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Using a quasi-experimental design, this study assessed the effects of waiting periods on the costs of Medicaid long-term care and the risk of long-term nursing home stays and hospitalizations. The study found that consumers who applied when wait times were shorter than six months were 25 percent less likely to have ever had a long-term nursing home stay within three years after application than those who applied when wait times were longer. The study suggests the value, to both consumers and Iowa Medicaid, of prioritizing waiting lists based on a patient's risk of institutionalization at the time of application, rather than solely on a first-come, first-served basis as is currently done in Iowa and many other states.