The 2022-23 California Spending Plan

Human Services

Aging-Related Budget Actions

This post provides an overview of 2022-23 budget actions that target or significantly impact older adults and older adults with disabilities. Specifically, this post first summarizes budget actions within the In-Home Supportive Services (IHSS) program and Supplemental Security Income/State Supplementary Payment (SSI/SSP) program. This post then describes aging-related budget actions in other state programs and departments and summarizes progress made in the 2022-23 budget to implement the policy goals and recommendations included in the Master Plan for Aging (MPA).

IHSS

The spending plan provides a total of $18.6 billion (all funds) for IHSS in 2022-23, which is $1.5 billion (8.5 percent) above estimated expenditures in 2021-22. The spending plan includes $6.1 billion from the General Fund for support of IHSS in 2022-23, which is a net increase of $1.1 billion (22.6 percent) relative to estimated 2021-22 levels. This year-to-year increase in General Fund reflects a much faster rate of cost growth relative to prior budget estimates. The main reason for the year-to-year General Fund cost increase is the anticipated ramp down of temporary increases to federal Medicaid funds (largely associated with the public health emergency) that were used to offset General Fund costs in the IHSS program in 2021-22. This initial ramp down of additional federal funds results in roughly $1.5 billion in IHSS costs shifting back to the General Fund in 2022-23. Additionally, the Governor’s budget assumes continued year-to-year growth in the three primary IHSS cost drivers: caseload (2.9 percent), hours per case (1 percent), and IHSS provider hourly wages and benefits (4 percent). We describe in more detail key cost increases and cost shifts in this section.

Anticipates Ramp Down of Temporary Increase to Federal Medicaid Funds Beginning January 2023. Under the Families First Coronavirus Response Act, the federal government increased the federal match rate for Medicaid services by 6.2 percentage points for the duration of the national public health emergency caused by COVID-19. This increased federal match lowers state costs for Medi-Cal, IHSS, and other programs that rely on federal Medicaid funding. The spending plan assumes this enhanced federal funding is in place from January 1, 2020 through December 31, 2022 and will offset around $500 million in total IHSS General Fund spending in 2022-23. Beginning January 1, 2023, the state General Fund will need to cover the IHSS costs that were previously covered with the additional federal funds resulting from the temporary 6.2 percentage point increase to the Medicaid federal match rate.

Phases in the Medi-Cal Asset Limit Repeal. Currently, seniors and persons with disabilities must have assets at or below $2,000 (or $3,000 for couples) to be eligible for Medi-Cal. The 2021-22 budget included legislation to raise the Medi-Cal asset limit from $2,000 to $130,000 for individuals and from $3,000 to $195,000 for couples no sooner than July 2022. Moreover, the asset limit would be eliminated altogether no sooner than January 2024 if the necessary federal approvals are obtained. The spending plan assumes that the asset limit will be raised on July 1, 2022, resulting in about 6,000 seniors and persons with disabilities becoming newly eligible for IHSS. As a result, the spending plan includes $69.4 million General Fund in 2022-23 to reflect the IHSS costs associated with the newly eligible seniors and persons with disabilities.

Establishes IHSS Permanent Backup Provider System. The 2021-22 budget included $5 million General Fund to create a permanent IHSS backup provider system on January 1, 2022, contingent on a policy framework being adopted in statute. However, a policy framework for the permanent backup provider system was not adopted within the 2021-22 budget period, resulting in the initial $5 million allocation going unspent. The spending plan codifies a policy framework for the permanent backup provider. Under the permanent backup provider system, a recipient who has an urgent need or whose health and safety will be at risk without a backup provider can receive up to 80 hours of backup provider services per state fiscal year. Additionally, subject to an appropriation in the annual budget act, backup providers shall be paid $2 above the local IHSS hourly wage rate. The spending plan provides $15.4 million to support the creation of the permanent backup provider services. The permanent backup provider system is expected to be implemented no sooner than October 1, 2022. A portion of this funding can be used by counties to provide ad hoc backup services until the statewide permanent backup provider system is implemented.

Expands Full-Scope Medi-Cal, Including IHSS Eligibility, to Remaining Undocumented Adults. The 2022-23 spending plan further extends full-scope Medi-Cal coverage and IHSS eligibility to income-eligible undocumented immigrants aged 26 to 49 no sooner than January 2024. As a result of this proposal, all undocumented immigrants, regardless of age, will be eligible for full-scope Medi-Cal and IHSS. While no funding is provided in 2022-23 due to the proposed schedule of implementation, it is estimated that this policy change will increase IHSS costs over time, reaching ongoing costs of roughly $400 million General Fund in 2026-27.

Other IHSS-Related Actions. In this section, we summarize other budget and policy changes in IHSS that are included in the 2022-23 budget.

• Allows for Automated CalSavers Retirement Account Payroll Deductions. The spending plan provides $3.4 million one-time General Fund to reprogram the Case Management Information and Payrolling System to allow IHSS providers to opt in for automatic payroll deductions for CalSavers retirement accounts.

• Provides Permanent Electronic Visit Verification and IHSS Social Worker Training Resources. The spending plan provides $1.5 million General Fund on an ongoing basis to administer the Electronic Visit Verification system and IHSS social worker training.

• Provides Guidance on In-Person Orientations for IHSS Providers. The spending plan includes language that clarifies how to structure in-person orientations under a state or local public health order. For example, if a public health order limits the size of gatherings, counties can hold a series of smaller in-person orientations to comply with the public health order. Additionally, a county is not required to hold in-person orientations if the public health order prevents in-person gatherings or the county’s collective bargaining agreement agrees to waive the in-person orientation requirement and have negotiated an alternative method for the provision of provider orientation. Overall, counties are required hold in-person orientations within 30 days of the date in which the public health order is lifted (counties and IHSS Public Authorities may request a 15-day extension if the public health conditions caused staffing or facility challenges).

• Clarifies IHSS Realignment Funding Penalty for Counties That Fail to Reach Collective Bargaining Agreement. The spending plan clarifies that the 7 percent withholding of realignment funds penalty shall be one time for counties that do not reach a collective bargaining agreement and a factfinding panel recommends settlement terms that are more favorable to the IHSS employee organization.

• Defers Action on IHSS Provider Employer Language Changes. The spending plan defers action on language proposed by the administration that is related to the definition and treatment of IHSS providers under state employment and labor laws.

SSI/SSP

The spending plan provides a total of $10.7 billion (all funds) for SSI/SSP in 2022-23, which is about $800 million more than estimated expenditure levels in 2021-22. Similarly, the amount of General Fund for SSI/SSP is expected to increase from $2.9 billion General Fund in 2021-22 to $3.3 billion General Fund in 2022-23. These funding estimates include costs associated with two other state-funded grant programs: (1) the Cash Assistance Program for Immigrants (CAPI), which provides grants to individuals ineligible for SSI/SSP solely due to immigrant status, and (2) the California Veterans Cash Benefit (CVCB) program, which provides a supplemental grant payment to veterans receiving payments from the federal Special Veterans Benefit program. Overall, both the total fund and General Fund increases are primarily attributed to (1) the full-year impact of federal SSI grant (5.9 percent) and state SSP grant (23.95 percent) increases implemented on January 1, 2022, and (2) the half-year impact of the estimated federal SSI grant cost-of-living adjustment (COLA) (estimated to be 6.9 percent under the spending plan, but federal government recently announced the actual SSI grant COLA will be higher—8.7 percent) and state SSP grant increase (10.3 percent), effective January 1, 2023. We describe the anticipated federal and state grant increase in more detail below.

Increases SSP, CAPI, and CVCB Grant Payments. As a part of the Governor’s January budget and May Revision, the administration planned to provide an SSP grant increase in 2023-24, which was intended to comply with intent language included as part of the 2021-22 budget agreement. Specifically, the intent language would have provided an additional state SSP grant increase on January 1, 2024 “subject to the same calculations, notifications, and implementation of the January 2022 SSP grant increase, subject to an appropriation in the Budget Act of 2023.”

The spending plan ultimately provides $150 million General Fund in 2022-23 and another $150 million in 2023-24 (each increasing to about $300 million annually) to increase SSP grants on January 1, 2023 and January 1, 2024. Additionally, the spending plan adopts intent language that requires the Department of Social Services (DSS) and the Department of Finance to calculate what SSP percent increase to grant levels the state can accomplish with the amount of funding appropriated in the 2022-23 budget and notify the Legislature 30 days before notifying the federal Social Security Administration (which administers the SSP grant on behalf of the state) to operationalize the SSP grant increase. The administration recently notified the Legislature that the state can afford to increase SSP grants by 10.3 percent effective January 1, 2023 with the amount of General Fund allocated in the 2022-23 budget. (This grant increase would also apply to CAPI and CVCB grant levels.) The 2023 SSP grant increase will be in addition to the recently announced 8.7 percent federal SSI grant COLA effective January 1, 2023. (The actual 2023 federal SSI grant COLA is higher than the spending plan estimate of the federal SSI grant COLA—6.9 percent—meaning total federal costs of the SSI/SSP program also will be higher than initial 2022-23 spending plan estimates.) Additionally, while the final value of the 2024 state SSP and federal SSI grant increase will not be known until the fall of 2023, the administration estimates that SSP grants could increase by 8.6 percent and federal SSI grants could increase by 2 percent on January 1, 2024 based on current caseload and economic trends. Overall, as shown in Figure 1, the combination of the actual and estimated state and federal grant increases will increase maximum SSI/SSP individual grants by $93.52 (9 percent) on January 1, 2023 and $36.90 (3.2 percent) on January 1, 2024 and maximum SSI/SSP couple grants by $161.98 (9.2 percent) on January 1, 2023 and $74.87 (3.9 percent) on January 1, 2024.

Other Aging-Related Budget Actions

In this section, we discuss additional key budget actions that primarily impact older adults.

Creates COVID-19 Mitigation Grants for Community-Based Adult Services (CBAS) Centers. The spending plan includes $61.4 million one-time General Fund made available over four years to provide competitive grants to CBAS centers to improve the health and safety of residents. Specifically, grants shall be awarded for the purpose of preventing COVID-19 infection, preparing for public health emergencies, and to improve workforce recruitment and retention.

Temporarily Restores Older Californian Act Programs. The spending plan provides $59.3 million General Fund in 2022-23, $86.9 million General Fund in 2023-24, and $39.8 million General Fund in 2024-25 to fund Older Californian Act programs that are included in statute, but have not been funded since 2008. The Older Californian Act programs include family and caregiver support services, senior volunteer development resources, aging in place services, and other home- and community-based services (HCBS).

Provides Additional Operating Subsidies for Board and Care Facilities. As a part of the 2021-22 budget, $805 million one-time total funds were provided to fund the acquisition, construction, and rehabilitation of adult and senior care facilities that serve older adults and persons with disabilities, including SSI/SSP recipients. The spending plan provides an additional $55 million one-time General Fund for operating subsidies for board and care facilities.

Creates Healthier Homes Nursing Pilot Project. The spending plan includes $12.5 million one-time General Fund available over five years to establish the Healthier Home Nursing pilot program in eight counties. Under this pilot program, a registered nurse and community health worker will provide health education and coaching services to residents in affordable senior housing developments to support the ability for older adult residents to age in place rather than entering a long-term care (LTC) facility.

Establishes Community Living Fund. The spending plan provides $10 million one-time General Fund available over three years to establish the Community Living Fund within the Department of Rehabilitation. The Community Living Fund will cover the costs of skilled nursing facility transition and diversion services for (1) individuals with disabilities who do not qualify for Medi-Cal and have income at or below 300 percent of the federal poverty level with certain medical deductions, and (2) individuals with disabilities who have Medi-Cal, but their needs are beyond what is covered by Medi-Cal Service providers.

Provides Funding for Additional Long-Term Services and Support (LTSS) and HCBS Research. The 2019-20 budget included funding to conduct an actuarial study of potential new LTSS benefit and funding structures. The 2022-23 spending plan includes $5 million one-time General Fund for an addendum report to the initial LTSS actuarial study to further explore LTSS financing and service options for the aging population and people with disabilities. The addendum LTSS study is meant to augment information provided by the first LTSS feasibility study conducted in 2019. Additionally, the spending plan includes $4 million one-time General Fund to conduct an inventory analysis of HCBS programs that serve non-Medi-Cal older adults and persons with disabilities.

Changes Related to Adult Protective Services (APS). The spending plan includes $4.6 million ongoing General Fund to permanently continue the APS training program and $733,000 for state operation positions to support APS expansion activities. Additionally, the spending plan reappropriates $60.6 million General Fund that was initially provided in the 2021-22 budget for APS expansion activities.

Provides Local Grants for Age-Friendly Community Projects. The spending plan includes $4.5 million one-time General Fund available over three years for the California Department of Aging (CDA) to establish local competitive grants to develop age-friendly action plans throughout the state.

Creates LTC Ombudsman Outreach Campaign. The spending plan includes $3.5 million one-time General Fund to conduct an LTC Ombudsman Outreach and Awareness campaign. The outreach and awareness campaign will include rebranding the state program logo, creating a statewide messaging framework, informing current and prospective LTC facility residents of their rights, and converting program materials into electronic formats and multiple languages.

Develops Training Materials for HCBS Providers and Programs. The spending plan provides $682,000 ongoing General Fund for CDA to create the Aging and Disability Institute of Learning and Innovation. The Institute will develop standardized and comprehensive training and leadership development resources for various HCBS providers and programs, including Area Agencies on Aging (AAA), Aging and Disability Resource Connection (ADRC) centers, LTC Ombudsman, and Health Insurance Counseling and Advocacy Program.

Creates LTC Facilities and Public Health Emergencies Working Group. The spending plan provides $450,000 one-time General Fund to develop public health emergency policies and best practices for LTC facilities during public health emergencies, including but not limited to visitation policies. The workgroup will consist of CDA, Office of the State Long-Term Care Ombudsman, California Department of Public Health, DSS, and other stakeholders.

Develops State Emergency and Natural Disaster Response Plans. The spending plan provides $400,000 General Fund to assist in the development of emergency and disaster planning and resource activities to support older adults and individuals with disabilities. This includes collaborating with HCBS program providers, such as AAA, ADRC centers, LTC Ombudsman, and LTC facilities, to better understand the needs related to disaster planning and response and identify response activities to implement before, during, and after an emergency event.

Prioritizes Increase to Medi-Cal Maintenance Need Income Level to Reduce Share of Cost Based on Spring 2024 Trigger Determination. The spending plan includes trigger language that would prioritize reducing the Medi-Cal share of cost requirements for seniors and persons with disabilities by increasing the Medi-Cal Maintenance Need Income Level as a part of the 2024-25 budget. Specifically, in spring 2024, the Department of Finance will determine whether there is enough General Fund money over the multiyear forecasts to support a number of ongoing augmentations and actions. The administration has estimated costs associated with this policy change will be $33.4 million General Fund in 2024-25 (increasing to $80.2 million General Fund annually thereafter).

Update on MPA Implementation

In recent years, the Legislature has called for the state to develop a plan for issues related to the growing aging population, including how best to structure state programs to meet the needs of the increasing number of seniors and assess the long-term impact of demographic changes on the state budget. In June 2019, the Governor signed an executive order establishing a formal process for the creation of an MPA. The executive order required the creation of a stakeholder advisory committee, publication of a stakeholder report on LTSS capacity and financing, and publication of a broader statewide MPA. The MPA was released in January 2021. The MPA is structured around 5 goals and 23 strategies aimed towards building what it describes as a “California for All Ages” by 2030. As shown in Figure 2—and described throughout this post—the spending plan includes about $480 million in General Fund spending for various budget proposals that directly or indirectly support the implementation of MPA goals.