Introduction
Background
The In-Home Supportive Services (IHSS) program of the California Department of Social Services (Social Services) provides assistance to eligible California residents who are 65 years of age or older (seniors), blind, or disabled (collectively referred to as recipients) to enable them to live safely in their own homes.Throughout the report we refer to the approved beneficiaries of IHSS care as recipients even in instances where they have not received care in a particular month. As of December 2019, IHSS provided in-home care to more than 591,000 Californians. This in-home care serves as an alternative to more intensive and costly out-of-home care, such as assisted living or skilled nursing facilities (long-term care). IHSS provides services based upon the needs of each recipient, which may include bathing, bowel and bladder care, feeding, and accompaniment to health-related appointments. According to Social Services, nearly all IHSS recipients are also beneficiaries of the California Medical Assistance Program (Medi-Cal)—California’s implementation of the federal Medicaid program—which the State provides to Californians who have minimal assets and an annual income of less than $23,500 for a family of two or who meet certain requirements. IHSS recipients receive an average of about 100 hours of services per month. State law allows up to 195 hours per month of care, or 283 hours of services each month for severely impaired individuals.
As of December 2019, more than 520,000 individuals provided supportive services (caregivers) through the IHSS program. The majority of these caregivers—74 percent—provide services to a family member. However, recipients retain the right to hire a caregiver or caregivers of their choice, as long as the caregiver meets certain basic requirements, such as securing a criminal background check clearance.
Importance of the IHSS Program
The IHSS program allows hundreds of thousands of low-income Californians to remain safely in their homes, saving the State millions of dollars compared to the expense of providing care in long-term care facilities. More than 45 percent of recipients enter the IHSS program because they qualify for a nursing home level of care.Social Services defines recipients as requiring nursing home levels of care when they need help with specific activities, such as routine bodily functions; when they have significant memory impairments; or when they require more than 195 hours of care per month. Recipients’ doctors train and certify IHSS caregivers to provide any necessary paramedical services those recipients need, such as administering medication or giving injections, blood testing, and wound care. Long-term care expenses average from about $39,000 to $170,000 annually, depending on the level of care needed, compared to average IHSS expenses of about $17,000 per year. As a result, the IHSS program saves the State between $22,000 and $153,000 annually for every recipient who would otherwise have transitioned to long-term care provided through Medi-Cal.
Demand for IHSS services will increase further in the next 10 years as the number of eligible California seniors grows. The Department of Finance (Finance) projects that California’s senior population will grow from 6 million in 2019 to nearly 8.5 million by 2030—an increase of more than 40 percent. Because the majority of IHSS recipients—55 percent as of 2019—are seniors, this will result in a growing number of people needing IHSS care. Anticipating this impending shift in California’s population, in June 2019, the Governor issued an executive order indicating that the State is committed to helping all Californians age with dignity and independence, and that all older adults should be able to choose to remain in their communities as they age. As the goal of the IHSS program is to provide recipients the assistance necessary to remain safely in their homes, ensuring an effective program is critical to meeting the State’s commitment to its seniors. Further, a 2013 study by the National Institutes of Health found that many low-income disabled seniors who rely on IHSS have few or no other options for their care. The study also found that disabled older adults often have changing needs for assistance, which the IHSS program’s design supports.
IHSS Program Administration and Oversight
Counties and the State share responsibility for administering the IHSS program. Under state law each county is obligated to ensure that services are provided to all recipients during each month of the year. As indicated in Figure 1, after a person submits an application for the program, county social workers determine whether the person is eligible and generally determine the need for services following a face-to-face meeting. Counties identify the number of hours of services needed and the services that the IHSS program will pay for based on regulations issued by Social Services that govern authorized services. For example, a county can approve hours for assisting a recipient with personal care, such as showering or toileting, but it is not able to approve other services, such as caring for pets. Counties also accept caregiver applications to provide services and provide training for prospective caregivers. Most counties have established public authorities—entities separate from the counties—to perform various functions related to caregivers, such as investigating the qualifications of potential personnel. Figure 1 details the caregiver enrollment process. Social Services administers the IHSS program at the state level and is generally responsible for its oversight. It issues guidance to counties and develops training materials for caregivers. It also generally has the authority to adopt regulations regarding the IHSS program.
Figure 1
State Regulations Specify the Amount of Time Counties Have to Enroll IHSS Recipients and Caregivers
Source: Social Services IHSS regulations and documents.
* The steps shown here do not need to be completed in this specific order although all must be completed within the set time frame.
IHSS Program Funding
The IHSS program operates using a mix of federal, state, and county funds. In fiscal year 2019–20, California budgeted $4.5 billion for its share of the program, counties contributed $1.6 billion, and the federal government provided $7.2 billion, for a total of $13.3 billion. County funds for IHSS come primarily from revenue from vehicle licensing fees and a sales tax allocated to the counties to fund various programs, including IHSS. Counties use general-purpose funds to cover any remaining funding needs. Figure 2 illustrates the sources of funds for IHSS.
Figure 2
State Regulations Specify the Amount of Time Counties Have to Enroll IHSS Recipients and Caregivers
Source: State law, Social Services IHSS program documents.
Beginning July 1, 2012, changes in state law outlined new requirements regarding the counties’ share of IHSS costs. Rather than paying a set percentage of the cost of providing caregiver services, as they had done previously, counties were required to pay a portion of the IHSS program costs in a specified amount called a maintenance of effort (county contribution). This county contribution was originally based on the amount expended by each county during fiscal year 2011–12. Beginning in 2014, state law adjusted county contributions by a flat percentage rate, known as the inflation factor. In 2017, Finance found that the method for determining county contributions was leading to increased costs for the State’s General Fund; in response, beginning July 1, 2017, the Legislature increased the total amount of county contributions by almost $600 million and, beginning July 1, 2018, it increased the inflation factor from 3.5 percent to 5 percent. Although state law reduced the amounts counties would be responsible for by appropriating a series of offsets—additional state funds appropriated to IHSS—a follow-up report by Finance in 2019 noted that the revenue sources set aside for counties to pay their IHSS contribution were not sufficient to cover this level of increased costs. Beginning July 1, 2019, state law reduced total county contributions by $500 million and beginning in July 2020, it lowered the inflation factor to 4 percent. Table 1 shows an example of the county contribution Kern County paid from fiscal years 2012–13 through 2018–19 as well as the inflation factor set by the State in each year. We found counties that locally negotiate caregiver wage increases pay a greater contribution, as we discuss in more detail in Chapter 1.
Table 1
Kern County’s Contribution Increased Based on the State’s Inflation Factor, a Locally Negotiated Wage Increase, and Changes to State Law| FISCAL YEAR | INFLATION FACTOR | KERN COUNTY CONTRIBUTION (millions of dollars) |
| 2012–13 | N/A | $7.46 |
| 2013–14 | N/A | $7.52* |
| 2014–15 | 3.5% | $7.88* |
| 2015–16 | 3.5% | $8.15 |
| 2016–17 | 3.5% | $8.44 |
| 2017–18 | 3.5% | {$12.60†} $10.18 |
| 2018–19 | 5% | {$13.23†} $11.16 |
Source: State law, Social Services’ communication with counties.
* County contribution includes increases of $61,000 in fiscal year 2013–14 and $154,000 in fiscal year 2014–15 for a locally negotiated wage increase in fiscal year 2013–14.
† In 2017, the Legislature increased the amount of county contributions, then provided counties with state general funds to reduce the amounts counties would pay. The amounts in brackets show the county contribution before the reductions. The reductions continued during fiscal year 2018–19.
Concerns Leading to the Audit
Various groups, including the Public Policy Institute of California; the University of California, Berkeley, Center for Labor Research and Education; and the Legislative Analyst’s Office have expressed concerns with the IHSS program, including concerns related to caregiver shortages, the effect that rapid growth in California’s senior population could have on the program, and the negative financial impact low wages can have on most caregivers. For example, in 2017 the Center for Labor Research and Education noted that low caregiver wages in the home care industry, which includes IHSS, make it difficult to recruit enough workers to meet rapidly growing demand. The report concluded that, unless California addresses low caregiver wages, the elderly and people with disabilities will not get the care they require, caregivers will continue to live in poverty, and the public cost of long-term care will increase. As a result of concerns related to the IHSS program, the Joint Legislative Audit Committee (Audit Committee) directed the California State Auditor’s Office (State Auditor) to perform an audit of the IHSS program. Appendix E outlines the Audit Committee’s objectives and the methods we used to address them.