Long-Term Medicaid Financing in California and Alabama

California State

Different agencies administer long-term care services for the elderly in the State of California. For instance, the Department of Health Services (DHS) administers nursing home care, while the Department of Aging (DOA) is made responsible for administering the home care and the Department of Social Services (DSS) looks after personal care services. As the result, different eligibility criteria are fixed by these agencies for claiming long-term care. This has resulted in the fragmentation of long-term care services in the state. Long-term care in California comprises a large volume of residential care beds and a smaller number of nursing home beds. This makes California the only state, which focuses more on residential care beds than nursing facility beds. The state tries to reduce its state expenditure on long-term care by encouraging higher private contributions, and the ‘Partnership for Long-term Program’ evidences this effort of the state. California is one among four states to receive Robert Wood Johnson Foundation to implement partnership programs in the long-term Medicaid financing. Consumers who were covered with qualified insurance policies can continue to get the benefits for long-term care even after their private insurance expired, without spending all of their assets. However, it is the complaint of many people that qualified insurance products are too expensive and complicated. In addition to maximizing the private contributions, the state also made efforts to increase the contributions from the Federal government. The state has also initiated several community-based cares to provide a large volume of long-term care. There are certain waiver programs for the elderly catering to only a few individuals because of the largeness of the state (Wiener & Stevenson, 1998).

Alabama State

In contrast to California, the long-term Medicaid programs for the elderly in the State of Alabama are concentrated on providing institutional services. The state has also not taken any major initiatives in securing more private or federal financing. Similarly, there were no efforts in integrating acute and long-term care services. Despite the interest of the state policymakers in expanding long-term home care, the state has no adequate funds to implement any programs. On the contrary, the state had employed traditional cost-cutting methods like a moratorium on new nursing home construction. The state has only a small proportion of people having long-term care insurance, despite the tax incentives initiated by the state to stimulate the purchase of such insurance. There is no comprehensive Medicare maximization program initiated by the state, except that the state has required the nursing homes and home health agencies to file Medicare before they claim Medicaid reimbursements. Since the Medicaid reimbursement rates are low, the agencies consider the economic benefits of seeking reimbursement rather than based on the policies of the state. The state has not focused on undertaking overall reform of the long-term care delivery system or financing of the programs. There are not enough managed care organizations, which limit the possible interest in integrating acute and long-term care services. As compared to the State of California, Alabama has instituted only fewer home and community-based services. The waiver processes of Alabama State are time-consuming. Medicaid nursing home reimbursement rates were made generous later. However, the nursing home industry considered the increase as compensation for the lower payments in the past. The lower-income level and the rural character of most parts of the state also pose special challenges to the provision of long-term Medicaid benefits. The provision of home care to the people who dwell in the rural areas, and to travel long distances and working in difficult conditions is often found difficult and expensive. This reduces the initiative of the state in the provision of long-term Medicaid significantly (Wiener & Stevenson, 1998).


Wiener, J. M., & Stevenson, D. G. (1998). Long-term Care for the Elderly: Profiles of Thirteen States.

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