IMPACTS ON LOW-INCOME CHILDREN

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1 Population Impacts of Proposed State Budget Cuts: How Vulnerable Children, Adults, and Seniors Are Impacted IMPACTS ON LOW-INCOME CHILDREN Medi-Cal. Reinstate quarterly status reporting for children enrolled in Medi- Cal. Healthy Families Program. 5% rate reduction to plans Premium increases Co-payment increases Limit dental coverage California Children s Services. 10% reduction for eligibility determination and case management of CCS children. 10% reduction in payments to CCS medical therapy units. Approximately 157,395 children would be impacted monthly by the proposed eligibility change. Those who are dropped from the system will re-enroll when they present with a serious illness, resulting in higher costs. Continuity of enrollment allows longer periods of enrollment in managed care avoiding some of the use of expensive emergency rooms and other episodic services that occur more frequently when enrollees churn in and out of coverage. Concern about access to services if the rate reductions result in fewer providers and/or health plans. Based on experiences in other states, some families will choose not to continue coverage due to premium increases. The Administration assumed a 1.25% decrease in utilization of services, which shows up as a rate reduction to plans. The Administration expects subscribers with significant dental needs to spread services over more than one year if feasible to avoid the dental cap. They estimate 5% of subscribers will be affected by the cap. This could drastically affect the services and health care of the severely ill children who qualify for CCS. Medical Therapy cuts would result in longer waiting lists for children to receive physical therapy. Delays in medical care for CCS children could result in greater usage of emergency rooms. Page 1 of 10 $194.8 million ($97.4 Rate reduction: $63.1 million ($40.7 million federal funds) Premiums: $31.3 million ($20.2 million federal funds), resulting from increased revenue Co-Pays: $9.6 million ($6.2 million federal funds) ), resulting from increased revenue Dental: $17.7 million ($11.4 million federal funds) $9 million ($5.4 million federal funds)

2 Child Health Disability Prevention (CHDP) Program. 10% reduction for outreach, education and case management for children receiving CHDP preventive health care. Early and Periodic Screening Diagnosis and Treatment (EPSDT). The Department of Mental Health proposes a new requirement for counties to conduct prior authorizations for child day treatment services that last over six months. Early and Periodic Screening Diagnosis and Treatment (EPSDT). EPSDT rates are also proposed to be cut by 5% and the cost of living adjustment eliminated. CalWORKs. The Administration s proposals would alter the state s sanction policy, place new time limits on assistance to children whose parents are not aided, and limit aid to children whose parents have reached their 60-month time limits. Food Stamps. 4 percent cut to county Food Stamp administration. Child Care. Reduce funding for certain child care and development programs Since CHDP provides follow-up to CHDP Gateway to assist families in completing Medi-Cal /Healthy Families applications, the number of Gateway children who become enrolled in Medi- Cal/Healthy Families will probably diminish. These projected savings would only be realized if less day treatment services are authorized for EPSDT-eligible children. No evidence exists to suggest that children are getting inappropriate clinical services and that the savings will occur. Denial of needed day treatment services to high risk and high need children and youth could result in higher cost and more restrictive placement in hospitals, or in youth ending up in the criminal justice system. Additionally, reductions to day treatment could reduce the number of foster families willing to care for these children. If counties cannot secure EPSDT providers, children being served by EPSDT, including foster children and probation youth, may have trouble accessing necessary mental health services. The proposals, if combined, would eliminate assistance to over 150,000 children currently receiving CalWORKs benefits. The proposed cut would result in the loss of an estimated 290 Food Stamp eligibility workers statewide. The loss of staff will result in delayed eligibility, fewer eligible people receiving Food Stamps, and more errors. Potential for increased utilization of Food Banks if applications are delayed. The Administration estimates 8,000 state preschool and child care slots would be reduced. Page 2 of 10 $3 million ($1.9 m federal funds) $19.5 million $24.6 million ($12.3 Sanction policy: $21 million savings 5-year Safety Net limit: $259 million savings Child-only savings: $242 million GF $35.4 million ($20.5 $198.9 million

3 Child Care. Freeze income eligibility for child care services at the level in Freezing the income limit means that working families receiving child care services lose eligibility at a lower income level than if the income limit were increased. Page 3 of 10

4 IMPACTS ON FOSTER CHILDREN & PROBATION YOUTH Child Welfare Services. 11.4% reduction to CWS. Counties provide a broad range of services through the Child Welfare Services Program to abused and neglected children and families at risk of abuse and neglect including emergency response, assessment, family maintenance, family reunification, and permanent placement. $129.6 million total funds ($45.9 million federal funds) Rate cuts to Foster Family Homes, Group Homes, Adoptions Assistance, and KinGAP. 10% cut to basic rate, specialized care and clothing allowance rates for foster family homes and group homes. Foster family agencies are proposed to receive a 5 percent cut. 10% cut to basic rate, specialized care and clothing allowance rates for Adoptions Assistance Program. 10% cut to basic rate, specialized care and clothing allowance rates for KinGAP This across-the-board cut will result in 1,005 fewer social workers and significantly reduced services for thousands of abused and neglected children. The Child Welfare System is already critically underfunded, as the current budgeting methodology uses social worker caseload standards not updated since Counties are very concerned that these reductions will destabilize foster care placements and potentially harm foster children. Numerous counties report a steady loss of foster homes in the last five years up to a 50 percent loss in higher cost counties because of low reimbursement rates and lack of supportive services. The basic rate paid by the state has not been increased in over five years, despite the fact that the cost of living and particularly housing, transportation, and utility costs have all increased. The cost of living has increased by more than 21 percent in the last five years (based on changes in the California Necessities Index or CNI). The reduction in the specialized care rate may reduce placement alternatives for children with special needs, resulting in more expensive placements. Please note that county probation departments utilize group Page 4 of 10 $190.3 million ($49.3

5 Dependency Drug Court. 10% reduction to drug courts, including Dependency Drug Court. CalWORKs. The Administration s proposals would alter the state s sanction policy, place new time limits on assistance to children whose parents are not aided, and limit aid to children whose parents have reached their 60-month time limits. Early and Periodic Screening Diagnosis and Treatment (EPSDT). The Department of Mental Health proposes a new requirement for counties to conduct prior authorizations for child day treatment services over six months. Early and Periodic Screening Diagnosis and Treatment (EPSDT). EPSDT rates are also proposed to be cut by 5% and the cost of living adjustment eliminated. Community Treatment Facilities. The Governor is proposing to eliminate the supplemental rate for CTFs in the budget year. homes to place youth from the juvenile justice system. The proposed reduction will lead to fewer clients being served, more clients serving jail or prison terms and an increase in associated costs, and increased recidivism. Dependency Drug Courts have saved more than 21,000 days in foster care. More than 98 percent of babies born to female participants were drug free in These remaining proposals, if combined, would eliminate assistance to over 150,000 children currently receiving CalWORKs benefits. Studies have shown that families in sanction status are more likely to appear in Child Welfare Services caseloads. In Illinois, for example "the odds of having a child placed outside the home or having a Child Protective Services case opened were 53 percent higher for sanctioned cases than for non-sanctioned cases." Denial of needed day treatment services to high risk and high need children and youth could result in higher cost and more restrictive placement in hospitals, or in youth ending up in the criminal justice system. Additionally, reductions to day treatment could reduce the number of foster families willing to care for these children. If counties cannot secure EPSDT providers, children being served by EPSDT, including foster children and probation youth, may have trouble accessing necessary mental health services. CTFs were created by the Legislature as community placements of last resort for the most seriously emotionally disturbed youth who have not succeeded in any other category of residential program. A supplemental rate was established to provide a reimbursement level sufficient to encourage providers to establish CTF programs. If this placement option is eliminated, children and youth in the foster care and probation systems with serious mental health issues will lose a valuable placement option. Some of Page 5 of 10 $3.1 million for all drug courts Sanction policy: $21 million savings 5-year Safety Net limit: $259 million savings Child-only savings: $242 million GF $39 million ($19.5 $24.6 million ($12.3 Unknown costs to child welfare and probation youth placements. The total supplemental rate is $3.6 million ($1.2 million state GF).

6 these children may end up in state mental hospitals or juvenile hall. Juvenile Probation and Camps Program. 10% budget reduction. Loss of these funds could mean closure or service reduction of some county-operated residential facilities. Displaced wards would be placed in group homes, thereby increasing impacts on foster care. It would also result in overcrowding in the remaining units, and loss of appropriate placement options for juvenile offenders. $20.1 million reduction. Juvenile Justice Crime Prevention Grants. 10% reduction. These services represent core programs vital to the local probation system and must be sustained to implement the continuum of care envisioned in the juvenile justice realignment of JJPCA has enabled counties to develop and implement comprehensive multi-agency juvenile justice plans to stem juvenile delinquency using a holistic approach to the problem of juvenile crime. Loss of these funds would result in diminished services for this population and would probably cause a rise in juvenile delinquency. $11.9 million Page 6 of 10

7 IMPACTS ON SENIORS AND DEPENDENT ADULTS Adult Protective Services. 10% cut to the APS program Translates into a loss of 75 APS social workers statewide, with 18,755 fewer incidents of elder abuse and neglect investigated each year and, of those that are investigated, an estimated 2,509 reports will have to be closed without a face to face interview. Loss of $11.4 million ($5.3 million federal funds) In-Home Supportive Services (IHSS). An across-the-board 18 percent reduction in domestic and related services to take effect July 1, 2008 for all clients in receipt of those services. These services include non-medical services such as meal preparation and clean-up, laundry, food shopping and errands. In-Home Supportive Services (IHSS). 10 percent cut to County administration funding. Shift IHSS reassessments from every 12 months to every 18 months. Supplemental Security Income/State Supplementary Payment (SSI/SSP). The budget proposes to suspend the June 2008 and 2009 COLAs. The Legislature delayed the June 2008 COLA to October Potential cost shifts to local law enforcement and related emergency services, including psychiatric and paramedic response. Reduced life expectancy for victims of abuse. Because most recipients receive domestic care services, this reduction will have an effect on nearly all IHSS recipients and providers. The average IHSS recipient will go from having 37 hours of domestic and related services to 30.4 hours per month, and their total services will be reduced from 86.6 hours to 80 hours per month. Many of the benefit restoration requests may be granted, given that the original assessment of program social workers will constitute proof that clients are in need of these services to avoid placement into a long-term care facility. Therefore, the savings will not be achieved. Counties are concerned that the lack of administrative funding will impact the ability to timely assess and reassess applicants, thus impacting consumers. The 12 to 18 month shift will not result in workload relief because of documentation and paperwork requirements. SSI/SSP provides cash grants to persons who are elderly, blind and/or too disabled to work and who meet the program s income and resource requirements. Monthly grants in 2009 will be $903 for individuals and $1,581 for couples. Please note that SSI/SSP recipients are not eligible for a separate Food Stamp grant; the SSI/SSP grant includes funds for food. One percent of SSI/SSP recipients Page 7 of 10 $110 million GF $28.7 million ($18.5 The 2008 delay saves $67.8 million. The 2009 proposal saves $30.3 million in and $363.9 million in

8 Senior Nutrition Programs. The budget proposes to reduce funding for a number of senior nutrition programs. Linkages Program. Multipurpose Senior Services Program (MSSP). 10% reduction. have earnings from work. Reductions include: Home Delivered Meals: $316,000 GF reduction Congregate Nutrition: $253,00 GF reduction Brown Bag Program: $60,000 GF reduction Seniors Farmers Market Program/Public Outreach: eliminate the program for $791,000 ($130,00 GF) The Linkages Program provides care management services to elderly and younger adults aged 18 and older with functional impairments who are at risk of institutionalization. The reduction would be allocated equally across all sites. The proposal would reduce the number of individuals served statewide by an estimated 335. IHSS and APS frequently refer cases to this program for care management services for disabled adults and seniors. MSSP is a Medi-Cal home and community-based service waiver aimed at maintaining elderly Medi-Cal individuals who meet the nursing home level of care in community settings. The reduction affects 1,179 funded client slots. IHSS and APS also frequently refer cases to this program for care management services for disabled adults and seniors. $1.42 million $544,000 GF $5.052 million ($2.526 million GF) Page 8 of 10

9 IMPACTS ON LOW-INCOME ADULTS Medi-Cal. Reinstate quarterly status reporting for adults enrolled in Medi-Cal. Medi-Cal. Elimination of Dental Benefits Approximately 8,000 adults would be impacted monthly by the proposed eligibility change. Those who are dropped from the system will re-enroll when they present with a serious illness, resulting in higher costs. Continuity of enrollment allows longer periods of enrollment in managed care avoiding some of the use of expensive emergency rooms and other episodic services that occur more frequently when enrollees churn in and out of coverage. Medi-Cal patients may present with more acute medical conditions due to the lack of dental treatment. $17.2 million ($8.6 $229.9 million ($114.9 million federal funds Medi-Cal. 10% Provider Rate Reductions. Food Stamps. 4 percent cut to county Food Stamp administration. Child Care. Reduce funding for certain child care and development programs Child Care. Freeze income eligibility for child care services at the level in To the degree that physicians may decide to stop taking Medi-Cal patients, demand for services at county hospitals and clinics would increase and access to care will be reduced. The proposed cut would result in the loss of an estimated 290 Food Stamp eligibility workers statewide. The loss of staff will result in delayed eligibility, fewer eligible people receiving Food Stamps, more errors, and more hunger. The Administration estimates 8,000 state preschool and child care slots would be reduced. Freezing the income limit means that working families receiving child care services lose eligibility at a lower income level than if the income limit were increased. $1.2 billion ($602.4 million General Fund) $35.4 million ($20.5 $198.9 million IMPACTS ON PERSONS WITH MENTAL HEALTH NEEDS Mental Health Managed Care. The Administration proposes a 5 percent reduction to the State Maximum Allowance (SMA) rate to county mental health These proposals limit the number of individuals who are able to access community-based outpatient services, but in the long term, they will result in increases in the population within the more costly state prison and state hospital Page 9 of 10 $46.7 million ($22.9 million Federal) in

10 managed care plans and elimination of the cost of living adjustment. Supplemental Security Income/State Supplementary Payment (SSI/SSP). The budget proposes to suspend the June 2008 and 2009 COLAs. The Legislature delayed the June 2008 to October systems. SSI/SSP provides cash grants to persons who are elderly, blind and/or too disabled to work and who meet the program s income and resource requirements. A number of the persons are disabled by mental illness. Monthly grants in 2009 will be $903 for individuals and $1,581 for couples. Please note that SSI/SSP recipients are not eligible for a separate Food Stamp grant; the SSI/SSP grant includes funds for food. One percent of SSI/SSP recipients have earnings from work. IMPACTS ON ADULTS IN THE CRIMINAL JUSTICE SYSTEM The 2008 delay saves $67.8 million. The 2009 proposal saves $30.3 million in and $363.9 million in Proposition 36 and Offender Treatment Program. Overall 10% reduction to funding for both programs. Counties will increase wait lists for treatment and in some cases clients will be referred to lower of levels of care. As clients are unable to access appropriate treatment, outcomes will decline. Counties are concerned about the potential for increased recidivism without appropriate treatment. $12 million Drug Courts. The Governor is proposing a 10% cut to drug courts, including the Comprehensive Drug Court Implementation (CDCI), Drug Court Partnership (DCP) and Dependency Drug Court. Recent studies have found that drug courts result in savings in prison costs that outweigh program costs, as well as reduced homelessness, increased employment, increased school attendance and grades, an increased number of drug-free births, reduced time to family reunification, and increased reunification rates. DCI avoided $35 million in prison costs in ; DCP avoided $27 million in prison costs in $3.1 million to Drug Court programs Page 10 of 10

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