From federal dollars to county budgets: how the cap traps caregivers

Step 1: Who pays IHSS wages?

• IHSS caregiver wages come from three pockets:
• Federal government (Medi-Cal/Medicaid)
• State of California
• Your county

They split the bill, but how much each pays depends on rules below.

Step 2: The California cap

• The state will only help pay up to a certain hourly wage.
• Right now, that cap = $1.50 above the state minimum wage.
• Example: if CA minimum wage is $16, the state will share costs up to $17.50/hour.
• If your county agrees to pay caregivers more than that cap, the county has to cover 100% of the extra.
• That’s why counties stall — they don’t want to be left holding the bag.

Step 3: What’s the “MOE”?

• MOE = Maintenance of Effort.
• Translation: each county has to put in a minimum chunk of money every year toward IHSS wages/benefits.
• It’s like a flat entry fee: counties can’t walk away from funding.
• The state calculates the MOE, updates it yearly, and counties must at least pay that much.

Step 4: How raises actually happen

1. Union bargains with the county for higher wages.
2. If the new wage is still under the state cap, then feds + state help cover most of it.
3. If it’s above the cap, the county alone pays the difference.
4. That’s why wealthier counties (SF, Santa Clara, LA) often pay higher wages — they can afford to go above the cap. Poorer counties don’t.

Step 5: Why it matters

• State minimum wage keeps climbing → cap moves up too.
• But unless the cap rule changes, counties with tight budgets keep us stuck near minimum wage.
• That’s why caregivers push: raise the cap, or fully fund above it — otherwise IHSS stays poverty pay.