On January 5th, faced with an estimated deficit of $9.2 billion, Governor Jerry Brown released his budget proposal for fiscal year 2012-2013, which once again includes cuts to education and several social services programs including IHSS. The governor's plan relies on the cuts and on the success of his November ballot proposal to temporarily increase certain fees and taxes to close the budget gap and build a $1.1 billion state reserve. Below is a summary of some of the governor's key proposals related to IHSS and Medi-Cal. Additional information will be posted on PASC's website as it becomes available.

Elimination of Domestic and Related Services for Some Consumers

The governor has proposed to eliminate IHSS hours for domestic and related services for consumers residing in shared living arrangements, effective July 1st. This includes hours for tasks such as meal preparation and clean-up, laundry, housecleaning, grocery shopping and errands. Currently domestic and related service hours are pro-rated for consumers in shared living conditions based on the number of members in the household. This cut would apply to any consumer who does not live alone, regardless of their relationship to the other residents. Certain exemptions would be made when a consumer lives with other IHSS consumers or the other residents have a certifiable medical condition that prohibits them from completing the task for the consumer. The governor's plan estimates that this will impact approximately 254,000 IHSS recipients statewide.

Continuation of 20% Service Reduction

During a December 13th press conference, the governor announced that it would be necessary to enact a mid-year trigger cut to IHSS that was approved as part of the state budget passed last summer. The trigger will cut funding for IHSS by $100 million, by reducing service hours for almost all IHSS consumers by 20%. Consumers who receive services through one of several waiver programs, such as the In-Home Operations Waiver or AIDS Waiver, will be exempt from the cuts. Other consumers will have the opportunity to apply for IHSS Supplemental Care hours to try to have their hours restored. The reduction was scheduled to go into effect on January 1st. However, U.S. District Court Judge Claudia Wilken issued a temporary restraining order requiring the California Department of Social Services to stop all actions that were being taken to implement the 20% reduction, until a hearing can be held on a pending lawsuit that seeks to permanently stop the reductions (David Oster et al. v. Will Lightbourne and Toby Douglas). A hearing has been set for January 19th, and the plaintiffs plan to seek a preliminary injunction that would prohibit the state from implementing the cut until the case is resolved.

The governor's budget proposal assumes that the state will be successful in the pending litigation, and that the 20% reduction will be implemented on April 1, 2012. If passed, the proposal would ensure that the 20% reduction is in place through at least June 30, 2013.

At this time, the governor's proposal does not seek to extend the temporary 3.6% reduction in IHSS services that was implemented in February 2011. That reduction is set to expire on June 30, 2012.

IHSS and Managed Care

In recent years, the state has taken steps to reform the way that Medi-Cal and Medicare funded services are provided in hopes of developing a more integrated system of care and saving the state money. Until recent changes were enacted, individuals who received either Medi-Cal or Medicare were able to receive a variety of services through multiple service providers, including doctors, therapists, adult day health care centers, and homecare workers (including IHSS). Legislation passed in 2010 required individuals who receive Medi-Cal only to be enrolled into managed care plans, which would be responsible for coordinating most of their medical and social care needs. IHSS was not included in the services provided. The Department of Health Care Services began enrolling individuals into managed care plans early last summer. In addition, the State of California was recently awarded a federal grant to implement pilot programs in four counties that will enroll individuals who receive both Medi-Cal and Medicare (commonly known as "dual eligibles") into managed care plans.

The governor has proposed to expand the four-county pilot to enroll 1.2 million dual eligible individuals into managed care plans throughout the state. His budget also proposes converting IHSS into a managed care benefit over a three-year period. During the 2012-2013 fiscal year, the IHSS Program would operate the same as it does currently. County social workers would continue to determine program eligibility, conduct assessments, and process IHSS timesheets. IHSS public authorities, such as PASC, would continue to act as the employer of record for collective bargaining services, operate registries to assist consumers in locating providers, and provide trainings and other support services. However, the governor's proposal states that over time, the managed care plans will have increased responsibilities in the administration of the IHSS Program. The impact that this could have on program benefits, public authorities, and the Department of Social Services is not known at this time.

Repeal of Past IHSS Savings Measures

As part of the 2011-2012 state budget passed last summer, the Department of Health Care Services was mandated to establish a new pilot program related to medication dispensation machines for certain Medi-Cal recipients, that would save the state an estimated $140 million. Under current regulations, if the Department of Finance determines in April 2012 that the pilot is not likely to reach its goal, a reduction in IHSS service hours (up to 8.4%) can be implemented in October 2012 with no further legislative action.

To date, the state has made little progress in implementing the pilot. The governor has proposed to rescind both the law that requires the state to implement the program and the related 8.4% reduction associated with the program's success.

Medi-Cal Enrollment Period

As mentioned above, recent legislation requires that individuals who receive Medi-Cal, but not Medicare, be enrolled in a managed care plan that coordinates most of their medical and social care needs. Current law states that Medi-Cal recipients may change the managed care plan they are enrolled in once per month, or 12 times per year. The governor has proposed to establish an annual open enrollment period for Medi-Cal recipients who wish to change plans. If enacted, recipients would be able to change plans only during the open enrollment period, and would have to keep the plan that they change to for at least one year.

Further information on these proposals and the state budget will be updated on PASC's website (www.pascla.org) as it becomes available.