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Dividends of a Hand Up

Public Benefits of Moving Indigent Adults with Disabilities onto SSI

March 1, 2011 / By Daniel Flaming
Underwriter: the Health Consumer Alliance of California
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Executive Summary

Counties bear large hidden costs for individuals with disabilities who are indigent or homeless. This includes costs for health care, jails and probation in addition to readily identifiable county costs for public assistance. A large share of this cost is health related – costs that the federal and state governments would pay through Medi-Cal if the individuals were receiving Supplemental Social Security Income (SSI).

This study examines opportunities for counties to avoid costs by moving individuals with disabilities who are General Relief recipients, medically indigent hospital patients, and homeless hospital patients onto SSI and Medi-Cal.

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California’s population of single adults 18-64 years of age who are U.S. citizens and not attending school includes:

  • Almost 300,000 indigent individuals with incomes of $4,000 or less in 2009
  • Nearly 140,000 individuals receiving General Relief (GR – also called General Assistance or GA) in a typical month, with the annual unduplicated caseload roughly 1.7 times greater.
  • An estimated 110,000 indigent single people with disabilities who are eligible for SSI but do not receive it.
  • Over 70,000 indigent individuals who are admitted to California hospitals each year, at an average cost of $40,000 per admission for county indigent programs.
  • Over 18,000 people identified as homeless who are admitted to California hospitals each year, at an average cost of about $37,000 per admission.

Statewide in 2009, an estimated 110,000 low-income single adults with disabilities were eligible for SSI but not enrolled in the program. This represents one potentially eligible person left out of SSI for every person who was covered by the program.

In the typical monthly GR/GA statewide caseload, an estimated 51,000 individuals, have disabilities but are not receiving SSI. Eligibility rates for SSI increase markedly with age, rising from less than 20 percent among recipients 18-25 years of age to half among recipients 46-55 years of age.

Most health care and public assistance costs for GR recipients with disabilities that are currently paid by counties ($831 per month) can be covered by Medi-Cal and SSI. In addition, there is a monthly average of $259 in health care costs at private hospitals that will be covered by Medi-Cal when these individuals move over to SSI.

California counties could save $42 million per month and private hospitals could save another $13 million if eligible General Relief recipients with disabilities in the typical monthly caseload were moved onto SSI. Because recipients cycle on and off of aid, the annual caseload is an estimated 1.7 times greater than the monthly caseload. Therefore, the annual costs avoided by moving the annual caseload of eligible individuals onto SSI are also 1.7 times greater, totaling $71 million for counties and $22 million for private hospitals.

County health costs for indigent residents will be ameliorated when the Medicaid Expansion provisions of the new Federal Health Law take effect in 2014 (and to a lesser extent by the 1115 Medicaid waiver), but the extent and amount of federal offsets is not known at this time. Counties are likely to face some level of continuing costs for these residents, and there are likely to be continuing financial benefits for counties’ healthcare and GR budgets when low income persons with disabilities are enrolled in SSI.

Mental disorders were the cause of hospitalization for three-quarters of homeless patients and half of county indigent patients. Most hospitalizations of these patients are for chronic conditions that are likely to result in return visits to the hospital.

Over half of homeless hospital patients and over a third of county indigent patients have disabilities and are likely to be eligible for SSI. After they move onto SSI, they have ongoing access to outpatient health care through Medi-Cal, which can help stabilize their chronic health problems, reduce the frequency of hospitalization, and provide a federal source of payment for inpatient care when it is necessary. Movement of these patients onto SSI will result in roughly $1.4 billion dollars a year in avoided hospital payments that are currently paid by county indigent programs.

When individuals with disabilities enroll in SSI, the federal government assumes a much larger role in underwriting public costs. Counties no longer have to pay health and welfare costs totaling $831 a month, and hospitals are assured of compensation for health care services. Furthermore, with greater financial stability under SSI and opportunities for permanent housing, county justice system costs may well decline significantly. Justice system costs have been shown to decline 82 percent when homeless individuals with disabilities enter permanent supportive housing.

When individuals move from General Relief to SSI, their income increases because SSI provides significantly higher monthly payments than General Relief. In addition to improving the quality of life for individuals, this increased income has multiplier impacts on the regional economy. Each new dollar that enters a region is spent multiple times, first by the original recipient, then by providers of goods and services as they in turn buy goods and services from their suppliers to meet increased demand. The net result is that the increased expenditures of SSI recipients create economic impacts that are greater than the amount of SSI funds that are spent.

For the 50,000 GR recipients with disabilities in the statewide monthly caseload, monthly SSI payments are typically $469 more than General Relief payments for single adults.

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Another 60,000 low-income Californians with disabilities are estimated to be eligible for SSI but receive no cash aid of any kind in a typical month. The $686 that SSI recipients in the state typically receive each monthly is all new money coming into the local economy when it goes to unaided individuals.

When 110,000 low-income California residents with disabilities move onto SSI, 50,000 from the GR caseload and another 60,000 from the unaided population, the statewide impacts will be:

  • $647 million in additional annual economic output.
  • 4,310 new jobs will be created.
  • $47 million in additional annual local and state tax revenue will be generated annually.
  • $50 million in additional federal tax revenue will generated annually.

Improved access to SSI will enable more individuals with disabilities who are chronically homeless to enter supportive housing, where they will have permanent, affordable rental units with on-site case management and linked supportive services. When these individuals are provided with supportive housing, local public costs for them decrease by about 80 percent. If the operating and capital costs, which are largely paid for by non-local funds, are added to the equation, public costs will decrease by about 44 percent.

The contents of this reports are as follows:

  • Executive Summary
  • How Many People are Eligible for SSI?
  • County Cost Savings from Moving GR Recipients to SSI
  • Hospital Cost Savings from Moving Disabled Homeless and Indigent Patients onto SSI
  • Economic Impacts of Increased Income after Moving from GR to SSI
  • Impact of Supportive Housing on Public Costs
  • Benchmarks for Estimating Costs, Cost Saving and Economic Impacts
  • Data Appendix
  • End Notes
Area of Work: People
Tags: Behavioral Health, California, Chronic Homelessness, City of Los Angeles, Cost Avoidance, Disabilities, Economic Impacts, General Assistance, General Relief, Health, Health Care Cost, Health Care Costs, Homelessness, Hospitals, Housing, Integrated Care, Los Angeles County, Permanent Supportive Housing, Poverty, Prevention, Public Assistance, Public Costs, Risk, Screening, Service Integration, Social Safety Net, SSI, Supplemental Security Income, Welfare