Report by Jennifer Shim, Applied Math-Economics major, Living Wage Coalition intern, Brown University Careers in the Common Good Winternship program with assistance from Alexander Gleason, Fiscal Analyst, City and County of San Francisco Human Services Agency

The In-Home Support Services Program (IHSS) is a program providing in-home supportive services for disabled California residents qualifying for Medi-Cal. IHSS is funded by federal, state, and local budget allocations. The point of this report is to determine the additional amount the county of San Francisco must allocate for the IHSS program this upcoming fiscal year (FY 24/25).

What programs are under IHSS?

IHSS is made up of four different programs: Personal Care Services Program, IHSS Plus Option Program, Community First Choice Option Program, and IHSS Residual Program. The most significant difference is that the Personal Care Services Program covers individuals qualifying for full-scope Medi-Cal, while the IHSS Residual program is for those not under full-scope Medi-Cal. The Community First Choice Option similarly provides home and community services as an alternative to the Personal Care Services Program and the IHSS Plus Option Program. The IHSS Plus Option covers individuals receiving services from family members (spouse, parent).

These programs are each funded with different federal, state, and local cost-sharing ratios (discussed below). More information about each of these programs and their requirements can be found here.

How are workers under IHSS compensated?

In this report, we will be discussing the MOE increase for the FY 24/25 based on wages for Independent Providers (IP). Independent providers are hired directly by those seeking supportive services. If the mayor/Board of Supervisors do not put in funding to the city budget for wage increases for IHSS Home Care Workers, then their wage increase on July 1st is deferred. These two groups are also paid differently:

Independent Provider Wages:

*Note: For the amount of wage increase for FY 24/25, we will only be using the initial $0.75 increase established 7/1/24. While there would be another wage increase in January 2025, it does not impact the MOE because the city will not cover this increase (this amount will be covered by State funding). In addition, Independent Providers are also paid health benefits of an additional $3.38/hr, with a projected increase of $0.19/hr on 7/1/24.

**There was also a $0.29 increase for contract mode hours on 7/1/24, which was entirely covered by the non-federal share.

Calculating Budget Allocations for the 2024-2025 Fiscal Year

The change in county level funding for the IHSS program is determined by changes in the Maintenance of Effort (MOE), which is the county’s share of the IHSS program paid out to the state. To calculate the MOE increase, we take into account certain factors:

• 4% annual inflation (or a 21.67% inflation figure to use for the 24-25 FY)
• Wage Increases
• Health Benefits Increases
• Changes in Non-Health Benefits
• Contract Mode Increases

Baseline Year Hours: Increases in MOE are calculated using paid and overtime hours from the 2019/2020 Fiscal Year. More information on these hours can be found here.

*Note:

• Hours for MOE calculated by adding half of overtime hours to capture the full number of hours (this does not apply to contract mode hours)

Non-Federal Share: Includes the county and state share of each program under IHSS. Each program under IHSS is funded with a different percentage of non-federal share.

10% Over 3 Years Period: San Francisco county has an agreement with the state of California, participating in a “10% Over 3 Years Period”. San Francisco has currently exceeded the state’s participation cap for FY 24/25, which is currently $17.10. As a wage supplement, the state has agreed to cover 65% of 10% of the county’s total wage per provider across a three year period. The county has just entered its third 3 year period.

In FY 24/25, the county has a $0.75 amount to use for its wage or health benefits increase, of which the state would cover 65%.

Note: The $0.75 wage increase and $0.19 health benefits increase established on 7/1/24 are both covered under the 10% rule, and as such, the county will pay 35% of the non-federal share of these increases.

Calculations: 

Due to inflation, the MOE will increase 4% annually, regardless of whether wage or health benefits increase for the city. In FY 23/24, the total budget for the IHSS program was $179.6 million in San Francisco (read more here).The projected MOE for the FY23/24 MOE was $178,965,890, based on similar calculations performed for FY 24/25.

Annualize Prior Year + Inflation

1) Take the FY 23/24 Projected MOE and factor in the annualize prior year adjustments:

For the 24/25 FY, because of the $1 wage increase which occurred on 9/1/23 which resulted in a $4,342,847 increase in the projected FY23/24 MOE. Because this wage increase was enacted two months after the start of the fiscal year, it only lasted for 10 months. As such, our calculations for the annualize prior year would be the following:

($4,342,847/10)*2 = $868,569

Inflation:

Based on a 4% inflation rate per year

($178,965,890 + $868,569)*0.04 = $7,193,378

2) Calculating San Francisco’s Non-Federal Share Based on 2019/2020 FY Hours

Non-Federal Share

= 1 – ((10,595,877 + 373,803 + 10,782,779*0.5)*0.5 + (15,688,991 + 1,675,122*0.5)*0.56)/(10,595,877 + 15,688,991 + 373,803*0.5 + 1,675,122*0.5))

= 46.369%

3) Calculating Wage Increase

Wage Increase * FY24/25 Hours * Non-Federal Share * 0.35 (derived under the 10% rule)

= $0.75*(13,118,899 + 20,107,077 + 169,913)*0.46369*0.35(12/12)

= $4,064,902

4) Calculating Health Benefits Increase

Health Benefits Increase *  FY24/25 Hours * Non-Federal Share * 0.35 (derived under the 10% rule)

= $0.19*(13,118,899 + 20,107,077 + 169,913)*0.46369*0.35(12/12)

= $1,029,775

*Note the (12/12) included above, though somewhat unnecessary, is being used to track for how many months the increase was in place

5) Calculating Contract Mode Increase

Contract Mode Increase * FY24/25 CM Hours * Non-Federal Share

=$0.29*546,909*0.46369

= $73,542.85

6) Projected MOE FY 24/25

= $178,965,890 + $868,569 + $7,193,378 + $4,064,902 + $1,029,775 + $73,542.85

= $192,196,057

7) Difference between FY23/24

= $192,196,057 – $178,965,890

= $13,230,167 (Projected MOE Increase for FY24/25)