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Legislators Hash Out 15 Percent Rise in General Fund for DHS

Funding has been secured for Oregon Project Independence to allow seniors to stay in their homes, and for General Assistance, which helps disabled homeless people get housing. DHS will end its live-in caregiver program in October and the agency will also no longer allow private payers access to its registered home care workers.
June 28, 2017

The Department of Human Services budget for the next two years is poised to rise 5.8 percent over the last budget, increasing to $11.2 billion in total funds to pay for services for seniors citizens, foster children and people with disabilities.

The general fund commitment to DHS will rise more sharply, at a clip of 15 percent, from $2.7 billion to $3.1 billion, and programs cut in the initial governor’s budget, including Oregon Project Independence for seniors and the General Assistance program for the homeless will be able to continue at their current funding levels.

Cutting either would have been pennywise and pound-foolish: the general assistance program allows the state to get repaid by the federal government for assisting homeless people awaiting disability approval with housing, which helps stabilize their health. Oregon Project Independence gives help to lower-middle class seniors that allows them stay in their homes. If they were forced to move into more expensive assisted living or nursing homes, the state would quickly end up paying for their care through Medicaid.

The DHS budget, which passed a budget subcommittee on Tuesday, slightly cuts funding for the Developmental Disabilities Division from about $900 million to $887 million as the agency works to get costs under control through a new assessment process.

Despite the cuts, Oregon’s underpaid service providers should get a 5 percent raise, which is intended to increase wages. “It’s an attempt to get more money out to employees in that very challenging field,” said legislative fiscal officer Laurie Byerly.

Oregon passed a big increase in the minimum wage last year, which will top out at $14.75 in the Portland Metro area. That put the squeeze on direct-service providers for people with disabilities, forcing them to compete for labor with jobs requiring less skill and stress for nearly the same pay.

At the same time, costs to this division have soared since the adoption of the Community First Option, also known as the K Plan, in 2013, which allowed the state to receive more money from the federal government for disability programs but also required the state to lift an artificial cap on funding and serve all eligible people according to their needs.

DHS has faced extensive  criticism from lawmakers for its seemingly unsustainable rate of spending growth, but Sen. Sara Gelser, D-Corvallis, said those criticisms were unfair.

Before the K Plan was adopted, Gelser said, some families were forced to put their disabled children into foster group homes because they could not care for them.

“We’re not doing that anymore,” she said. Now the program pays for lifts and other equipment that allow these kids to stay with their families. The number of kids in the program also ballooned from 800 to 3,000 in a few short years.

“We have given the agency an impossible task, to hold down costs, when we’ve switched from a capped system to an open-ended entitlement. It was an expensive policy choice,” but the right one, Gelser said.

Trumpcare looms over the program for these children. Sen. Ron Wyden told reporters on Friday that the newest version strips the Community Force Program of the 6 percent federal funding enhancement that Oregon receives -- which would likely force the state to close its doors on this program.

The DHS budget increases the amount spent on services that are delivered in a home and community setting anyway, since this reduces costs overall and is typically preferred by Medicaid members.

The agency will be expected to increase the share of its of patrons who receive disability services at home from 74 percent to 80 percent, while nursing home care for seniors should also decline. Oregon is already a national leader in moving away from nursing homes for long-term care needs, but it is expected to improve from 13 percent to just 11 percent of Medicaid seniors receiving care in nursing homes.

At the same time, the caregiver live-in program -- long a bastion of Oregon’s senior services -- will officially end in October, saving the state $4.5 million. The cost of the program skyrocketed after the U.S. Department of Labor told the state that Oregon must pay overtime for as much as 24 hours a day for caregivers who live with their clients, rather than allowing them to be on-call without getting paid.

SB 5526 also scraps the Home Care Choice Program -- which allowed private citizens to hire home care workers from the state registry. The program was pushed by SEIU as an alternative to private home care agencies and opposed by the Oregon Health Care Association, which represents those agencies. In the end, Byerly said, the program failed because it did not attract enough interest to sustain the program. The state saves $1 million by shuttering the program early.

Reach Chris Gray at [email protected].