Demographic challenges posed by the growing elderly population and demands for greater public commitment to home and community-based care for persons with disabilities have drawn the attention of federal and state policymakers. Spending on long-term care by both the public and private sectors is significant. In 2001, spending for long-term care services for persons of all ages represented 12.2% of all personal health care spending (almost $152 billion of $1.24 trillion). Federal and state governments accounted for almost two-thirds of all spending. By far, the primary payer for long-term care is the federal-state Medicaid program, which paid for almost half of all long-term care spending in 2001. Maine is one of the smallest states in the country with 13 million people in 2000; it is also one of the oldest states, with 14.4% of its population aged 65 and older. By 2025, over one-fifth of its population will be 65 and older. Medicaid spending for long-term care in Maine in FY2001 was $411 million -- almost one-third of all Medicaid spending. In part due to the aging population and because of a 1993 budgetary crisis involving rapidly escalating Medicaid nursing home costs, Maine has pursued an aggressive policy to decrease dependence on nursing homes. Between 1995 and 2001, the percentage of public long-term care funding devoted to these facilities decreased from 84% to 61%. Moreover, the state has decreased reliance on large state-operated residential facilities for persons with mental retardation in favor of smaller community-based facilities. Maine's efforts to reduce reliance on institutional care has been in part due to expanded use of Medicaid's home and community-based waiver program as well as multiple state-funded programs. PARTIAL