Residential Care and Assisted Living Compendium: 2007. Public Financing of Services

11/30/2007

Medicaid is a significant payer of long-term care services. Medicaid expenditures on long-term care comprise 33.2 percent of Medicaid spending (see Table 1-6). States are steadily shifting the balance of long-term care spending from institutional to home and community settings. Medicaid spending for institutional care in nursing homes and ICFs-MR rose from $41.5 billion in 1996 to $60.2 billion in 2006.20During the same period, spending for home and community services (state plan personal care, home health, and HCBS waivers) grew from $11.2 billion to $38.5 billion.21 Consequently, Medicaid spending for institutional care dropped from 79 percent of all Medicaid long-term care spending in 1996 to 61 percent in 2006 for all populations. The percentage of Medicaid long-term care spending on home and community services was higher for individuals with development disabilities (60.7 percent) than for adults with physical disabilities and elders (28.6 percent.)

TABLE 1-6. Medicaid Long-Term Care Spending (in billions)

Service 1996 2006
  Spending     Percent     Spending     Percent  
Home Health $2.1 1.4% $3.6 1.2%
Personal Care State Plan   $2.9 1.9% $9.3 3.1%
HCBS Waiver $6.2 4.0% $25.6 8.6%
ICF-MR $9.7 6.3% $12.5 4.2%
Nursing Home $31.8 20.6% $47.7 16.0%
Total Long-Term Care $51.8 33.6% $99.3 33.2%
Total Medicaid $154.2 $298.7

Much of the growth in HCBS spending has been for services for persons with MR/DD, which account for 75 percent of all spending.

The expansion of home care programs, home health services, and residential care options has afforded persons with long-term care needs a number of alternatives to nursing homes. People with fewer ADL impairments are less likely to enter a nursing home.22 Thus, while the absolute number of nursing home beds increased from 1.8 million in 1985 to 1.9 million in 1999, the rate per thousand persons over age 75 declined from 141 beds to 117 beds, and nursing home occupancy rates dropped from 92.3 percent in 1987 to 87.0 percent in 1996,23 and further declined to 85.6 percent in December 2003.24 See Table 1-7 for occupancy rates in each state.

Declining nursing home occupancy rates create some concerns for states. First, as higher income individuals choose assisted living, the proportion of nursing home residents who are Medicaid beneficiaries increases. Increased reliance on Medicaid creates pressure to raise payment rates to replace revenue formerly received from private-pay residents. Second, excess capacity creates a greater likelihood that Medicaid nursing home expenditures will rise if Medicaid beneficiaries do not have access to sufficient home and community services and must rely on nursing homes at greater expense to the states.

State officials thus have an interest in ensuring that the supply of nursing facilities declines as the supply of home and community services expand. The 1999 U.S. Supreme Court Olmstead decision gives further impetus for shifting spending from institutions to home and community settings. That decision, and guidance to states from CMS, requires that states have plans for serving people with disabilities in the most integrated setting. Additionally, the ruling states that if states have a waiting list for services, the list must move at a “reasonable pace.”

TABLE 1-7. Nursing Home Supply and Occupancy Rates and Residential Care Supply, 2003

  State     NF Supply/  
1000 65+
  Occupancy  
Rate
Residential
  Care Supply/  
1000 65+
  State     NF Supply/  
1000 65+
  Occupancy  
Rate
Residential
  Care Supply/  
1000 65+
US 50.0 85.6   US 50.0 85.6  
AL 44.8 90.0 16.8 MT 60.9 77.0 30.4
AK 20.6 83.9 12.3 NE 70.5 86.7 39.4
AZ 23.4 82.7 34.9 NV 21.6 83.6 16.7
AR 78.6 73.3 21.3 NH 51.0 92.4 26.3
CA 35.8 85.5 41.7 NJ 45.1 87.8 14.3
CO 46.3 81.9 31.7 NM 33.6 85.4 n.a.
CT 66.1 93.4 7.9 NY 49.6 92.7 17.6
DC 45.4 91.8 2.7 NC 43.1 89.0 17.6
DE 44.4 91.0 16.5 ND 69.4 93.5 30.3
FL 28.9 88.0 26.2 OH 79.3 86.0 27.7
GA 49.1 90.9 31.3 OK 71.1 67.3 21.0
HI 22.4 95.0 23.3 OR 28.8 67.8 47.5
IA 93.2 83.2 12.1 PA 47.6 89.9 40.0
ID 41.4 76.0 40.8 TN 52.8 92.0 19.3
IL 71.0 80.1 9.7 SC 36.4 91.8 33.1
IN 72.9 83.2 15.5 SD 68.0 92.4 31.0
KS 76.2 85.7 22.4 TN 52.8 89.3 19.3
KY 50.3 91.1 14.5 TX 56.4 77.5 19.6
LA 73.1 77.2 9.6 UT 37.4 72.7 22.5
MA 60.2 91.2 12.3 VA 38.5 89.9 42.3
MD 47.7 86.1 27.8 VT 44.5 92.4 30.4
ME 40.8 93.0 48.4 WA 35.0 85.7 36.2
MI 39.9 87.2 38.6 WI 60.2 86.6 38.9
MN 65.2 92.5 n.a. WV 40.7 89.9 11.9
MO 71.9 75.7 28.8 WY 51.7 80.8 21.7
MS 52.4 88.6 14.2        

SOURCES: Population Division, U.S. Census Bureau. Annual Estimates of the Resident Population by Selected Age Groups for the United States and States: July 1, 2003. American Health Care Association: December 2003. The supply of residential care settings was calculated by NASHP using Census data and data reported by state licensing agencies. (n.a. -- not available).


While some areas of the country, particularly rural areas, have an inadequate supply of residential care facilities, in other areas, developers have over-built facilities. In over-built areas, nursing homes compete with ALFs for market share and residential care facilities compete among themselves for residents. Low occupancy rates in ALFs may lead to greater interest in serving Medicaid beneficiaries, thereby increasing the availability of this service option for low income individuals.


  1. Data provided by Brian Burwell, Steve Eiken, et. al. The MedStat Group. Memorandum, 2006.

  2. Medicaid spending for services delivered in residential care settings is not reported separately.

  3. Jones, A. “The National Nursing Home Survey: 1999.” National Center for Health Statistics. Vital Statistics 13(15) 2002.

  4. Rhoades, Jeffrey A. and Krauss, Nancy A. Nursing Home Trends, 1987-1996. Rockville, MD: Agency for Health Care Policy and Research; 1999. MEPS Chartbook No. 3. AHCPR Pub. No. 99-0032.

  5. American Health Care Association. Based on CMS-OSCAR form 671:F41-F43. 2003.

View full report

Preview
Download

"07alcom.pdf" (pdf, 375.82Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcom1.pdf" (pdf, 526.33Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcom2.pdf" (pdf, 243.49Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcom3.pdf" (pdf, 733.96Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomAK.pdf" (pdf, 204.3Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomAL.pdf" (pdf, 204.53Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomAR.pdf" (pdf, 261.84Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomAZ.pdf" (pdf, 199.28Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomCA.pdf" (pdf, 244.07Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomCO.pdf" (pdf, 251.63Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomCT.pdf" (pdf, 252.9Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomDC.pdf" (pdf, 237.02Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomDE.pdf" (pdf, 239.59Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomFL.pdf" (pdf, 266.34Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomGA.pdf" (pdf, 238.99Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomHI.pdf" (pdf, 235.68Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomIA.pdf" (pdf, 282.87Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomID.pdf" (pdf, 246.8Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomIL.pdf" (pdf, 270.45Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomIN.pdf" (pdf, 302.82Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomKS.pdf" (pdf, 266.62Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomKY.pdf" (pdf, 266.79Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomLA.pdf" (pdf, 255.35Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomMA.pdf" (pdf, 277.77Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomMD.pdf" (pdf, 266.35Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomME.pdf" (pdf, 278.78Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomMI.pdf" (pdf, 282.06Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomMN.pdf" (pdf, 277.92Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomMO.pdf" (pdf, 279.7Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomMS.pdf" (pdf, 259.42Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomMT.pdf" (pdf, 274.28Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomNC.pdf" (pdf, 280.03Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomND.pdf" (pdf, 264.76Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomNE.pdf" (pdf, 274.84Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomNH.pdf" (pdf, 276.25Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomNJ.pdf" (pdf, 270.25Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomNM.pdf" (pdf, 270.64Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomNV.pdf" (pdf, 274.34Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomNY.pdf" (pdf, 276.1Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomOH.pdf" (pdf, 278.22Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomOK.pdf" (pdf, 274.8Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomOR.pdf" (pdf, 280.67Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomPA.pdf" (pdf, 260Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomRI.pdf" (pdf, 271.06Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomSC.pdf" (pdf, 267.07Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomSD.pdf" (pdf, 268.63Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomTN.pdf" (pdf, 269.42Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomTX.pdf" (pdf, 277.27Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomUT.pdf" (pdf, 178.65Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomVA.pdf" (pdf, 187.43Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomVT.pdf" (pdf, 193.81Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomWA.pdf" (pdf, 197.21Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomWI.pdf" (pdf, 193.09Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomWV.pdf" (pdf, 176.81Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"07alcomWY.pdf" (pdf, 138.01Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®