To increase access to residential facilities for SSI beneficiaries in areas with high housing costs, states can create a special SSI state supplement for residents in these facilities, and limit what providers may charge to the amount of the Federal payment plus the state supplement.38 Many states have such SSP programs to supplement the Federal SSI payment, which in 2010 is $674 a month; the payment is adjusted each January based on the cost of living index. Individual states may use a specific term to refer to their supplement, and some use the term SSI to refer to both the Federal payment and any state supplement.
States may pay different supplements based on a persons living arrangement. A few states have developed a supplemental payment rate specifically for SSI recipients in residential care facilities to increase the amount of income they have to pay for room and board. State supplements are totally state-determined and vary widely. In 2009, the SSI state supplement payment standards (including the Federal payment of $674) ranged from $722 and $735 a month in Vermont and New Hampshire, respectively, to $1,275 a month in Hawaii and $1,350 in one area of Virginia.39
Some policymakers might question the fiscal benefit of providing 100 percent state funding for a state supplement to enable residents to pay for room and board. However, it is important to consider the net state cost for services provided in a residential care facility rather than a nursing home.40 If the program diverts people from nursing homes or allows nursing home residents to move to a residential care facility, states may be able to fund a fairly substantial supplement to the Federal SSI payment and still reduce their net cost. To determine if such a policy would be budget neutral, states would have to determine the number of people who would receive the increased supplement and the combined cost of the supplement and Medicaid services provided in residential care settings.