ESSB 5517

SENATE BILL REPORT
ESSB 5517

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As Passed Senate, February 15, 2008

Title: An act relating to increasing the personal needs allowance for persons receiving state-financed care.

Brief Description: Increasing the personal needs allowance for persons receiving state-financed care.

Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Berkey, Kauffman, Haugen, Eide, Kastama, Schoesler, Shin, Hatfield, Keiser, Rasmussen, Kline and Regala).

Majority Report: That Substitute Senate Bill No. 5517 be substituted therefor, and the substitute bill do pass.Signed by Senators Prentice, Chair; Fraser, Vice Chair, Capital Budget Chair; Zarelli, Ranking Minority Member; Brandland, Hatfield, Hewitt, Hobbs, Honeyford, Keiser, Kohl-Welles, Parlette, Rasmussen, Regala, Roach, Rockefeller, Schoesler and Tom.

Background: Elderly people and people with disabilities who receive publicly-financed care in facilities operated or contracted by the Department of Social and Health Services (DSHS) are required to contribute a portion of their income toward the cost of care. For clients receiving Medicaid services, their income is generally made up of Social Security payments or Supplemental Security Income. DSHS, with a combination of state and federal funds, pays the remainder, less these client contributions.

In order to avoid leaving DSHS clients with no funds, a clothing and personal incidentals allowance, also called the personal needs allowance (PNA), is set aside for the clients' use. The remainder is then credited to the cost of care. Clients may use their personal needs allowance for whatever they like; common uses are clothing, beauty/barber, phone bills, postage, travel, snacks, etc. The state and federal government share about equally in the cost of the PNA, regardless of setting, depending on the current federal match rate for Medicaid programs.

There are two categories of PNAs, depending on the type of care setting in which a client resides: (1) medical/institutional, and (2) community (congregate care facilities). The medical/institutional PNA is required by both federal and state law, and must be at least $30. States have the option to provide a higher PNA. Through operating budget increases, the total PNA in Washington State for medical/institutional is currently $53.68. Medical/institutional facilities include contracted nursing homes, the two state psychiatric hospitals, and "Intermediate Care Facilities for the Mentally Retarded"— primarily the five Residential Habilitation Centers (RHCs).

The community PNA is not required by the federal government. Washington State has elected to provide a PNA, although statute does not require it. The PNA for community settings is higher than those for medical/institutional, and is currently $58.84/month. This level has not been increased since 1988. Community settings include contracted adult family homes, assisted living/boarding homes, adult residential care, and group homes. These facilities take clients from DSHS Long-Term Care, Developmental Disabilities Division, and the Mental Health Division.

In the 2007-09 operating budget, the 2007 Legislature funded a temporary two-year increase in the PNA equivalent to the Federal Social Security Administration's cost-of-living adjustment. The increase expires June 30, 2009.

Summary of Engrossed Substitute Bill: The Legislature establishes the PNA in statute and intends to increase it annually to reflect federal Social Security cost of living adjustments. The change applies to Medicaid residents in institutional and community settings in DSHS Long-Term Care, Mental Health, and Developmental Disabilities.

Effective July 1, 2008, and each fiscal year thereafter, the PNA must be increased by the Federal Social Security Administration's cost of living adjustment, unless it conflicts with the maximum PNA allowed under federal law.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony on Original Bill: PRO: The personal needs allowance for the elderly and other people in the community is only $59 per month and hasn't increased in years. That isn't enough. We appreciate past increases for people in nursing homes, but people have similar needs in the community so they should have an increase, too. Fairness across the board would require equal personal needs allowances among settings.

Persons Testifying: PRO: Senator Berkey, prime sponsor; Louise Ryan, Long-Term Care Ombudsman.