Cash and Counseling: Improving the Lives of Medicaid Beneficiaries Who Need Personal Care or Home- and Community-Based Services

To address the needs of Medicaid beneficiaries who are elderly or disabled and desire greater control over their personal care, the federal government has encouraged states to offer consumer-directed options. One of the most innovative and flexible consumer-directed-care models is Cash and Counseling, recently tested in a demonstration program in Arkansas, Florida, and New Jersey. The program gives consumers a monthly allowance that they may use to hire workers and to purchase care-related services and goods. This report summarizes findings from five years of research on how each of the three demonstration states implemented its program, and on how the programs have affected consumers who participated, consumers’ paid and unpaid caregivers, and costs to Medicaid. The findings from the randomized trial study design show that the program had overwhelmingly positive effects on consumers of all ages and their caregivers. However, in each state, total Medicaid expenditures were higher under the program than what they would have been in its absence, for different reasons. States interested in offering a Cash and Counseling program or similar consumer-directed options may benefit from the report’s discussion of lessons learned about how to control costs.