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any study that we would consider a real adequate study of costsharing in terms of the impacts on minority participation.
This IG study that is being discussed today is one of the few that looks at the actual observations from participants rather than just opinions, but that study suffers from the fact that its respondents were people who have paid, who have, in effect, invested into the program. The program services are satisfactory to them, and they think they are worthwhile. You don't know who may have been discouraged. They weren't part of the study.
Chairman MARTINEZ. Exactly. Thank you. Thank you, Mr. Chairman.
Chairman ROYBAL. Mr. Mangano, I would like to go over with you just your study and your report. I am sorry I did not read it before this meeting took place, but what little I have read leaves some questions in my mind, and that is with regard to some of your findings. You conclude in one of your findings that extending cost-sharing to Title III has strong support. Most of it is strong support from the states that are short of money. Therefore, they want more income. Is that not correct?
Mr. MANGANO. Yes. It came from the states as well as from the recipients themselves.
Chairman ROYBAL. How many recipients were interviewed?
Chairman ROYBAL. So 160 recipients out of how many thousands coming into the program?
Mr. MANGANO. Well, of course, there are thousands and thousands.
Chairman ROYBAL. Well, then what I am getting at is that a real study to make that determination was not made because if 160 were only interviewed out of 26,000, that is not a good
Mr. MANGANO. Well, I would add though that the persons that we interviewed at the individual sites within the states were randomly selected off the list of people who participate.
Chairman ROYBAL. Sure. And another thing, two-thirds of the state and local officials from all eight states say they maintain services to recipients while they try to resolve payment issues. Did you find out in this study how much it cost to resolve payment issues in view of the fact that there are high-salaried officials conducting these investigations? How much did it cost to do that? Did you find that out?
Mr. MANGANO. No, we didn't. We can't answer that specifically, but what I can say generally is that the system they used is a very cost-efficient one in that it is based on self-declaration, sliding fee scales, and they do not ask the recipients to bring in any economic data.
Chairman RoyBAL. But that is not the point. The point is that the two-thirds of the state and local officials say that they maintain services. They don't stop the services. They maintain the services while they try to resolve payment issues. That is bothersome because how much does it cost to resolve payment issues? We don't know, do we?
Mr. MANGANO. I can't answer that.
Chairman ROYBAL. This is one of the things we should know before we go into this thing. There is something else that bothers
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 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
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.
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
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.)
Canyon County Organization au Aging, Inc.
304 N. Kimball Ave.
April 22, 1991
Hon. Larry LaRocco