Kansas Medicaid offers home and community-based services through the Frail and Elderly (FE) program as an alternative for older adults who are eligible for nursing home (NH) care but wish to stay in the community. We determined demographic and clinical characteristics of enrollees receiving FE or NH services, examined their relative health care utilization patterns, and estimated the difference in Medicaid's expenditures for FE versus NH care. After adjusting for key demographic and clinical variables, mean monthly expenditures were $1,281 lower for the FE cohort. Since NH and FE populations are dissimilar, these care options may not be easily interchangeable at the individual level.