BILL ANALYSIS AB 1269 Page 1 Date of Hearing: May 6, 2009 ASSEMBLY COMMITTEE ON APPROPRIATIONS Kevin De Leon, Chair AB 1269 (Brownley) - As Amended: April 14, 2009 Policy Committee: Health Vote:13-6 Urgency: No State Mandated Local Program: Yes Reimbursable: Yes SUMMARY This makes several eligibility changes to the California 250% Working Disabled Program (CWD) to improve continuity of coverage. Specifically, this bill: 1)Exempts consideration of Social Security income from eligibility calculations while on CWD. Allows accumulated savings to be exempted from future eligibility determinations in other Medi-Cal programs. Exempts Social Security income received by disabled individuals 65 years or older from Medi-Cal eligibility determinations. 2)Authorizes temporarily unemployed beneficiaries up to 26 weeks of continuation coverage like many employer-based health policies offer under the Consolidated Omnibus Budget Reconciliation Act (COBRA) or Cal-COBRA. FISCAL EFFECT 1)Annual increased costs of $300,000 (50% GF) to $500,000 (50% GF) to the extent the eligibility changes regarding income and asset disregards increase CWD enrollment. Costs associated with prior versions of this bill do not apply, as the CWD program was made permanent in the budget act last year and those provisions are no longer contained in this legislation. 2)The actual fiscal impact of this bill may be less, depending how many enrollees transfer from other Medi-Cal programs versus new enrollees who have either been uninsured or covered by private insurance. Due to the low annual income ($27,000 in 2009) and assets required for eligibility, as well as the significant disabilities of individuals in this program, most AB 1269 Page 2 of the CWD beneficiaries will remain eligible for other Medi-Cal programs, regardless of employment status. Several provisions of this bill should reduce churning, the cycling on and off of coverage or between coverage programs. 3)Caseload estimates over the past 10 years for this very small Medi-Cal program have been continually overestimated as can happen with small programs with specific and complex eligibility criteria. In addition, small programs like CWD often grow slowly. Initial estimates for this program in 1999 were 7,000 to 14,000 individuals enrolled annually. However, five years after the creation of the program, only about 1,500 were enrolled. Now 10 years later, only 3,700 are enrolled. This bill reduces enrollment barriers and should increase caseloads, but not significantly. COMMENTS 1)Rationale . This bill, sponsored by the World Institute on Disability (WID), makes eligibility changes to allow individuals to increase earnings and advance toward self-sufficiency while maintaining access to Medi-Cal services. WID, founded 25 years ago, provides programs to address issues of concern to people with disabilities. For people with disabilities, fear of losing health coverage if they work often prevents them from entering the job market. CWD reduces this fear by allowing working disabled individuals to buy Medi-Cal coverage on a sliding scale premium basis. This bill increases continuity of coverage by allowing beneficiaries who become unemployed to continue coverage for a period of time and allows beneficiaries receiving specified Social Security benefits to continue working without losing health eligibility. 2)Background . The CWD, created in 1999, allows working disabled individuals under 250% of the federal poverty level (FPL) and generally eligible for the Supplemental Security Income/State Supplemental Program (SSI/SSP) to buy into the Medi-Cal program.The current program is unique among Medi-Cal programs in exempting Individual Retirement Accounts (IRAs) and 401K accounts from property limits. Based on countable income, individuals pay monthly premiums on a sliding scale from $20 to $250. This bill increases the earning and savings potential of current CWD enrollees as well as reducing barriers to participation. Survey results regarding such barriers indicate AB 1269 Page 3 42% of potentially eligible individuals do not understand eligibility, 22% are concerned about asset tests, and 57% would be helped by reducing fears about losing Medi-Cal coverage. 3)Related Legislation . AB 155 (Migden), Chapter 1088, Statutes of 1999, established CWD. AB 1183 (Committee on Budget), Chapter 758, Statutes of 2008 made the CWD Program permanent by deleting the September 1, 2008 sunset date. AB 1269 is similar to AB 851 (Brownley) in 2008 and AB 1113 (Brownley) of 2007. AB 851 was held on the Suspense File of the Senate Appropriations Committee and AB 1113 was vetoed due to a drafting error. The error is not contained in AB 1269. AB 2679 (Wolk) in 2004 extended the sunset of CWD. This bill was held on the Suspense File of the Senate Appropriations Committee. Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081