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. The "individual budget" model is a service option that originated in the Cash and Counseling Demonstration in three states in the late 1990s. As of January 2006, the model had been implemented for elderly Medicaid beneficiaries in some form by an additional seven states, and 12 other states were in the process of implementing programs. This report describes the 10 operating individual budget model programs serving older persons, identifies four areas of program design that are of particular importance to the success of the model, and provides more detailed profiles of programs in three states.