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California State Auditor Logo COMMITMENT • INTEGRITY • LEADERSHIP

In-Home Supportive Services Program
It Is Not Providing Needed Services to All Californians Approved for the Program, Is Unprepared for Future Challenges, and Offers Low Pay to Caregivers

Report Number: 2020-109

Summary

Audit Highlights . . .

Our audit of the Department of Social Services’ IHSS program highlighted the following:

Results in Brief

The In-Home Supportive Services (IHSS) program of the California Department of Social Services (Social Services) provides care to more than 591,000 lower-income elderly or disabled Californians (recipients), helping them to live independently in their 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. This assistance saves the State a significant amount of money, as without IHSS many recipients would require more expensive out of home care. Even so, some recipients are not able to get the care they need. In 2019 for example, more than 40,000 recipients on average did not receive needed in-home care each month, and that number is likely to grow. California’s population of those age 65 and older (seniors) will grow by several million in the coming decade, which will likely increase the demand for IHSS assistance. The gap between the number of recipients and the number of caregivers is widening and will likely increase the number of recipients who go without services. In addition, caregivers in IHSS are largely paid minimum or near-minimum wage. The low wages caregivers earn—far below a living wage—will make recruiting additional workers difficult.

State law requires counties to ensure that services are provided to all IHSS recipients each month; however, that is not always happening. From January 2015 through December 2019, the number of recipients statewide who lacked care grew from 33,000 to more than 40,000 on average each month. Over the five-year period, this equates to more than 130 million hours of services IHSS recipients needed but did not receive. County administrators provided several reasons why a recipient would not receive services, including extended hospitalizations, the inability to hire a provider, and recipients moving to a new location and requiring a new provider. These gaps in care can represent periods of increased risk of injury or other hardships for IHSS’s elderly and disabled beneficiaries. However, none of the counties we reviewed—Butte, Kern, San Diego, and Stanislaus—created the required annual county plans that would describe to Social Services how the counties would ensure services to all those eligible for the IHSS program. According to Social Services, it has not required—and counties have not created—such plans for at least 20 years.

Expected rapid growth in the number of recipients will likely place more strain on the IHSS program. According to the Department of Finance, the number of California seniors will increase from 6 million in 2019 to 8.5 million by 2030. Because seniors currently make up the majority of recipients, we expect demand for IHSS services to increase significantly. Counties are already not providing timely IHSS approval to all eligible applicants and timely initial services to many recipients, and they will face increasing strain to do so as the number of applicants increases. Further, although most IHSS recipients come to the program with a caregiver—usually a family member—and are therefore receiving assistance before entering the program, about 58,000 did not during the period we reviewed. Those recipients who only begin receiving services after they enter the program usually hire a nonfamily caregiver. The Public Policy Institute of California has noted that in the future seniors will be less likely to have family support because they have never married or had children. Thus, counties will need to work harder to ensure the availability of nonfamily caregivers.

Recruiting a sufficient number of caregivers will be difficult because the job pays minimum or near-minimum wage, below a living wage in even the State’s most affordable counties.The State’s minimum wage ranged from $9 per hour in 2015 to $12 per hour in 2019. Living-wage calculations represent the wages necessary for a full-time worker to afford basic necessities without public assistance. For example, a living wage in Modoc County, a rural county in the northeastern part of the State, is about $18 per hour. However, IHSS workers in that county earn the state minimum wage of $12 per hour.For purposes of our report, we reference the minimum wage required for employers who employ 26 or more people. No county in the State pays IHSS caregivers a living wage. In fact, wages in many counties are so low that caregivers without other sources of income would be eligible for public assistance, such as CalFresh, California’s food assistance program. In addition, caregivers in the city of San Diego actually earned less than the local minimum wage because the city exempted IHSS caregivers from receiving its minimum wage increase.

Although caregiver wages and benefits are bargained for locally in each county in accordance with state law, we found the program’s funding structure discourages raising IHSS worker wages. IHSS is funded through a combination of federal, state, and county funds. State law contains requirements for establishing a county’s share of the cost of providing IHSS services. In 2012 state law established this share based on the actual cost of the program in fiscal year 2011–12, with future adjustments to be updated periodically, based on an inflation factor specified in the law. In addition, a county that chooses to increase caregiver wages has its share permanently increased. Further, a county must pay an even greater share of the increase if the raises it provides collectively equate to more than a 10 percent raise over three years, which we refer to as the limit. For example, between 2018 and 2019, San Francisco increased IHSS caregiver wages by a total of $2 per hour. These raises increased San Francisco’s contribution to the program by a total of $21 million because the total wage increases exceeded the 10 percent limit.

These increased costs remain a component of a county’s share of its IHSS expenses indefinitely, even in cases where the state minimum wage surpasses the locally negotiated wage. Unless state law is updated, this means that counties that raise caregiver wages may pay millions more than they would have if they had kept caregivers at the state minimum wage. As a result, counties must balance the impact wage increases have on their finances against the benefit they offer caregivers in light of these increased costs. Given this funding structure, it is not surprising that the number of counties paying caregivers above the minimum wage has shrunk. In 2014, 52 counties paid more than the minimum wage; in 2019 only 20 counties did so. Although low wages act to control costs associated with the IHSS program, they also make recruiting caregivers more difficult.

Selected Recommendations

To help ensure that all recipients throughout the State receive the services they need, Social Services should enforce its requirement that counties submit annual plans. These plans should include, at a minimum, a description of how each county will ensure that all recipients receive the services for which they have been approved.

To limit the disincentive for counties to provide wage increases, the Legislature should modify the State’s cost-sharing system to eliminate the ongoing costs that counties pay for local wage increases that are surpassed by increases to the State’s minimum wage.

Agency Comments

Butte, Kern, San Diego, and Stanislaus counties generally agreed with our recommendations. Social Services disagreed with a number of our conclusions, including those related to recipient care, county contributions to the IHSS program, and the effect of state law on caregiver wages. Social Services also raised concerns with our analysis of its data and indicated that it would not implement our recommendations. We address Social Services’ response beginning here.


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