BILL ANALYSIS
SB 1431
Page 1
Date of Hearing: June 22, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 1431 (Simitian) - As Amended: April 7, 2010
SENATE VOTE : 25-10
SUBJECT : County Health Initiative Matching Fund.
SUMMARY : Expands eligibility for children to enroll in the
County Health Initiative Matching (CHIM) Fund program which uses
local funds to match federal Children's Health Insurance Program
(CHIP) funds. Specifically, this bill :
1)Expands eligibility to the CHIM Fund to children in families
whose income is at or below 400% of the federal poverty level
(FPL), from 300% of FPL.
2)Authorizes eligibility for children who meet the requirements
for the Healthy Families Program (HFP) but are unable to
enroll as a result of restricted enrollment by the Managed
Risk Medical Insurance Board (MRMIB) due to budget
limitations.
3)Conditions implementation on obtaining federal approval.
EXISTING LAW :
1)Establishes HFP, administered by MRMIB, to provide low-cost
insurance, including health, dental, and vision coverage, to
children who do not have health insurance, do not qualify for
free Medi-Cal, and are in families at or below 250% of the
FPL.
2)Authorizes the CHIM Fund, administered by MRMIB, to fund
children's health coverage using local funds as the state
match for children in families with income at or below 300% of
FPL and who don't qualify for HFP or no share of cost
Medi-Cal.
3)Establishes a sharing ratio for Medi-Cal at 50% federal, 50%
state, but under the American Reinvestment and Recovery Act
provides a temporary enhanced sharing ratio of 62% federal,
38% state retroactively from October 1, 2008 through December
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31, 2010.
FISCAL EFFECT : According to the Senate Appropriations
Committee, the applicant counties pay a $17,000 application fee,
which covers the application process and the necessary
submission of the State Plan Amendment (SPA). Assuming that the
per member per month cost of a child enrolled in the County
Children's Health Initiative Program (C-CHIP) is approximately
$75 total funds and that a county that chooses to enroll
children with family incomes between 300 and 400% FPL, as
permitted by this bill, would enroll between 300 and 400
children annually, the costs would be approximately
$135,000-$180,000 federal funds and $135,000 - $180,000 local
funds each year. If more counties choose to do this, the costs
would be higher. If no counties choose to enroll children above
300% FPL, then there would be no cost to this bill.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
intended to allow counties that participate in the CHIM Fund
to draw federal matching funds by providing health care
coverage to qualified children with family income at or below
400% of FPL. The author states that increasing the income
level from 300% of FPL allows these participating counties to
take full advantage of the increase in available federal
matching funds through the federal Children's Health Insurance
Program Reauthorization Act (CHIPRA) of 2009 (Public Law
111-3). This bill is also intended to allow counties to
provide health care coverage to children who would otherwise
have been eligible or covered by HFP through MRMIB but for
limitations on enrollment or eligibility restrictions that may
be imposed due to budget shortfalls.
2)BACKGROUND . C-CHIP and CHIM Fund were created by AB 495
(Diaz), Chapter 648, Statutes of 2001. The purpose was to
allow local entities, by means of intergovernmental transfer
of local funds, to draw down federal financial participation
(FFP) matching funds for low cost health coverage, with
benefits similar to HFP, to children who through age 19 who
are not eligible for HFP or the no-cost Medi-Cal Program, and
whose household income falls within 251% and 300% FPL.
Usually federal funds require a State fund match. The C-CHIP
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Program allows counties to use county funds as a match for
available federal funds which are allocated to California, but
for which there had been no state General Funds allocated.
There are currently three counties, San Francisco, San Mateo,
and Santa Clara that were approved to draw down FFP under a
SPA that was approved in 2004. According to MRMIB, these
counties use the funds to provide health insurance coverage to
uninsured children through the County Organized Health System
or Local Initiative.
3)CHILDREN"S HEALTH INSURANCE PROGRAM . CHIP was enacted as part
of the Balanced Budget Act of 1997 and has allocated about $20
billion over 10 years to help states insure low-income
children who are ineligible for Medicaid but cannot afford
private insurance. HFP is California's version of the federal
CHIP and provides health, dental, and vision coverage to
children in families with incomes between 100% and 250% of the
FPL who are not eligible for Medi-Cal and do not have private
insurance. The sharing ratio in HFP is 65% federal, 35%
state. As of April 2010, there were 877, 284 children
enrolled.
In 2007, after President Bush and Congress could not agree on
CHIP reauthorization details, the program was extended through
March 2009. In February 2009, CHIPRA was approved by Congress
and signed by President Obama extending CHIP for four and a
half years. In concert with the signing, President Obama sent
a memorandum to the Centers for Medicare and Medicaid Services
requesting that they immediately withdraw an August 2007
Directive sent to state health officials which imposed
conditions on states and limited their options to provide
coverage to uninsured children. He requested that they
implement CHIP from this time forward without these
requirements. Among other provisions, this clarified that
only children with family incomes up to 300% of FPL will be
eligible for the enhanced CHIP match, but states are not
limited from increasing eligibility above that level and
drawing down the match at the state's Medicaid rate.
Each state is allocated a specific amount of federal CHIP funds.
In federal fiscal year 2009, California's allotment was $1.55
billion. The state used $1.14 billion leaving approximately
$400 million in unused funds. Future allotments are expected
to be the similar. If a state does not use its entire
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allotment, the funds revert to other state CHIPs around the
country.
The Patient Protection and Affordable Care Act (Public Laws
111-148) extends the authorization of the federal CHIP Program
for an additional two years, through September 30, 2015. The
laws require states, upon enactment, to maintain current
income eligibility levels for CHIP through September 30, 2019.
States are prohibited from implementing eligibility
standards, methodologies or procedures that are more
restrictive than those in place as of March 23, 2010, with the
exception of waiting lists for enrolling children.
In 2009, HFP had a $194 million General Fund shortfall resulting
from budget-related cutbacks and was closed to all new
enrollments. In August of 2009, there were 70,788 children on
the HFP waiting list. MRMIB projected that over 600,000
children would need to be disenrolled. A three-part funding
solution was devised. The California Children and Families
Commission voted to grant MRMIB $81 million to cover children
age zero to five; $157 million in gross premiums taxes on
Medi-Cal managed care plans was enacted which yields $97
million in additional federal funds for HFP; and, savings from
program changes to HFP, including increased family premiums
and other program changes being adopted by MRMIB.
4)CHILDREN'S HEALTH INITIATIVES. In 2001, Santa Clara
established the first Children's Health Initiative (CHI) to
provide universal coverage to low-income children not eligible
for Medi-Cal or HFP. Currently 29 counties participate in the
CHI. Counties use a variety of local government and
foundation fund sources to provide health care coverage and
application and enrollment assistance. After the passage of
AB 495, four pilot counties, Alameda, Santa Clara, San
Francisco, and San Mateo submitted applications to implement
C-CHIP. Federal approval was granted in 2004, but there were
many limitations on the source of county matching funds.
Alameda withdrew prior to implementation. Two additional
counties, Santa Cruz and Tulare submitted applications and
MRMIB submitted a SPA in 2007. It was withdrawn after the
August 2007 Directive, but has not been resubmitted.
5)PRIOR LEGISLATION.
a) AB 1130 (Diaz), Chapter 687, Statutes of 2003, renames
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the Children's Health Initiative Matching Fund to be the
CHIM Fund and is the implementing legislation for AB 495.
b) AB 1524 (Richman), Chapter 866, Statutes of 2003,
expands the scope of the CHIM Fund to include health
insurance coverage for adults.
c) AB 495 establishes the Children's Health Initiative
Matching Fund to allow local funds from counties with
children's health initiatives to draw down federal dollars
from California's CHIP allotment.
6)SUPPORT . According to the sponsors, San Mateo County, this
bill would align and conform current state law to allow
counties to take full advantage of the eligibility expansion
extended under federal funding should the state once gain
limit enrollment in HFP. The California CHIs write in support
that this bill would allow communities to draw down federal
finding made available through CHIP which is not currently
claimed. The City and County of San Francisco, in support
states that in the even the Governor's budget and "trigger"
cuts to HFP are implemented and the City decides to backfill
those cuts, this bill would endure $2.74 million to $15.47
million to San Francisco in federal matching funds.
REGISTERED SUPPORT / OPPOSITION :
Support
County of San Mateo (sponsor)
California Children's Health Initiatives
California Chiropractic Association
California Medical Association
California School Employees Association
California State Association of Counties
City and County of San Francisco
County of Santa Clara Board of Supervisors
Health Improvement Partnership of Santa Cruz
Peninsula Interfaith Action
Urban Counties Caucus
Opposition
None on file.
SB 1431
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Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097