60 Pages

State Discretion and Medicaid Program Variation in Long-Term Care: When Is Enough, Enough?

Federal statutes and regulations establish the broad parameters within which state Medicaid programs operate, while federal administrative review and the courts ultimately determine whether or not particular state actions fall within the purview of federal guidelines. That the federal government might want to exercise vigilance in its oversight of the Medicaid program should come as no surprise, given its substantial role in financing the program. In 2000, for example, the federal government paid for 56.7% of total program expenditures of $194.7 billion, including $38.0 billion for long-term care services (CMS, 2002a). As a grant-in-aid, moreover, Medicaid has grown exponentially over the years. From just 14% of federal grant-in-aid monies in 1975, it has become the largest program, accounting for nearly 40% of the $271.3 billion in federal grant-in-aid monies flowing to the states in 1999. Neither transportation (10%), education (4%), Temporary Assistance for Needy Families (6%), nor food stamp/child nutrition programs (5%) represent a larger share (Kaiser Commission, 1999).