Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services

Budget Subcommitee number three on Health and Human Services will come to order. We are going to begin as a Subcommitee. Whenever we have one of the other Members, I will call the however, we expect no votes today, so the roll call will be for quorum purposes only.

I am filling in for Chair Menjivar today, and we have a hard stop in 90 minutes. And so we are going to try, I think these items, many of them, are necessarily brief, and we want to be able to allow public comment.

If for any reason we get bogged down, we will actually carry over the remaining agenda items and public comment to the next hearing. But it is our hope to accommodate it here.

And I will sort of make a judgment by a show of hands as to how many people want to offer public comment as to what the time frame is for doing that when we get to that point on the agenda.

Today's topics for discussion are in two areas, the California Department of Aging, where we have three issues, and the California Department of Social Services, where we have 10 issues. We have one stakeholder issue. And then we have public comment. And we will solicit the public comment after all items.

So we're not doing it after each of the individual 14 items. We will do it after we get through all 14 items. And just in case, even if you're listening and you can't attend, the Committee welcomes your comments.

So if we don't get to public comment today and it's urgent or you're watching remotely and can't attend, we would accept your comments in writing to the Budget Subcommitee or through the Budget Committee's webpage on the Senate website. Just make sure that we do that.

So we are going to begin with issue number one, which is an overview of the California Department of Aging. And we will have with us three people. The Director well, actually, we have four because hopefully one is just here for questions. But nevertheless, we have the Director of the Department of Aging. We have the deputy Director.

We have a representative of the Legislative Analyst, Juan Trotter. We have the Department of Finance, Jennifer Ramirez. And so we will move to to item number one, the overview. And we will begin with the Director of the Department. And we'll go to the legislative analyst. Then we'll go to the Department of Finance. Welcome to the Committee.

Good morning, Senator Laird, Susan DeMarois, Director of the California Department of Aging. And I'm joined by Nicole Shimasaka, who's our Chief Deputy Director. The first question on the agenda today relates to the Master Plan for Aging and the progress that the state of California is making on our 10 year blueprint.

We're pleased to report we're at the midpoint of the Master Plan for Aging. We're at the five year mark, and at the end of January, we issued a report to the Legislature. This is our fifth annual report highlighting our notable achievements from the prior year, 2025.

For the sake of brevity, I will condense our achievements into three areas. The first, we're extremely proud of the local leadership that's been developed over the five years of the Master Plan for Aging. We concluded a round of local aging and disability action plans last year with funding provided by the Legislature.

21 entities in 30 communities have now done their own local plans, including in your district. San Benito, Santa Cruz and San Luis Obispo. All produced local action plans. The second area of note is research to inform public policy.

Last year we concluded an h home and community based services gap analysis, mapping all 58 counties in the state and determining where we have gaps in services. And we did that in partnership with the Department of Healthcare Services. They led the medi cal work of the HCBS gap analysis.

We also have embarked on an older adult older adults in the workforce report that we're working on. Currently. We're doing that jointly with AARP and the community college chancellor's office. And the third area would be long term services and supports financing, again with funding provided by the Legislature and approved by the Governor.

We will be issuing a comprehensive report to the Legislature as early as June. Those are. And then in addition, for the master plan for aging, I think we're. From the outset, we've relied on stakeholder engagement. We're so pleased. We've had tremendous interest in all of our stakeholder advisory committees.

We currently have 150 stakeholders contributing to those six committees. And just this year we stood up for the first time our aging and disability lived experience advisory board where we're hearing directly from consumers. I'll stop there on our MPA progress.

Right. Thank you. And you're here for questions?

No, I. Excuse me. I am here from the California Department of Aging to present on the other issues.

But not this issue. No, not this issue. Just checking. That's the point. Okay, then, let's go to the legislative analyst.

Good morning, Senator Laird. Juan Charter. Let's divan his office. So, as noted in the agenda, Department of aging's overall budget does remain relatively flat year over year. However, we would note, as was also noted in the agenda, HR1 will reduce federal support for CalFresh administrative costs beginning October of this year.

So we just want to reiterate that this in turn will place added fiscal pressure on both the state and the counties to cover this change in the share of administrative funding. Thank you. The Department of Finance.

Good morning. Jennifer Ramirez, Department of Finance. Nothing further to add.

Okay, then I have a couple of questions, but first, we've got a quorum, so I would ask if you would please call the roll.

[Roll Call] We have a quorum.

Thank you very much. And as I said at the outset, we don't intend to have any votes today, but it's important to establish an official quorum then to move on to questions. Let me ask the Director. I know we had some background in the staff report, and you mentioned you're halfway through the Master plan.

Really, overall, what progress do you think you are making toward the goals that are in the master plan? So that, I mean, what has actually happened that's noticeable or transformational in the first half?

Thank you for that question, Senator. There are different metrics that we use. We're committed to public transparency and accountability. We have initiated 300 initiatives since the start of the Master Plan for Aging. About 3/4 of those have been completed and about one fourth are still underway.

The state has invested nearly $1 billion, all told, in all five bold goals of the Master Plan for Aging since inception. And then in addition to that, we use other measures, local leadership, stakeholder engagement. These are things that future proof the Master Plan for Aging. And we will be evaluating our work.

We currently have an evaluation underway that we'll be able to share at the end of this year that that measures us in all of those categories.

And if you were somebody that was aging in California, not a Senator, how would you experience some of those things? How would you see that implementing the plan has resulted in something for them?

That is an excellent question. So while we have the 300 initiatives, those typically are programmatic. So an individual may see a new program or a new benefit that didn't exist previously. So to the person, there might be services that they receive or services that have been sustained. Then there is the climate and the environment.

A big piece of the Master Plan for Aging is combating ageism and ableism in our state and building communities in a state that supports aging in place. And so that's where our local aging and disability action plans have come in.

And then raising awareness about the needs of older adults and connecting and linking them to services has been a big focus as well.

And if I were to ask the Global question, which is the baby boom bubble has really moved into aging and it has changed the demand for services in number and type. How would you feel we are doing against addressing that demographic bubble?

So yes, the numbers are certainly climbing and it's not just the increased volume, but it's the greater complexity, the greater diversity and the affordability issues in particular that older adults encounter. So in terms of how an individual is faring, the master plan is for all ages and abilities.

So we have many older adults who rely on Medi Cal and they may have a different experience than somebody who's in the missing middle and does not qualify for home and community based services under the Medi Cal program. We have Medicare beneficiaries and that's a federal program. We've made inroads with veterans benefits.

So the experience, I often say with 10 million people who are 60 plus, their experiences will be varied across the state. It's not a homogenous group. And so we have varied experiences across the state.

Great. And I appreciate the partnership because I'm chairing the Select Committee on Aging LGBT Californians that we will be doing a select Committee hearing in the next month and you've done a report in a study and we really look forward to sort of airing those issues. And then one last global question.

In the 14 items, even though majority of them in the Department of Social Services, not in the Department of Aging, the impacts of H R1 are in many of the them. How would you describe the impacts of H R1 to your area and your programs?

We're very excited about your select Committee as well and looking forward to that work. Thank you. In terms of HR1, we have no direct impacts to our Department. But part of the Master Plan for Aging is it's the whole of all of government, all of society.

So we can't deny that there are direct and devastating impacts to other departments and programs that serve and support older adults. And we're deeply concerned about those impacts.

And as far as the Master Plan for Aging goes, this is a year where with reduced state revenues, but also the federal climate where we're really grateful that we have a plan in place where we have five bold goals and we can keep our focus on, on housing, health equity, caregiving and affordability for older adults.

And I can't imagine in this environment if we didn't have a, if we weren't five years into our Master Plan for Aging to have guiding principles and values to stand.

And so do I deduce that there are real impacts to your whatever you would call it base of people you serve, but we might hear them separately in cuts to medical care or in cuts to food assistance or in cuts to housing assistance. And so we will be addressing those. They're just not part of your budget directly.

Exactly, exactly. And being a Department in the Health and Human Services Agency, I'm very familiar with what Department of Social Services and Healthcare Services and others are experiencing now. And you'll get to hear more from them as the experts.

Great. And then before we move on from this item, because that exhausts my questions and right now that's the entire questions of the Subcommitee, let me ask if the Department of Finance or the Legislative Analyst have any comments on what we've been talking about in the questions.

Come on, Charter, let's diverse office.

I would just say that as we kind of see these pressures from, as you mentioned with HR1 throughout the Greater budget and Department of Social Services on things like food programs, while it doesn't have direct impacts on the Department of Aging, there are these kind of downstream effects as this will put further pressure on kind of other nutrition programs that this population does utilize.

Okay. Anything from the Department of Finance?

Jennifer Ramirez, Department of Finance. Nothing further to add.

Okay, well, thank you. I appreciate that presentation and that discussion. And we will stay on some of these issues as they move forward. Forward. And we will get into them in individual pieces of the budget as well.

So we'll move to item number two, which is the Health Insurance Counseling and Advocacy Program Modernization, or better known as hicap. And I know we have the Assistant Director and then once again the LAO and the Department of Finance. And so let me ask if you'd like to make a comments.

Yes, and I will also keep it brief. Good morning, Senator Laird. The Health Insurance Counseling and Advocacy Program, or HIGH cap, is a program designed to educate and empower older adults with free and objective Medicare counseling so they better understand their health insurance options.

Currently, less than 1% of beneficiaries in California receive High cap services, despite there being over 7 million individuals who qualify.

The California Department of Aging requests 5 million ongoing from the special HICAP Fund to better support local HICAPs in serving more individuals by adding between one to four paid Medicare counselors per site and making prior year investments permanent, which includes volunteer coordinators.

Specifically, approval of this request will allow local HICAPs to increase engagement by reducing customer wait times, allow HICAPs to be properly staffed to meet increased demand for services, promote equitable access to services by prioritizing recruitment of bilingual staff, and improve the quality and consistency of services through standardizing training across all HICAPs.

This investment will allow HICAPs to double the number of unduplicated clients counseled and increase the statewide penetration rate to align with the national standard.

Thank you very much. Ask the legislative analysts for comments and you can move the microphone right up to you if you'd like. Appreciate that.

Jawan Char Aleo we are continuing to review this bcp, but we would acknowledge that this request does not include a request for General Fund. But at this time we don't have anything additional to raise. Okay.

Department of Finance, Jennifer Ramirez, Department of Finance. Nothing further to add.

Okay, well, the Legislative analyst sort of with the comment was one of the questions I was going to ask, but clearly this is from the Fund and this is not a General Fund impact.

That is correct.

Okay, and then the other thing I was going to ask is just year to year changes. What are the year to year changes in the program that are embodied in this request? I mean, what is different from what we have in the budget year than we have in the current year?

So in the current year we currently are staffing, this is a program that's heavily reliant on volunteers. And what we've seen year over year is that it's more challenging to retain those volunteers and the training they have to go through is growing more complex, which is even more challenging to get and retain volunteers.

So previously we did receive funding for the volunteer coordinator full time at each site. This adds paid counselors to the workforce, so it moves away from such a heavy reliance on the volunteers to do the work.

And it has permanent full time staff Members that would be able to offer that counseling and go through the complex training and so forth. Another compounding issue is that every year there's more beneficiaries that are available for the service. So without addressing some of these issues, our numbers will continue, will actually get worse.

They won't remain stagnant, they'll get worse. And so this is to try to get ahead of that and to counsel more individuals so that they're aware of their options.

I appreciate that because this is one of those programs I hear about out in the District. I know people are utilizing it, it makes a difference and we make references to it regularly because people are struggling with the decisions they're making.

Let me ask if the Legislative analyst or the Department of Finance have anything they wish to add before we move to the next item. Nothing further A.D. nothing further. Okay, then we're going to move to item number three, which is the meal programs for seniors and it's the same panel.

So let me ask the Deputy Director if you would like to to make some opening comments.

Yes, I also just have brief comments on this one. The California Department of Aging serves as a state unit on aging and we administer the Older American Act programs throughout a network of 33 area agencies on aging.

The Department's largest Older American act program is nutrition and we receive approximately $124 million in federal funds annually and serve roughly 21 million meals. Assembly Bill 1476 updates the Older American Act Title 3C nutrition program to require increased oversight and support of the area agencies administering to go meals.

To go meals are defined as meals either picked up by or delivered to participants 60 years of age or older. Assembly Bill 1476 instructs the Department to support, monitor and train area agencies and in implementing virtual congregate to go meal programs which addresses social isolation and food insecurity.

Approval of this request will allow the Department to lead ongoing monitoring, training and technical assistance of the virtual congregate meal program.

Legislative Analyst Juan Jarara Leo we have nothing further to raise at this time.

And finance Jennifer Ramirez, Department of Finance

Nothing further then I thank you. I have a few questions and one is the obvious one which is in our overall food programs. Even before HR1 we were experiencing various challenges. I mean during Covid all the congregate meal programs were closed, including the senior meal programs that are administered by you.

And we have funded food banks to come in and try to fill the gaps and the gaps still exist and now we have SNAP coming, the cuts from the Federal Government. How do you feel the recommendations in front of us fill in the gaps that are created either pre existing or created by HR1.

So this request in particular, I don't think that we have an answer to fill the gaps. I think that the gaps that are going to be created, I don't think that there's unilaterally that there's a response to that.

I do think this particular BCP is going to help individuals that cannot participate in those congregate meals have challenges leaving their homes, have to take take medication with their meals. It'll help them to not have that social isolation and it'll help them to also have a meal.

I think that these are steps in the right direction to address some of these problems. I don't think that this unilaterally will address what is happening with hiv.

But let me dwell down on it a little because your description about people being at home just sort of Tease up Meals on Wheels as sort of the program that would respond to that is sort of focusing on additional assistance or beefing up the Meals on Wheels program, a response that you have considered.

So with the we refer to it as Modernizing Older Californians acted. It was $186 million investment that the Department received from the Legislature and the Governor in 22, 23. And that one of our area agency's prominent subcontractors is Meals on Wheels.

And that investment was really addressed to help with what was perceived to what determined to be a nutrition cliff when the Covid funding ended. And so we were very fortunate throughout Covid that we received a $50 million investment to bolster the nutrition infrastructure across the state.

Because something that was also realized at the time was a lot of money was coming in which was very exciting. We weren't necessarily mobilized in a way to use all of that.

So there was a subsequent investment from the home and Community based services investment that allowed a lot of our AAA's directly or their subcontractors to go ahead and increase their infrastructure. So when the $186 million investment came from modernizing OC, they were more equipped and prepared to then utilize that funding effectively and provide more meals statewide.

We have seen an increase in meals starting in the COVID era and moving forward to today widely in part due to that investment that has not tapered.

Yes. Let me just drill down for a second on that. Because that investment wasn't that primarily for capital stuff for equipment and buildings and different things?

There were two investments. There was one specific to nutrition infrastructure in the $50 million and then the $186 million was it was for both supportive services and nutrition. 126 million of the 186 was for the nutrition.

And was that built into the base so that continues or was that a one time thing and we're running out of it?

It's a five year investment that the AAA, the Area Agencies on Aging, will have until June 2029 to exhaust. And at that point it will. It will be over.

But in 28-29 that will be a major issue for us. Although it might be a major issue if we are having unmet needs due to food pressures that are created by the federal program.

Are there any comments on this from for the record, for those of you at home, they both shook their head with a non verbal moment.

Before we leave the senior programs and I have you here, let me just ask about one AAA issue and it overlaps with my district, the triple the every agency on AIDS for San Luis Obispo, Santa Barbara and Ventura county has sort of experienced some problems.

And there's a question about the programs that receive the money passing through, that they are not jeopardized by what happens on this. And I happen to be doing legislation, but I was wondering if you would speak to this so that we would know what the state of the play is. And the calvary has come in.

Finance, Susan Demoris, Director of the California Department of Aging. Again, to answer the question, Senator Laird. Yes, there are two planning and service areas in the state PSAs. We've referred to them as PSA 17 in your district includes San Luis Obispo and Santa Barbara counties. And PSA 18 is a standalone Ventura County.

Both of those planning and service areas have area agencies on aging that deliver services to the community. I'm pleased to report that just recently the Ventura County Board of Supervisors reversed their decision and they have decided to retain the AAA and to continue running the AAA as they have done for decades.

So I wouldn't say it's a moot issue, but many of the concerns have been resolved as a result of the action by the Ventura County Board of Supervisors. So business as usual.

And when you say you're not sure it's a mood issue, what does that mean? I'm trying to just tease out what still might be an issue, or is it good to have the fallback of making sure that that's protected in statute

despite that decision in terms of your legislation? And thank you for your leadership and the Bill that you introduced. And we look forward very much to working with you and your staff on that. It no longer applies in Ventura county because the Aging and Disability Resource Connection serving Ventura county, basically we need to

focus on Santa Barbara and San Luis. Correct?

Correct. And so, yes, your proposed legislation is very important to address the issue in PSA 17 and if this should ever occur again. So in the case of San Luis Obispo and Santa Barbara counties, we have a AAA that voluntarily withdrew.

And we currently have a competitive request for proposals seeking a new community provider to enter the community as the new aaa. We expect to have somebody named by late spring, and we will be working to transition new AAA provider in that community to make sure that services continue uninterrupted.

And we're very much looking forward to reviewing the proposals and selecting a very strong AAA to start.

But it still sounds like necessary to make sure that there's some apparatus that the contractors are not left out in the cold during this process.

Yes. So for when we transition from the outgoing AAA to the incoming AAA, the new entity will need to issue RFPs and select their new providers. Specific to the issue in your bill, the Aging and Disability Resource Guidelines Connections There is a local community provider Access.

Central Coast is the Independent Living center that holds that contract with the Department of Aging and they are doing business as the Central Coast the Aging and Disability Resource Connection of Central Coast. That's a partnership between the Independent Living Center and the AAA in those two counties.

Their contract is good, well in place 30th the end of the state fiscal year, business as usual. And we have notified them that we're able to extend an emergency contract from July 1st through December 31st. Our authority is limited to six month emergency contracts.

That's why if this festered a Bill would be necessary to cover it.

Yes. And so if there were a change in January of 2027 that might allow that ADRC to continue

then one follow up question and I just heard as you went rapidly by that there would be an RFP for services with the new provider. Does that mean if there's an existing service provider they would have to reapply through an RFP to continue being delivering services in that area?

Agency on Aging when we extend when we award the contract and enter into the contract with the new entity, they may choose to deliver some of their services in house. They may choose to contract out for services. It is that's that would be reflected in their RFP and that is their choice and their option.

I would imagine in these communities that the strong subcontractors will emerge because they have the best reputations and the track record for serving their community. But we can't obligate the new AAA or compel them to work with any local subcontractors. And they may determine it's advantageous to hire staff in house and do some services in house.

They may determine it's more advantageous to contract out.

I can see where that is going to cause a bunch of heart attacks. But I appreciate your offer to continue to work together on this and we look forward to it. Yes. Any further further comments on on this or any of the aging items? Actually the I forgot to call on the Calvary.