To determine whether Medicaid home care spending reduces the proportion of the disabled elderly population who do not get help with personal care.
Data on Medicaid home care spending per poor elderly person in each state is merged with data from the Medicare Current Beneficiary Survey for 1992, 1996, and 2000. The sample (=6,067) includes elderly persons living in the community who have at least one limitation in activities of daily living (ADLs).
Using a repeated cross‐section analysis, the probability of not getting help with an ADL is estimated as a function of Medicaid home care spending, individual income, interactions between income and spending, and a set of individual characteristics. Because Medicaid home care spending is targeted at the low‐income population, it is not expected to affect the population with higher incomes. We exploit this difference by using higher‐income groups as comparison groups to assess whether unobserved state characteristics bias the estimates.
Among the low‐income disabled elderly, the probability of not receiving help with an ADL limitation is about 10 percentage points lower in states in the top quartile of per capita Medicaid home care spending than in other states. No such association is observed in higher‐income groups. These results are robust to a set of sensitivity analyses of the methods.
These findings should reassure state and federal policymakers considering expanding Medicaid home care programs that they do deliver services to low‐income people with long‐term care needs and reduce the percent of those who are not getting help.
