Medicaid's 'Cash and Counseling' Allows Pay for Family Caregivers

Cash and Counseling (also referred to as consumer directed care or self-directed services) allows people who are eligible for Medicaid to manage their health care budget, decide which products and services they wish to receive, and how they receive them. This is a useful alternative to the traditional approach in which agencies manage the provision of personal assistance products and services.

Patients are generally able to hire whomever they choose to provide their care. This program benefits both Medicaid recipients who need care and family caregivers who would otherwise be providing services without pay. The patients are able to remain in their own home or community rather than transitioning to assisted living or other long-term care facilities, while a relative or friend can provide loving care and still manage to bring in some money. This is vitally important since many family caregivers find themselves cutting back on hours at work or quitting entirely in order to provide care for a loved one. These difficult choices have a serious financial impact on multiple generations within these families.

These services are part of the elder's authorized Medicaid care plan and paid for by the state. This means that relatives, adult children, in-laws, grandchildren, or a close friend could be hired and paid for the care they provide. However, spouses are excluded from this program. In other words, family members could become paid caregivers.

Funds received through cash and counseling programs can also be used to purchase items related to the patient’s activities of daily living (ADLs). This could include cleaning services, meal preparation or delivery, laundry services, and transportation for medical appointments.

Eligibility requirements for Medicaid programs vary from state to state. Therefore, each state’s qualifications for individual cash and counseling programs vary as well. Generally, in order to qualify a person must:

  • Be a legal resident in the state where they are applying for benefits;
  • Qualify for their state’s Medicaid program (this includes meeting strict financial requirements);
  • Be at least 65 years of age, blind or disabled; and
  • Require nursing facility level of care (typically, assistance with two or more activities of daily living).

After meeting the requirements for a state’s Medicaid program and its version of patient-managed care benefits, the applicant’s needs will be thoroughly evaluated.

  • An in-depth assessment of the applicant’s needs is conducted with the assistance of their caregiver and the expert authority of their physician.
  • After establishing the specific types of assistance that are medically necessary for the applicant, the physician will create a personalized care plan estimating the amount of care needed. This is usually calculate in hours per week or hours per month.
  • Using this care plan, hourly estimate and the average care costs in the state, a monthly monetary allowance is determined. This care budget can be used to purchase approved care services and products related to daily living.
  • Some states have additional requirements that selected caregivers must meet as well. For example, a family member or friend who is providing care may have to register as a licensed care provider, undergo a background check, and/or be subject to payroll taxes.

For more details on your state's Medicaid program and available consumer-directed options, contact your local Area Agency on Aging.

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