Inside The Senior Alliance: Fiscal Year 2024 State Budget Review with Dave LaLumia (Ep 1.34)
In this episode, Jason Maciejewski, CEO of The Senior Alliance, talks with Dave LaLumia, Executive Director of the Area Agencies on Aging Association of Michigan, aka 4AM. They discuss the fiscal year 2024 budget that was just passed in Lansing, and what the funding looks like for Senior Programs that are overseen and implemented by all Michigan Area Agencies on Aging. Some of the program funding they talk about include Meals on Wheels, the MI Choice Wavier Program, The Silver Key Coalition, Caregiver Resource Centers, and more. Jason and Dave also highlight the importance of advocacy during the next budget process for 2025, which begins next February, and how you and people you know can become involved in getting better funding for programs seniors depend on having.
Produced by The Senior Alliance and Blazing Kiss Media
Jason Maciejewski (00:00):
Welcome to Inside The Senior Alliance, a podcast exploring resources and issues in the field of aging. I’m Jason Maciejewski, CEO at the Senior Alliance, the Area Agency on Aging serving Western and Southern Wayne County. Joining me today is Dave LaLumia, Executive Director of the Area Agencies on Aging and Association of Michigan, which we refer to as 4 AM. Dave, thanks for joining me today.
Dave LaLumia (00:21):
Thanks, Jason. Happy to be here.
Jason Maciejewski (00:23):
Today we want to cover what has happened with the fiscal year 2024 budget here in the state of Michigan, specifically for older adults and caregivers and services that we provide as an Area Agency on Aging and a MyChoice waiver agent. And the state budget process really occurs over, you know, a five or six month period of time, Dave, and it starts with the governor in early February delivering her budget message and her proposed budget. And there are consensus revenue estimating conferences that occur where Treasury and the fiscal agencies get a consensus on what the revenue is going to be in the upcoming fiscal year for the state. And that feeds the appropriations process in the two chambers of the state legislature, which hold hearings in March and April. And then in May, typically the process really gets going where the chambers are passing budget bills as they’re being reported up from subcommittees and through the appropriations committee, and they get into conference committees where they negotiate the final deal. And so we’ve been through that whole process here now in 2023 for fiscal year 2024, which starts on October 1st and we now have a budget. But I wanted to start today by asking you, Dave, what were we looking for as an area Agency on Aging Association here in Michigan out of the fiscal year 24 budget?
Dave LaLumia (01:42):
Well, there were a couple of items that were really high on our priority list, and one of them was direct care worker salary increases. And, you know, as everyone is experiencing, it’s very difficult to recruit and retain direct care workers throughout the aging network. The governor and her budget had a dollar and a half per hour increase recommended. 4 AM was part of a statewide coalition that was requesting a $4 an hour increase, but we also supported the request of the governor, so that was one of ours. You know, salaries and wages aren’t the only thing that are important to direct care workers, but to be competitive with other community employers, direct care workers and the aging network really need a competitive salary and wage. The other item that was high on our priority list was a request for funding to establish caregiver resource centers at the AAAs around the state.
Dave LaLumia (02:41):
We have come to understand and appreciate the vital role that family and informal caregivers play in long-term care. Without the work that family and informal caregivers do every day our older adults and people with disabilities would be much more reliant on a service delivery network that in some ways is struggling to help them. So we had requested a 16.8 million dollar appropriation to establish caregiver resource centers at each of the 16 area agencies on aging. Another area was MyChoice rates. We have the MyChoice waiver agents have been struggling with continuing to provide services to adjust their unit rates to accommodate growing pressure to increase direct care workers rates. So we’ve been very concerned about the whole MyChoice rate structure, the actuarial soundness requirements that Medicaid and the federal government impose on managed care organizations. So we’ve been talking about rates with our house and Senate members, hoping that they will come to have a greater appreciation of what’s involved in the rate structure and how rates are established, and to make sure that MyChoice waiver agents get the best possible rates that they can within the structure.
Dave LaLumia (04:06):
Those are really our top priorities going into the budget year.
Jason Maciejewski (04:10):
Yes, certainly important topics that we’ve been advocating on for quite a while. One of the consistent thing that we are annually advocating on are those older Americans Act funded items, and specifically in the Michigan Department of Health and Human Services budget for the nutrition programs, which a lot of people know as Meals on Wheels and the in-home service programs that at the Senior Alliance we call care Management case coordination and support. And I know we had a couple of asks around those two items, and people who have listened to our podcast in the past might be familiar with the Silver Key Coalition, which is that group of aging-related organizations across the state to advocate for the nutrition programs budget and for the in-home services budget. So could you tell us, you know, what we were looking for on those two traditional budget items and what we ended up getting in the budget this year?
Dave LaLumia (05:02):
Yeah, the Silver Key Coalition is an important voice and they prepare their own appropriation priority agenda every year. This year, the items that appeared on a Silver Key list were funding of non-Medicaid home and community-based services. You know, the MyChoice program is a program that serves Medicaid beneficiaries, but there are also many older adults, people with disabilities who don’t quite make Medicaid eligibility, but who still need assistance in remaining in their own homes. So, you know, AAAs financed these services through state appropriations or local funding. And the Silver Key was asking for just a little over 6 million dollars in State general funding to assist with addressing the waiting list for non-Medicaid, home and community-based services. They also requested a million dollars for home-delivered meals. And then this is another state funding, a state general fund request, and they were also promoting improvements in the Long-Term Care Ombudsman program, which has not had an increase in several decades now.
Dave LaLumia (06:14):
But the Ombudsman’s program is an important tool that we have to make sure that older adults get into the right service mix and have any grievances that they might have addressed by an independent ombudsman. So, you know, those were the asks of the Silver Key Coalition. Now what we ended up getting, it’s both, I think, encouraging and a little bit disappointing, encouraging in that some of our items were addressed in the budget, but not at the levels that were requested or that we felt were needed. On the direct care worker wage increase I mentioned that the governor’s budget proposed a dollar and a half increase. The statewide coalition was proposing a $4 an hour increase, the house concurred with the governor and put in the dollar and a half increase. The Senate was much lower at a 65-cent-an-hour increase.
Dave LaLumia (07:14):
And the final decision made on direct care worker increases was an 85-cent-an-hour pay increase. So something, again, something in there for, to acknowledge the fact that direct care worker support is important but not what was asked for or requested and certainly far short of what’s needed to make sure that the AG network remains competitive. On the caregiver resource centers, we had asked for 16.8 million dollars. The Senate had put in 9.4 million and the house did not include this item in their budget. And the conference committee, the final decision on the budget was to add 5 million dollars for caregiver support services across the AAA network. These funds would be distributed to AAAs based on their interstate funding formula. I think it’s important that this need was recognized and that there was an appropriation for it, but certainly short of what had been asked for. Another item that appeared in the budget was a million dollars in funding for nutrition services or Meals on Wheels.
Dave LaLumia (08:25):
While this was an ask of the Silver Key Coalition, the million dollars that was put in was one time funding. It was federal, one time ARPA funding. I think this will be a challenge to AAAs to spend this money on nutrition services and knowing that it’s not going to be there necessarily in the coming fiscal year FY 25. So on home and community-based services this was one of those asks of the Silver Key Coalition. They had requested 6.4 million. The final amount in the budget was state funding, but it was $658,000. This will be put to good use across the network, but it was certainly far short of what is needed to address all the waiting lists around the state. It’s about, it ended up being about 10% of what was asked for. So those were the, I think the major highlights of the budget.
Dave LaLumia (09:21):
There was an MDHHS departmental request for federal funding to take advantage of the Home and Community-Based Services incentive program, which was part of the federal legislation and that was included in part of the budget that was actually an FY 2023 supplemental. So this is good news for our state, partners and they will intend to address some direct care worker training issues. It’s possible that they will address some caregiver resource center issues with that funding, but it was included as a part of the supplemental.
Jason Maciejewski (09:57):
I think that when you look back at the budget that we just passed here in Michigan, we got partial appropriations on just about everything we were looking for. We were looking for increases in a lot of different budget lines and we got partial increases. So while a little bit of progress has been made, we haven’t gotten to the point where we’re actually reaching the goal of eliminating wait lists and fully being able to build out a caregiver resource center network. So we still got some work to do ahead of us on those fronts. And just to maybe illustrate why we put so much effort into advocating for these things, I’ll pick out that in-home services line item, that care management program, the one that we got just over $600,000 in additional funding for when we were looking for more like 9 million, we’ve got about 1100 people on that program with the Senior Alliance that participate in that.
Jason Maciejewski (10:47):
And the wait list is just as big. So there’s an incredible demand for people to receive those kind of community living supports and services that enable them to remain living in their homes. And it’s funded through these appropriations in the state budget. So that’s why this year we were looking for that additional 9 million and we’re grateful to get the amount that we got, but it’s not going to be enough to eliminate those wait lists right now. But I do want to turn to MyChoice, the MyChoice Medicaid Waiver program. We are continually advocating for rate increases there as well. It’s a little bit different than the Old Americans Act programs because A, it’s Medicaid and then B it’s a capitative system. So we get a set amount of money for what are called slots, in essence, people that get enrolled into the program. And then we have to manage that over the course of the year. And we have been trying to keep pace with inflation and keep pace with the cost of delivering those services and building the direct care workforce and all the things that are involved there. But the budget isn’t necessarily the final step in setting the rate for the MyChoice program. So could you maybe illustrate for us what the final pieces of setting that rate for fiscal year 24 are going to be?
Dave LaLumia (12:02):
The rate setting process is quite complex and as you mentioned, MyChoice waiver agents are capitated, a capitated rate is set and AAAs and waiver agents are considered managed care organizations by the federal government. So they have to meet federal requirements for rate setting. And those federal requirements include an actuarial analysis and a requirement that any rate that’s set for a Medicaid managed care organization be actuarially, sound and certified by competent and qualified actuary. So the state has retained an actuarial firm, you may hear the name, Milliman, that is the state actuary, and they review data submitted by MyChoice Waiver agents and they determine a rate based on that information, which meets the actuarial soundness requirements. So it has been very frustrating in that either no increases have been recommended over the last year and a half.
Dave LaLumia (13:10):
In some cases, there were rate reductions recommended at a time when the pace of inflation across the country in every category has been precedent setting. You know when the budget is passed they put a kind of a placeholder number in the budget, which is their estimate about what the rate increase might be. But the actual rate increase is determined by the state actuary and has to be certified according to generally accepted accounting and actuarial principles to be an accurate rate. So we have the budget now, there’s money in there for a rate increase across the board, not only for MyChoice, but for Medicaid health plans for the My HealthLink program and other Medicaid programs. But we’ll know what the rate will be exactly when the Milliman firm finishes its analysis of the MyChoice waiver data, and puts a rate out there. And that will be sometime in the next month, usually in late July or early August.
Jason Maciejewski (14:16):
Thanks for that overview. It can be a bit of a complicated issue when you’re beginning to talk about how MyChoice is funded, but at the end of the day, for us, these are all critical programs, whether it’s the MyChoice waiver, whether it’s care management, nutrition programs, they’re all helping us reach our mission of assisting people to remain living in the community and the homes where they they want to be. So we appreciate your work at the State association on behalf of the 16 AAAs as well, but if we want to engage advocates going forward, we certainly have a lot of issues that we need to keep addressing and keep talking to the state legislature about. What can an advocate do to help support our advocacy on these issues?
Dave LaLumia (14:57):
Well, I think there are a couple of things. And first I would like to just underscore something that you said before, and that is that a number of our priority issues actually a large number of our priority issues were addressed in some way. And to me that says that we did get a message out there and people, legislators and departmental staff heard the request. They got the message, they were aware of what was being asked for. You know, were those areas addressed adequately in the budget process? Not really, but I think it, to me it’s encouraging that so many of our issues did get some attention in the budget process. Moving forward, I think we have to continue our advocacy on all of these issues. I think our momentum will continue to build on some of them. And we may have some greater success next year and in years to come.
Dave LaLumia (15:50):
But, you know, what can we do now that the budget process is over? The legislature has adjourned for the summer, and I think what the main thing we can do is continue to build relationships. You know, the success in getting items in the budget or having legislation passed or amended really has to do with relationship building. So getting to know your house and Senate members over the summer, everybody’s going to be working in their district offices, they’re going to be having coffee hours, they all have newsletters that go out which keep their constituents informed. They request input from people. And we need to just engage in that process to get to know our legislators, to go to coffee hours, to read their newsletters and know what they’re up to and what they’re doing. And a lot can be accomplished between now and next February when the governor introduces her FY 25 budget and the whole process of legislative consideration of that budget begins all over again.
Jason Maciejewski (16:57):
Great. Thanks for those tips as well on how to advocate and the importance of it. As we wrap up today, I want to shout out one of our colleagues, Pam Curtis, who’s the CEO at the Muskegon Area Agency on Aging over there. She is going to be taking over as president of the board of directors for our National Association, US Aging this coming Sunday here in mid-July. And she’s going to serve as president of that important association and just, I think shows the strength of the area agencies on aging here in Michigan as we have one of our own taking in the leadership role at our National Association for the next year. So that’s a really big feather in our cap, I think, here in Michigan. And congratulations to Pam. But Dave, I want to thank you again for taking the time to join us here today on Inside the Senior Alliance.
Dave LaLumia (17:43):
Thank you, Jason.
Jason Maciejewski (17:44):
If you have questions about services or programs The Senior Alliance offers, you can call us at 734-722-2830 or email us at email@example.com. Information about our agency or the programs and services we offer can found on our website at www.thesenioralliance.org. On Facebook, we can be located by searching for the Senior Alliance. And finally, our Twitter handle is @AAA1C. I’m Jason Maciejewski. Thank you for listening to this episode of Inside the Senior Alliance.