After Anna G., a 74-year-old New Jersey woman, suffered a stroke, she needed help with bathing, dressing, food shopping, laundry, meal preparation and housekeeping. Her state Medicaid plan covered the cost of a home-health care worker to provide those services, but the local agencies were short-staffed and couldn't send helpers on the schedule Anna needed.
Anna's daughter finally insisted her mother go to a nursing home and when Anna refused, the New Jersey Department of Human Services gave her another option: a monthly stipend to hire her own helpers. Anna paid a cousin and a neighbor to take care of her and avoided checking into a nursing facility, a move medical experts say dramatically decreases the length and quality of an elder's life.
The solution to Anna's problem - a non-traditional Medicaid program called Cash and Counseling - was pioneered by New Jersey, Florida and Arkansas in the late 1990s with seed grants from the U.S. Department of Health and Human Services , the Administration on Aging and The Robert Wood Johnson Foundation . The same grants were extended to12 more states - Alabama, Illinois, Iowa, Kentucky, Michigan, Minnesota, New Mexico, Pennsylvania, Rhode Island, Vermont, Washington and West Virginia - in 2004.
Now, the Medicaid option - which allows elders to avoid tapping into the overburdened home health care industry - is spreading across the country. At least 18 more states already have plans to offer Cash and Counseling programs starting in 2008 or later, according to a new study by the Center for Health Care Strategies .
Last year, the federal government made it easier for all states to offer Cash and Counseling by eliminating the requirement to get a Medicaid waiver. In addition, the Administration on Aging gave 12 states money to offer similar programs for poor elders whose incomes are not low enough to qualify for Medicaid. These states are Arkansas, Connecticut, Georgia, Illinois, Kentucky, Maryland, Michigan, Minnesota, New Hampshire, New Jersey, West Virginia and Vermont.
For New Jersey, helping Anna remain in her home meant a big savings compared to the cost of institutional care. According to AARP , home-based long-term care costs up to half as much as comparable nursing home care and it is preferred by all but the frailest clients.
"No one wants to enter a nursing home - that's the bottom line," William Ditto, New Jersey's director of Medicaid services told Stateline.org . But as baby boomers age, experts predict the demand for home health care services will outstrip the supply of trained workers, forcing many into unnecessary and unwanted institutional care.
Cash and Counseling programs make sense, because at least 90 per cent of long-term care already is provided by unpaid family caregivers, Ditto said. "They're the backbone of the system. Without them, this country would be in a big mess."
The movement is part of an overall effort by states to give consumers more control over their health care spending as a way to stem spiraling costs. A new study by the Kaiser Commission on Medicaid and the Uninsured reports that 42 states give Medicaid recipients some flexibility in spending their entitlement.
Under Cash and Counseling programs, states give clients a monthly stipend equal to the amount that would have been spent on personal services provided by a licensed agency. With the help of state counselors, clients can decide for themselves what mix of goods and services best meet their needs.
In New Jersey, the Medicaid reimbursement rate for professional personal care services is $16.15 per hour. Under Cash and Counseling programs, elders must pay friends and family at least minimum wage, although most pay more, Ditto said. The difference in wages leaves a lot of money left over for other services, such as cleaning and meal delivery, he explained.
Elders can also use the money to make home modifications or buy appliances such as microwave ovens or washing machines that help them live independently.
While Cash and Counseling gives seniors more choices and typically gives them a lot more services for their money, it requires work and commitment.
"Not everyone wants to take on that kind of responsibility," said Donna Folkemer, long-term care expert with the National Conference of State Legislators . "I think what states are going to do is figure out where the program might work. They're not going to stop relying on agencies altogether," she said.
Ditto agrees. "There will always be a need for agencies," he said, suggesting the limited home health care workforce should focus on people who do not have family support.
While Cash and Counseling costs states no more than traditional Medicaid programs, setting up the option involves re-training social workers and getting the word out to the community. In the past, states also had to fill out voluminous paperwork to apply for a Medicaid waiver and, in most cases, enact special legislation.
Cash and Counseling national program director Kevin Mahoney predicts many more states will adopt the flexible Medicaid plans this year and next. Already this year, he said, at least nine state legislatures are considering Cash and Counseling bills.
In June, Mahoney's office plans to publish a Cash and Counseling handbook. "We're trying to make it easier for more states to get these programs up and running by giving them all the key lessons learned so far," he said.