Finds that through the medicaid program, state and federal government fund long-term care and medical services for many elderly persons and people with disabilities, both in institutions and in community alternatives.

Finds that a significant portion of these individuals' social security benefits is retained by the state to assist with the cost of their care. The legislature intends that these individuals retain for their own use a reasonable personal needs allowance which may be used to purchase clothing, postage, barber services, travel, and other personal items not covered by their care setting, in order to ensure their autonomy and dignity.

Declares an intent to establish a minimum level for the personal needs allowance, make it equal between institutional and community-based settings, and adjust the personal needs allowance annually to reflect cost-of-living adjustments to federal social security benefits.