Location:
ASSISTED LIVING; ELDERLY; HOME CARE SERVICES;
Scope:
Connecticut laws/regulations; Program Description;

OLR Research Report


October 6, 2010

 

2010-R-0237

Revised

ASSISTED LIVING SUBSIDY PROGRAMS

By: Robin K. Cohen, Principal Analyst

You asked whether the 2009 and 2010 cost-sharing requirements in the state-funded portion of the Connecticut Home Care program for Elders creates an inequity between people living in that program's state-assisted congregate housing and the Department of Economic and Community Development's assisted living service subsidy program.

SUMMARY

The state offers two programs that help elderly residents of state-subsidized congregate living facilities who need assisted living service agency (ALSA) services. The Department of Social Services (DSS) runs the Connecticut Home Care Program for Elders (CHCPE), and the Department of Economic and Community Development (DECD) has its own subsidy program. Functional eligibility for the subsidies is the same, but the CHCPE program imposes asset, but not income limits on eligibility, while DECD's imposes income, but not asset, limits. Both allow participants to protect a certain amount of their income when determining how much they must contribute towards their care costs.

A 2009 law increased the amount of the cost that higher income CHCPE participants must pay for ALSA services and also required lower-income participants to pay a percentage of the cost. A 2010 law reduced the amount of the payment for both groups of participants.

Using very simplistic assumptions about participants' financial circumstances, it would appear that CHCPE clients who have very low and moderately low incomes pay considerably less for their ALSA services than similarly situated DECD participants, and those who have the highest incomes pay essentially the same as similarly situated DECD participants. But because one program imposes an asset but no income limit and the other does the opposite, it is not possible to say whether there is an equity issue, as your constituent has asserted.

DECD AND DSS SUBSIDY PROGRAMS

If they meet the eligibility criteria, residents of state-subsidized congregate living facilities may qualify for a state subsidy to pay their assisted living costs. To qualify for DSS' state-funded CHCPE, residents must (1) be at least age 65, (2) meet the program's functional eligibility criteria (need help with activities of daily living without which they would require institutional care) and (3) have assets under $32,868 (if single) or $43,824 (if married). There is no income limit.

To qualify for the DECD subsidy, residents must (1) meet the functional eligibility criteria for CHCPE, (2) be age 62 or older, and (3) have income less than 75%-80% of the area median income (AMI) in which the congregate living facility is located. There is no asset limit in this program. The maximum DECD subsidy is $500 per month.

The DECD client contributes the difference between the care costs and the state subsidy. CHCPE clients must also contribute towards their care costs. Until 2009, only those CHCPE clients with income above 200% of the federal poverty level (FPL, $1,806 per month for one person in 2010) were subject to this cost sharing. PA 09-5, SSS ( 66) required all participants to pay 15% of their care costs. For individuals with incomes above 200% of the FPL, this new requirement is in addition to the pre-2009 applied income amount (see Table 1 below for illustration of how cost sharing is calculated). This year, PA 10-179 ( 21) reduced the contribution to 6% of home care service costs, beginning July 1, 2010.

DOES THE NEW COST SHARING REQUIREMENT CREATE AN EQUITY ISSUE BETWEEN THE TWO PROGRAMS?

Constituent Assertions—OLR Comments

In her letter to you, a congregate living facility administrator asserts that the 2009 and 2010 CHCPE cost-sharing requirement creates an inequity since it applies only to one group of residents. We respond to each of her assertions below.

Assertion. One of the most confounding aspects of the 15% contribution is that by definition, CHCPE residents have fewer assets than DECD residents.

Comment. The administrator is correct that CHCPE residents must have fewer liquid assets than those individuals who receive DECD subsidies for their ALSA services.

DECD residents have no asset limit, but must spend any assets they have on their ALSA services after the DECD subsidy is paid. On the other hand, CHCPE residents have no income limit. If their income is less than 200% of the FPL, they pay 6% of their service costs (after July 1, 2010); if it is above that level, they pay the difference between their income and 200% of the FPL, plus 6% of the care costs after the initial contribution is deducted from the care cost amount.

Assertion. If a resident receiving ALSA services has assets of less than $32,868 for an individual or $43,824 for a couple, he or she is placed in the CHCPE program.

Comment. This is correct.

Assertion. If a resident receiving ALSA services has assets greater than the limits stated above, he or she is placed in the DECD program. Some of the resident's income is protected, and gross monthly income less the protected amount equals the amount available to the resident to pay the ALSA program fees.

Comment. All of this is true. In a slightly different way, these same deductions are taken from someone in the CHCPE program. For example, the first $1,806 of monthly income is protected in both programs.

Assertion. CHCPE residents have less income and assets to help pay for their ALSA services, while some of their neighbors are in the DECD program, in some cases, pay less or nothing for the same services even though they have greater assets.

Comment. This statement is not necessarily true. Because CHCPE residents are not subject to an income limit, in some cases their income may be higher than the income of their neighbor who receives a DECD subsidy.

To check the validity of this last assertion, Table 1 shows a number of scenarios for unmarried congregate living residents at different income levels. For simplicity's sake, we made several assumptions.

1. The congregate living facility resident was receiving ALSA services costing $2,000 per month.

2. The resident was living in the Norwich-New London geographic area since that is where your constituent's facility is located.

3. There would be three income limits that would represent people at different levels who could qualify for one subsidy program or the other, depending on their assets. For each income level, we varied the asset limits slightly to show that above the $32,868 asset level, only the DECD subsidy would be available, while below that level, the individual would receive the CHCPE subsidy.

According to the calculations, residents have almost identical contribution requirements at the higher income levels. At the middle and lowest ends, DECD clients pay much more than DSS clients.

It would appear that the 2009 law may have put CHCPE residents at a slight financial disadvantage, but the 2010 reduction to 6% should soften this effect.

Table 1: Assisted Living Subsidies in DSS and DECD Programs

Subsidy Source—Agency

DECD

DSS

DECD

DSS

DECD

DSS

Income

75% of AMI [1]--$3,733 per month

50% of AMI--$2,350 per month

30% of AMI--$1,408 per month

Assets

$35,000

$32,000 [2]

$35,000

$32,000

$35,000

$32,000

Deductions

-$1,806 (standard deduction, 200% of FPL)

-$96.40 (Medicare Part B premium)

-$1,806

-$96.40

-$1,806

-$96.40

-$1,806

-$96.40

-$1,806

-$96.40

$96.40

Net Income (rounded)

$1,831

$1,831

$447.60

$448

0 [3]

$1,312

Total Client Contribution

$1,831

$1,841 (net income plus 6% of the care plan cost after initial client contribution is deducted from these costs

$1,500 ($2,000-500)

$541

$1,500

$120 (Net income is less than $1,806; client pays 6% of care costs)

Amount of State Subsidy (difference between ALSA cost [4] and client contribution)

$169 ($2,000-$1,831)

$159 ($2,000-$1,841)

$500 ($2,500-$1,500)

$1,459 ($2,000-$1,451)

$500 ($2,000-$1,500)

$1,880 ($2,000-$120)

[1] The income limit for the DECD program is 75-85% of AMI. There is no income limit for the CHCPE.

[2] We used different asset amounts to show how someone would fare in both programs. If we had used the $35,000 for both, the individual would not have qualified for the CHCPE.

[3] After all the deductions are taken, the resident would have negative income to be applied towards care costs. In this case, the client would be spending down his assets each month until they are low enough to make him or her eligible for CHCPE.

[4] We assumed the monthly cost of care is $2,000.

RC:ts