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

Recent research suggests that Florida's Cash and Counseling model-Consumer Directed Care (CDC)-increased the well-being of children with disabilities and their parents in Florida and that the Cash and Counseling programs in Arkansas, Florida, and New Jersey similarly increased the well-being of adults. The program also increased the likelihood that consumers in all three states would receive paid personal care services. However, the results to date on costs are less clear-cut. Arkansas's Cash and Counseling program increased personal care costs for adults, but, because of savings on other Medicaid services, the higher costs were partially offset during the first postenrollment year and almost fully offset during the second. Florida's program for children increased Section 1915(c) waiver costs, although savings on home health services partly offset the higher costs. This report compares results from all three demonstration programs to examine how consumer direction for adults affects Medicaid and Medicare service use and costs. [96 PDF pages]