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me; you state that cost-sharing programs appear to operate efficiently. What position did the study take? Can we understand this? Is it efficient or isn't it efficient? That it appeared to be efficient doesn't mean anything to me.

Mr. MANGANO. Okay. What we are trying to do is make a distinction between the kind of study we did versus what you would have to do to answer that question. We did not do a cost analysis on the items that would have to be included in that. We basically asked the officials themselves how they viewed it as being cost efficient. We got into the mechanisms they used which they felt were cost efficient particularly for very highly intensive services like in-home and adult day care.

Chairman MARTINEZ. Would the gentleman yield on that?
Chairman ROYBAL. I yield on that point.

Chairman MARTINEZ. Did you bother to try to find out how many new clients the cost-sharing yielded? Did anybody ask anybody, these officials who, you know, from a state and local level with the kinds of budget restraints they are under; sure they want more money, sure they want to prove that a cost-sharing plan is effective because it means that then they can charge those plans that money and get some of that money back, but did any of them say it has resulted in X number of percentage increase in clientele?

Mr. MANGANO. They told us that it did enable them to increase the number of people coming in.

Chairman MARTINEZ. Did they give a percentage, a figure or was it just off the top of their head? "Well, it increased the numbers”? Mr. MANGANO. Yes. I am not sure

Chairman MARTINEZ. Because I will tell you why. NASUA, under cross-examination, admitted that it didn't increase any participation in the program, that it didn't increase any, and when questioned, “Do they really want cost-sharing?” because they came as advocates of cost-sharing, they finally broke down and said, “No, we would really rather have more monies allocated, appropriated for the program, but since we can't get that, our only alternative then is to look for cost-sharing.”

Mr. MANGANO. It is clear that the local communities have gone to cost-sharing to help them expand the amount of money that they have available to them.

Chairman MARTINEZ. Not necessarily the clientele? Mr. MANGANO. Well, what they would like to do is to be able to serve more people, and they found that cost-sharing in their community

Chairman MARTINEZ. But do you have a stat that shows that they did? That is what I am asking. Mr. MANGANO. Only their word that it did.

Chairman MARTINEZ. Only their word, not a stat, and nobody has produced that stat yet, and until they do, I am not one that is going to be going along with anybody saying that cost-sharing is effective.

Chairman ROYBAL. May I then continue along the same lines, Mr. Mangano? The finding was that extending cost-sharing to Title III, has strong support, but you added a but to it, “But," you said, "careful planning is recommended.” What do you mean by “careful

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planning is recommended”? And how is it going to be done? How is it going to affect the individual participating in the programs?

Mr. MANGANO. Okay. We believe that if the Congress and the Administration were to support cost-sharing, that this activity needs to be planned very carefully preparing the elderly for the concept, and putting into place the mechanisms as to how it would be carried out. Most of the states told us that they recommended that if we were to go to cost-sharing, that we go on the basis of selfdeclaration and without verification of income, many of the same characteristics that we did see in the state and local communities that had this program itself. So there is preparation that would be required as well as systems to be put into place that would operate it on a fair basis.

Chairman ROYBAL. Now, you also went on to say that they, the states, want broad guidelines and maximum flexibility incorporated into the implementation of cost-sharing, then you added, "And they prefer self-declared disposable income.” Mr. MANGANO. Yes. Chairman ROYBAL. What does that mean? Mr. MANGANO. They prefer that the recipient declare what their income is as opposed to them bringing

Chairman ROYBAL. Take for instance, I am a senior citizen. I go to this place, and I say when I go to whoever the director is, "My income is $9,000 a year.” Is that the end of it? Mr. MANGANO. That is correct.

Chairman ROYBAL. In other words, they will not have to sign anything? They will just make that declaration and be left alone?

Mr. MANGANO. Yes. It is a self-declaration. You would not need to bring any other

Chairman ROYBAL. All right. Is that the recommended procedure?

Mr. MANGANO. That is the recommended procedure from the .states and local communities that we talked with.

Chairman ROYBAL. Mr. Bechill, what do you think of that? Mr. BECHILL. Well, once it starts, then people will begin to question the self-declaration system as being inefficient. I can almost see the number-crunchers now in state government on this one.

Chairman ROYBAL. I tend to agree with that, because I remember, incidentally, I was not here when Social Security was passed, but I was here when Medicare was passed, but I remember that Social Security was supposed to be something that we would give to our employer only at the time of employment, but now you have to carry it with you. You can't cash a check without it. You can't do anything without it. And it is turning now into a national identification system which was not the intent of Social Security. I am afraid if something like this starts as described by Mr. Mangano, then eventually it will turn into a full-rate income investigating situation where the individual would have to declare in writing, in every other way what his income really is. Mr. Bechill

Mr. BECHILL. Well, I don't want to alarm people, but if you start with income declaration, it will not be too long before the fiscal pressures will develop again and you will get yourself into, when I say you I mean the government, will get themselves into a precise eligibility test which is just exactly what has stigmatized

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programs like the Supplementary Security Income and other programs that are based on a means-test. That is a fundamental change in the entire Act.

Chairman ROYBAL. Mr. York, I think we have heard probably both sides of this particular issue. I would like to ask you if you think it is premature to consider any significant change in the Act towards mandatory cost-sharing in view of the fact that everyone has admitted no study has been made on the subject with regard to the individuals concerned? We don't even know whether more money will be coming in with a mandatory program versus a voluntary program. Since we don't have that information, what kind of information would Congress need in order to make the appropriate policy decision?

Mr. YORK. Well, Mr. Chairman, as the representative of an organization that is very concerned about efficiency in government, cost-sharing has an appeal to GAO. On the other hand, you and other members of the committees have raised a great many sensitivities very effectively today, I think, about the dangers of mandatory cost-sharing. We have so far not found information available to inform you about what these impacts might be upon the people's participation and people's feelings.

Chairman ROYBAL. In other words, studies have not been made?
Mr. YORK. That is correct, sir.

Chairman ROYBAL. We don't have concrete evidence one way or another that a change must be made in the Act. Is that correct?

Mr. YORK. I believe if you are concerned about impacts on individual persons, we do not have evidence to support any particular position now. That is right.

Chairman ROYBAL. I don't know of anyone that has that evidence up to the present time, and we in Congress, amateurs in this field who are willing at all times to seek the proper information from experts, do not have at this time the evidence needed to bring about a change.

Now, it is my opinion that GAO, for example, doesn't move in any direction until a study is made. I understand that you make mistakes but

Mr. YORK. We try to stick to the facts.

Chairman ROYBAL. -most of the time that is what you do. That is what we should do every time we go into a business project of any kind-studies are made. You know, I even make a study of the voting trends of my district before every election. I think I know what they are before the study is made, but that study convinces me that I am right.

Mr. YORK. That study is very useful, I am sure.

Chairman ROYBAL. Right. But it also takes some effort, you see, and we haven't even made the effort. I don't think we have the evidence to make a determination on this most important subject because no studies have been made. I would like to thank the members of the panel for a very interesting discussion. Thank you for your testimony. The Committee, of course, will take it under advisement, and let us hope that before a final decision is made that studies are made based on true fact. Thank you very much.

(Whereupon, at 12:15 p.m., the joint hearing was adjourned.]

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Dear Chairman Roybal:
I an in receipt of your press release concerning the
Joint Hearing on the Reauthorization of the older Americans
Act.
I am very concerned that the proposed changes not create
additional access problems for our low-income and minority
elderly.
In Caldwell, Idaho, Canyon County, we have a large concentration
of low-income and elderly minority citizens along with other
states, who would be gravely affected by some of the recommenda-
tions presented to the committee for consideration.
Many low-income and minority elderly do not have anything
left of the meager social security by the last of each month
are unable to make donations to nutrition sites or for needed
transportation services.
Please take this into consideration when any amendments go through
and include this letter as part of the hearing.

Sincerely,
CC:Idaho Senators:

merckett
Hon. Larry Craig

Margaret Langan
Hon. Steve Symas

Executive Director

Idaho Representatiyes
CC: Hon, Richard Stallings

Hon. Larry La ROCCO
Please give this your upmost consideration when the OAA Reautho

ir most consideration when the OAA Reauthorization comes up. ML/ml

(137)

A AHA AMERICAN ASSOCIATION OF HOMES FOR THE AGING 901 E STREET NW, SUITE 500, WASHINGTON, DC 20004-2837

202.783.2242 FAX 202.783.2255

"Proposed Changes to the Older Americans Act:

Impact an Participation and Service Delivery

Testimony of

The American Association of Homes for the Aging, Inc.

for submission to the

House Select Committee on Aging

and

House Subconmittee on Human Resources of the

Committee on Education and Labor

May 17, 1991

RALPH D. KNIGHT, CHAIRMAN_SHELDON L. GOLDBERG, PRESIDENT

Regional offices in Albany•Chicago.Denver

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