BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
438 (Yee)
Hearing Date: 5/28/2009 Amended: 5/6/2009
Consultant: Katie Johnson Policy Vote: Health 9-2
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BILL SUMMARY: SB 438 would require the Department of Health
Care Services (DHCS) to seek federal approval to implement a
program for accelerated enrollment of children and pregnant
women in the Medi-Cal program.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
DHCS administration upon implementation, unknown, General/
and accelerated benefits but significant ongoing costs likely
Federal
in the tens of millions of dollars
driven by
the number of applicants, the
utilization
of services, and the type of health
plan
Data system update and unknown, but up to millions of
General/
feasibility study report dollars in one-time system
updatesFederal
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STAFF COMMENTS: SUSPENSE FILE.
Existing law provides for the Medi-Cal program, administered by
the DHCS, to be the state's version of the federal Medicaid
program. Medi-Cal provides comprehensive health benefits to
low-income persons, including the aged, blind, disabled,
pregnant women, and children and their families.
Existing law provides for the Healthy Families Program (HFP), as
administered by the Managed Risk Medical Insurance Board
(MRMIB), which is the state's version of the federal Children's
Health Insurance Program. HFP provides low-cost medical, dental,
and vision benefits to low-income children.
Existing law provides for the accelerated enrollment of children
in Medi-Cal for children making enrollment changes between HFP
and Medi-Cal, enrolling in Medi-Cal through the Child Health and
Disability Program (CHDP), applying for free lunches through the
National School Lunch program, and enrolling through the single
point of entry, a central administrative entity that receives
applications and sends them to the appropriate counties for
eligibility determination.
This bill would require the DHCS to seek federal approval of any
state plan amendments necessary to implement a program for the
accelerated enrollment of children and pregnant women in the
Medi-Cal program. This bill would require the DHCS to commence
implementation of this program on the first day of the second
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SB 438 (Yee)
month following the month in which the federal government
approves the state plan amendments or on July 1, 2010, whichever
is later. This bill would provide that the DHCS should implement
this bill only if federal financial participation is available.
This bill would require a county, upon the application of a
child or pregnant woman, to determine whether the applicant
appears eligible for Medi-Cal benefits, and if so, to grant
accelerated enrollment to the applicant. This bill would require
that a county, upon granting accelerated enrollment for a child
or pregnant woman, the county would determine whether or not the
applicant was eligible for Medi-Cal. If the applicant is
determined to be ineligible, the county would be required to
report the finding to the Medical Eligibility Data System (MEDS)
so that benefits would be discontinued. It takes approximately
up to 45 days to process a Medi-Cal application. Thus, the state
would pay for an extra 45 days of coverage for all Medi-Cal
children and pregnant women applicants that appear to be
eligible at the time of application and if the applicant is
determined ineligible, the state could likely not claim federal
reimbursement. Although the costs of implementing this bill's
provisions are unknown, they are likely in the tens of millions
of dollars in general and federal funds. The costs would depend
on several factors, including the number of potential
applicants, which is unknown, but is potentially in the tens to
hundreds of thousands each month, and whether or not the
applicant would be enrolled in a managed care or a
fee-for-service plan. The more people enrolled in managed care,
the more expensive the 45 days would be because the DHCS would
pay a health care service plan a fixed rate to cover the person,
whereas a person enrolled in a fee-for-service plan would
produce costs for each service he or she sought from a provider,
the total of which would likely be less than the managed care
rate.
This bill would also require a county that determines that a
child is eligible for the Medi-Cal program with a share of cost
to enroll that child in Medi-Cal and subsequently forward the
application to the Managed Risk Medical Insurance Board (MRMIB)
for an assessment of the child's eligibility for the Healthy
Families Program (HFP). This provision would increase a county
welfare office's administrative expenses in an unknown, but
possibly significant, amount that would depend on the number of
children deemed eligible for Medi-Cal with a share of cost.
In addition, to implement this bill, the DHCS would need to
update the MEDS system to accommodate the accelerated
enrollment. It is estimated that the DHCS would need an unknown
amount likely in the millions of dollars to complete a
feasibility study report for the technology changes and then the
actual changes.
Medi-Cal costs are generally shared 50 percent General Fund and
50 percent federal funds. However, in February of 2009,
President Obama signed the American Reinvestment and Recovery
Act (ARRA) into law. As a result, the Federal Medical Assistance
Percentage (FMAP) increased from 50 percent to 61.59 percent.
Thus, retroactively from October 1, 2008, through December 31,
2010, the federal government would pay for approximately 62
percent and the state General Fund would pay for 38 percent of
benefit-related Medi-Cal expenditures.
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SB 438 (Yee)
Additionally, Medi-Cal technology upgrades are shared 10 percent
General Fund and 90 percent federal funds. It is possible that
the changes to MEDS necessitated by this bill could be funded at
that cost sharing ratio. However, if that is not the case, then
the sharing ratio would be 50 percent General Fund and 50
percent federal funds.
This bill is similar to SB 1459 (Yee) of 2008 that would have,
among its other provisions, established presumptive eligibility
for pregnant women applying for Medi-Cal at county eligibility
offices. SB 1459 was held in the Senate Appropriations
Committee.