Medicaid and long-term care for the elderly: implications of restructuring

Abstract

Because it absorbs about a third of Medicaid spending, long-term care would be affected by any major changes in the financing or structure of this federal–state program. Analysis of the implications for long-term care of the Medicaid restructuring proposals that Congress considered in the 1995–96 federal budget debate leads to this conclusion: the fiscal pressure and incentives that would be created by fixed dollar or block grants, or by limits on federal spending per beneficiary (per capita caps), when combined with enhanced state flexibility in program design, could significantly hinder service choice and quality, reduce access to care, and increase out-of-pocket payments by Medicaid beneficiaries or their families.