Your browser doesn't support JavaScript. Please upgrade to a modern browser or enable JavaScript in your existing browser.
Skip Navigation U.S. Department of Health and Human Services
Agency for Healthcare Research Quality
Archive print banner

This information is for reference purposes only. It was current when produced and may now be outdated. Archive material is no longer maintained, and some links may not work. Persons with disabilities having difficulty accessing this information should contact us at: Let us know the nature of the problem, the Web address of what you want, and your contact information.

Please go to for current information.

Beyond Olmstead: Community-Based Services for All People with Disabilities

Access & Quality


William A.B. Ditto, M.S.W., L.S.W., Executive Director, Division of Disability Services, New Jersey Department of Human Services, Trenton, NJ.

Randall Brown, Ph.D., Senior Fellow, Mathematica Policy Research, Inc., Princeton, NJ.

The Cash and Counseling program is a demonstration program that was approved by the Centers for Medicare & Medicaid Services for Arkansas, Florida, and New Jersey. It allows Medicaid beneficiaries eligible for personal assistance services to receive cash allowances or grants to purchase and manage supportive services, rather than receiving services through a home care agency. Participants receive counseling to help plan the use of the funds given to them.

The primary goals of the program are to:

  • Improve the consumers' control over their personal care and assistance.
  • Increase satisfaction.
  • Meet consumers' needs more fully without increasing costs.

Consumers can use their cash allowance to hire family members, friends, or others to provide care, or to purchase equipment that increases the consumers' independence. This empowerment over the choice of providers, services, and equipment can aid in improving consumers' overall quality of life.

The research goals of the study were to assess for each State:

  • Whether these goals were met.
  • Whether the program worked better for some types of consumers than others.
  • How paid and unpaid workers were affected.
  • How the program was implemented and what operational problems it confronted.

The initial findings for Arkansas and New Jersey, based on roughly the first 200 enrollees, described:

  • The participants.
  • How the benefits were used.
  • The types and amounts of help hired.
  • Satisfaction with the overall program.

Some findings about the enrollees include:

  • About three-fourths of these early enrollees in Arkansas and one-half of those in New Jersey were age 65 or over.
  • More than one-half were in poor health and dealing with chronic illnesses.
  • Many had severe difficulties with activities of daily living.
  • Nearly 60 percent of Arkansans and three-fourths of New Jersey participants purchased help with eating.
  • Ninety percent in each State received help with bathing.
  • Two-thirds of the enrollees in Arkansas and three-fourths of those in New Jersey were still in the program 9 months after entering.

Some findings about how benefits were used include:

  • In both States, enrollees were most likely to select caregivers that they knew personally.
  • More than three-fourths chose a family member as one of their caregivers.
  • Thirty-five to 40 percent hired friends, neighbors, or fellow church members.
  • Typically, enrollees hired people to provide 10-20 hours of care per week.
  • More than one-third hired multiple caregivers to meet their needs.
  • Most enrollees were highly pleased with their care arrangements.
  • A full 100 percent were satisfied with the arrangements they made with their hired workers.

Consumers were able to use their monthly allowances to purchase goods to improve their overall quality of life. The types and amounts of goods included:

  • One-third bought or repaired equipment for personal activities, communication, or safety.
  • Some bought stoves, microwaves, or dishwashers.
  • Others made modifications to their homes (e.g., handicap bathroom access or ramps).
  • Some used a portion of their allowance to purchase drugs that were not covered through Medicaid.

Finally, early enrollees in the program appeared to be extremely pleased with their overall experience:

  • Ninety-three percent of Arkansas participants would recommend the program to others.
  • About four out of five in each State said the program improved their lives.
  • Only two participants stated that they were worse off than before.

How their experience compared with those enrolled in regular Medicaid options remains to be seen. A series of reports will present this comparison for various outcome measures for each of the three States.

New Jersey received a planning grant in 1997 from the Robert Wood Johnson Foundation to participate in the demonstration program. New Jersey had several reasons for experimenting with the cash and counseling approach: Labor shortages and consumer dissatisfaction created an interest in the development of a program where consumers would have more control over who provided care.


Previously, consumers sometimes had agency-based aides who did not speak their language or understand cultural differences. This resulted in complaints from the consumers and concerns that the agency was not meeting their needs adequately.

The consumers were given a monthly cash grant that ranged from $282 (5 hours per week) to $2,262 (40 hours per week). The average cash grant was $1,300 per month.

The program allowed individuals to:

  • Hire relatives and friends.
  • Hire current home care aides privately.
  • Use agency service as a private-pay costumer.
  • Advertise for and hire workers.
  • Purchase appliances.
  • Purchase equipment (comfort and convenience items).
  • Purchase supplies not covered under New Jersey Medicaid.
  • Purchase services.
  • Make home modifications.

Eligibility was for individuals who were 18 years of age or over, were eligible for Medicaid, were qualified for Personal Care Assistant Services, and needed the those services for at least 6 months.

Additional Resource

Brown R, Foster L. Issue brief: Cash and counseling: Early experiences in Arkansas. Princeton (NJ): Mathematica Policy Research, Inc.;2000 Dec.

Previous Section Previous Section       Contents         Next Section Next Section

The information on this page is archived and provided for reference purposes only.

AHRQ Advancing Excellence in Health Care