An Analysis of Proposed Formulas for the Home and Community Based Services Block Grant Program

Pursuant to a congressional request, GAO analyzed the formulas proposed by S. 2301 designed to allocate federal funds under the home and community-based services block grant program. Specifically, GAO discussed options that would target federal funds based on measures of the elderly poor and near poor and considered alternative methods of providing minimum state allotments.

GAO identified three alternative measures of the needy population for consideration in the formula: (1) the total number of elderly, including poor and nonpoor; (2) the total number of elderly, adjusted for state differences in the proportion of elderly residents; and (3) the number of elderly poor and near poor. GAO found that the bill's plan to allocate funds to states based on their proportion of elderly residents penalizes those states with relatively young populations and favors states with old populations. Also, the proposed minimum allotment formula provides more funding to states with small elderly populations. GAO concluded that it is difficult to select a measure because the block grant program does not explicitly define eligibility criteria. Therefore, it is a matter of judgment as to which measure is most appropriate for individual programs.