Use of Medicaid 1915(c) Home- and Community-Based Care Waivers to Reconfigure State Long-Term Care Systems

Abstract

Since Congressional authorization in 1981, Medicaid 1915(c) home- and community-based care waivers have influenced states’ efforts to transform their long-term care systems. In 1997, every state participated in the 1915(c) waiver program, while waiver expenditures, at $8.1 billion, represented 59.6 percent of all Medicaid community-based care expenditures. To explore state-level factors that appear related to these expenditures, the authors turn to a body of work on Medicaid resource allocation. They compare the influence of five factors—sociodemographic, supply, economic, programmatic, and political environment—on states’ allocations to long-term care expenditures and 1915(c) waiver expenditures. The state economic environment was an important influence on total, as well as waiver expenditures. State regulation of long-term care supply demonstrated the most substantive relationship, increasing the share of dollars supporting 1915(c) waivers from 11.6 to 20.0 over the study period, all else equal.