Megan O'Neilⁱ
World Institute on Disability
Access to Assets Project

In his fiscal budget for 2007, President Bush unveiled a proposal that contains new cuts in Medicaid that would reduce federal funding by $1.5 billion over the next five years. A substantial majority of these cuts would come from cost-shifting to states. These cuts are on top of the cuts already made in Medicaid and Supplemental Security Income in the budget reconciliation bill that Congress recently approved. This comes at a time when the number and percentage of Americans living in poverty has increased for four consecutive yearsⁱⁱ.

Yet, this article will focus on an option where not only are Medicaid dollars being saved, but people with disabilities are given increasing amounts of choice over the direction of their lives. 'Self-directed services' has as many different names and varieties of implementation as the people it serves. Beginning with the 1960's Independent Living Movement, advocates began a fundamental shift towards individuals with disabilities controlling how, who, and what services were delivered and away from the medicalized agency controlled system. Tom Nerney at the Center for Self-Determination further expanded the original concept of self-directed services to better include those with cognitive or developmental disabilitiesⁱⁱⁱ. This article will not attempt a comprehensive analysis of all the programs; what we do offer is a brief overview of the concept of self-directed services and present a few ways in which incorporating financial literacy skills and asset building opportunities can further promote the quality of life and economic well-being of people with disabilities.

Cash & Counseling

About 1.2 million people receive disability-related supportive services at home through state Medicaid plans or home- and community-based waiver programs. (See the March 2006 EQUITY Tip of the Month for more information about recent expansion made to these waiver programs.) Under state plans, services traditionally have been restricted to assistance with personal care and homemaking provided by licensed agencies. Waiver programs have offered additional services, but coverage often has been limited, with a case manager deciding whether services were needed. In contrast to these traditional service models, states are increasingly offering Medicaid beneficiaries and their families the opportunity to obtain supportive services from individual providers, who are recruited, hired, trained, and managed by the service recipient.. This alternative is called "consumer-directed" care^iv.

The Cash & Counseling approach provides consumers with a flexible monthly allowance that is based on an individualized budget, which allows them to direct and manage their own personal assistance services and address their own specific needs. In addition, this innovative program offers counseling and fiscal assistance to help consumers manage their budget and responsibilities by themselves or with the aid of a representative. These main features are adaptable to consumers of all ages with various types of disabilities and illnesses. Cash & Counseling intends to increase consumer satisfaction, quality, and efficiency in the provision of personal assistance services. The vision guiding this expansion is the promise of "a nation where every state will allow and even promote a participant-directed individualized budget option for Medicaid-funded personal assistance services". Kevin J. Mahoney, PhD, National Program Director of the National Cash & Counseling Program Office at the Boston College Graduate School of Social Work^v.

The original demonstration program of Cash & Counseling operated in New Jersey, Arkansas, and Florida sponsored by The Robert Wood Johnson Foundation (RWJF), the Office of the Assistant Secretary for Planning and Evaluation in the United States Department of Health and Human Services (ASPE/DHHS), and the Administration on Aging (AoA). In addition, the Centers for Medicare and Medicaid Services (CMS) reviews states' Section 1115 demonstration or 1915 (c) waiver applications and provides continuing oversight and technical assistance in the waiver process^vi.

Due in large part to the success of these three initial sites, the program has been expanded to eleven states. The eleven states include Alabama, Iowa, Kentucky, Michigan, Minnesota, New Mexico, Pennsylvania, Rhode Island, Vermont, Washington, and Pennsylvania. Additionally, Illinois has been funded by the Retirement Research Foundation to implement its own Cash & Counseling program. The various states are different stages in the development process. According to Jim Parker, New Mexico Aging and Long-Term Services Department, the State program is in the final phase of applying for a 1915c waiver which it hopes to implement, following CMS approval, July 1, 2006^vii. Larger states, like Pennsylvania, Michigan, and Illinois are still early in negotiations. Other states like Iowa, with the driving influence of Jack Hillyard of the University of Iowa's Center for Disabilities and Development, are creating innovative programs (See the March 2006 EQUITY Model of the Month article on the Smart Start program), incorporating financial literacy and asset building tools, like Individual Development Accounts.

California's In-Home Supportive Services (IHSS)

In the 1950's in Los Angeles County, CA, the March of Dimes began funding relatives to care for adults with post-polio in their own homes so they could move out of the costly hospital setting. By 1960, the State began paying for attendant care based on individual need under the Aid to the Disabled program administered by the County (up to a maximum of $300 in 1973). Based on the philosophy of the Independent Living Movement of the 60's, in 1973 the disability community successfully advocated for a new Homemaker-chore program, based on individual need with the consumer in charge of hiring and supervising their worker rather than having an agency provide the worker and which allowed family members to be paid. In the late 1970's it was renamed the In Home Supportive Services (IHSS) program. This kind of consumer-directed in-home care program was unique and a revolutionary concept up until recently in the U.S.^viii

Today in California, over 360,000 people are receiving monthly In-Home Supportive Services offered through California Department of Social Services. The IHSS Program helps pay for services such as housecleaning, meal preparation, laundry, grocery shopping, personal care services, accompaniment to medical appointments, and certain services prescribed by a medical provider that require assistance.

IHSS provides a maximum of 283 hours per month and allows the consumer to hire as their provider either someone unrelated or a family member. Ordinarily, the personal assistant is paid by the State Controller's Office after the services have been provided and the IHSS recipient submits timesheets. However, those IHSS recipients receiving Advance Pay directly pay attendants from the funds they receive once per month^ix. A consumer with over 20 hrs of personal care can request the option of advance pay, in which the consumer receives funding at the beginning of the month and can pay it the workers they use, allowing greater flexibility.

According to Charles Calavan, Executive Director of the Public Authority for IHSS in Alameda County, "Beginning in 1993, legislation allowed counties to set up public authorities to provide home care worker registries, do background checks, provide training and serve as employer of record for wages and benefits so there could be bargaining with the union representing the IHSS workforce". Only a few counties actually created Public Authorities from 1994-1999 until the State mandated that all counties have a Public Authority or a similar entity by 2003. Public Authorities assist IHSS consumers and attendants to work cooperatively with the county-administered program to strengthen IHSS. The Alameda County Public Authority also offers a Rapid Response emergency replacement attendant service at no cost to IHSS recipients^x. Washington and Oregon states have also established Public Authorities for their home and community-based workers^xi.

Opportunities for Building Assets

While programs that allow individuals with disabilities the freedom to direct their own care and manage their own lives are growing in popularity, there is a part of the puzzle that has been largely unexplored. These self-directed options hold tremendous opportunity for people with disabilities. To further enhance the economic self-sufficiency of people with disabilities, financial literacy skills and asset building opportunities need to be incorporated.

Financial Literacy

The original Cash & Counseling program demonstrated that most individuals choose to adopt a fiscal agent, yet financial counseling is rarely offered. Compare the California IHSS system (with no allowance for a fiscal agent or financial literacy counseling) and the Cash & Counseling demonstration projects (where fiscal agents are available, but little individual financial literacy trainings are being offered). Supplying basic money management skills, including check writing, accounting, payroll functions (like preparing and submitting tax returns) could further enhance independence and understanding of the process that in some cases, individuals are expected to manage.

The asset building community can help supply the key- with years of proven experience and data- that given the financial literacy skills, people can and do save money. Yet, without the tools necessary to make good budgetary choices, it is understandable why so many participants in these programs would choose to have a fiscal intermediary assigned. It must be acknowledged that some with significant cognitive impairments may not be able to independently manage their finances; yet, without offering the option of financial counseling, then no one is making a truly informed choice.

Building Assets

One of the stated advantages of the self-directed system is that the flexibility allows individuals to meet their needs through the purchase of goods and services not available through the traditional system. For example, those with Alzheimer's can secure companion services. On the other hand, individuals can choose not to use services they do not want or need. Yet, beyond daily maintenance services, little exploration has been done in the area of building long-term assets as a potential mechanism to enable employment and/or the promise of leaving the public benefit roles. Here are a few suggestions on how to incorporate building assets into self-directed services:

1. Incentivize Saving. Most programs, if they do allow for any direct payment, require that any saving over the budgeted amount must be repaid. For those programs that do not pay the individual directly, recipients are generally allocated a budget that if they do not use- they loose. This means that there is no real incentive to be efficient. Why not allow an individual to save the money already allotted to them in an account structured like a Plan for Achieving Self-Support (PASS)? (For more information on PASS plans, see the November 2004 EQUITY Responds section.) Individuals could use the money that they have been determined eligible for, to save for employment-related goals that may be more expensive than their budget allows. This would encourage people to use the services they need, but not be penalized for saving money. They, in turn, would be able to save for things like computers or vehicles that could enhance their employment opportunities.

2. Transition Savings. For individuals wanting to move out of nursing homes, affordable housing is a major barrier. If there ever was any savings, it went to the nursing home to pay for their care. As more emphasis is placed on providing personal assistance in the home, how does an individual wanting to live in the community save even enough money to pay for their first month's rent and a security deposit or to purchase basic furnishings? While some states do have Medicaid waivers that help fund the transition out of nursing homes, this is not the case in every state, nor do these funds cover unforeseen costs. Allowing individuals an opportunity to save a percentage of the money that the state currently pays the nursing home, would the first step towards self-directed care and facilitating independence.

3. Change State's Medicaid Asset Limits. Many states have extremely restrictive asset tests- even on the programs that allow people with disabilities to “buy-in” after becoming employed. For example, in California, people with disabilities are allowed to purchase Medicaid coverage, which allows individuals to keep their IHSS payments to cover even attendants that can be used in the workplace. For more information on the 250% Working Disabled Program, see Disability Benefits 101.

   However, the program also has an asset limitation ($2,000 for an individual and $3,000 for a couple). This program encourages people to work, but penalizes the individual for saving unless they also are able to enroll in an Individual Development Account that receives funding from the federal Assets For Independence Act (AFIA) or state Temporary Assistance for Needy Families (TANF). Given the limited availability of these programs, many people are unnecessarily penalized for working and saving money earned from employment. While states have no control over the asset limitations of Supplemental Security Income (SSI), which is federally regulated, they do have the authority to address the Medicaid limits. Changing the asset limitations of these programs would enhance people with disabilities ability to work and become more economically self-sufficient.

Conclusion

Self-directed services support and enhance options for people with disabilities to live in their own homes, while proving to be a cost-effective measure for the allocation of state Medicaid dollars. Sixteen states now spend more on home and community-based services than on nursing home care and the National average is on the verge of reversing the institutional bias (46% of Medicaid dollars went to Nursing Facilities compared to 37.3% for Home Health & Personal Care) More and more states are applying for waivers (see the March 2006 EQUITY Tip of the Month for more information on waivers available to states) from the Centers for Medicaid and Medicare Services (CMS).

Each of the systems of self-direction included in this article- Cash & Counseling and California's In Home Supportive Services- purport to have to goals of enhancing the independence of people with disabilities. Yet, neither provides the skills and supports in order to enable the end user to become financially literate. Finding ways of incorporating financial literacy training and asset building opportunities- including amending policy regulations that prevent asset accumulation- into self-directed services is one step in furthering the economic self-sufficiency of people with disabilities.