January 12, 2017

Governor Brown’s Director of Finance will discontinue the Coordinated Care Initiative (CCI) and dismantle the In-Home Supportive Services (IHSS) Maintenance of Effort (MOE) deal in the 2017-18 budget. Following current statute, Director Cohen has the authority to do so without legislative action. The county IHSS MOE for all counties will expire on June 30 of this year, health plans will lose their enhanced capitation rates for IHSS benefits, and the CCI would end on December 1, 2018. CSAC will oppose the state’s efforts to shift new IHSS program costs to counties.

“This would be devastating to counties all over the state. We undoubtedly would have to make cuts in other vital social services to cover these costs,” said CSAC President and Alameda County Supervisor Keith Carson. “These services are required by both state and federal laws, so if the costs do fall on counties, we have to pay them and we don’t have the ability to raise the revenue we’ll need to do so. That means cutting other critical local services.”

“When California took over parts of IHSS in 2012, the costs were far less than they are today,” said CSAC Executive Director Matt Cate. “Since then, the state has added to the annual cost with minimum wage increases and sick-leave pay, and the federal government added overtime pay requirements. Now, when the Governor says we may be on the verge of a recession, and when the future of the Affordable Care Act is uncertain, they want to shift these higher costs back to California Counties. We simply can’t afford it.”

Cost
According to estimates developed by the County Welfare Directors Association, the demise of the county MOE for all 58 counties will result in $625 million in increased county costs for the IHSS program in 2017-18 if statutory sharing ratios for the nonfederal share of the current program costs are used: 65 percent state and 35 percent county.

This estimate is based on normal program growth costs and includes new costs recently enacted by the state – the minimum wage increase up to $15 per hour and three paid sick leave days for IHSS workers – and the new federal overtime regulations. The IHSS MOE deal had limited county IHSS costs to a base year calculation of 2011-12 costs plus an annual 3.5 percent inflator.
 

Collective Bargaining
The January Budget proposal means that IHSS Collective Bargaining from counties participating in the CCI will transfer from the Statewide Public Authority back to the counties. This also means that any future transfer of collective bargaining in the other 51 counties will not occur. To date, only the 7 current CCI counties (Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo and Santa Clara) had transferred IHSS Collective Bargaining to the state.

Timeline

• Jan 10, 2017 – Deadline for Director of Finance to announce that CCI will not generate net GF savings and will become inoperative
• July 1, 2017 – County IHSS MOE (WIC §12306.15), including 3.5 percent inflator and state responsibility for collective bargaining, becomes inoperative.
• Jan 1, 2018 – CCI becomes inoperative.

Coordinated Care Initiative
While Director Cohen has decided to scrap the CCI, including the elimination of the enhanced rates for health plans, the eradication of the Statewide Public Authority, and a return to pre-MOE state-county costs sharing (65/35), he does indicate that the budget proposes to continue the Cal Medi-Connect program, continue mandatory enrollment for dual eligibles, and include long-term services and supports – but not IHSS – into managed care. The budget also encourages continued cooperation between plans and counties, but without funding for these activities, it is unclear how the policy directives would be carried out.

Please click here for the full CSAC Budget Analysis, including additional information about impacts on health and human services policies.