Since the mid-1970s, states have had the option to offer personal care services under the Medicaid state plan in individuals' place of residence, whether in their own home or in a residential care setting. Until 1993, the Medicaid personal care option had a medical orientation: services had to be prescribed by a physician, supervised by a nurse, and delivered in accordance with a care plan. In 1993, Congress amended Medicaid law to allow states to use means other than physician prescription to authorize personal care services and other than nurse supervision to oversee the provision of care. States may impose reasonable medical necessity criteria for receiving personal care services, but may not restrict it to persons who require a nursing home level of care.
Because personal care is an optional Medicaid service, states have considerable discretion in its provision. While optional services must be offered statewide, states can set additional eligibility criteria for the receipt of services. For example, Florida restricts eligibility for personal care services to residents of group living arrangements, and, prior to 1995, North Carolina restricted eligibility to people in their own homes.
An advantage of using the personal care option to cover services in residential care settings is that the state can provide services to a less severely impaired population than those eligible for nursing home care. From the perspective of individuals who need personal care, a disadvantage of the personal care option is that it lacks the higher income eligibility standard that states may use for waiver programs. From the state's perspective, however, this limitation may be seen as an advantage because it enables the state to limit costs by restricting the benefit to those who meet the lower income eligibility standard.
As of 2003, 36 states have the personal care option in their state Medicaid plan, but only 13 use the option to cover services in residential care settings.10
10, Mollica, 2002. Op. cit.