An estimated 550 older and disabled North Carolinians will be able to live at home instead of in nursing homes or psychiatric hospitals, thanks to a $16.9 million federal grant, state officials said.

The money, part of a $1.75 billion, five-year federal project called Money Follows the Person, will pay for caregivers to provide personal services, hygiene, cooking and other activities in an older person's home.

It's a start on meeting the desire of a large majority of older people to live at home as they age; the federal money could help those moved from institutions with everything from housing deposits to hot meals in their new homes. Another goal is to save money, keeping people out of high-dollar, high-maintenance settings such as nursing homes.

Consumer costs for a nursing home easily run $50,000 a year. Medicaid is likely to save more than two-thirds of the $1.75 billion it's spending on the project by keeping patients out of nursing homes, the Congressional Budget Office estimates. But Medicaid rules have typically made it easier to get care in a nursing home or other institution than at home.

"We know that a lot of people would not wind up in care facilities if they had the option of someone helping them at home," said Alice Watkins, executive director of the Alzheimer's Association, Eastern North Carolina branch.

In addition to personal care, the grant money will pay for help with transportation, counseling and even home modifications, said Dr. William Lawrence Jr., deputy director of the state Division of Medical Assistance. It could also pay for respite care, paying for someone to fill in occasionally for a family member who normally handles the care.

"We are going to target elderly and disabled people in nursing homes who have been there for at least six months," Lawrence said. "It will be those who are now stabilized and clearly in a situation where they could benefit from moving back to a least restrictive environment."

No older patients have yet been served by the project. It's being designed and should benefit people next year.

"It's a very different thing to live in one's home than in a group home," said Dave Richard, executive director of the ARC of North Carolina, a nonprofit group that advocates for people with mental retardation and other disabilities. "Just imagine if you lived in a house with five people unrelated to you, with whom you had nothing in common but an intellectual disability."

State officials said the program for older nursing home residents will look much like the program that has helped people with disabilities such as Lee Tillery, who briefly considered living in a nursing home more than 10 years ago, but concluded it wasn't for her.

Tillery, 42, suffered a spinal cord injury at birth, but she was in her early 30s when her aging parents realized that they couldn't look after her at home indefinitely.

"I said, 'Nursing home, no; group home, no,'" Tillery said, shaking her head Tuesday as she recalled the search. "I'd rather be here than in a group home."

"Here" is an apartment that Tillery shares with a roommate near the Raleigh-Cary town limits. It's made possible through Medicaid funding, which pays for Tillery and her roommate to get in-home care from workers to help with hygiene, cooking and other activities.

North Carolina's Community Alternatives Program, or CAP, is allowed under a waiver of some Medicaid rules and brings helpers such as Mary Hinnant into Tillery's home.

"We help her with bathing and hygiene," said Hinnant, an employee of Easter Seals UCP. "If they are going to have coffee, we help them to get cups and everything."