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DAS director warns of federal shutdown effects, details IHSS reassessment penalty shift to counties

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Summary

Executive Director Kelly Dearman told the DAS Commission the federal shutdown began Oct. 1 but safety-net programs continue; she described a state-to-county shift of penalties tied to IHSS reassessments and reported progress reducing a backlog of overdue cases in San Francisco.

SAN FRANCISCO — At its Oct. 1 meeting, Department of Aging and Adult Services Executive Director Kelly Dearman told the DAS Commission that a federal government shutdown began the previous night and that city safety-net programs are continuing for now, while warning of federal policy changes that could affect local services.

"Welcome to the federal shutdown, which started last night at midnight," Dearman said. She added that "safety net programs will continue, and including Medi-Cal and Medicare and Social Security checks will continue, for now."

Dearman told commissioners that two federal issues of local consequence are under debate: the expiration of Affordable Care Act premium tax credit subsidies on Dec. 31, which state-level briefings estimate could raise out-of-pocket premiums on the individual marketplace by as much as 75% for some consumers, and discussion at the federal level about proposed long-term Medicaid funding changes.

On county fiscal exposure, Dearman described a change in the treatment of penalties associated with the Community First Choice Option (CFCO) and In-Home Supportive Services (IHSS) reassessments. "Beginning this past July, the 2025 Budget Act shifted half of this penalty cost to counties. And starting 07/01/2026, counties will be responsible for the full penalty," she said, calling the shift "a significant financial burden on counties."

Dearman gave specific local counts: San Francisco has 29,435 IHSS cases, she said, and about 48% are CFCO cases (roughly 14,000). She also reported progress on overdue reassessments: IHSS staff reduced the number of overdue cases from 1,173 in July to 663 in September and "cleared over 400 cases in a 2 week period between August and September." Dearman cautioned that "to have 100% compliance is almost impossible," and said the California Welfare Directors Association (CWDA) is pursuing legislative changes to reduce county penalties.

Dearman updated the commission on other items in her report. The Dignity Fund community needs assessment has completed surveys and forums; focus groups are underway and preliminary findings are expected by the end of the calendar year, with a final report anticipated in March or April. Dearman also announced October programming for National Disability Employment Awareness Month, including a hybrid staff event on Oct. 28 featuring disability-rights activist and author Alice Wong and the official launch of a Disability Employment Resource Group.

Commissioners asked whether staffing reductions were hindering IHSS reassessments; Dearman said the department has shifted teams, offered overtime and is seeking additional staff but that resource limits remain a challenge. Commissioners praised IHSS staff for the recent reductions in the backlog.

The report was informational; no formal action was taken.