Medicaid funds direct care for one in four dual-eligible older adults nationally, but state variation is 4-fold.

Introduction: Medicaid spent over 129 billion dollars on home- and community-based services (HCBS) in 2022. However, complex financing structures obscure which services are used, who uses them, and how use varies across states. Methods: Using 100% of national Medicaid claims data from 2021, we characterize HCBS use among dual-eligible adults aged 65 and older, distinguishing between direct care services (services that provide hands-on assistance with functional needs) and non-direct care services (eg, transportation and case management), which are often grouped together in the literature. Results: We find that 38% of older duals used any Medicaid-funded HCBS in 2021, and 26% used direct care, with direct care users being older, sicker, and more likely to have dementia than non-users. We also find that the share of older duals using direct care varies more than 4-fold between the lowest and highest utilization states, with states that finance personal care as a State Plan benefit, rather than exclusively through waiver programs, generally having greater utilization. Conclusion: In light of potential funding cuts, our findings highlight the large but uneven role that Medicaid plays in financing direct care for a vulnerable population of older adults, which can be critical for them to remain in their homes and communities.