BILL ANALYSIS
SB 1431
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SENATE THIRD READING
SB 1431 (Simitian)
As Amended April 7, 2010
Majority vote
SENATE VOTE :25-10
HEALTH 18-1 APPROPRIATIONS 17-0
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|Ayes:|Monning, Fletcher, |Ayes:|Fuentes, Conway, |
| |Ammiano, Carter, Conway, | |Bradford, |
| |De La Torre, De Leon, | |Huffman, Coto, Davis, De |
| |Eng, Hayashi, Hernandez, | |Leon, Gatto, Hall, |
| |Jones, | |Harkey, Miller, Nielsen, |
| |Bonnie Lowenthal, Nava, | |Norby, Skinner, Solorio, |
| |V. Manuel Perez, Salas, | |Torlakson, Torrico |
| |Smyth, | | |
| |Audra Strickland, Gilmore | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Gaines | | |
| | | | |
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SUMMARY : Conforms state law to a federal option by expanding
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 Program 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.
FISCAL EFFECT : According to the Assembly Appropriations
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Committee:
1)No General Fund impact for MRMIB to expand the administration
of CHIM Fund Program to support the counties access to federal
funding.
2)Premium expenditures of $300,000 (50% federal/50% local) to
$500,000 (50% federal/50% local) to extend coverage to 300 to
500 previously ineligible children.
COMMENTS : According to the author, this bill is intended to
allow counties that participate in the CHIM Fund Program 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 CHIP 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.
The County Children's Health Initiative Program and the CHIM
Fund Program were originally created by AB 495 (Diaz), Chapter
648, Statutes of 2001, to allow local funds to be used to draw
down unused federal CHIP funds. There are currently three
counties, San Francisco, San Mateo, and Santa Clara that were
approved to draw down these funds under a 2004 State Plan
Amendment. 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.
In February 2009, CHIPRA was approved by Congress and signed by
President Obama extending CHIP until 2013. 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 Bush administrative directive which
imposed conditions on states and limited their options to
provide coverage to uninsured children. Among other provisions,
this clarified that states may cover children with family
incomes up to 300% of FPL at the enhanced CHIP match of 65% but
that states are not limited from increasing eligibility above
that level and drawing down the match at the state's Medicaid
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rate. CHIPRA also increased the allocation for California from
$800 million to $1.5 billion.
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. First, AB 1422 (Bass), Chapter 157,
Statutes of 2009, extended the gross premium tax to Medi-Cal
Managed Care organizations. It is assumed that $239 million
will be backfilled by these revenues, assuming an extension of
the tax to June 30, 2011 and an extension of the federal
American Recovery and Reinvestment Act (to June). Second,
through continued discussions with the CA Families First
Commission (First Five), a total of $77.2 million (Proposition
10 Funds) are committed for 2009-2010, and $55.6 million
(Proposition 10 Funds) is proposed for 2010-11. Third, savings
from increased family premiums and other program changes adopted
by MRMIB
The Patient Protection and Affordable Care Act (Public Law
111-148) (PPACA) extended the authorization of CHIP for an
additional two years, through September 30, 2015. States are
required to maintain current income eligibility levels for CHIP
through September 30, 2019 and 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 as needed to
stay within the allotment.
The Governor's 2010-11 Budget, as introduced, proposed to reduce
eligibility from 250% FPL to 200% FPL. Consistent with the
mandate of PPACA, this was withdrawn with the May Revision of
the budget. However, as a result of the temporary freeze,
increased premiums and elimination of funding for application
assistance, enrollment is down approximately 5% as of June 2010.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
SB 1431
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FN: 0005999