Do Non-institutional Long-Term Care Services Reduce Medicaid Spending?

Spending on HCBS has grown in recent years, but little is known about what effect alternatives have on overall costs. An analysis of state data from 1995-2005 shows that for two population groups, spending growth was greater for states offering limited noninstitutional services than for states with large, well-established noninstitutional programs. Expansion of HCBS appears to entail a short-term increase in spending, followed by a reduction in institutional spending and long-term cost savings.