Health Care Financing Administration

Objective: The authors explore state variation in expenditures for Medicaid community-based care services for the period 1990 to 1997. Method: A random effects panel model is used to explore the relationship between state demographic, supply, eco-nomic, programmatic, and political factors and states ’ Medicaid community-based care expenditures. Results: Although states increased provision of services over the study period, significant state-level variation was evident. Expenditures were posi-tively associated with state per capita income, regulation of nursing home bed supply, and the number of Medicare home health users but were negatively related to nursing home bed supply. Conclusions: Recent legal rulings, combined with the demon-strated preferences of most individuals to receive care in the community, require poli-cies to foster the expansion of Medicaid community-based care. The most consistent relationships that are amenable to policy intervention relate to state fiscal resources and long-term care supply regulation. The Medicaid program is the most significant public source of fund-ing long-term care for people with disabilities. It is in a key position t