ElderWeb

The Social Security Administration has revised the rules for counting the value of personal property when determining eligibility for Supplemental Security Income (SSI). The new rules will make it easier to qualify by clarifying that there will be no limit on the dollar value of personal property or a vehicle used by the recipient or a member of his or her household. The rule also states that gifts of clothing will no longer count as income. The changes to SSI eligibility impact Medicaid because anyone who qualifies for SSI is automatically eligible for Medicaid as well.

The explanation of the rule change was printed in the Federal Register February 7, 2005 (Volume 70, Number 24):

"We are revising our regulations that explain how we determine an individual's income and resources under the supplemental security income (SSI) program in order to achieve three program simplifications. First, we are eliminating clothing from the definition of income and from the definition of in-kind support and maintenance. As a result, we generally will not count gifts of clothing as income when we decide whether a person can receive SSI benefits or when we compute the amount of the benefits. Second, we are changing our resource-counting rules in the SSI program by eliminating the dollar value limit for the exclusion of household goods and personal effects."

"As a result, we will not count household goods and personal effects as resources when we decide whether a person can receive SSI benefits. Third, we are changing our rules for excluding an automobile in determining the resources of an SSI applicant or recipient. We will exclude one automobile (the 'first' automobile) from resources if it is used for transportation for the individual or a member of the individual's household, without consideration of its value. These changes will simplify our rules, making them less cumbersome to administer and easier for the public to understand and follow. Our experience of nearly 30 years of processing SSI claims indicates that these simplifications will have minimal effect on the outcome of SSI eligibility determinations."

DATES: These regulations are effective on March 9, 2005.

PRESS RELEASE

Spending Pressures Continue Despite Revenue Growth
Recovery Continues, but Rise in Medicaid Costs Outstrip Growth in Revenue

WASHINGTON--Despite the gradual improvement in the nation's economy, states, increasingly burdened by rising health care and Medicaid costs, continue to recover slowly from the worst fiscal crisis in the last six decades, according to the National Governors Association (NGA) and the National Association of State Budget Officers (NASBO).

In a report released today, The Fiscal Survey of States, NGA and NASBO found that revenue collections are now narrowly exceeding budgeted estimates in nearly all states in fiscal 2004. However, state spending pressures, specifically costs associated with health care, remain especially significant. Moreover, Medicaid continues to grow at high rates with no relief in sight.

"It's important to remember that we have just come through a tremendously difficult fiscal period, one in which we are only now beginning to see relief," said NGA Executive Director Raymond C. Scheppach. "The light at the end of the tunnel is beginning to appear; unfortunately, it's a long tunnel. Are states better off than they were a couple years ago? Certainly. Are they where they want to be or where they should be? No way, and that is attributable to the rising health care costs."

During fiscal 2005, Medicaid is estimated to grow as high as 12.1 percent due in part to the expiring federal fiscal relief. Long term growth of Medicaid is expected to be a hefty 8 to 9 percent--well above expected state revenue growth. In fact, according to NASBO's State Expenditure Report, estimates for fiscal 2004 revealed that for the first time ever, Medicaid is now a larger component of total state spending than elementary and secondary education combined.

While state finances are showing signs of improvement, state expenditures have increased slightly after being flat for a two-year period. State spending is expected to grow at 3.0 percent and 4.5 percent respectively in 2004 and 2005, below the 6.3 annual average since 1979, when the Fiscal Survey began tracking budget data.

"While there is relative improvement from the fiscal malaise of the past few years, our findings show that states' fiscal situations will remain difficult for the foreseeable future," said Scott Pattison, executive director of NASBO. "Medicaid spending continues to be driving state budgets. The bottom line is that the pressure from Medicaid and other skyrocketing health care costs makes it difficult for states to completely recover from these difficult fiscal times."

To control rising Medicaid costs, states have employed aggressive actions over the past four years. According to a recent Kaiser Family Foundation study, all 50 states implemented at least one new Medicaid cost containment strategy in fiscal 2004. Despite states' best efforts, Kaiser Foundation says, 35 states experienced Medicaid shortfalls in fiscal 2003 and 34 states anticipated shortfalls in fiscal 2004.

"The growth rate on Medicaid is rapidly reaching its breaking point. While the federal fiscal relief package that ended in June was a welcome reprieve for states, it was only a temporary band-aid for a much more serious ailment," Scheppach said. "States are employing a variety of cost containment strategies, but serious structural changes to Medicaid are necessary if they are to meet the needs of the nation's burgeoning senior population in the years to come."

In a sign that the national economy is continuing to improve, 15 states reduced their enacted budgets in fiscal 2004 by more than $2 billion, down from 40 states in fiscal 2003 that cut previously enacted budgets by nearly $12 billion. Three states report negative growth budgets in fiscal 2005, down significantly from fiscal 2003 when 21 states enacted negative growth budgets.

Following numerous years in which states did not meet growth expectations, revenue collections in fiscal 2004 narrowly exceeded budget estimates in 35 states. Ten states met their expected revenue targets, and only five states reported revenue estimates below original projections for the last fiscal year. In fiscal 2005, 24 states enacted tax and fee changes accounting for about $3.5 billion with more than $888.4 million coming from cigarette and tobacco taxes, and $710.6 million coming from sales taxes.

"After several years during which collections failed to meet targets, seemingly no matter how low states set their sights, a measure of revenue stability has returned. As economic recovery continues, state tax collections have become more robust," the report says. "However, from a budget perspective the margin of revenue security is narrow, even more so considering the spending pressures states are under, and states still face fundamental challenges regarding how they collect taxes and on what."

Against a backdrop of soaring health care costs and sluggish revenue growth, states are employing a variety of budget-balancing efforts. "Even though the overall fiscal situation seems to be getting better in many states, most are still keeping expenditures reigned in, especially considering pent-up demand that resulted from the recent fiscal crisis," the report says.

In addition to spending and revenue, year-end balances are another bellwether of the fiscal health of states. And, according the report, the total balances in the last few years "remain below what are generally considered an adequate financial cushion." The total balances for fiscal 2003 were $16.4 billion or 3.2 percent of expenditures, $25.3 billion or 4.8 percent of expenditures in fiscal 2004, and $18.6 billion or 3.4 percent of expenditures in fiscal 2005.

The Fiscal Survey of States assembles data self-reported by states on their general fund budgets. General fund budgets are the current operational plans states use to finance most broad-based state programs and services and thus are the most important element in determining states' overall fiscal health. General funds constitute about one-half of state expenditures. States also make expenditures from other dedicated state funds (such as for education or transportation), from bonds and federal grants-in-aid.

NASBO conducted the field survey between July and November 2004 and governors' state budget officers completed the surveys. Fiscal 2003 data represent actual figures, fiscal 2004 figures are preliminary, and fiscal 2005 data reflect appropriated budgets.

The Ohio Commission to Reform Medicaid recommends numerous program cuts to help balance the state budget, including the follow suggestions:

* Allow nursing home reimbursement to be set by administrative action rather than statute and cut reimbursement to nursing home providers by 3%
* Expand estate recovery by broadening the list of assets that can be recovered
* Implement "cash and counseling" voucher programs and other programs that allow consumers to participate in savings if they use less expensive programs
* Reduce the number of drugs that Medicaid will cover
* Step up pre-admission screening efforts to divert people away from nursing homes.

View report at: http://www.ohiomedicaidreform.com/

For more information, contact:
Joe Sutherland or Colleen Chapman,
301-652-1558

Model Program that Improves Quality of Life for Elderly Medicaid Beneficiaries and Those with Disabilities Expands to 11 New States

Evaluation of Original Three-State Cash & Counseling Program Found Participants Much More Satisfied with Services Received When They Direct Their Own Care. Expanded Program will Give Thousands More the Opportunity to Exercise Choice and Control Over the Supportive Services They Receive

BOSTON (October 7, 2004) '“ Funders of the original three-state Cash & Counseling program announced today that 11 new states will receive three-year grants of approximately $250,000 each to replicate and expand the successful program, which allows people eligible to receive supportive services through Medicaid to direct their own care and live more independently. The program is funded by The Robert Wood Johnson Foundation (RWJF) and the Office of the Assistant Secretary for Planning and Evaluation (ASPE) and the Administration on Aging (AOA) within the U.S. Department of Health and Human Services (HHS).

An independent evaluation of the original Cash & Counseling program by Mathematica Policy Research Inc. found that, in all three participating states, when Medicaid beneficiaries of various ages and disabilities were given the opportunity to direct their own supportive services and hire their own caregivers, their quality of life improved, satisfaction with services increased, unmet needs for care were reduced, and access to home care increased ¾ without compromising beneficiaries'™ health or safety (relative to randomly assigned control groups that received services from agencies).

And while impacts on the use and costs of Medicaid services are not yet available for all three Cash & Counseling programs, results from one (whose evaluation was completed earlier than the others) show that by the second year of enrollment, the consumer-directed option cost no more than agency care, due to lower spending for nursing home and other Medicaid services.

'œWe'™re thrilled to be able to expand this program to 11 new states because it was so obviously a winner for participants in Arkansas, Florida, and New Jersey,' said Risa Lavizzo-Mourey, MD, MBA, president and CEO of RWJF.

'œThis is wonderful news for elderly and younger people with disabilities,' said HHS Secretary Tommy G. Thompson. 'œThis successful model program will allow caregivers and beneficiaries to live independently and with the freedom they desire.'

Under the new Cash & Counseling program, 11 states received approximately $250,000 to replicate the program, and two of those states received an additional $100,000 to expand the model.

The 11 new Cash & Counseling State Programs are:

Alabama Department of Senior Services, $250,000
Iowa Department of Human Services, $250,000
Kentucky Department for Medicaid Services, $250,000
Michigan Department of Community Health, $250,000
Minnesota Department of Human Services, $350,000
New Mexico Aging and Long Term Service Department, $349, 153
Pennsylvania Governor'™s Office of Health Care Reform, $250,000
Rhode Island Department of Human Services, $250,000
Vermont Department of Aging and Independent Living, $249,416
Washington Department of Social and Health Services, $250,000
West Virginia Bureau of Senior Services, $250,000

Traditionally, state Medicaid programs have contracted with home care agencies to provide personal assistance services ¾ such as bathing, dressing, grooming, preparing meals, and housekeeping ¾ to the elderly and younger people with disabilities. Although those who are eligible for services may be able to choose among available agencies, frequently their decision-making power ends there. They often have little say in who provides the services or even when or how they are provided.

The experimental Cash & Counseling program was launched in 1995 to give Medicaid beneficiaries choice and control over their personal care needs. It provides a self-directed, individualized budget to recipients of Medicaid personal care services. Participants use the money to hire their own caregivers or purchase items ¾ such as chair lifts or touch lamps ¾ that help them live independently. Each person'™s budget is comparable to the value of services that he or she would have received from an agency. Consulting and bookkeeping services are available to help participants weigh their options and keep up with required paperwork.

'œProviding more choice and control to people who are capable of managing these very personal daily activities makes a tremendous difference in improving their quality of life,' said Kevin Mahoney, PhD, director of the Cash & Counseling program and a professor of social work at Boston College. 'œWith 11 new states launching programs, we hope we'™re that much closer to the day when every state will make this voluntary option available to Medicaid beneficiaries who have disabilities.'

Unlike the three original demonstration programs, the new round of Cash & Counseling programs will not include control groups. Grantee states will need to secure 1915(c) or 1115 waivers from the Centers for Medicare and Medicaid Services (CMS) in order to implement a participant-directed individual budget model for Medicaid.

The Boston College Graduate School of Social Work will serve as the National Program Office for the new program. The program is sponsored jointly by RWJF, ASPE, and the AOA. In addition, CMS reviews states'™ Section 1115 demonstration or 1915 (c) waiver applications and provides continuing oversight and technical assistance in the waiver process.

More information on Cash & Counseling is available online at www.cashandcounseling.org or through RWJF'™s Website at www.rwjf.org.