As proposed in the January budget, if the Governor’s Tax Initiative is not approved by the voters in the November election, it will trigger $6.1 billion in further spending cuts to education and public safety. There would be no impact to IHSS as a result of this trigger.

Proposals Impacting IHSS

The May Revision contains $224.5 million in spending reductions to the IHSS program:

1. Elimination of Domestic and Related Services for certain recipients in the IHSS program:

• Would eliminate domestic and related service hours for consumers who live in any type of shared living arrangement in which these services can be “met in common” with other household members. This would not apply to consumers who live only with other consumers. Domestic and related services include: meal preparation and clean-up, housekeeping, laundry, food shopping, shopping and errands. Currently, when a consumer lives with a roommate, the assessment of need for domestic and related services is prorated and reduces the number of hours approved for domestic and related services.
• Would also eliminate domestic and related service hours for recipients under age eighteen who live with a parent who is able and available to provide the domestic and related services.
• If a recipient needs domestic and/or related services due to fact that other members of the household, or their parents if applicable, have a medically verified condition, they may request authorized hours for any of these services that meet the need assessment metrics.
• It is unclear how this would apply if a recipient resides in a shared living arrangement with an individual who refuses to provide domestic and related services not as a result of a medical condition.
• The Administration estimates that approximately 310,000 recipients in shared living arrangements will be impacted by this proposed reduction beginning October 1, 2012.
• Assumes a General Fund savings of $125.3 million in FY 12-13.

2. Across-the-board reduction in IHSS hours

• Would decrease authorized hours for all IHSS recipients by 7% effective August 1, 2012.
• Recipients would be able to direct the manner in which the reduction is applied to their authorized services.
• Additional details are not yet available.
• Assumes a General Fund savings of $99.2 million in FY 12-13.

The May Revision also includes the Governor’s proposed Coordinated Care Initiative, which contains two major components: 1 – the Dual Eligible Demonstration, which would financially and administratively integrate the full range of medical and long term care services for individuals who are eligible for both Medicare and Medi-Cal, and 2 – the inclusion of long term supports and services (LTSS) as mandatory managed care benefits for all Medi-Cal recipients.

Both proposals have the potential to significantly impact the IHSS program, as IHSS would then be administered as a managed care benefit.

The May Revision makes several changes to the CCI from the version first introduced in the January budget: 1 – it would phase in implementation for both the Duals Demonstration and LTSS Integration according to the same geography and timeline, 2 – it would reduce the number of counties participating in Year One from ten to eight, and 3 – it would delay implementation from January 1, 2013 to March 1, 2013.

These proposals, in combination with payment changes and deferrals not detailed here, are expected to generate approximately $663.3 million in General Fund savings in FY 12-13 and $887 million when “fully implemented”.

Other notable items include:

The May Revision continues to assume that the 20% across the board reduction in IHSS service hours that was “triggered” by the Department of Finance in December 2011 will be implemented on April 1, 2012. It is important to note that the state has set aside the amount it projects to save through this cut should pending litigation not turn out in its favor. Thus, the 20% “trigger” cut is a cost-neutral proposal.

The May Revision assumes that the current 3.6% across the board reduction in service hours will expire on June 30, 2012, as per existing state law.

It assumes a decrease in General Fund spending for Social Services Programs (including IHSS) as a result of decreased caseload projections in both FY 11-12 ($57.3 million) and FY 12-13 ($180 million).

Prior anticipated savings in the IHSS Program have not been realized (e.g. the IHSS provider tax and medical certification requirement), resulting in a significant increase in spending in FY 11-12 and FY 12-13

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