What is Medicaid Participant-Directed Care?
Medicaid participant-directed care, also called self-directed care or consumer-directed care, is a “service delivery option” for how seniors and persons with disabilities receive Medicaid-funded Home and Community Based Services. It is an alternative to agency-directed care, the traditional way in which Medicaid services are received. Rather than the care be managed and provided by a home care agency, self-directed care allows participants the freedom and independence to choose which services and supports they receive, from whom they receive services, how they receive them, and when they are received.
Consumer-directed services are most commonly known for allowing a participant to select, hire, train, manage, and fire their own caregivers from whom they receive personal care assistance (i.e., assistance with bathing, toileting, dressing, mobility, eating) and homemaker services (i.e., meal preparation, shopping for essentials, laundry, light housework). Friends and family, including one’s adult child, and in approximately 34 states, even a spouse, can be hired as a caregiver (often called an attendant or personal care attendant). Other services and supports that may be self-directed include respite care services, companion services, home modifications, non-medical transportation, adult day care, and nursing services.
Persons who have cognitive impairments associated with Alzheimer’s disease or a related dementia or who cannot self-direct their own care for another reason, can often choose a “representative” to make decisions on their behalf. While this person may be a friend or relative, they cannot also be the hired caregiver.
Note: Participant-directed care goes by a variety of names: participant direction, self-direction, self-directed care, consumer-directed option, consumer-directed services, consumer-directed personal care, consumer-directed care, and participant-directed services. Although now a dated term, cash and counseling, is what Medicaid used to call participant-directed care.
How Does Participant-Directed Care Work?
The way that self-directed care works varies based on the state and the specific Medicaid program through which consumer-directed care is available. States may give program participants what CMS (Centers for Medicare & Medicaid Services) calls “employer authority” and / or “budget authority”.
With “employer authority”, the participant becomes the employer. They can recruit, manage, train, and even fire, the person from whom they receive care. This allows them to directly hire a loved one as their caregiver. All states that allow participant-directed care allow for employer authority. With “budget authority”, the participant manages their allocated Medicaid budget (funds). This allows them to choose which services and supports best serve them (based on their Medicaid service plan) and use the funds in that manner. With budget authority, one may also choose how much to pay their caregiver, giving them the flexibility to receive more hours of care at a lower rate or fewer hours at a higher rate.
For persons who choose (or are considering choosing) self-directed care, supportive services are available. This may include information about participant-directed care and one’s responsibilities, training (i.e., how to select, hire and manage a caregiver), and counseling. Financial management services (FMS) via a fiscal intermediary agency or fiscal employer agent are also available to assist persons in self-directing their care. FMS include managing care budgets, issuing payments, managing taxes, and purchasing approved services / goods.
Eligibility Criteria for Medicaid Self-Directed Care
To be eligible for participant-directed supports and services, one must be financially and functionally eligible for Medicaid. Though eligibility requirements can vary based on the state and specific Medicaid program, general eligibility criteria follows.
Most commonly, self-directed care is available via Home and Community Based Services (HCBS) Medicaid Waivers, also called 1915(c) Medicaid Waivers. In 2025 in most states, an applicant can have income up to $2,901 / month (300% of the SSI Federal Benefit Rate) and assets up to $2,000. One must also require a Nursing Facility Level of Care (NFLOC). HCBS Waivers target specific populations (i.e., seniors, persons with disabilities, those with Alzheimer’s disease), can be limited to specific geographic regions within a state, and limit the number of participant enrollment slots. Therefore, a waitlist for program participation may exist.
Persons may also self-direct their personal care services via a state’s Medicaid State Plan. The income limit is often much more conservative than it is for HCBS Medicaid Waivers. In 2025 in most states, the limit for an individual is generally either $967 / month (100% of SSI Federal Benefit Rate) or $1,304.17 / month (100% of the Federal Poverty Level). The asset limit is usually $2,000. Unlike with HCBS Waivers, an applicant does not need a Nursing Facility Level of Care. Instead, they must have a medical need for care, which generally means they need assistance with their Activities of Daily Living (i.e., bathing, dressing, eating, mobility, toileting). Benefits via the Medicaid State Plan are an entitlement, which means participant slots are not limited and there is never a waitlist to receive assistance.
Learn more about the Medicaid programs (and the eligibility criteria) through which one can be paid for providing care.
Self-Directed Caregiver Requirements
There are also eligibility criteria that one’s self-directed caregiver must meet. While the exact requirements are state-specific and program-specific, generally one’s caregiver must be 18+ years old. However, some states, such as Connecticut, are more lenient and permit persons 16+ years old to provide care. Caregivers must be eligible to work in the state in which they reside, must be capable of providing the required care, and generally have to pass a criminal background check. They may also have to undergo some type of caregiver training or complete a certification. A relative, including a legally responsible person, such a spouse, can be hired in some states, while other states do not permit it. However, if a spouse can be hired, they must be providing a level of care that is above and beyond that which is usually expected of a spouse.
How to Apply for a Consumer-Directed Medicaid Program
While all states offer participant-directed Medicaid programs, this does not necessarily mean that self-directed care is available to seniors in all states. See state-specific programs relevant to seniors (and click on the program to see if participant-directed care is possible). Persons should also check the Medicaid eligibility criteria to determine if they meet the requirements. Persons who do not meet the financial criteria can consult a Certified Medicaid Planner for assistance in restructuring income and assets to meet the criteria. While the Medicaid application process varies based on the state and specific Medicaid program, one will need to submit an application and required documentation. For questions regarding the Medicaid application process, one can contact their state’s Medicaid agency. More on applying for long-term care Medicaid.