Medicaid enrollees who used long-term services and supports had “disproportionately high” spending in 2020, but just 24% who utilized the benefit did so in an institutionalized setting, according to a new analysis. 

States have increased payment rates for LTSS, but KFF said in a report Monday that it is “unclear where additional funding would come from to further increase payment rates and engage additional staff” to meet coming demands. 

The authors acknowledged current worker shortages in the long-term care sector but also hints at conditions that could be worsened by a federal minimum staffing mandate.

“As the population continues to age, it is likely that more people will need Medicaid LTSS and that workforce challenges will persist,” KFF wrote.

KFF found that 5.6 million people in total used Medicaid LTSS in 2020, but just 1.4 million utilized institutional care. The rest participated in home- and community-based services. Medicaid spending was nearly nine times higher for LTSS beneficiaries ($38,769) compared to regular Medicaid patients ($4,480). Spending was “particularly high” for those seeking care in facilities, the analysis noted. What’s more, those using LTSS comprised 6% of overall Medicaid enrollment but 37% of federal and state spending, which KFF said reflects the “generally high cost” of these services. 

The analysis noted that the program’s usage “did not change notably” between 2018 and 2020.

“In 2020, Medicaid was the primary payer for LTSS, covering over half of all LTSS spending in the US,” KFF said, adding that total spending for the 5.6 million people who used LTSS was nearly $217 billion. 

The $11,000 Medicaid difference

The average Medicaid spend per-person for using LTSS in a facility was $47,279 compared to $36,275 for those in home and community settings. 

The staffing shortages and high turnover among LTSS workers mirrors the broader problems throughout the long-term care sector. The KFF Health System Tracker found that the number of employees in LTSS settings was “measurably lower” in June 2023 compared to early 2020. 

“Shortages and high turnover among LTSS workers reflect demanding working conditions and relatively low wages,” the KFF analysis said. “Workforce shortages have negative effects on the quality of care provided in institutional LTSS settings.”

The federal staffing mandate hanging over the sector — with proposed language currently with the Office of Management and Budget — is also likely to impact LTSS workers. The federal government can require an increase in staffing, but it remains unclear how such a move would be implemented.