How Much Could Financing Reforms for Long-Term Services and Supports Reduce Medicaid Costs?

Medicaid pays for much of the care received at home and in nursing homes by older adults with health problems who need long-term services and supports (LTSS). New LTSS insurance programs with dedicated premiums or taxes would prefund at least some LTSS expenditures and reduce spending by Medicaid, which is financed through general tax revenues and strains government budgets. New insurance programs could also provide older adults with more flexibility in how they receive LTSS and enable more people to receive services at home rather than in nursing facilities. Impacts would depend, however, on how the new programs are structured.

Urban Institute