BILL ANALYSIS Ó AB 1640 Page 1 Date of Hearing: March 28, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 1640 (Mitchell) - As Introduced: February 13, 2012 Policy Committee: Human ServicesVote:4 - 2 Urgency: No State Mandated Local Program: Yes Reimbursable: Yes SUMMARY This bill allows otherwise eligible women, without children, to receive CalWORKs and full-scope Medi-Cal benefits in their first and second trimesters of pregnancy. Women in their third trimester are eligible under current law. Specifically, this bill: 1)Requires payment of a CalWORKs grant to a pregnant mother in a family without a needy child upon verification of pregnancy. 2)Allows eligible uninsured women or women, receiving pregnancy-only fee for service Medi-Cal, to enroll in full-scope Medi-Cal. 3)Prohibits a pregnant woman from being denied CalFresh benefits or from being required to participate in a CalFresh employment and training activity at any time after the verification of her pregnancy. 4)States legislative findings and declarations, including asserting that without the supportive services provided by CalWORKs, CalFresh and full-scope Medi-Cal, poor women are more likely to have premature and low birth-weight babies, which may interfere with the parents' ability to reach economic self-sufficiency. FISCAL EFFECT 1)Annual CalWORKs grant and administrative costs between $5 million and $20 million (TANF/GF) to the extent that one-third to one-half of the over 40,000 women who receive AB 1640 Page 2 pregnancy-only Medi-Cal receive three additional months of CalWORKs benefits under this bill. While some of these women will remain on CalWORKs the entire 48 months allowed under current law and will simply be starting those months earlier under this legislation, it is likely that a portion of the women will be exempt from participating in an activity and therefore will not have their 48-month time clock activated, thus simply receiving an additional three months of benefits. In addition, because the average time on CalWORKs is 24 months, it is likely that a significant subset of the women will simply extend their stay on the program by three months because any training and work activities they may be participating in prior to the birth of their child will be interrupted to care for an infant. Under current law, a parent with one child is exempt from participating in a welfare-to-work activity for up to 2 years. 2)To the extent eligible pregnant women receive three months of CalFresh benefits that they would not otherwise apply for, this bill could bring in an additional $13.5 million in federal food and nutrition benefits. The administrative costs for those cases would be approximately $4.8 million ($2.4 million GF). 3)One-time Medi-Cal costs in the range of $500,000 or more (50% GF, 50% federal funds), in both fiscal years 2012-13 and 2013-14. Increased costs would result from pregnant women making an earlier transition to full-scope Medi-Cal as a result of automatic eligibility linked to CalWORKs. Precise costs are difficult to estimate because data on current sources of health care coverage for women applying to CalWORKs in the third trimester are not collected. Medi-Cal costs related to this bill will only be incurred during calendar year 2013. Under federal law, beginning in 2014, Medicaid programs must provide comprehensive health care coverage to all adults under 133% of the federal poverty level poverty (138% with a standard income disregard). Thus, beginning in 2014, the population affected by this bill will automatically be eligible for full Medi-Cal benefits based on income, regardless of the fact or duration of their pregnancy. AB 1640 Page 3 COMMENTS 1)Rationale . The purpose of this bill is to allow poor pregnant women access CalWORKs, CalFresh and full-scope Medi-Cal upon verification of their pregnancy, rather than waiting for their third-trimester as is required under current law. The author asserts that providing an additional three or four months of aid will significantly reduce stress and insure continuity of medical care by allowing access to full-scope Medi-Cal rather than just pregnancy-related care. The sponsors of this bill, Western Center on Law and Poverty, hope that providing cash assistance and other benefits earlier in a woman's pregnancy will be enough to alleviate her exposure to stress and thus allow her to carry her fetus to term rather than having a preterm or low birth-weight infant. 2)Improved Birth Outcomes . Studies suggest that abject poverty increases the risk of pre-term and low birth-weight infants. According to a March of Dimes study, the average first-year medical costs, including both inpatient and outpatient care, were about 10 times greater for preterm infants ($32,325) than for full-term infants ($3,325). The author and sponsor argue that providing an additional three to four months of CalWORKs benefits and ensuring a continuity of healthcare will improve the outcomes for these infants, helping to offset the cost of the additional services. The overall impact of the specific provisions of this bill on birth outcomes and maternal self-sufficiency postpartum is uncertain. For example, it is uncertain whether the provision of services earlier in pregnancy will result in a substantive reduction in pre-term births. There are many risk factors that impact a woman's likelihood of delivering a pre-term baby. Some of these factors may be affected to some extent by the services offered, such as late or no prenatal care, or high levels of maternal stress. However, stress can be caused by myriad social and economic factors, many of which would not be substantively affected by expanding eligibility for state services. All women affected would already be eligible for, and most would be enrolled in, pregnancy-only Medi-Cal and have coverage for prenatal care. Many other factors related to preterm birth are largely unrelated to the provision of services, including overall maternal health and preexisting health conditions, obesity, use of cigarettes, alcohol, or AB 1640 Page 4 other drugs, previous premature birth, uterine or cervical abnormalities, a short time between pregnancies, and twins or multiple births. 3)Governor's Proposed 2012-13 CalWORKs Budget . The governor's proposed 2012-13 budget for CalWORKs contains significant reductions to the program. Among those changes are a complete restructuring of the overall program into two subprograms within CalWORKs and a separate program for children continuing to receive a grant once their parent has been removed from the aided case due to time limits or other program rules. The first program would be called "CalWORKs Basic" and would provide services to families similar to the style of the current CalWORKs program, including job search, barrier removal, employment training, and child care services, but for a reduced period of 24-months, versus the current 48-month time limit. Failure to meet welfare to work requirements will result in a sanction equal to the adult portion of the grant. Clients unable to meet federal work participation requirements after 24 months, or cases in sanction status for more than three months will be disenrolled from CalWORKs and moved to a separate child-only program. The second program would be called "CalWORKs Plus" and would serve recipients working sufficient hours to meet federal work participation requirements (WPR) in unsubsidized employment, generally 30 hours per week (20 hours per week for families with children under the age of six). These clients will retain access to supportive services and child care that they have now. These benefits continue for up to 48 months if clients maintain unsubsidized employment. After 48 months, the adult will no longer be aided. This program essentially houses those cases currently meeting federal WPR through unsubsidized employment (25,445 cases). Recipients in this program are discontinued after their 48-month lifetime time limit and moved to the child-only program. The third subprogram would be called "Child Maintenance" and would, at the outset of 2012-13, include 300,999 cases in the CalWORKs caseload that do not meet the eligibility requirements for either CalWORKs Basic or Plus. This includes: Safety Net cases (where the case no longer includes the AB 1640 Page 5 adult portion of the grant), including those not meeting WPR through unsubsidized employment; Recipients of Social Security Income; Non-Needy Caretaker Relatives; Citizen Children of Undocumented Parents; Drug/Fleeing Felon Parents; and, Cases sanctioned for more than three months. The average monthly cash aid grant for these child-only cases currently is $463. Under the new proposal, the grant would be reduced to $375 per month for a family with two children in Child Maintenance. In total, the changes proposed by the governor would reduce the CalWORKs program by a net $946 million in 2012-13, growing to $1.1 billion in 2013-14. These proposed reductions are in addition to $1.6 billion in combined reductions adopted over the last few years. 1)CalWORKs Cost Consideration . The committee may wish to consider whether it is prudent to expand eligibility for a program that has been significantly reduced in recent years and potentially faces an additional $1 billion in cuts in the coming year. 2)Automatic Eligibility for Full-Scope Medi-Cal . California state law maintains an automatic link between Medi-Cal and CalWORKs; any family receiving CalWORKs benefits is also automatically eligible for full-scope Medi-Cal without a share of cost. Thus, an expansion in CalWORKs eligibility also results in an expansion in Medi-Cal eligibility. This bill would result in some women transitioning earlier from being uninsured, or from less generous Medi-Cal eligibility categories, to full-scope Medi-Cal benefits without a share of cost. These less generous Medi-Cal categories include pregnancy-only coverage for women under 200% FPL, which is delivered through the Medi-Cal fee-for-service (FFS) system, and "share-of-cost" (SOC) Medi-Cal. In pregnancy-only coverage, Medi-Cal will not provide coverage for certain services deemed unrelated to a woman's pregnancy. Women who happen to be uninsured when gaining eligibility from Medi-Cal through linkage to CalWORKs would generally be eligible for, but not enrolled in, pregnancy-only Medi-Cal under current law. If an individual has SOC Medi-Cal, services are only covered once an individual has exceeded his share of cost for AB 1640 Page 6 the month-for example, an individual with a SOC of $700 needs to spend $700 on health services within a given month before Medi-Cal will begin paying for services. 3)Continuity of Pregnancy-related Care . The author states that this bill would prevent disruptions in health care for pregnant women. Disruptions in care may result when pregnant women who are enrolled in pregnancy-only coverage on a FFS basis gain access to full-scope Medi-Cal and are enrolled into a managed care plan. If a woman's regular care provider is not in the managed care plan network, a woman may be forced to switch providers, jeopardizing her continuity of care during the last months of a pregnancy. An All-County Welfare Director's Letter from the Department of Health Care Services dated November 9, 2011 indicates the department is aware of this continuity of care issue and has taken some administrative steps to address it. The letter directs counties to clearly communicate to women transitioning from pregnancy-only to full-scope Medi-Cal that they have the right to remain with their current providers. Although enrollment into a managed care plan is generally mandatory for families enrolled in Medi-Cal through automatic linkage to CalWORKs, the letter indicates that the managed care enrollment system currently has a medical exemption process in place to allow pregnant women to remain with their care providers when they switch eligibility categories. The department states that women have the option to continue their prenatal care in the FFS system until 60 days post-partum. Pregnant women must contact the Medi-Cal program to request a delay in joining the managed care delivery system. Given that there is already a viable means for women to request exemption from managed care enrollment if they wish to remain with their provider, it is unclear whether providing earlier access to full-scope Medi-Cal-as this bill does-is an efficient way to further promote the policy goal of ensuring continuity of pregnancy-related care. In addition, this change to earlier Medi-Cal eligibility would only be in effect for calendar year 2013. As noted above, the population affected by this bill will be eligible for full Medi-Cal benefits based purely on income level beginning in 2014. Analysis Prepared by : Julie Salley-Gray and Lisa Murawski / APPR. / (916) 319-2081 AB 1640 Page 7