RTI International: Medicaid Spend Down: New Estimates and Implications for Long-Term Services and Supports Financing Reform

Medicaid provides an important safety net for people who are poor or become poor, either because of the high costs of health and long-term services and supports, or for other reasons.  The transition from non-Medicaid to Medicaid status can be difficult, especially since it is often associated with illness, disability, and declining income and assets.

Long-Term Care Financing

The high cost of long-term services and supports results in catastrophic out-of-pocket costs for many people needing services, some of whom spend down to Medicaid. For people who have been independent all of their lives, transitioning to Medicaid means depending on a means-tested welfare program for their health and long-term services and supports. Moreover, spending for people transitioning to Medicaid is a substantial portion of state Medicaid expenditures.