Consumer-Directed Medicaid Home Care Shows Promise

Disabled Medicaid recipients living at home who are allowed to direct their own care are more satisfied with their care and spend less money on nursing homes than those using Medicaid's traditional agency-provided services, according to a new study reported in The Wall Street Journal and Health Affairs.

Medicaid can assist beneficiaries living at home who need help with routine activities, such as bathing, preparing meals and shopping for food. The services are intended to improve beneficiaries' quality of life and allow them to live in their homes, rather than in nursing facilities. Normally, these services are provided by employees of home-care agencies. But beneficiaries' choices, Health Affairs notes, are sometimes limited about how and when their care is provided, especially since agencies generally do not provide care on weekends or outside normal business hours. In addition, the benefit does not cover assistive technologies or home modifications that could reduce dependency on human assistance.

A new program, called Cash and Counseling, is being field tested in three states '“ Arkansas, Florida and New Jersey. Under this program, beneficiaries are given a lump sum to spend on their own care as they see fit. If they like, they can hire friends or family members to provide care, a provision that is attractive to people who already spend a great deal of time caring for a disabled individual without any financial assistance in return. Extra funds can be spent on equipment to help beneficiaries remain at home instead of moving to nursing homes.

In a study reported in the journal Health Affairs, researchers found that those who directed their own care were more satisfied. Although they spent somewhat more on care than a control group, much of the difference was made up for by lower spending on long-term care and other services.

"Often people come up with clever ideas like this one, and they rarely work out as hoped," says Randall Brown, a senior research fellow at Mathematica Policy Research Inc., which conducted the study. "But in this case, results are turning out better than anyone could have predicted. We are all very surprised."

For the article on the study in Health Affairs, go to:

For The Wall Street Journal article, go to:,,waldholz_on_health,00.html (An online subscription is required.)