Racial and ethnic health inequities are driven by multiple social and political factors. Race-neutral policies that overlook the role of racism in policy and in disparities may also contribute to inequities. In response, one broad policy-making approach has been to craft race-based policies that attempt to improve outcomes explicitly for specific racial groups. However, race-based policies can be politically infeasible. We propose a racism-conscious approach to policy making and health care practices that addresses racism and advances health equity. Using postacute and long-term care policies as a backdrop, we identify five key steps to creating racism-conscious policies that rest on continuous community engagement and policy evaluation. The proposed racism-conscious framework can be used to develop a new health policy or to redesign an existing policy, and it can work for federal, state, local, and organizational policies, practices, or both.