0.342
36 4 39 Kentucky 1,209,161,974 25.8 Georgia 66,667 43.4 North Carolina 11,151 0.337
37 35 25 North Dakota 305,327,011 25.8 Mississippi 39,336 41.0 California 11,325 0.312
38 27 35 Arkansas 858,715,978 24.9 Louisiana 60,275 38.1 Alabama 8,385 0.260
39 34 30 District of Columbia 315,228,327 23.2 Tennessee 51,989 35.2 Kentucky 7,991 0.253
40 37 40 Mississippi 1,037,298,529 11.1 Indiana 59,185 32.5 Mississippi 7,115 0.191
SOURCE: Mathematica analysis of 2006 MAX data for 39 states and the District of Columbia with representative FFS LTC data (excludes data from Arizona, Maine, Massachusetts, Michigan, Minnesota, Montana, New Hampshire, Oregon, Pennsylvania, Rhode Island, and Texas).
NOTES: Excludes enrollees in managed LTC and those eligible for restricted Medicaid benefits only. HCBS include 1915(c) waiver services and state plan services for personal care, residential care, home health, adult day care, and private duty nursing. ILTC includes services provided in nursing homes, ICFs/IID, mental hospitals for the aged, and inpatient psychiatric facilities for people under age 21.

These data also demonstrate how a single indicator of system performance could be misleading. State rankings differed substantially across the three measures. For example, both California and New Mexico ranked among the top six states in HCBS as a percentage of LTC spending and users. Yet, California spent only $11,300 per user of HCBS, or about 31 cents for every dollar spent for persons in institutional care, compared with $25,700 per HCBS user in New Mexico -- or 83 cents per dollar of institutional care. Compared with California, which provides at least some (but not necessarily costly) HCBS to a very large number of enrollees, New Mexico serves fewer enrollees, but apparently at a level closer to that of its institutionalized population as a whole. Since California and New Mexico have achieved similar outcomes with respect to overall Medicaid LTC spending on HCBS and percentages of LTC users receiving HCBS, it might be asked: is California's pattern of much lower per-capita spending on HCBS (coupled with somewhat higher per-capita spending on ILTC) a more cost effective way to achieve these overall "re-balancing" results? This is not a question we address in this report, but it is one worth asking and attempting to address in future research. States vary in the financial resources they have available to pay for LTC and, whereas the higher federal match rates available to poorer states help, they do not eliminate, these inequalities. Thus, from a state policymaking perspective, it would be extremely helpful to have a better handle on how much spending per user is "enough."

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