BILL ANALYSIS
AB 324
Page 1
Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON AGING AND LONG-TERM CARE
Bonnie Lowenthal, Chair
AB 324 (Beall) - As Introduced: February 18, 2009
SUBJECT : Aging: Elder Economic Security Standard Index.
SUMMARY : Requires the California Department of Aging (CDA) to
update the Elder Economic Security Standard Index (Elder Index)
and area agencies on aging (AAA) to use the Elder Index in their
service planning. Specifically, this bill :
1)Includes numerous findings and declarations regarding older
Californians and poverty, including:
a) The population of people 65 years of age and older is
expected to more than double from the year 2000 to the year
2030, both nationally and in California;
b) The United States Department of Health and Human
Services uses the Federal Poverty Guidelines (FPG) as a
benchmark to determine eligibility for public assistance
programs. In 2008, the FPG were $10,400 for a one-person
household and $14,000 for a two-person household;
c) The FPG are an inadequate and antiquated measurement
tool that uses a nearly 50 year-old methodology based
solely on one expense: food;
d) Despite the significant shortcomings in the underlying
data and methodology, the FPG continue to be used to
determine eligibility for 82 different state and federal
programs, to determine funding allocations to local
communities, and to justify cuts to public benefits;
e) Without a precise poverty measurement tool, policy and
fiscal decisions intended to tackle poverty will continue
to be imprecise;
f) Many of California's elders often do not receive any
public assistance because their incomes are just above the
official FPG, and are therefore forced to make untenable
choices among basic needs, such as choices between eating
three meals a day, foregoing medications, or paying for
shelter;
g) The Elder Index is a more sophisticated and updated 21st
century calculation of poverty that provides a more
accurate picture of the true economic needs of elders and
their families; and,
h) A more accurate calculation of the poverty rate among
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elders will result in a more targeted distribution of
federal funding to states to support elders, more effective
programs, and strategic planning.
2)States that it shall be the policy of the state that new state
needs-based programs and current state programs that are later
modified to become needs-based use the Elder Index to
establish income eligibility standards.
3)Redefines "greatest economic need" to mean the need resulting
from an income level at or below thresholds established by the
Elder Index instead of using the poverty threshold established
by the Census Bureau.
4)Requires CDA to report the Elder Index data for each service
area in its state plan as part of the overall data and
population trends used to develop programs and policies.
5)Requires CDA to annually update the Elder Index for each
county in California, using the methodology developed for the
2008 Elder Index, beginning in 2010 and calculate the number,
percentage, and demographic profile of older adults living
below the Elder Index.
6)Requires CDA to analyze the number and percentage of older
adults living below the updated Elder Index for that year by
county, race, ethnicity, gender, age, housing situation, and
other relevant demographic factors.
7)Specifies that each AAA's area plan must utilize the Elder
Index and identify which elders are living at or below the
Elder Index as well as specify the costs of meeting basic
needs for older adults in their respective planning and
service area (PSA).
8)Requires AAAs to annually update the Linkages Program intake
form to include the most current Elder Index adopted by CDA in
order to identify older adults in economic need and refer them
to other resources and programs.
EXISTING LAW
1)Establishes the federal Older Americans Act (OAA) which
provides a national network of state units on aging and AAAs
to deliver home and community-based programs for older adults.
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Programs include nutrition, transportation, information and
assistance, elder abuse prevention, and caregiver support.
2)Establishes the Older Californians Act which provides
state-funded programs and services for older adults and people
with disabilities.
3)Establishes CDA as the state unit on aging to administer a
broad range of home and community-based programs. The
department's mission is to provide leadership to the AAAs in
developing systems of home and community-based services that
maintain individuals in their own homes or least restrictive
homelike environments.
4)Requires CDA to develop minimum standards for service delivery
to ensure that programs meet consumer needs, operate in a
cost-effective manner, and preserve the independence and
dignity of aging Californians.
5)Establishes the AAAs as the entities that provide for and/or
deliver services under the Older Americans Act, the Older
Californians Act, and other funding sources at the local
level.
6)Requires AAAs to conduct regular needs assessments in their
planning and service area to document the service needs of
older adults and adults with disabilities.
7)Requires each AAA to develop and submit to CDA an Area Plan
every four years. Each plan must include the available data
and population trends, assess the community's need for
services, identify sources of funding for those services, and
develop and implement a plan for the delivery of those
services based on the community's needs.
8)Specifies that in fulfilling their mission, AAAs shall build
upon the resources unique to each community and be guided by a
description of a community-based system that includes the
assurance that all services are readily accessible to all
older adults, involves a collaborative decision making
process, and offers special help or targeted resources for the
most vulnerable older individuals, those in danger of losing
their independence.
9)Establishes the Linkages program to provide comprehensive case
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management to help frail elderly and adults with disabilities
remain in their homes. The program is designed to serve
individuals who are not eligible for other care management
programs. There are no income criteria for clients but they
must have some difficulty with completing their daily
activities to qualify for the program.
10)Requires CDA to develop a State Plan on Aging every four
years based upon the local area plans. The State Plan is
submitted to the Administration on Aging at the federal level.
11)Establishes the FPG issued each year in the Federal Register
by the Department of Health and Human Services for use in
determining financial eligibility for certain federal
programs.
FISCAL EFFECT : Unknown.
COMMENTS :
Planning for Aging Services
California has 33 AAAs that provide a wide range of services
designed to keep older adults and adults with disabilities
independent and in their own homes and communities for as long
as possible. AAAs serve as the focal point for local aging
issues and concerns. The services are funded through the OAA,
the Older Californians Act, local entities, and grants.
To ensure that programs and services funded by the AAA
adequately serve the older adults within each community, AAAs
are required to conduct a needs assessment every four years to
document the service needs of community residents and any gaps
in the service network. The needs assessment process typically
includes a community-wide survey, community meetings, and
information received from stakeholders and key informants.
California Code of Regulations (Title 22, Division 1.8, Chapter
3, Article 3) requires that each needs assessment include all of
the following: the target populations, the types of existing
and potential needs of older individuals in the community, the
services or resources that currently are available, as well as
any constraints (waiting lists, geographic limitations,
quality), an estimate of unmet needs or barriers to access,
demographic information, and data from other agencies. The
information received through the needs assessment process guides
the AAA in identifying the service priorities for the Area Plan.
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Every four years, CDA is required by federal law to submit a
State Plan on Aging to the federal Administration on Aging.
When approved, CDA receives federal funds to administer the
State Plan. Beyond the minimum required information,
California's 2005-2009 State Plan on Aging addresses key
socio-demographic factors that will shape funding needs and
priorities, unmet needs and promising practices identified by
CDA and the AAAs, and CDA's objectives in working with the AAAs
to provide cost-effective, high quality services to California's
Older adults and their informal caregivers.
The 2005-2009 State Plan on Aging states that the number of
older Californians at both ends of the income scale is growing,
creating two very different groups: persons with annual incomes
over $50,000 (41 percent) and persons with incomes below $15,000
(19 percent), with a diverse middle class in between.
The highest proportion of older adults with income below 200
percent of the FPG is in Imperial County, followed by several
counties in Northern California and the Central Valley, where
about two-fifths of older adults are low income. Eight percent
of the population age 65 and over have income below the FPG and
another 21 percent have incomes between 100-199 percent of the
FPG.
Recent research from the University of California, Los Angeles
and the Insight Center for Community Economic Development has
shown that 495,000 older Californians living alone in 2007 could
not make ends meet - lacking sufficient income to pay for even a
minimum level of housing, food, health care, transportation and
other basic expenses.
Poverty Guidelines and the Elder Index
Since 1965, there have been two slightly different versions of
the federal poverty measure - the FPG and the federal poverty
thresholds. The poverty thresholds are the original version of
the federal poverty measure and are updated by the Census Bureau
each year. The thresholds are used primarily for statistical
purposes. The FPG are issued each year in the Federal Register
and are a simplification of the poverty thresholds. They are
used for administrative purposes, including determining
financial eligibility for certain federal programs. The FPG are
sometimes loosely referred to as the federal poverty level.
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Proponents argue that policymakers struggle to create effective
policies to promote economic security and eradicate poverty
because they do not have an accurate picture of what it really
takes to make ends meet in today's economy. Policymakers
typically measure poverty and determine benefits eligibility by
using the FPG, a 1963 measure based solely on the cost of a
bare-bones food diet. Although the FPG is updated annually
using the Consumer Price Index, the 2008 FPG is the same dollar
amount ($10,400 for an individual living alone) whether one
lives in a high cost market like urban Los Angeles, or a low
cost region like rural Arkansas.
In response to the shortcomings of the FPG, The Insight Center
for Community Economic Development led the effort to create the
California Elder Index which sets a new benchmark of income
adequacy for older adults. According to proponents, it provides
the true cost of meeting basic needs and maintaining
independence in the community. The Elder Index methodology uses
national and state data sources, including the U.S. Census
Bureau and the U.S. Department of Housing and Urban Development,
and reveals that in California, the FPG covers less than half of
the basic costs experienced by older adults.
While California's most expensive counties to live in tend to be
urban and coastal, the Elder Index and related research show
that older adults in rural counties face significant challenges
as well. For example, Imperial County has the highest
percentage of single older adults with incomes below the Elder
Index benchmark (67.1 percent). San Francisco County has the
next highest percentage with 61.3 percent of older adults living
alone with incomes below the Elder Index.
Impact of using the Elder Index on Program Eligibility and
Funding
Programs and services administered by CDA and the AAAs do not
require means-testing for eligibility, however, the OAA requires
that preference be given to older adults with the greatest
economic or social needs, with particular attention given to
low-income minority individuals. To meet the federal
requirements, CDA and AAAs track data, including poverty data,
on the number of older adults and people with disabilities
within a given PSA, but enrollment in programs is not restricted
to those who fall below a certain threshold, with the exception
of programs that use Medi-Cal funds. This bill will not change
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eligibility for any of the programs administered by CDA or the
AAAs.
However, this bill could potentially change the distribution of
existing funds across AAAs. The overall funding formula used by
CDA for distributing federal and state funds to the AAAs takes
into account the number of older adults with the greatest
economic need which is currently defined as the need resulting
in an income below the poverty thresholds established by the
Census Bureau. This bill will change that definition and base
the determination of the greatest economic need upon the Elder
Index. CDA also considers those who are in the greatest social
need, minority status, geographic isolation, and in some cases,
the medically underserved in the funding formula and each factor
is assigned a weight, ranging from 1.0 to 2.0.
To the extent that the number of individuals in a given PSA that
fall in the gap between the current definition and the Elder
Index varies, the funding formula could change the distribution
of funds among AAAs. For example, in Los Angeles County
(excluding the city of Los Angeles), 9 percent of the over 65
population fall below the FPG and 54.2 percent of the same
population falls below the Elder Index. In contrast, Napa and
Solano counties have a similar percentage (8.9) of individuals
falling below the FPG, but a smaller percentage (45.7) with
incomes below the Elder Index.
An additional complication may arise due to the fact that
current programs funded by CDA and the AAAs, and the
corresponding funding formula, target individuals over the age
of 60. In contrast, the Elder Index measures the cost of basic
needs for an individual over the age of 65. These two issues
may have an impact on the overall feasibility of incorporating
the Elder Index into the planning for aging services, and the
author and sponsor of the bill may wish to explore any potential
complications with CDA.
Arguments in Support
The California Association of Area Agencies on Aging, National
Association of Social Workers, California Chapter, the Older
Women's League of California, Partners in Care Foundation and a
host of other organizations, contend that the Elder Index sets a
new benchmark of income adequacy for older adults. It provides
the true cost of meeting basic needs and maintaining
independence in the community. By institutionalizing this tool,
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AB 324 will empower policymakers to allocate limited resources
more effectively, and prepare for the needs of seniors and aging
baby boomers.
According to the author, as policymakers grapple with our
State's budget, it is essential that we be able to accurately
evaluate the effectiveness of existing programs and identify the
most needy populations. The Elder Index is much more robust
than the current tool, FPL.
Suggested Technical Amendments
1)Page 11, lines 3 and 4 - In order to ensure that area plans
incorporate local data and other demographic data, the author
may wish to re-insert the stricken language requiring AAAs to
consider available data and population trends.
2)Page 11, line 6 - change "public service area" to "planning
and service area"
Related Legislation
AJR 6 (Beall) memorializes the President and Congress to ensure
the economic security of all older adults and use the Elder
Index to modernize federal poverty measures and guidelines. AJR
6 is currently pending referral in the Senate.
REGISTERED SUPPORT / OPPOSITION :
Support
Insight Center for Community and Economic Development - Sponsor
Women's Foundation of California - Sponsor
California Senior Legislature (CSL) - Co-Sponsor
California Alliance for Retired Americans - Co-Sponsor
Catholic Charities of California - Co-Sponsor
National Association of Social Workers - California Chapter -
Co-Sponsor
AARP
Asian Pacific American Legal Center (APALC)
Asian & Pacific Islander Older Adults Task Force
Asian Pacific Health Care Venture
Beth Eden Housing
California Association of Area Agencies on Aging (C4A)
California Advocates for Nursing Home Reform (CANHR)
California Commission on Aging (CCoA)
California Welfare Directors Association (CWDA)
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Cambrian Center
Chinatown Service Center
Christian Church Homes
Community Living Campaign
Congress of California Seniors
Consumer Action
East Bay Asian Local Development Corporation
Ecumenical Peace Institute
Friendly Visiting Program, Alameda County
Irene Cooper Terrace Senior Housing
Japanese American Citizens League (JACL)
Jewish Family Services of Los Angeles (JFS)
J.L. Richard Terrace
Keller Plaza Apartments
Korean Churches for Community Development
LifeLong Medical Care
Little Tokyo Service Center
Live Oak Adult Day Services
Older Women's League of California (OWL)
ONEgeneration
Partners in Care Foundation
Planning and Service Area 2 Area Agency on Aging
Professional Fiduciary Association of California (PFAC)
Rebuilding Together Oakland
Salud Para La Gente-Elderday
San Francisco, City of
San Leandro, City of
Satellite Housing, Inc.
Senior Housing Solutions
Senior Services Coalition of Alameda County
St. Mary's Center
The Utility Reform Network
Time for Change Foundation
Visiting Angels, East Bay
Westlake Christian Terrace
Wider Opportunities for Women
Yu-Ai Kai/Japanese American Community Senior Service
15 Individuals
Opposition
None on file.
Analysis Prepared by : Allison Ruff / AGING & L.T.C. / (916)
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