Getting Paid by Medicaid for Caring for a Family Member

Summary
Seniors who are frail, disabled or suffer from dementia will likely need to move into a nursing home or assisted living unless they get help with the basic activities of living, like eating and bathing. The job of providing that help usually falls on spouses, family members or friends. These caregivers are rarely paid, but that doesn’t have to be the case. Family members and other loved ones can be compensated for their caregiving efforts through multiple Medicaid programs.

Getting Paid by Medicaid as Caregiver to a Loved One

All 50 states have a Medicaid-funded program with an option that allows for Consumer Directed Care, or something with a similar name, like Self Directed Care, Participant Directed Care, or Cash & Counseling. This option gives the Medicaid recipient some decision making power when it comes to their own care. One of the primary benefits of Consumer Directed Care is the ability to hire a caregiver of the recipient’s choice. These caregivers can be friends or family members in most states and programs, and Medicaid will actually pay them for their care, which many of them may have already been providing. Some Medicaid programs will even pay spouses to be caregivers.

The amount of money a loved one can be paid for caregiving via Consumer Directed Care is usually determined by two factors:

• average caregiver wages in one’s specific state or region
• care needs of the Medicaid recipient

Medicaid recipients will be evaluated by their state of residence to determine their level of care of needs, and what specific long-term care services and supports their situation requires. If it requires personal care assistance, and it usually does with frail seniors who are living independently, the Medicaid beneficiary can use the Consumer Directed Care option to hire, and pay, a family member or loved one.

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

Medicaid programs and the rules that govern them can vary by state. Medicaid is even known by a different name in many states, like “Medi-Cal” in California and “MassHealth” in Massachusetts. In general, however, there are two Medicaid programs that have Consumer Directed Care options: Home and Community Based Services (HCBS) Waivers and Aged, Blind and Disabled (ABD) Medicaid.

Home and Community Based Services Waivers

Home and Community Based Services (HCBS) Waivers will pay for long-term care services and supports that help seniors who require a Nursing Facility Level of Care remain living in the community instead of living in a nursing home. The word “waiver” means something like “voucher” in this instance. Think of it as a voucher that will pay for long-term care services for seniors who live in their home or the home of a loved one. Many states also have HCBS Waivers that will cover long-term care in assisted living residences, group homes, adult foster care and memory care units for patients with Alzheimer’s disease and other dementias. While HCBS Waivers can cover some long-term care services and supports in all of those settings, they will not cover room and board costs such as mortgage payments, rent, utility bills and food expenses.

Many HCBS Waivers have Consumer Directed Care options. In some states this option will give the Medicaid beneficiary the ability to hire a caregiver of their choice. These individuals will be paid to provide personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting), as well as homemaking services (such as cleaning, cooking, shopping, bill paying, medication management, etc.). Some states may provide HCBS Waiver beneficiaries with a healthcare budget and allow them to spend it on healthcare services and goods of their choice. And some states may only have a limited Consumer Directed Care options for HCBS Waivers, like the ability to choose from a larger group of providers, or more flexibility when it comes to prescription medications.

Other HCBS Waivers benefits can include adult day care, case management, meal delivery, transportation and home modifications for safety and accessibility. The type of benefits, and the settings where they can be provided, depend on the state, the Waiver, and the individual.

HCBS Waivers have a limited number of enrollment spots. Once those spots are full, additional eligible applicants are placed on a waitlist. Most seniors come off HCBS Waiver waitlists and enroll in the program within two months, but it can take as long as two years. Some waitlists are prioritized on a first-come, first-serve basis, some are prioritized by need, and some use different methods. It all depends on the specific HCBS Waiver.

For a step-by-step guide to applying for HCBS Waivers, click here.

Aged, Blind and Disabled Medicaid

Aged, Blind, and Disabled (ABD) Medicaid provides basic healthcare coverage and long-term care goods and services to seniors who are aged (65 and older), blind or disabled and live in the community. ABD Medicaid can sometimes be referred to as state Medicaid or regular Medicaid for seniors, but it should not be confused with the regular Medicaid that is available to financially needy people of all ages.

Beneficiaries who show a need for long-term care can receive that care through ABD Medicaid. In many states, the ABD Medicaid long-term care coverage includes a Consumer Directed Care option that allows the beneficiary to hire a caregiver of their choice to provide personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting), as well as homemaking services (such as cleaning, cooking, shopping, bill paying, medication management, etc.). The exact scope of the coverage depends on the state, as can the name of the Consumer Directed Care option available through ABD Medicaid. It’s the Community First Choice (CFC) option in California, New York, Texas, Washington, Oregon, Connecticut, Maryland, Montana and Alaska. In other states it’s the Self-Directed Personal Assistance Services (PAS) option or the Home and Community Based Services State Plan Option, which is different than the HCBS Waivers described above.

ABD Medicaid is an entitlement, which means all qualified applicants are guaranteed coverage without wait.

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

Child Caregiver Exemption

The Child Caregiver Exemption does not pay family members for caregiving, but it does compensate them in a different way, and it provides some potential benefits for the Medicaid applicant/recipient, as well. The Child Caregiver Exemption allows a senior parent to transfer ownership of their home to a qualified adult child without the home being subject to Medicaid’s Estate Recovery Program or Look-Back Period, which are both described below. An adult child qualifies for the Child Caregiver Exemption if they have lived in the home with the parent for at least two years and during that time they provided care that allowed their parent to live at home rather than move into a nursing home.

Medicaid Estate Recovery Programs (MERPs) are obligated by law to seek reimbursement for Medicaid recipients’ health care costs after their death. The home is a common way for the MERPs to collect that reimbursement (by forcing a sale of the home), but homes transferred using the Child Caregiver Exception are protected from MERPs.

Medicaid’s Look-Back Period prevents applicants from giving away assets, or selling them at less than fair market value, simply to get under the asset limit in an attempt to become financially eligible for Medicaid. A senior could not just give their home to their adult child, or sell it to them for $1, without violating the Look-Back Period. If a Medicaid applicant is found to have violated the Look-Back Period, their application will be denied and they will be penalized with a period of ineligibility. Home transfers using the Child Caregiver Exemption do not violate the Look-Back Period.

Before attempting to use the Child Caregiver Exemption on your own, we recommend consulting with a professional, like a Certified Medicaid Planner.

Structured Family Caregiving

Family members who are providing 24-hour supervision and care can be paid by Medicaid via Structured Family Caregiving (SFC) in some states. SFC is also known as adult foster care, adult family living and coordinated caregiving. The caregiver does not have to be a relative, but usually it is an adult child who has taken the parent into their home or is living in their parent’s home. Some states allow spouses to be SFC caregivers. SFC is available in Connecticut, Georgia, Indiana, Louisiana, Massachusetts, Missouri, North Carolina and South Dakota.

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

Some states require family members to complete certain medical care certification classes in order to be paid as a caregiver by Medicaid. Some may require a background check for potential family caregivers. Some do not allow people who serve as Power of Attorney for the Medicaid beneficiary to also be their caregiver. And some states do not have any of these requirements. To find out the requirements in your state, check with your local Medicaid offices or consult with a professional.

As mentioned above, some states allow spouses to be paid as caregivers through Medicaid, while some do not. The rules on friends, foster children, stepchildren, and step-siblings also vary by state. It is believed that adult children (biological or adopted) and grandchildren, nieces, nephews, and siblings may be caregivers in any state and the District of Columbia.

How Much Payment Do Caregivers Receive?

Medicaid’s pay rate for family member caregivers paid through Medicaid depends on a number of factors. First, state Medicaid officials will usually assess the beneficiary and determine what kind of long-term care services and supports they might need, how many hours they might need them for, and how much money they have to spend via Consumer Directed Care. Some Medicaid programs may also have budget limits on how many hours or dollars worth of healthcare they can provide per participant. Those factors will determine a total amount per month or year the family member caregiver can be paid, but the hourly rate they can be paid is determined by state of residence.

For example, home health aides in Alabama earn about $13 per hour on average, while wages for the same job in Rhode Island are typically $18 per hour. So, Medicaid would 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. Instead, 75% of the regional average is a good rule of thumb.

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. This can be complicated, so consulting with a professional like a Certified Medicaid Planner is recommended. They can also help you determine which program is best for your family.