Getting Paid by Medicaid for Caring for a Family Member

Summary
When a senior cannot be independent because of old age or chronic illness, the job of caregiving often falls to a spouse or adult child. Without help with activities of daily living like eating and bathing, someone who’s frail, disabled, or suffers from dementia will need to move into assisted living or a nursing home, and to prevent such a move, approximately 80% of frail seniors rely solely on friends and/or family members. These caregivers are usually unpaid, but they don’t have to be. There are multiple programs under Medicaid through which it is possible for caregivers to be paid for caring for their loved ones.

 

In every state there is a Medicaid-funded program with a benefit referred to as “Consumer-Directed Personal Care Assistance” or with a similar name. This benefit allows the Medicaid recipient to pick their own caregiver within certain parameters. Depending on the state and program, caregivers can be a good friend or family member (including, in some states, a spouse) and they can actually be paid by Medicaid to provide care.

The amount of money a loved one can be paid for caregiving under Medicaid consumer-directed care programs is usually determined by two factors:
– average caregiver wages in one’s specific state or region
– care needs of the Medicaid recipient

Other names for this program include:
– Self-Directed Care Program
– Participant-Directed Program
– Cash & Counseling

 

Which Medicaid Programs Allow Loved Ones to be Paid as Caregivers?

Medicaid is a state-run health insurance program, and in every state it provides an option for loved ones, meaning friends or relatives, to become paid caregivers. The specifics can vary quite a bit, however, as there is a lot of variance between how Medicaid works in each state. (Medicaid is even known by a different name in many states, like “Medi-Cal” in California and “MassHealth” in Massachusetts.)

Though the names and specific details will differ depending on the state, more broadly these are the programs under which Medicaid consumer direction allows loved ones to be paid for caregiving:

 

Consumer Direction Medicaid Waivers

Most state Medicaid programs have some version of the Home and Community Based Services (HCBS) waiver, and many allow for paying a loved one to be caregiver. These waivers are also called 1915(c) waivers or 1115 Demonstration Waivers, and they are not considered entitlements, meaning states might cap the number of waivers and applicants might have to go on a waiting list.

HCBS waivers are for Medicaid-eligible seniors who might need some level of nursing care but do not want to actually move into a nursing home. Benefits include medical equipment, adult day care, and transportation, and waivers can often also include consumer direction allowing the recipient to choose their own caregiver and pay that person for help with activities of daily living (ADLs) like eating, bathing, grooming, using the toilet, and getting dressed.

For a step-by-step guide to applying for Medicaid waivers, click here.

 

Consumer Direction in ABD Medicaid

Aged, Blind and Disabled (ABD) Medicaid, also called Regular Medicaid, has programs to provide long term care to seniors and those with chronic illness, often including the option to hire a loved one as caregiver. Unlike the waivers described above, ABD Medicaid is an entitlement, so everyone who is financially eligible should receive the benefits. Consumer-directed care, for hiring a loved one as caregiver, is available under this program in many states. Keep in mind that financial eligibility requirements under ABD Medicaid are often stricter than for applicants for Medicaid waivers.

For help with the process of applying for ABD Medicaid, click here.

 

Child Caregiver Exception

The Child Caregiver Exception is not a benefit to literally pay a family member for caregiving, but it does allow Medicaid to help a caregiver receive special compensation. Under the Child Caregiver Exception, Medicaid will allow the ownership of a parent’s home to be transferred to an adult child who has served as caregiver for at least two years preceding placement in a nursing home. It would therefore work like payment, and make the home exempt from Medicaid look back rules after death. The Child Caregiver Exception rules can vary by state, and the steps to do it correctly can be complicated. Anyone considering this option should contact a certified Medicaid planner for help with the process.

 

Money Follows the Person

Money Follows the Person (MFP) programs are a way for Medicaid to cover the costs of moving from a full-time nursing home back into one’s own home. In order to make this move possible, Money Follows the Person provides funds to cover expenses including home modifications. Money Follows the Person might also (it depends on the state) allow for self direction, meaning the recipient can hire a person of their own choosing to provide caregiver support, like help with ADLs, and that person can be a friend or relative. The rules governing MFP are state-specific and even the name of the program can change by state.

 

Community First Choice

Community First Choice (CFC) Medicaid programs, also called the 1915 (k) state plan option, provides self-directed long-term care for eligible residents who cannot live independently because of age or illness. CFC is another program for nursing-home eligible recipients who want to stay at home and need caregiver help for ADLs like eating and bathing. CFCs are available in nine states (Alaska, California, Connecticut, Maryland, Montana, New York, Oregon, Texas, and Washington) and are meant to be personalized, so hiring a loved one as paid caregiver is often among the options available.

 

Adult Foster Care

In some states, Medicaid will pay for a recipient to move into the home of a caregiver and receive help with activities of daily living like eating, grooming, bathing and dressing. Medicaid does not pay room and board under the adult foster care program, but it does allow coverage for caregiving duties. This option is available in seven states: Connecticut, Indiana, Louisiana, Massachusetts, Ohio, Rhode Island and Texas. Also called Adult Family Living or Adult Family Care, this is for frail adults who move in with a close relative rather than their spouse.

 

What Are the Eligibility Requirements to be Paid by Medicaid as a Caregiver?

Many states allow adult children to become paid caregivers for a person who has lost independence due to age or chronic illness like Alzheimer’s disease and related dementias. Increasingly, a Medicaid-eligible person’s spouse may also receive compensation for caregiving duties. Siblings, step-children and even friends are eligible, state and program dependent.

It is possible, depending on the state, that a loved one who wants to be paid as caregiver would need to complete Medicaid certification, meaning they would be trained by a medical professional who works with Medicaid to help caregivers in the state. Or there may be requirements for paid caregivers that are less stringent, like needing to pass a background check. Some states prohibit those persons who serve as a Power of Attorney (POA) for the care recipient from being paid caregivers.

 

How Much Payment Do Caregivers Receive?

How much payment Medicaid programs can provide to loved ones serving as caregiver will depend on a number of factors. Often, a physical assessment of the Medicaid recipient will be required to determine what level of care is necessary. Payments are also determined by considering the amount a caregiver or home health aide is typically paid in your state.

Home health aides in Alabama, for example, earn about $18 per hour on average, while wages for the same job in Rhode Island typically top $25 per hour. Medicaid would therefore pay a caregiver less money in Alabama than in Rhode Island. Medicaid typically does not pay as much as the hourly average for a given geographic area, 75% of the regional average is a good rule of thumb.

Other programs such as the Child Caregiver Exception are calculated differently and depend on the home equity value as the caregiver will be permitted to receive the home without the state utilizing the Estate Recovery Program clause. For example, if the care recipient / homeowner has $350,000 in home equity and the adult child / caregiver inherits 100% of the home, they are effectively compensated $175,000 per year for their caregiving efforts.

 

How to Apply & What to Expect

The first step to receiving payment for caregiving through one of these programs is to ensure that the senior who needs help is Medicaid-eligible. For specific eligibility criteria by region, use our Medicaid Eligibility Requirements Finder.

Even someone who does not appear to be eligible because of the income and/or assets requirements can take steps to become eligible through Medicaid planning. For a guide to techniques that can help with Medicaid eligibility when exceeding financial limits, click here.

It’s a good idea to contact your nearest Medicaid eligibility office for help determining exactly which program is best for your family. Click here for contacts.

The program in your state most likely to provide consumer-directed care and therefore allow for a loved one to be paid as caregiver is Home and Community Based Services waivers. For a step-by-step guide on how to apply for these waivers, click here.