In-Home Services for the Elderly:

Cost Sharing Expands Range of Services Provided and Population Served

HRD-90-19: Published: Oct 23, 1989. Publicly Released: Nov 17, 1989.

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Mark V. Nadel
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Pursuant to a congressional request, GAO examined existing state approaches to cost-sharing for in-home services for the elderly, focusing on the: (1) extent to which cost-sharing was currently used; (2) types of services that states cost-shared; (3) benefits and disadvantages of cost-sharing; (4) types of fee schedules used; and (5) characteristics of clients participating in cost-sharing programs.

GAO found that: (1) 36 states and about one-third of the area agencies surveyed used cost-sharing for in-home services to some extent for such services as adult day care and home health and personal care services; (2) most of the state and area agencies surveyed supported cost-sharing because it allowed them to serve more low-income people, reduce the welfare stigma associated with receiving free services, improve service equity, and reduce service cutbacks; (3) both the cost-sharing and non-cost-sharing agencies favored amending legislation to permit cost-sharing for selected services; (4) most agencies used self-reported client income to determine fees for the services; (5) although arguments against cost-sharing stated that income reporting would cause declines in low-income and minority elderly, many agencies that did not cost-share collected client income data; (6) the majority of clients paid no fees because their incomes were below the minimum charge level; (7) fee-paying clients in Rhode Island, Illinois, and Pennsylvania paid 20 percent or less of the service costs, and very few clients paid the full cost of services in the cost-sharing programs; (8) the typical client in the three programs reviewed was a low-income white older female, unmarried or living alone; and (9) there was no evidence that cost-sharing would result in shifting services toward higher-income elderly.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The agency has held hearings and is now proposing that the Older Americans Act be amended. Reauthorization was passed on September 12, 1991 by the House and Senate. The Committee has requested another study by PEMD to provide further information for a decision. The Older Americans Act was reauthorized without cost sharing. The Senate Aging Committee blocked action.

    Matter: Congress should consider amending the Older Americans Act to specifically authorize state and area agencies on aging to establish mandatory charges for in-home services for the elderly funded under Title IIIB of the act. Congress could build in protections that are similar to current practices in agencies that cost-share. Such protections could include: (1) excluding from cost-sharing certain services already strongly supported by voluntary contributions; (2) adding measures to ensure that the very-low-income elderly continue to receive free services; and (3) limiting fees to a reasonable proportion of income for fee-paying clients.


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