Richard H. Chambers Courthouse, Pasadena, CA

A federal appeals court in California ruled against Gov. Arnold Schwarzenegger on March 3, invalidating past budget cuts that would substantially reduce wages for In-Home Supportive Services (IHSS) direct-care workers.

Schwarzenegger’s 2009 and 2010 budgets contained cuts that would reduce the state’s contribution to the IHSS home care workers’ hourly wage by $2 per hour — from $12.10 to $10.10, or a 17 percent decrease.

IHSS workers are independent providers (IP); they are employed directly by consumers, not by agencies that control the hourly wage. Consequently, these IP’s rely on government decisions to set their wage and benefit packages.

Decision Celebrated

“The court’s decision is most welcome, but not surprising,” said Donna Calame, executive director, San Francisco IHSS Public Authority.

“Governor Schwarzenegger has proposed multiple, egregious budget cuts for California’s model IHSS program, under the guise that the cuts are necessary and unavoidable,” Calame continued. “This ruling reminds us of what our nation stands for: fairness and public support for those most in need among us.”

IHSS is a Medicaid program, known as Medi-Cal in California, that helps low-income elders and people with disabilities live independently at home. The home care workers provide clients with needed services like bathing, dressing, cooking, shopping, and transportation.

The state-funded agency employs 370,000 direct-care workers and serves 440,000 consumers.

Cuts Violate Federal Medicaid Act

The U.S. Court of Appeals for the Ninth Circuit — in agreement (pdf) with decisions made by lower courts — continued to prevent the home care workers’ wages from being slashed on the grounds that the cuts did not comply with the federal Medicaid Act.

The state is required by law to first study the impact of the wage cuts on both the consumers’ ability to access the services provided by IHSS and the quality of these home care services.

California officials estimated that the state could save $79 million by cutting IHSS home care workers’ wages during the two-year period on which the appeals court ruled.

“The court’s decision means that IHSS consumers who have been approved to get home care will actually be able to find a worker to do it,” Calame said. “When wages fall or are exploitative of the workforce, consumers find it difficult — if not impossible — to get the services they need.”

The appeals court also handed down decisions that thwart the governor’s past budgets plans to cut the Medi-Cal reimbursement rate by 5 percent for adult day health programs, hospitals, and pharmacists.

Governor Plans Appeal

According to news outlets, Schwarzenegger does not plan to let the appeals court have the last say.

“We strongly disagree with the court’s decisions, which interfere with the state’s ability to manage its finances and reduce its spending to match its revenue,” said Schwarzenegger spokeswoman Rachel Arrezola. “We are confident the U.S. Supreme Court will overrule the Ninth Circuit’s rulings and reaffirm the state’s ability to make tough decisions to balance its budget.”

The recent appeals court’s decision does not bode well for the governor’s 2011 budget plan, which proposes to cut the IHSS budget by 87 percent.

– by Deane Beebe