Medicaid long-term care is rapidly changing, and some of those trends may eventually remake the way all of us receive personal assistance as we age or become disabled.

Nearly half of all states are now providing Medicaid long-term care benefits through managed care, and 13 states are requiring older adults to receive care that way. At the same time, four out of five states are expanding home care benefits through Medicaid and 16 are even beginning to provide housing services with their Medicaid dollars. These are just a few of the key findings in the Kaiser Family Foundation’s latest annual survey of state Medicaid programs.

Those two trends—managed care and the accelerating move towards home-based care—are redefining long-term supports and services, at least under the Medicaid program. Let’s take a closer look at each trend and what it might mean for all seniors and people with disabilities in coming years.

Home and Community Care: From its inception in 1965, Medicaid considered nursing homes as the place where it delivered long-term care benefits. But for the past decade, that venue has gradually but inexorably shifted to home and community assistance. Consumers demanded it, a Supreme Court decision required it (though for years that obligation was largely ignored), and a series of federal waiver programs gave the states the flexibility they needed to make it happen. More recently, the feds allowed states to provide that care in some assisted living facilities.

The Kaiser study shows the impact of those changes on state Medicaid programs. In 2013, for the first time, Medicaid’s long-term supports and services (LTSS) programs spent more on home and community based services than on nursing home care. In each of the past two years, four out of five states expanded, or said they planned to expand, their home and community-based care programs, shifting increasing numbers of older adults and younger people with disabilities from nursing facilities to home care.

This trend is being driven by supply and demand. By holding down their Medicaid payments to nursing homes for long-stay residents, states are encouraging operators to scale back long-term care. In many cases, facilities are converting beds from long-term care, where Medicaid pays an average of about $140-a-day, to post-acute services, where Medicare pays $500-a-day or more.

Managed Care. While the trend to home-based care affects mostly poor Medicaid beneficiaries, the accelerating shift to managed care may have much broader consequences for all older adults.

In provisions that got little attention, the 2010 Affordable Care Act opened the door to a wide range of state experiments in Medicaid managed care for those receiving long-term supports and services, including older adults and younger people with disabilities.

And states are taking advantage. Last year, 42 states told Kaiser that they increased or planned to increase the number of participants in managed care. This year, 41 say they will do so. Many are expanding their Program of All-Inclusive Care for the Elderly (PACE) programs, a long-standing fully managed medical and long-term care program. Interesting the move to managed care is happening in deep red state like Kansas and in deep blue ones like New York.

Medicaid managed long-term care works like this: States contract with insurance companies and other managed care organizations (MCOs) to provide services to people who need long-term care. The states pay the MCOs a fixed monthly fee for each participant. The MCOs, in turn, provide a package of services for each member. Sometimes, they include the full suite of medical care and long-term care; sometimes long-term care only; and sometimes medical care and care management, but not actual long-term care services such as home health aides or transportation.

The states love the programs because they provide a predictable fixed cost for an expensive set of services. If the payment rates are generous enough, MCOs like the arrangement because fully integrating medical care and long-term care has the potential to reduce their medical costs. And the concept has the potential to keep consumers healthier and improve their quality of life by avoiding hospitalizations.

The program has been controversial in some states, notably California, and the MCOs are still learning how, and whether, this integrated care arrangement actually can reduce health care costs.  Yet, as the Kaiser study shows, states and MCOs are increasingly embracing this model in its many forms.

If the added cost of providing long-term supports and services really does offset a significant amount of medical costs, look for managed care organizations to begin offering such plans as part of Medicare Advantage. That’s down the road, but it is getting a close look inside the MCOs.