BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1640
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          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 








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            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. 










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           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 








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            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 








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               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 








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            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 








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