The 2024-25 California Spending Plan

Human Services

Aging-Related Issues

In-Home Supportive Services (IHSS)

The 2024-25 spending plan provides a total of $25.2 billion (all funds) for IHSS, which is $2.8 billion (12.5 percent) above estimated total expenditures in 2023-24. Of this total, the spending plan includes $9.1 billion from the General Fund for support of IHSS in 2024-25, which is a net increase of $783 million (9.4 percent) relative to estimated 2023-24 levels. The primary reason for the year-over-year General Fund cost increase is the continued growth of the three primary IHSS cost drivers: caseload (5.9 percent), cost per hour (3.1 percent), and hours per case (1.3 percent). We describe in more detail additional spending changes in this section.

Continued Expansion of Full-Scope Medi-Cal Coverage to Undocumented Individuals. The 2024-25 spending plan continues to extend full-scope Medi-Cal coverage and IHSS eligibility to income-eligible undocumented individuals. However, the estimated cost for this expansion has changed substantially from 2023-24 estimates. In 2023-24, the spending plan included $903.3 million General Fund. At Governors budget, this estimate was reduced to $399.5 million General Fund and later revised again to $94.7 million General Fund at May Revision. It is our understanding that this estimated reduction partially reflects the administration’s use of an updated caseload methodology for the 26-49 and 50 and over age groups. The lower estimate also reflects an effort to more accurately reflect the lower than anticipated utilization rate for the expansion of IHSS services to undocumented individuals.

In an effort to assist in closing the projected budget shortfall, as part of the May Revision, the administration proposed to eliminate the full-scope Medi-Cal expansion to undocumented individuals of all age groups. Ultimately, the spending plan rejected the administration’s May Revision proposal. As a result, the 2024-25 spending plan includes $94.7 million General Fund to continue extending full-scope Medi-Cal coverage and IHSS eligibility to income-eligible undocumented individuals of all age groups. This includes the $22 million General Fund for the 26-49 age group, who were extended full-scope Medi-Cal coverage in January 2024, but did not begin receiving IHSS services until 2024-25.

Reduction in Permanent Backup Provider System. The 2024-25 spending plan includes $8.6 million General Fund to continue supporting the permanent backup provider system. The permanent backup provider system was first implemented in October 2022 and was designed to provide up to 80 hours of backup provider services per fiscal year to any recipient who has an urgent need or whose health and safety will be at risk without a backup provider. However, since implementation, actual utilization of the program has come in lower than budgeted. The most recent expenditure data show that between October 2022 and September 2023, roughly $350,000 was expended on program services compared to the roughly $13 million allocated for services and $1.5 million allocated for administration in the 2022-23 spending plan.

In an effort to assist in closing the projected budget shortfall, as part of the May Revision, the administration proposed to eliminate the permanent backup provider system. This was estimated to save $11.6 million General Fund in 2024-25. Ultimately, the spending plan rejected the administration’s May Revision proposal and instead reduced the permanent backup provider system by $3 million General Fund, leaving the permanent backup provider system with $8.6 million in 2024-25 ($5.6 million for services and $3 million for administration).

To Comply With Current Law, Paid Sick Leave Increases for IHSS Providers. Chapter 309 of 2023 (SB 616, Gonzalez) increases the required amount of paid sick leave for California employees, including IHSS providers, from no less than 24 hours or three days to no less than 40 hours or five days in each year of employment. These changes took effect July 1, 2024. To account for this, the 2024-25 spending plan includes $84.1 million General Fund.

Supplemental Security Income/State Supplementary Payment (SSI/SSP)

The 2024-25 spending plan provides a total of $11.3 billion (all funds) for SSI/SSP in 2024-25, which is $88 million less than estimated expenditure levels in 2023-24. However, the amount of General Fund for SSI/SSP is expected to increase slightly from $3.55 billion in 2023-24 to $3.64 billion in 2024-25. 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 program, which provides a supplemental grant payment to veterans receiving payments from the federal Special Veterans Benefit program. Overall, the total fund decrease is primarily attributed to a decline in overall caseload. While the General Fund increase is primarily attributed to the full-year impact of the state SSP grant increase (9.2 percent) implemented on January 1, 2024 and an increase in the CAPI caseload. We describe the anticipated federal and state grant increase in more detail below.

Budget Accounts for Prior-Year Increase and Budget-Year Federal Cost-of-Living Adjustment (COLA). The 2024-25 spending plan includes $292 million General Fund to account for the full-year costs of the 9.2 percent SSP grant increase that was provided as part of the 2023-24 budget. However, the 2024-25 spending plan does not include an SSP grant increase for January 2025. Overall, as a result of the federal COLA, the maximum SSI/SSP individual grants will increase by $28 (2.4 percent) and the maximum SSI/SSP couples grant will increase by $42 (2.1 percent)—as shown in Figure 1.

Department of Aging

Elimination of Older Adult Behavioral Health Initiative. The 2024-25 spending plan eliminates all remaining funding for the Older Adult Behavioral Health Initiative. At a high level, the Older Adult Behavioral Health Initiative was designed to focus on addressing behavioral health and/or substance use disorder needs of older adults, and was split into four main components: (1) community capacity building with local partners, (2) a media campaign to reduce behavioral health stigma and isolation, (3) a statewide Older Adult Friendship line, and (4) state oversight and support. As of February 2024, less than $15 million of the $50 million over three years included in the 2023-24 spending plan ($20 million in 2023-24, $20 million in 2024-25, and $10 million in 2025-26) had been encumbered or expended—­­$10 million encumbered for the media campaign, $4.5 million encumbered for the Friendship line, and $74,000 expended on staffing resources. As part of the May Revision, the administration proposed to eliminate all remaining funds for the Older Adult Behavioral Health Initiative. In addition to accepting the administration’s proposal, the 2024-25 spending plan includes a reversion of $8 million previously encumbered for the media campaign. This action results in General Fund savings of $13.4 million in 2023-24, $20 million in 2024-25, and $10 million in 2025-26.

Elimination of Healthier Homes Nursing Pilot Project. The 2024-25 spending plan eliminates all remaining funding for the Healthier Homes Nursing Pilot project. Under this pilot program, a registered nurse and community health worker were to provide health education and coaching services to residents in affordable senior housing developments to support aging in place rather than entering a long-term care facility. However, as of 2024, only $610,000 had been spent on this project. In an effort to assist in closing the projected budget shortfall, as part of the January budget, the administration proposed to revert all remaining unspent funds. The administration’s proposal was accepted in early action, resulting in $11.9 million General Fund savings in 2024-25.

Authorizes Loan From the Health Insurance Counseling and Advocacy Program (HICAP) Fund to General Fund. The 2024-25 spending plan includes a $10 million one-time loan from the HICAP Fund to the General Fund. The loan is intended to be paid back with interest by June 30, 2027. The loan shall be repaid sooner if the General Fund no longer needs the loan or the HICAP Fund needs the money for program operations.

Transfers Funds From Special Fund Accounts to Long-Term Care Ombudsman Program. Current law includes language that allows for the transfer of up to $1 million from the State Health Facilities Citation Penalties Account to the Long-Term Care Ombudsman Program (LTCOP) if the balance of the account exceeds $6 million, as determined in the Governor’s May Revision each year. The 2024-25 spending plan increases the amount of funds eligible for transfer from $1 million to $2 million. Additionally, the 2024-25 spending plan allows for the one-time transfer of $4.25 million in additional funds from the Licensing and Certification fund to support the LTCOP. Currently, the LTCOP receives $400,000 from the Licensing and Certification fund annually and received approximately $15.3 million from all funds in the 2023-24 fiscal year.