The effects of chronic illness on costs of care for older persons receiving long-term care

Abstract

BACKGROUND: Using Medicaid and Medicaid claims data in 2005, we examined the effects of chronic diseases on the Medicaid and Medicare expenditures associated with persons receiving long-term care (LTC) in seven states. METHODS: Participants were elderly beneficiaries in seven states receiving Medicaid paid long term care services. We created our chronic disease variables from the ICD9 codes in the Medicare and Medicaid claims data using on algorithms similar to the CMS Chronic Condition Data Warehouse - Chronic Condition Categories. We classified beneficiaries into community or institution group using state provided enrollment data. We calculated per-person month health care expenditures based on actual Medicare and Medicaid claims for 2005. RESULTS: Medicaid medical care expenditures were low across all chronic illnesses in both community and institution groups and were higher for the community group. The Medicare medical care expenditures were also higher for community care recipients, but were substantial for both groups. Prescription drug expenditures were higher for beneficiaries in institutions. The Medicare medical care, Medicare LTC, and Medicaid medical care and prescription drug expenditures increased substantially as the number of chronic illnesses increased, while there was a very small increase in Medicaid LTC expenditures. CONCLUSION: Medicare expenditures for both medical care, LTC, and prescription drug were more sensitive to chronic disease than were Medicaid expenditures. The level and extent of Medicaid paid LTC services were more sensitive to functional needs than to medical ones. Once chronic disease was controlled for, older age and being White were associated with lower expenditures.