UDW Preliminary IHSS Overview of 2013-2014 Governor’s Budget

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UDW/AFSCME Local 3930
2013-2014 Governor’s Budget
Preliminary IHSS Overview
January 11, 2013


As a result of massive spending cuts in the last two years and new temporary revenue provided by Proposition 30, California no longer faces a budget shortfall in the coming fiscal year. This is a dramatic improvement from just two years ago, when the budget deficit was estimated at $26.6 billion. On January 10, 2013, Governor Jerry Brown submitted a balanced budget for FY 2013-2014 that entails $97.7 billion in General Fund expenditures (an increase of 5% from the current year), $98.5 billion in General Fund revenue (an increase of 3.3% from the current year), and the creation of a $1 billion reserve.

Importantly, under current projections, the budget is expected to remain balanced in future years.

In-Home Supportive Services (IHSS)

The FY 2013-14 budget does not propose any new cuts to the IHSS program. The budget proposes $1.8 billion for IHSS, a 6.5% increase over the 2012 budget. Average monthly IHSS caseload for FY 13-14 is estimated at 419,000 recipients, down 1% from the current year’s projections.

The Governor proposes the following budgetary adjustments for IHSS in FY 13-14:

  • An increase of $92.1 million associated with more restrictive federal requirements for IHSS recipients to qualify for the federal Community First Choice Option (CFCO). Beginning July 2013, only recipients who meet the standards for nursing home level of care will be eligible for the enhanced federal match. Hence, the federal matching funds from CFCO will be lower than the state originally projected. This increase will supplement that difference.
  • An increase of $59.1 million to reflect restoration of the 3.6% across the board reduction to IHSS recipient hours. The 3.6% cut is scheduled to end on June 30, 2013.
  • An increase of $47.1 million in state expenditures on IHSS as a result of the recently enacted county maintenance of effort (MOE) requirement. Effective July 1, 2012, a county’s share of the non federal portion of IHSS costs is based on the county’s actual expenditures in FY 2011 12. Therefore, starting in FY 13-14, counties will pay less into the IHSS program and the state will be required to pay more.
  • A decrease of $30.2 million as a result of the health care certification requirement enacted in 2011 12, requiring IHSS recipients to receive written certification from their doctors before being enrolled in the IHSS program. This certification leads to a slight decrease in IHSS caseload.
  • A decrease of $113.2 million to reflect implementation of a 20% across the board cut to recipient hours on November 1, 2013. This reduction was originally supposed to take effect in January 2012; however, it has been stalled as a result of a court injunction1 . The FY 13-14 budget assumes the Administration will be successful in its efforts to overturn this injunction. The savings amount identified reflects fully restoring hours for severely impaired recipients who would otherwise be placed in nursing homes.

Coordinated Care Initiative (CCI)

The IHSS program is a key component of Governor Brown’s Coordinated Care Initiative (CCI). Originally part of the FY 2012-13 budget, the CCI moves individuals who are eligible for both Medi-Cal and Medicare into a managed health care system for all their health care services, including in-home care. The FY 2013-14 budget makes several significant changes to the CCI from what was agreed upon in the final FY 2012-13 budget:

  • The budget has been revised to reflect the decreased population participating in the demonstration and accounts for individuals excluded from the program, including beneficiaries enrolled in the Developmentally Disabled waiver, beneficiaries enrolled in a Kaiser Plan, and beneficiaries with other health coverage
  • The budget changes the implementation timeline. The 2012 Budget Act assumed beneficiaries would phase into the CCI over a 12-month period beginning in March 2013. According to the new budget, beneficiaries in the first eight pilot counties will now enroll in managed care beginning in September 2013. Los Angeles County will phase in beneficiaries over 18 months. San Mateo County will enroll all beneficiaries at once. Orange, San Diego, San Bernardino, Riverside, Alameda, and Santa Clara counties will phase in over 12 months. Once enrollment is complete in a pilot county, collective bargaining for IHSS provider wages will move to the new California In-Home Supportive Services Authority (otherwise known as the “Statewide Authority”), which will become the new “employer of record” for IHSS providers.
  • The Governor’s budget projects a revised General Fund savings of $170.7 million in FY 13 14 as a result of the CCI. Savings are projected to grow to $523.3 million General Fund annually. This is a decrease in savings from the final FY 12-13 budget, when the CCI was projected to generate approximately $611.5 million in General Fund savings in FY 12-13 and $880.9 million when fully implemented.

The State Department of Health Care Services is working to reach an agreement with the federal government on a number of issues surrounding the CCI, including the amount of savings from CCI that will go to the state vs. the amount that will go to the federal government. UDW will continue to closely monitor these negotiations.

1 Oster, et al v. Lightbourne et al


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