Medicaid and Long-Term Services and Supports
 Updated January 2013
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Long-term services and supports (LTSS) are designed to meet the personal and health needs of individuals living with disabilities, chronic diseases, complex medical needs, impaired mobility or impaired cognitive function. These services range from home health and personal care services (such as bathing and dressing) designed to help people live successfully and independently at home to services provided in institutional settings, such as nursing homes. About one-half of people who require LTSS are older than age 65 and one-half are people with disabilities under age 65. As our population ages, the number of individuals who need these types of services will grow.
Medicaid is now the largest payer of Long-Term Services and Supports (LTSS), accounting for 41 percent of all LTSS spending in the United States. As a comparison, Medicare accounts for 20 percent, direct out-of-pocket care spending accounts for 15 percent and private financing options such as long-term care insurance, reverse mortgages, annuities and trusts make up the remaining 24 percent . Providing high quality, appropriate LTSS is expensive. The average annual spending per Medicaid beneficiary using LTSS was $43,296 in 2007, compared to an average of $3,694 for all other Medicaid beneficiaries who did not use long-term care services.
State Medicaid programs are increasingly experimenting with ways to improve the quality and the efficiency of LTSS. As states seek to enable more people with disabilities and the elderly to remain in their homes, the proportion of Medicaid dollars spent on community-based long-term care is gradually increasing. In 2010, 45 percent of Medicaid LTSS spending was for home and community-based services, up from 13 percent in 1995, according to the Kaiser Family Foundation.
More states are also adopting managed care services delivery models for LTSS, rather than the traditional fee-for-service model, in an effort to improve care coordination, chronic disease management and manage costs.
The Patient Protection and Affordable Care Act includes several opportunities for state Medicaid programs to expand home and community-based services programs and to improve the care and streamline services for people eligible for both Medicaid and Medicare, also known as “dual eligibles.”
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