This Congressional Research Service report analyzes state strategies for containing long-term care costs for older people. To improve finance and delivery systems, states are expanding home and community-based services and are integrating acute and long-term care services through the use of managed care. Secondly, states are seeking to substitute private, Medicaid, and Medicare financing for state funding through tax incentives, private long-term care insurance, and establishing public/private partnership. None of these strategies has contributed much to containing long-term care costs. If faced with an economic downturn, count on states to rely on traditional strategies--such as cutting reimbursement rates and controlling nursing home supply--which run counter to the demographic imperative of the aging baby boom generation.