OBJECTIVES: 1) To provide an inventory of current state policies affecting long term care services for the aged in six major program areas (Medicare and Medicaid, Older Americans Act, Title XX of the Social Security Act, Supplemental Security Income, Certificate of Need regulation, and utilization review); 2) to assess the relation of a series of preconditioning and contextual factors to state discretionary policies and outcomes; 3) to determine the effect of state policy discretion on the availability, utilization, and public cost of long term care services for the aged; 4) to assess how state discretionary policy choices affect the distribution of federal, state, and local expenditures for long term care services for the aged; and 5) to assess the implications of the research for federal state, and local policy choices concerning long term care services for the aged. METHOD: The study will combine case study techniques in ten states with regression and other statistical techniques for all fifty states, using the state as the primary unit of analysis. The ten state sample represents 40% of the nation's elderly and its long term care facilities, and has significant variation on major dimensions relevant to the study. Data will be drawn from a wide variety of secondary sources, from analysis of state program documents, and from site visits with 300 agencies and telephone interviews with 1000 respondents in ten states.