U.S. Department of Health and Human Services

Analysis of the California In-Home Supportive Services (IHSS) Plus Waiver Demonstration Program

Executive Summary

Robert Newcomer, Ph.D. and Taewoon Kang, Ph.D.

University of California, Center for Personal Assistance Services

July 2008

This report was prepared under contract contract #HHS-100-03-0025 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and Research Triangle Institute. Additional funds were provided by the National Institute for Disability and Rehabilitation Research under grant #H133B031102. For additional information, you may visit the DALTCP home page at http://aspe.hhs.gov/daltcp/home.htm or contact Pamela Doty, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. Her e-mail address is: Pamela.Doty@hhs.gov.

This report was prepared under subcontract 5-312-0208826 between RTI International and the University of California (Edith G. Walsh, Ph.D., project director). The opinions and findings expressed in this report are those of the authors. They do not necessarily reflect the views of the Department of Health and Human Services, the contractor or any other funding organization.

In 2004, the Centers for Medicare and Medicaid Services (CMS) approved California’s In-Home Supportive Services (IHSS) Plus program under the Section 1115 demonstration authority of the Social Security Act. California refers to this program as the IHSS Plus Waiver. Full Medicaid (referred to as Medi-Cal in California) benefits and IHSS Plus benefits are available to all eligible IHSS Plus recipients. The IHSS program began in the early 1970s and was originally funded primarily with state and county funds and some federal Title XX (later renamed Social Services Block Grant) funds. Beginning in 1993, most IHSS services were financed through the Personal Care Services Program (PCSP) optional benefit and California benefited from 50% federal financial participation to cover these costs. However, prior to the granting of the IHSS Plus waiver, some services provided to a minority of IHSS recipients were not eligible for Medicaid federal matching payments. The cost of these “Residual Program” services had to be borne entirely by the state, with county cost sharing.

The effect of the IHSS Plus Waiver is to reduce the state and county share of costs for eligible Residual Program services to the same rates as in the state’s PCSP. About 26,000 persons were receiving all or a portion of their IHSS personal assistance in 2004 through elements of the Residual Program that were to be incorporated into the IHSS Plus Waiver. The components of the IHSS Plus Waiver (i.e., the services not previously eligible for federal matching payments) include:

• Advance Pay: IHSS recipients meeting severely impaired criteria have the option to receive Advance Pay (i.e., Medicaid funds are paid to recipients in advance of personal assistance service delivery). This allows recipients to assure timely payments to care providers (including any emergency back-up providers).

• Parent and Spouse Providers: IHSS Plus Waiver permits spouses of adults, and parents of minor children to be paid as IHSS providers for personal care, protective supervision, domestic and related services. Other family members as well as Non-Relative providers can provide similar services under California’s regular IHSS (i.e., PCSP) program.

• Restaurant Meal Vouchers: IHSS Plus Waiver recipients have the option, under appropriate circumstances, to receive a Restaurant Meal voucher in lieu of in-home assistance for meal preparation and related tasks.

As a condition of granting the IHSS Plus Waiver, CMS required an evaluation. All “1115” research and demonstration waivers are subject to a “budget neutrality” requirement; that is, Medicaid costs under the waiver cannot exceed estimated costs in the absence of the waiver. Thus, the primary purpose of the evaluation was to determine the impact of the waiver on Medicaid service use patterns and associated costs. However, the Office of the Assistant Secretary for Planning and Evaluation also wished to know about availability of and preferences for Spouse and Parent providers and whether IHSS recipients with Spouse or Parent providers (especially minor children with Parent providers) and differences in characteristics, such as medical diagnoses and severity of disability, among those receiving services from different provider types (e.g., Spouse or Parent, Other Relatives, and Non-Relatives).

Changes made to Medicaid law and policy through the Deficit Reduction Act of 2005 now make it possible California and other states to offer Medicaid coverage for personal care services provided by “legally responsible relatives” (i.e., spouses or parents/guardians of minor children) without an “1115” waiver. The results of the IHSS Plus evaluation indicate that allowing personal care services to be provided by such previously prohibited provider types is unlikely to increase -- and may even slightly decrease -- Medicaid costs.

The IHSS Plus Waiver was initiated in August 2004. This report documents IHSS Plus Waiver implementation and recipient Medicaid service use in calendar year 2005. Analyses compare recipients having a waiver-eligible provider (i.e., parents of children, spouses of adults) for any portion of 2005 with recipients in the regular IHSS program who received personal assistant services through Other Relatives and Non-Relative providers during the same period. Recipients are classified by these provider types on an “intention to treat” basis. Recipients changing between Spouse/Parent providers and non-waiver-eligible providers are considered throughout the analysis as being in the spouse/parent group. This is analogous to an experiment where an individual enrolls into the innovative care group and later changes into “usual” care, but for purposes of analysis, the recipient is included within the group to which they were originally assigned.

The following questions are examined:

• Do Waiver recipients differ from regular IHSS program recipients in race/ethnicity, living arrangement (e.g., household size, and availability of legally responsible relatives)?

• What are the functional limitations, task assistance needs, and chronic health conditions of individuals participating in each waiver component (e.g., Parent providers, Spouse providers, Advance Pay, Restaurant Meals voucher)? Do these differ from recipients in the regular program?

• Do Waiver and regular IHSS recipients differ in terms of continuity with their provider relationship, and Share of Cost?

• Are there differences between waiver and regular program recipients in the number of IHSS hours authorized?

• What are the Medicaid (aka Medi-Cal) expenditures incurred by waiver and regular program recipients? This includes all IHSS services; personal care from Medicaid home and community-based services (HCBS) waiver programs; Medicaid hospital, emergency room (ER), nursing home, home health, and medical provider claims.

Taken together, these descriptive questions assess four fundamental policy issues: whether there was a change in the number and attributes of spouses and parents of minors that are paid providers under the IHSS program; whether hiring legally responsible relatives as personal assistance providers seems to be a recipient/family preference; whether Spouse and/or Parent providers performed, as well as the use of other providers in enabling IHSS recipients to remain at home, safely; and whether the employment of family providers has been budget neutral for Medicaid in terms of health care use/expenditures. These policy issues are addressed in the conclusions section of this summary.

Approximately 407,000 persons received IHSS services in 2005. Of these approximately 25,700 recipients had as paid providers either parents of minor children, or spouses of adults. These recipients were classified as being in the IHSS Plus Waiver. Restaurant Meals voucher and Advance Pay recipients combined to include 1,600 additional Waiver recipients. About 60% of all IHSS recipients in 2005 were age 65 or more. Minor children (age 3-17) accounted for about 4% of recipients. The remaining one-third was recipients age 18-64. The distribution of recipients by IHSS Plus Waiver and PCSP providers varied by recipient age group. Parents predominate (70%) as providers among recipients age 3-17. Other Relatives and Non-Relatives are the predominant source (75%-95%) of providers for adult IHSS recipients. About 5% of non-aged adults and 2.5% of the aged IHSS recipients had IHSS-paid Spouse providers. There were only minor differences in these distributions comparing IHSS recipients continuing in the program from 2004 and those entering the program in 2005.

Females are the absolute majority of IHSS recipients, as well as the majority of those cared for by Other Relatives and Non-Relatives. Males predominate as IHSS recipients age 3-17, and they account for the majority of those cared for by an IHSS-paid Spouse. The IHSS program has a broad mix of racial/ethnic groups, with non-White groups accounting for the majority of recipients across all age groups. Hispanic and Asian recipients are more likely to use relatives (parents, spouses, or other relatives) as paid IHSS providers than are White or Black recipients.

The disability/chronic illness profile of each age group is different, as is the distribution of recipients among the types of paid providers used. Because of this most of the discussion is presented by recipient age group.

Summary of Findings

Racial/Ethnic and Household Characteristics of IHSS Recipients

• Hispanics are the largest group (45%) of continuing recipients age 3-17. Whites are about 40% of continuing adult recipients, Hispanics about 22%. Blacks account for about 20% of the non-aged adult recipients, Asians about 10%. These latter proportions reverse among recipients age 65 or over.

• The race/ethnic characteristics of persons entering IHSS in 2005 among minor children and non-aged adults are generally similar to those of the continuing recipients. Among recipients age 65 or more the proportion of Whites and Blacks is about 20% lower, and the proportion of Hispanic and Asian is 10%-20% higher among recipients entering the program in 2005.

• Hispanic IHSS recipients are more likely than any of the other race/ethnic groups to have paid Parent providers, whereas Black IHSS recipients are the least likely. (80% of Hispanic recipients age 3-17 and 20% of Hispanic recipients age 18-64 have paid Parent providers, compared to 60% of Black IHSS recipients age 3-17 and 9% of Black non-aged adult recipients.

• Black non-aged adult IHSS recipients are the least likely of the four race/ethnic groups to have Spouse (2%) providers.

• More than half the White and Black adult age IHSS recipients use Non-Relative IHSS providers. This contrasts with about one-third among Hispanic and Asian groups.

• The Advance Pay and Restaurant Meals voucher programs have a much different race/ethnicity distribution than the IHSS personal assistance program. Whites account for about two-thirds of each program, Hispanics and Blacks, each about 13%. Chinese account for about half of the Asian/Other recipients.

• Regardless of age or race/ethnicity, larger households are more likely to have an Other Relative provider and less likely to have Non-Relative providers. Among those 18-64 household size is positively related to having a paid Parent or Other Relative provider, and negatively related to having Non-Relative providers. Recipients age 65 or more in larger households are less likely to have Spouse and Non-Relative providers, and more likely to have Other Relatives as providers.

• The presence of a parent or spouse in the household reduces the odds of having non-relatives as paid IHSS providers. Among those age 18-64 a present spouse has a modest association with having Other Relatives as providers.

Functional Limitations and Chronic Health Conditions

• Children average 3.6 activities of daily living (ADLs: bathing and grooming, dressing, toileting, transferring, and eating) where human assistance is required. These rates of impairment are similar for both new and continuing IHSS recipients in 2005 and among all provider types.

• Adult IHSS recipients average about 2.5 ADL limitations requiring human assistance. These rates increase to an average of about 3.5 ADLs for recipients having a paid Spouse provider. There is little difference in average impairment levels among those with Other Relative and Non-Relative providers. Recipients entering IHSS in 2005 average about 0.5 fewer ADL limitations.

• Limitations in instrumental activities of daily living (IADLs: housework, laundry, shopping and errands, meal preparation and clean-up, mobility inside) requiring human assistance are pervasive, averaging more than four IADL limitations among adults, and three IADLs among children. These levels of impairment are similar across all provider types and between new and continuing IHSS recipients.

• More than 10% of children and 5% of adults require human assistance with breathing.

• Based on Medicaid claims, minor children in IHSS have an average of 3.5 chronic health conditions. This rate is 4.2 among those age 18-64, and 3.0 among those age 65+. The prevalence rates are slightly lower among recipients entering IHSS in 2005. Prevalence rates derived from claims data may under report the actual prevalence.

• Minor children recipients with paid Parent providers tend to have a slightly higher prevalence of chronic conditions than those with Other Relatives or Non-Relative providers. (e.g., 81% with at least one condition vs. 72% and 69% respectively).

• Among IHSS recipients age 18-64, there is a comparable prevalence of chronic conditions (e.g., 89% with at least one condition) among those with paid Spouse, Other Relative, and Non-Relative providers. Recipients in this age group with Parent providers tend to have somewhat fewer conditions (74% with at least one condition), but they are five times as likely to have mental retardation/developmental disabilities (6.1%) and one-third more likely to have central nervous system injuries/disorders (22%).

• IHSS recipients age 65 or older have similar prevalence of chronic conditions (e.g., 83% with at least one condition) regardless of paid provider type. Those with paid Spouse providers tend to have slightly higher prevalence of Endocrine and Metabolic disorders, Cerebral and Other Vascular system disorders, and Pulmonary System disorders; and slightly lower prevalence of other conditions.

Continuity of Provider Relationships and Share of Cost

• The factors associated with selection of a Parent, Spouse, or Other Relative or Non-Relative providers are, in part, a function of the family and other resources available. For those without parents, spouses or other relatives, the only paid provider option becomes a non-relative. This influence is most apparent among minor children, where the vast majority of those with available parents have paid Parent providers; and among the few adults with parents or spouses.

• Cultural preferences may also contribute to provider selection. This is most evident in the greater propensity of Hispanics and Asians to have other relatives as paid IHSS providers.

• Fewer than 6% of IHSS recipients changed the type of provider they were using during 2005. Children were the most consistent (95% consistent), non-aged adults the least consistent (93% consistent).

• Change from having a spouse as a paid provider to another provider type was the most common change (9%). Changes between other relatives and non-relatives affected about 7% of non-aged recipients and 4% of the aged.

• Share of Cost requirements affected relatively few IHSS recipients in 2005: about 1% of recipients age 3-17 and 3% of those age 18 or older. Among adult recipients more of those entering the program in 2005 had a Share of Cost compared to the continuing recipients: 3.4% vs. 2.8% non-aged, 5.6% vs. 3.3% aged.

• Among minor children Share of Cost was more common when the provider was a Parent (1.5%). Among adults, Share of Cost was most common when the provider was a Spouse (10% non-aged, 11% aged).

Authorized Hours of Service

• A maximum of 283 hours of IHSS services can be authorized in a month. This is based on the number and degree of the recipient’s limitations, with adjustments made for the living arrangement. Time that would otherwise be allocated for performance of household tasks is deducted when the recipient is living with others who can be expected to routinely perform (for their own benefit as well as for the IHSS recipient) tasks such as house cleaning, meal preparation, and shopping.

• Regardless of the IHSS recipients’ age, those continuing in IHSS from 2004 have a higher number of authorized hours than those entering the program: this difference averages about 40 hours per month among minor children, 30 hours among non-aged adults, and 25 hours among the aged.

• Among recipients age 3-17, there is little difference in authorized hours comparing continuing recipients having Parent providers (an average of 112 hours/month) and those with Non-Relative providers (an average of 108 hours/month). Those with other relatives had the fewest average authorized hours (102 per month). These minor differences persist among those entering IHSS in 2005.

• Recipients age 18-64 continuing from 2004 with Parent providers have substantially more authorized hours (average of 135 hours/month) than those with any other provider type. Those with Non-Relatives (average of 89 hours/month) and those with Spouse (average of 86 hours/month) have a similar amount of hours authorized. These differences reduce among recipients entering IHSS in 2005, but those with Parent providers average about 20 hours more per month than those with other provider types.

• Aged recipients have a similar amount of authorized hours (about 84 hours per month) across all provider types. Average authorized hours reduce to about 60 hours per month among recipients entering IHSS in 2005, with little difference among provider types.

Average Monthly Total Medicaid Expenditures

• Across all age groups participating in IHSS, mean unadjusted Medicaid expenditures (excluding pharmacy payments) range from $1,400 to $1,700 per IHSS participation month. This is a cost inclusive of Medicaid-reimbursed personal assistance-related expenses, which averages about $825 in 2005. The highest average total expenditures are among that age 18-64, the lowest among those age 65 or more. Lower expenditures among this latter group are explained, in part, by more of these recipients having access to Medicare -- their primary payer for hospital, physician, and other health care use.

• Among IHSS recipients age 3-17, those with Parent providers tend to have about $900 lower adjusted monthly Medicaid expenditures (i.e., holding health status, functional ability and other factors constant) than those with Non-Relative providers. Comparisons between those with Other Relatives and Non-Relative providers were not statistically significant.

• Recipients age 18-64 with paid Spouse providers have adjusted mean monthly Medicaid expenditures about $1,000 lower than do those with Non-Relative providers. There was no statistically significant difference between those with Parent providers and those with Non-Relative providers.

• Among IHSS recipients age 65 or more, those with Non-Relative providers have higher adjusted average monthly expenditures than those for either recipients with Spouse providers ($780) or Other Relative providers ($110).

• Expenditures of new as compared to continuing IHSS recipients showed minor differences in adjusted mean monthly expenditures: non-significant among children, slightly higher among those age 18-64, slightly lower among the aged.

Medicaid-Reimbursed Hospital Expenditures and Use

• Among all IHSS recipients’ age groups the unadjusted average monthly hospital expenditures generally show the Waiver recipients (i.e., those adults with paid Spouse providers, minor children with paid Parent providers) to have within their age group either the lowest mean expenditures or expenditures approaching the lowest group.

• About 13% of the minor children and 25% of the IHSS adult recipients had at least one “any cause” hospital stay in 2005. Among minor children and the aged, comparisons (adjusting for recipient characteristics) of the likelihood of a hospital stay between those having waiver providers (i.e., Parent and Spouse providers respectively) and those with Non-Relative providers found no statistically significant differences.

• Among IHSS recipients age 18-64, those with Spouse providers were about 15% more likely to have hospital stays than those with Non-Relative providers (adjusting for recipient characteristics). Comparisons between those with Non-Relative and Parent providers found 25% lower adjusted odds of a hospital stay for those with Parent providers. Non-aged adults with Other Relative providers show about a 10% lower risk of hospital stays than those with Non-Relative providers.

• These findings of favorable or neutral outcomes comparing recipients with Waiver-related providers vs. those with Other Relative and Non-Relative providers were sustained using a more targeted comparison of hospital stays. These involved admissions having an Ambulatory Care Sensitive Condition (ACSC) -- conditions thought to be manageable with appropriate primary care. For IHSS recipients age 3-17 (adjusting for recipient characteristics), there were no statistically significant differences in the likelihood of an ACSC hospital stay comparing across all provider groups. For recipients age 18-64, a similar finding occurs comparing those with Spouse and Other Relative providers to those with Non-Relative providers. Those with Parent providers had lower adjusted odds for an ACSC hospital stay than those with Non-Relative providers. Among recipients age 65 or more, those with Spouse providers have reduced risk of an ACSC hospital stay. There were no statistically significant differences comparing those with Other Relative providers to those with Non-Relative providers.

• Consistently, whether testing “any cause” or ACSC hospital admissions, non-White adult age IHSS recipients tended to have an increased risk for admissions. Among minor children, the pattern was less consistent, and non-significant in the ACSC comparisons. New IHSS recipients, across all age groups and provider types, tended to have about half the odds of a hospital stay compared to recipients continuing from 2004.

Medicaid-Reimbursed Physician, Outpatient and Emergency Room Use

• About 17% of IHSS recipients, regardless of age group did not have any Medicaid claims for either physician services (including MDs, nurse practitioners, medical groups, surgi-centers, and rural clinics), or outpatient department (including hospital-based and other organized outpatient departments) use in 2005. Minor children recipients (85%) with Parent providers and adults with Spouse providers (94% non-aged adults 85% aged) have the highest rate of any use. (Service use estimates do not include uncompensated care or medical care encounters billed solely to non-Medicaid payment sources.)

• ER use is experienced by more than half of the IHSS recipients in each age group. Adjusting for recipient characteristics differences among provider groups for recipients age 3-17 become non-significant. Among adult age recipients (ages 18 and over), those with Spouse providers tend to have about 20% higher odds of ER use compared to those with Non-Relative providers. Recipients age 18-64 with Parent providers have reduced odds of ER use. Adult age recipients with Other Relative providers have lower risk of ER use. New IHSS recipients, in all age groups have about 50% lower odds of ER use. The cause of the difference is unknown, but the main point is that recipients entering IHSS after initiation of the waiver are seemingly healthier than the recipients who continued in the program from 2004.

• Inclusion of Medicaid ER use claims results in a 2%-3% increase, across all IHSS recipient subgroups, in the percentage of recipients having any medical care use.

• Adjusting for recipient characteristics: minor children with Parent providers and adult recipients with Spouse providers have a higher likelihood of any medical care use (including ER use) compared to those with Non-Relative providers. Comparisons between IHSS recipients with Other Relative and Non-Relative providers are not statistically different. Adults with Parent providers have a 20% lower odds of medical care use than do those with Non-Relatives as paid IHSS providers.

• The race/ethnicity of IHSS recipients, adjusting for health conditions and functional limitations, showed no statistically significant differences in the odds of medical care use (both including and excluding ER use) comparing Non-White to White race/ethnic groups among IHSS recipients age 3-17, and comparing Hispanics and Asians to Whites among recipients age 65+. Adult Black IHSS recipients, on the other hand, were less likely to use medical services than Whites. Non-aged adult Hispanic and Asian recipients tended to have a higher likelihood of medical care use than Whites of the same age.

• Medical care expenditures follow patterns consistent with service use. Within recipient age groups there is little difference in the average monthly expenditures for physician and outpatient department services among recipients, regardless their provider type. Average monthly Medicaid expenditures tend to be highest for children, lowest for those 65 or older. Combining the sources of medical care (excluding ER use), the mean monthly expenditures for IHSS recipients age 3-17 continuing from 2004, range from a $140-$180 across all provider types; the ranges are respectively $105-$170 among those age 18-64, and $40-$50 among those age 65 or more. The lower expenditures among adults (the aged in particular), are likely due to Medicare or another source being a primary payer on these services. Expenditures for those who entered the IHSS program in 2005 are marginally higher than for continuing recipients.

Home and Community-Based Services

• The use of Medicaid HCBS waiver or State Plan services (excluding IHSS) is proportionately low among IHSS recipients: fewer than 0.04% among IHSS recipients age 3-17, 4.2% among those age 18-64, and 17% among those age 65+. Average monthly expenditures for the users of these services tend to be highest among IHSS recipients age 18-64, particularly those with Parent providers (mean $2300/month). This rate is about double that for recipients with Spouse and Other providers. There is little unadjusted difference among recipients with different provider types for those age 65+ (mean $620), and too few minor children recipients to appropriately draw conclusions.

• IHSS average monthly expenditures are comparable among adult recipients regardless of whether they are older or younger than age 65, but are higher among recipients age 3-17. Children with Parent providers ($520), and Adults with Spouse providers ($350 non-aged-$400 aged recipients) have the lowest unadjusted average monthly expenditures. The non-aged adult recipients with Parent providers had the highest average monthly expenditures ($980). There are minor differences comparing monthly expenditures for recipients with Other Relative versus Non-Relative providers within each of the recipient age groups: age 3-17 $870 vs. $880, age 18-64 $660 vs. $740, age 65+ $700 vs. $730.

• Analyses combining IHSS and the other home care expenditures, and adjusting for recipient characteristics, found that IHSS Plus Waiver recipients (i.e., minor children whose parents are paid IHSS providers, and adults whose spouses are paid IHSS providers) had lower average monthly home care expenditures than recipients with Non-Relative providers. Differences averaged $520 for minor children, $340 for aged, and $430 for non-aged adults.

Nursing Home Use

• The incidence of nursing home placement among IHSS recipients in 2005 was low: 0.26% among children, 2.25% among non-aged adult recipients, and 5.9% among those age 65+.

• Among recipients age 18-64, there is a persistent adjusted effect: IHSS recipients related to their providers have lower adjusted odds of nursing home use than persons with Non-Relative providers. Recipients with paid Parent providers tend to have a lower adjusted risk than recipients with either Spouse or Other Relative providers. There were no differences between new and continuing IHSS recipients in placement rates.

• Among recipients age 65 or older, the protective effect of relatives as providers is present only comparing recipients with Other Relatives to those with Non-Relative providers. Recipients with paid Spouse providers have a modest tendency toward a lower placement rate, but this did not reach statistical significance. Recipients joining IHSS in 2005 were less likely than continuing recipients to have a nursing home placement.

Conclusions

This section addresses four fundamental policy issues implicit in the IHSS Plus Waiver and its efforts to extend the use of spouses and parents as paid providers for personal care services.

IHSS Plus vs. the IHSS Residual Program Participation

The number of recipients cared for by Spouses and Parents of minors paid as IHSS providers remained relatively constant between 2004 (under the IHSS Residual Program) and 2005 (under the IHSS Plus Waiver); as did the total number of persons (about 1,600 recipients in 2005) participating in the Restaurant Meals voucher and Advance Pay waiver-eligible services. The new recipients, as a group, tended to be somewhat less impaired, to have lower health care expenditures, and to receive fewer IHSS authorized hours than the group of recipients who were in IHSS during the prior year, or longer. These attributes likely could be common to all cohorts of new recipients, and may not be unique to IHSS Plus Waiver program entrants. The race/ethnic and provider mix was somewhat different comparing the new and continuing program cohorts, showing a proportionate increase in Hispanic and Asian recipients.

Preferences in the Selection of Paid IHSS Providers and Outcomes

The selection of a Parent or Spouse as a paid provider, across all age groups, is partly a function of available family members, but differences in the proportion among race/ethnic groups “selecting” each of the various provider types suggests that cultural preferences may be an important selection factor. Wage and other possible influences on provider availability were not an in-depth focus of these analyses, but IHSS wage rates (which vary by county) did not have a consistent association with the selection of paid Parent or Spouse providers. To the contrary, higher wages were marginally associated with an increased use of Non-Relative providers, and Parents and Spouse providers were more likely when wages were low (and presumably low wages may make it more difficult to attract Non-Relative providers).

Recipients Age 3-17

Minor children in IHSS generally have at least one parent in the home. Consequently, for most of these children, the choice of Parent/Non-Parent provider was possible and the choice made by families was for a Parent provider (70% overall and 80% when a parent was present in the home). Hispanics had the highest proportion selecting Parent providers (81%) and the least selecting Non-Relative providers (9%). Blacks (60%) were the least likely to have paid Parent provider, and comparable to Whites in the proportion selecting Non-Relative providers (20%). The decision of families to seek IHSS versus other service options was outside the scope of this study.

There were few differences by provider type in the number of ADL/IADL and cognitive limitations among minor children IHSS recipients. However, proportionately more minor children with paid Parent providers were dependent on human assistance with breathing (this includes assistance with self-administration of oxygen, and the cleaning of this equipment), and had more chronic health conditions (including mental retardation, seizure disorders, and paralysis). These conditions have been shown to be associated with nursing home use in minor children (Fries, Wodchis, Blaum, et al., 2005), and may be indicative of the Parent provider’s willingness and/or greater ability to assume the demanding care responsibilities associated with these conditions. Contributing to this ability may be that parents are legally permitted to perform “skilled nursing” tasks that other providers, especially Non-Relatives, would not be permitted to perform. Investigation of the “cause” of this pattern is outside the scope of the current study.

Recipients Age 18-64

Spouse providers were rarely available as a choice to the non-aged adults participating in IHSS. Most IHSS recipients in this age group were either not married or their spouses were also IHSS recipients or otherwise not able physically/mentally to be paid caregivers. However, when spouses were available and able, the “preference” for them appears to be strong (90% among those with an available/able spouse). Parents were more readily available than spouses to non-elderly adults, and more recipients of this age group selected Parent paid providers. The availability of parents beyond those selected as paid providers is unknown in the IHSS data. There were discernable ethnic differences in the propensity to select Parent or Spouse providers. Hispanics were most likely to select Parent providers (26%), and the second most likely to select Spouse providers (9%). Asians were the most likely to select Spouse providers (11%), and second most likely to select Parent providers (18%). Blacks were the least likely to select either Spouse (2%) or Parent (10%) providers. More than half of the Blacks and Whites relied on Non-Relative providers. This contrasted with about a third among Hispanics and Asians.

In general, recipients with paid Parent or Spouse providers had more limitations in ADL and cognitive functioning, and a comparable number of chronic health conditions than recipients with other providers. However, those with paid Parent providers had higher rates of mental retardation/developmental disability, central nervous system injuries/disorders such as quadriplegia, paraplegia, other extensive paralysis or spinal cord disorders, and seizure disorder) -- all of which are conditions shown by Fries and associates (2005) to be associated with higher risk of nursing home placement.

Recipients Age 65 or More

Spouses were present among about 25% of this age group of IHSS recipients, but except for those paid as Spouse providers, the number able/available reduced to about 3%. When a recipient-provider was an Other Relative or a Non-Relative, almost half of the spouses present were also IHSS recipients. This pattern of both partners being on IHSS may be the consequence of the income and asset eligibility criteria used for Medicaid among IHSS recipients. Unlike the criteria used for nursing home recipients, IHSS recipients are not allowed to separate their couple assets when determining program Medicaid eligibility for one individual. Recipients with IHSS-paid Spouse providers tended to have more ADL, cognitive, and breathing assistance limitations, but there were no substantial differences in the number of health conditions. Race/ethnicity had a minor association with the presence of a paid Spouse provider (the percentages range from 1%-4%), but the more striking differences involved recipients with Other Relative and Non-Relative providers. More than half of the Asian (64%) and Hispanic (54%) recipients had an Other Relative as their paid provider, whereas more than half of the Whites (53%) and Blacks (56%) had Non-Relative providers.

Implications for Medicaid and IHSS Expenditures

For all recipient age groups, IHSS expenditures, adjusting impairment severity and service needs, are expected to be lower relative to those with Non-Relative providers when Parents, Spouses, and Other Relatives living in the household are paid IHSS providers. This cost difference arises because an IHSS algorithm adjusts the authorized time for housekeeping/meal preparation when there are relatives living in the household who might be expected to perform these tasks for themselves as well as for the recipient. This adjusted cost difference was observed for Parent providers to minor children, and for Spouse providers of adults. The cost differences for Parent provider (non-aged adults) and Other Relative providers were minor or non-significant. This could be because these providers were not living with the recipient or they may reflect limitations in the risk adjustment model.

Minor children with Parent providers, after adjusting for recipient functional and health conditions, have lower average monthly Medicaid expenditures than those with Non-Relative providers. These recipients also have lower adjusted use of IHSS and other home care service expenditures.

Adjusting for recipient characteristics, recipients age 18-64 with Spouse providers had lower average Medicaid monthly expenditures than those with Non-Relative providers. There were no statistically significant differences comparing recipients with Parent and Non-Relative providers. Among these adult IHSS recipients each of the paid relative provider groups had a significantly reduced likelihood of nursing home placement compared to those with Non-Relative providers. The Parent provider effect for those age18-64 appears greatest. Those with Spouse providers tended to have higher risk of “any cause” hospital stays (but not those associated with ambulatory sensitive conditions), higher risk of ER use, but lower IHSS and home care expenditures than recipients with Non-Relative providers. Recipients with Parent providers compared to those with Non-Relative providers had lower adjusted use of hospitals, ERs, and home care.

Average monthly Medicaid expenditures among recipients age 65 or more, adjusting for recipient characteristics, were lower for those with Spouse providers and Other Relative compared to Non-Relative providers. This tendency for lower risk among those with family providers was also present with respect to ambulatory sensitive hospital stays; and those with Other Relative providers compared to those with Non-Relative providers had reduced risk of ER use, lower monthly expenditures for IHSS and other home care. The protective effect of relatives as paid providers was also present, but this association was with the Other Relative provider category as compared to Non-Relative providers.

In short, these analyses found no financial disadvantage and some advantages to Medicaid from allowing spouses, parents (and other relatives) to be paid IHSS providers. This argues in favor of honoring the recipient’s and family’s preference for such providers. Whether the availability of spouse, parent, and other relatives can be expanded beyond its current proportion among all race/ethnic groups in IHSS is unknown, but changes in the race/ethnic mix of recipients evident in the new cohort of enrollees may affect this. The proportion of recipients who are Hispanic or Asian seems to be growing. These groups presently have the highest proportionate use of Spouse, Parent, and Other Relative providers.

These effects of selecting Parent, Spouse, and Other Relatives as paid providers are present within a program where the rate of Medicaid nursing home stays among IHSS recipients with Non-Relative providers seems to be low. This suggests that IHSS in general is doing a good job of enabling recipients to remain in the community regardless of the provider type selected. Not examined in this analysis were the factors (such as hospital stays, avoidable changes is health or functional status) associated with entry into and exit from IHSS; or the duration of participation in IHSS and the cost/use comparisons over time.