Kentucky, a fairly small Southern state with about 4 million people in 1999, provides home and community services to a substantial number of aged and physically disabled adult beneficiaries through its Medicaid home health benefit and the Home and Community-Based Services (HCBS) waiver. In 2000, the state expects to serve over 18,000 beneficiaries through the home health benefit and over 15,000 beneficiaries through HCBS waiver. These two programs can be characterized as traditional in that they rely largely on an agency-based model for provision of services. The state also has a large, agency-based, state-funded Home Care program, along with several other smaller state-funded programs. Despite the size of Kentuckys home and community services programs, nursing home care dominates the states long-term care system.