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Money Follows the Person and Balancing Long-Term Care Systems: State Examples

Prepared for:
U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services
Disabled and Elderly Health Programs Division

Background on the National “Money Follows the Person” (MFP) Initiative

Money Follows the Person (MFP) is a federal program intended to broaden the use of Medicaid dollars for the care of the elderly and disabled in their own homes.

For those states participating in the Money Follows the Person initiative, the federal government provides increased Medicaid funding, reimbursing them for 75% of the costs of a resident’s first year back in the community, instead of the customary 50%. The enhanced federal support is a financial incentive for states to reduce reliance on expensive institutional care for Medicaid recipients, according to a press release issued by Connecticut Gov. Jodi Rell’s office.     

Medicaid rules in Connecticut currently allow some payments to go toward at-home care, but only for people with very limited care needs. These programs include the Personal Care Assistant (PCA) Program and the Care for Elders Program.

Money Follows the Person is designed to help people with more extensive needs, including 24-hour live-in assistance, personal management, home alterations to accommodate wheelchair and other medical equipment needs and other supportive services.

“Connecticut’s current Medicaid home-care program is designed to keep people from going into nursing homes. Conversely, Money Follows the Person is designed to bring people home from nursing facilities,” noted Joe Stango, Founder of Advocates for Medicaid Choice in Connecticut (AMCC).   

The State Department of Social Services (DSS) will administer MFP in Connecticut.
In 2006 DSS estimated the cost savings of caring for an individual at home versus a nursing home at approximately 50%. DSS estimated the typical cost of one day in a nursing home at $180 versus $90 at home, a savings per individual of $32,850 a year.