The essence of that funding formula is still used today (1). But, modest OAA funds stretched thin by the steadily rising 60-and-older population – and the increasing federal mandate for prioritizing services to “the elderly with the greatest economic and social need,” as stipulated in language added in later amendments to the OAA – have resulted in increased funneling of state allocations to older persons who stand to benefit from them the most. That is, older persons with severe disabilities living at, or below, the poverty level.

But, it should be made clear that the formula of federal funding to the states is based mainly on 60-plus population, and it is up to the states to oversee the distribution of those funds to those in the most need of them, both economically and in terms of disability and living situation. The states do so based on a funding formula that takes into account regional poverty levels and population distribution. Older persons in rural areas, for example, typically require more resources to serve than those in urban or suburban areas, simply because of the distances traveled to reach them.

The OAA funding formula to the states (2) ensures that no state, regardless of population, receives less than one-half percent of total OAA dollars. For territories, that minimum may vary from one-fourth to one-sixteenth of one percent. Funds are then distributed to states and territories, for the most part, on the basis of 60-plus population. (Exceptions are made in funding for Caregiver Support and Elder Rights.) In some states, such as Florida, the 60-plus population comprise nearly one-fourth of the overall population. In others, such as Alaska, the 60-plus population may constitute only 10 percent of the state’s overall population (3). Through “hold harmless” and “growth guarantees” (which will gradually be phased out by 2011), the funding formula also ensures that monetary allocations to the states will not dip below previous levels and that all states will receive a share of any increases in AoA appropriations.

As stated in the previous paragraph, exceptions to the 60-plus funding formula are made for Caregiver Support (Title III-E) (4) and Elder Rights (Title VII ) (5) programs. Funding for Caregiver Support, because it so often involves services for those of a more advanced age, is based on a state’s 70-plus population. Funding for Elder Rights is based on the 60-plus population, but does not have the “guaranteed growth” adjustment for inflation and has a less generous “hold harmless” component.

From its inception, the OAA has set broad and lofty aspirations against a backdrop of restrained budgeting. OAA allotments have always been far less than government allocations for Medicare and Medicaid, and have continuously diminished in proportion to those programs over the years. For example, OAA’s initial budget in 1966

was $7.5 million, less than 5 percent of Medicaid/Medicare spending at the time. And while OAA funding has increased over the years to today’s annual $1.85 billion (6), that figure is now less than one-half percent of the more than $511 billion the U.S government currently spends on Medicare and Medicaid every year.

The U.S. Government Accounting Office and AoA

show the following outlays for the year 2006:

• Medicare - $325 billion
• Medicaid (federal portion only) - $186 billion
• Older Americans Act - $1.34 billion

Consequently, OAA funds are increasingly being targeted by states and tribal organizations to those most in need of them economically and in terms of disability. More and more OAA dollars (and Medicaid-waiver allocations used to fund alternatives for nursing home care in the states) during the past decade have been earmarked for in-home and community services – as well as in support of family members and other voluntary caregivers – helping to keep older persons living as independently, enjoyably and fulfillingly in the place they overwhelmingly most want to be, their own homes.

(1) AoA; Budget and Legislation: (www.aoa.gov/about/legbudg/current_budg/legbudg_current_budg.asp

(2) AoA: Legislation and Budget: www.aoa.gov/about/legbudg/oaa/legbudg_oaa_unofficial_comp.asp

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