States are increasingly interested in the individual budget model for older Medicaid beneficiaries as a mechanism to improve responsiveness of benefits to beneficiaries’ needs and preferences and to increase their ability to remain outside or leave nursing homes. Beginning in January 2007, a new provision in the Deficit Reduction Act of 2005 (DRA) allows states to offer an individual budget option for an expanded range of home- and community-based services in their Medicaid state plans without having to obtain a waiver from the Centers for Medicare and Medicaid Services.

This report describes 10 operating individual budget model programs that serve older persons and identifies four areas of program design that are of particular importance to the success of the individual budget model. It also discusses how states have addressed these areas and draws key findings and implications in several areas such as level of funding, participant choice, support systems, and quality of care monitoring.

 Report (.pdf)