The Effect of Cash and Counseling on Medicaid and Medicare Costs: Findings for Adults in Three States

This report examines how Cash and Counseling affected Medicaid and Medicare service use and cost. In all three states, costs incurred by the treatment group were higher than those incurred by the control group. However, the reasons were different across states, and the patterns differed over time. In two of the states, costs for the treatment group did not exceed the costs the state would have incurred for delivering the approved baseline care plan service, but the control group received less than they were approved for. Furthermore, in one state, the participants' nursing home and other long-term care costs fell enough to nearly offset the higher personal care costs. In the third state, consumers received allowances well beyond the initially approved amount. The report suggests that states may want to adopt the program for its large, overwhelmingly positive effects on the well-being of consumers and caregivers, and take advantage of the lessons states have learned to keep costs within expected ranges.