The benefits of expanding funding for Medicaid long-term care home and community-based services (HCBS) relative to institutional care are often taken as self-evident. However, little is known about the outcomes of these services, especially for racial and ethnic minority groups, whose members tend to use the services more than whites do, and for people with dementia who may need high-intensity care. Using national Medicaid claims data on older adults enrolled in both Medicare and Medicaid, we found that overall hospitalization rates were similar for HCBS and nursing facility users, although nursing facility users were generally sicker as reflected in their claims history. Among HCBS users, blacks were more likely to be hospitalized than non-Hispanic whites were, and the gap widened among blacks and whites with dementia. Also, conditional on receiving HCBS, Medicaid HCBS spending was higher for whites than for nonwhites, and higher Medicare and Medicaid hospital spending for blacks and Hispanics did not offset this difference. Our findings suggest that home and community-based services need to be carefully targeted to avoid adverse outcomes and that the racial/ethnic disparities in access to high-quality institutional long-term care are also present in HCBS. Policy makers should consider the full costs and benefits of shifting care from nursing facilities to home and community settings and the potential implications for equity.
Keywords: Disparities; Long-term Services and Supports; Medicaid; dementia; home- and community-based services; long-term care; nursing homes.