Institutional bias and medicaid use in nursing homes

When analyzing long term care, researchers and policy-makers alike tend to focus on the process of spenddown, overlooking the more sizable portion of nursing home residents who are already receiving Medicaid upon admission to nursing homes. In this article I use National Nursing Home Survey (1985) data to examine the 36 percent of nursing home residents who are already receiving Medicaid upon admission. I find that whites, men, and married persons are significantly less likely to receive Medicaid than their counterparts. Explanations for the high rate of Medicaid use upon admission include advancing old age, spenddown during previous nursing home stays, spenddown in the community and income differences in the propensity to use nursing homes. Dissatisfied with these hypotheses, I posit an alternative: ultimately, Medicaid's institutional bias provides the soundest explanation. Federal regulations permit states to set Medicaid income tests as low as 75% of the federal poverty line in the community and as high as 225% for nursing home applicants. Thirty states have no income limit whatsoever for nursing home residents.