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Medicaid Managed Long-Term Care

Medicaid managed long-term care is a contractual agreement between a Medicaid agency and a contractor (health maintenance organization, community services agency, provider organization or other entity) under the terms of which the contractor accepts financial risk through a capitated payment for providing long-term care (LTC) benefits to Medicaid beneficiaries.

Amid federal and state budget pressures, policymakers in many states are either planning to start new managed care programs for Medicaid beneficiaries with LTC needs or are expanding existing programs. This AARP Public Policy Institute Issue Brief reviews the limited but important experience of states that have implemented such programs to date, identifies key policy issues going forward, and assesses the likelihood of future growth in these programs. The authors find that:

  • Enrollment in Medicaid managed LTC programs is small but likely to grow in the near future.
  • Medicaid managed LTC reduces the use of high cost services (including emergency rooms, hospitals, and nursing homes) and promotes greater access to home and community-based services.
  • Although policymakers are drawn to the potential cost savings, cost studies to date are inconclusive.
  • Medicaid managed LTC programs appear to increase or maintain quality.
  • Medicaid managed LTC has been slow to develop, in part because it involves complex policy choices and intense stakeholder engagement

Despite inconclusive evidence of cost savings, these factors may result in a new wave of Medicaid managed long-term care planning and implementation in states. (16 pages)