Has Increased Medicaid Spending on Home- and Community-Based Services Reduced Unmet Needs in Activities of Daily Living Care among Community-Dwelling Older Adults with Dementia? Evidence from 2008 to 2020.

OBJECTIVES

This study aimed to examine the potential impact of Medicaid total long-term services and supports (LTSS) expenditures and the proportion allocated to home- and community-based services (HCBS) on unmet needs among community-dwelling older adults with dementia.

DESIGN

This is a retrospective study using nationally representative, longitudinal data and quasi-experimental approach.

SETTING AND PARTICIPANTS

A total of 2722 respondent-waves of community-dwelling older adults who participated in at least 1 of the 7 waves of Health and Retirement Study interviews between 2008 and 2020 and were identified as having dementia.

METHODS

Unmet needs were assessed using a binary variable indicating whether respondents who reported difficulties with activities of daily living (ADL) did not receive the necessary assistance. Generalized linear models (GLMs) with a logit link function and binomial distribution, clustered at the individual level, were used for both bivariate and multivariable analyses. To address potential endogeneity, a 2-stage residual inclusion (2SRI) analysis was conducted using state education expenditures per pupil as an instrumental variable (IV). Additionally, the Durbin-Wu-Hausman (DWH) test was performed to assess endogeneity.

RESULTS

Both GLM and IV regressions indicated that an increase in the share of HCBS relative to total Medicaid LTSS expenditures was associated with a significant reduction in unmet ADL needs among dementia individuals (OR 0.77, 95% CI 0.59-0.98, P = 0.03; OR 0.76, 95% CI 0.58-1.00, P = 0.05). However, total Medicaid LTSS expenditures showed no significant association with patient unmet needs in either model. The DWH test for endogeneity supported the GLM estimates, confirming that total Medicaid LTSS expenditure was exogenous (P = .64). Sensitivity analyses excluding the total Medicaid LTSS expenditures yielded consistent estimates and suggested no collinearity between the independent variables.

CONCLUSIONS AND IMPLICATIONS

A higher proportion of Medicaid LTSS expenditures allocated to HCBS can potentially reduce unmet needs for ADL among community-dwelling older adults with dementia, supporting efforts to shift long-term care from institutional to home- and community-based settings.