.png)
As a special needs planner one of the biggest questions we face is what life looks like for our clients after their primary caregivers are gone. It has always been a challenging issue – for many parents finding a community or provider that aligns with their intentions is an incredibly difficult process. It’s about to become substantially more difficult.
According to the American Network of Community Options and Resources (ANCOR) annual report on the state of America’s Direct Support Workforce, the majority of service providers to the intellectual and developmental disabilities (I/DD) population are already in crisis and in further decline. Consider the following[i]:
95% indicated they have experienced moderate or severe staffing shortages in the past year
77% are turning away new referrals due to staffing shortages
72% experienced difficulties adhering to establish quality standards
75% of case managers experienced difficulties connecting people with available services
60% are likely to pursue discontinuation of programs where individuals are currently receiving services
The turnover rate for staff at the national level is 44% annually
The vacancy rate for staff at the national level is 20%
No matter how you frame them, these numbers illustrate a bleak picture and uncertain future for the I/DD community. The question of why this is happening is addressed in the ANCOR report – historic underinvestment in Medicaid has created an unstainable reimbursement climate. The median direct support professional receives an hourly wage of $14.50; for reference a fast-food worker makes a nationwide hourly average of $20[ii]. It’s no secret why understaffing exists and why turnover is so high – but the real question is what to do about it.
Advocacy groups like ANCOR, the ARC, and others promote policy intervention and new legislation. We understand the necessity but that isn’t our talent. Our role is to figure out what this means for clients’ futures and special needs planning as a service. From that perspective here are our biggest takeaways:
Accepting the Reality of the Situation
Trends like those detailed above are unlikely to reverse themselves in the short-term. Medicaid and other government programs have been under scrutiny for reform for decades and little to no action has been taken. While we all hope for change, it is critical to plan based on what we know and see happening right now. That is to say – we anticipate the crisis in special needs service providers to persist and worsen over the coming decades.
Reliance on Medicaid is Not an Option
This is an opinion we have held for a long time, but the data strengthens our resolve. While Medicaid might continue to provide some funding to the special needs community, the gap between what it provides and what is required for quality care is widening. Any inclination to let government benefits exclusively carry the burden of providing for your child should be re-evaluated.
Quality Care Will Be Privately Provided
We know individuals who provide high-quality services to the special needs community – they will always exist. What we expect to change is their willingness to work within the confines of Medicaid reimbursement guidelines. Simply put, it is not sustainable to pay members of the direct support workforce less than they would receive cooking french fries. We anticipate a much larger shift towards private pay solutions for many services individuals are currently receive through Medicaid so businesses can provide market-rate compensation to their employees.
Decreasing Service Options
While some employers will opt for private pay, others might not have that option given their client demographic or business environment. Accordingly, we expect to see continued discontinuation of programs and fewer service provider options in the future.
What Can You Do?
Identifying the problem is important, but that’s unhelpful if there isn’t a solution. If you’re a parent or caregiver reading this wondering what you can do, our recommendation is simple: it’s time to create a plan that doesn’t rely solely on government benefits. There are a variety of strategies to obtain quality care beyond what Medicaid is willing to provide, but they all require financial planning to manifest. Some of the strategies we have seen clients use in the past are:
Leveraging special needs trusts and 529 ABLE accounts to accrue funds necessary for essential services or lifestyle enhancements
Creating a “co-op” of individuals with similar support needs who live together in a private residence, with service providers visiting on-location
Utilizing pooled trusts sponsored by non-profit organizations to spread the financial burden of support across multiple families
Since each individual and each family are different, there is no “silver bullet” solution to this problem. What we expect is for the problem to worsen and for families who don’t prepare to face an even more dire environment than we are in right now. As the ANCOR report states – this is a CRISIS, and one that is not going away any time soon.
If you have a loved one with special needs and need help planning their future, please contact us immediately. We are in a position to help.
Moors & Cabot, Inc - Johnson Cotroneo Group
999 Vanderbilt Beach Rd. Suite 102
Naples FL, 34108
239-449-7982, 239-449-7992
Investment Advisory Services provided by Johnson Cotroneo Group are through Moors and Cabot, Inc., an SEC-registered investment advisor.
Brokerage services and investment products offered through affiliated broker-dealer Moors and Cabot, Inc., Member FINRA, SIPC
[i] The State of America’s Direct Support Workforce Crisis 2023. American Network of Community Options and Resources (ANCOR).