Racial and Ethnic Inequities in the Relationship Between State Home and Community-Based Services Expenditures and Long-Term Care Utilization in the United States: A Fixed-Effects Analysis

Despite decades of increased spending on home and community-based services (HCBS) under Medicaid, the impact of these expenditures on long-term services and supports (LTSS) utilization across racial and ethnic groups remains unclear. This study analyzes state-level HCBS expenditures from 1996 to 2016, linked to individual-level data from the Health and Retirement Study (HRS; 1998–2018). The sample includes 3,097 Medicaid beneficiaries aged 65 and older with difficulties in daily living (6,750 person-wave observations). Multivariate logit models were employed, controlling for individual socio-demographic factors, state and time fixed effects, and time-varying state-level characteristics. Among non-Hispanic White older adults, higher state-level HCBS spending was associated with a greater use of home health care services (β: 0.13, 95% CI: 0.02, 0.25) and specialized health facilities (β: 0.24, 95% CI: 0.14, 0.34). These protective effects were less evident for Black and Hispanic older adults, though limited statistical power may have prevented detecting significant effects in these subgroups. The findings suggest inequities in the benefits of increased HCBS funding, with the benefits primarily concentrated among White older adults. Further research is needed to explore mechanisms behind these patterns, including structural barriers to LTSS access.