BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair (Mitchell) - CalWORKs benefits: pregnant mothers. Amended: May 25, 2012 Policy Vote: Human Services 4-1 Urgency: No Mandate: Yes Hearing Date: August 16, 2012 Consultant: Jolie Onodera SUSPENSE FILE. Bill Summary: AB 1640 would require CalWORKs aid to be paid to a pregnant mother who is 18 years of age or younger at any time after verification of pregnancy, regardless of whether she is eligible for the Cal-Learn Program. Fiscal Impact: First-year CalWORKs grant, services, and administrative costs of $0.9 million (TANF/General Fund) in 2012-13; ongoing costs of up to $3.0 million for approximately 260 pregnant teens per month to receive three additional months of benefits, assuming the Cal-Learn Program is operative. In the event the Cal-Learn Program is suspended again at some point in the future, the Department of Social Services (DSS) would incur major ongoing costs, potentially in the tens of millions of dollars (TANF/GF) to provide an additional three months of CalWORKs benefits to over 9,000 pregnant teens per month that would not have been provided under existing law, as benefits from the point of pregnancy verification are currently conditioned upon the operation of the Cal-Learn Program. Potential minor increase in Medi-Cal costs (Federal/General Fund) by expanding eligibility to full-scope Medi-Cal and Medi-Cal managed care enrollment to specified pregnant teens. Potential one-time automation costs for MEDS programming to establish earlier eligibility for a subset of pregnant women in the Medi-Cal 1931(b) Program. Background: Under existing law, CalWORKs aid is required to be provided to a pregnant woman in a family without a needy child for the month in which the birth is anticipated and for the three-month period immediately prior to the month in which the birth is anticipated. Existing law additionally provides that, AB 1640 (Mitchell) Page 1 when the Cal-Learn Program is operative, CalWORKs aid payments shall be paid at any time after verification of pregnancy if a pregnant teen is also eligible for the Cal-Learn Program and the mother and child, if born, would have qualified for CalWORKs aid. The Cal-Learn Program was established to provide intensive case management to assist teen parents to obtain education, support services, and a comprehensive range of health and social services, as well as provide payments for necessary child care, transportation, and educational expenses to enable pregnant and parenting teens to attend school. Successful participation is encouraged through the provision of bonuses earned through report card results and graduating or attaining an equivalent high school diploma. The Cal-Learn Program was suspended for one year from July 1, 2011, through June 30, 2012. Pursuant to SB 1041, Chapter 47/2012, the recently enacted human services budget trailer bill, the Cal-Learn Program is to be fully operative commencing April 1, 2013. For the period July 1, 2012, to March 1, 2013, existing law provides that counties will be provided with full or partial year funding, depending on their phase-in to full implementation of the Cal-Learn Program by April 1, 2013, as specified. Under existing state law, all low-income pregnant women with income below 200 percent of the federal poverty level are eligible for Medi-Cal. Under Medi-Cal pregnancy-only coverage, certain services are not covered if deemed unrelated to a woman's pregnancy. However, because existing state law provides for the automatic linkage between CalWORKs and Medi-Cal eligibility, any family eligible for CalWORKs benefits is categorically eligible for full scope Medi-Cal benefits without a share of cost. Proposed Law: This bill would require CalWORKs aid to be paid to a pregnant mother who is 18 years of age or younger at any time after verification of pregnancy, as specified. This bill would eliminate the requirement that pregnant teens be eligible for the Cal-Learn Program in order to receive CalWORKs aid at any time after verification of pregnancy. This bill would also delete the provision that CalWORKs aid to Cal-Learn eligible pregnant teens be provided only when the Cal-Learn Program is AB 1640 (Mitchell) Page 2 operative. Related Legislation: SB 35 (Committee on Budget) Chapter 69/1993 and SB 1078 (Watson) Chapter 1252/1993 established the Cal-Learn Program. SB 72 (Committee on Budget) Chapter 8/2011, the human services budget trailer bill, suspended operation of the Cal-Learn Program from July 1, 2011, to June 30, 2012, with the exception of the payment of supplements and bonuses to eligible participants. SB 1041 (Committee on Budget) Chapter 47/2012, the human services budget trailer bill, provides the Cal-Learn Program to be fully operative commencing April 1, 2013. For the period July 1, 2012, to March 1, 2013, the bill provides counties will be provided with full or partial year funding, depending on their phase-in to full implementation of the Cal-Learn Program by April 1, 2013, as specified. Staff Comments: This bill will result in the provision of CalWORKs benefits to a pregnant teen who is 18 years of age or younger at any time after verification of pregnancy, regardless of her eligibility for Cal-Learn. Under existing law, CalWORKs aid is not provided until a pregnant woman's third trimester unless the pregnant woman is eligible for Cal-Learn and the Cal-Learn Program is operative. As the suspension of the Cal-Learn Program has been lifted pursuant to the recently enacted budget trailer bill, costs for CalWORKs aid provided to a Cal-Learn eligible individual from the point the pregnancy is verified will not be considered a cost attributable to this bill as long as the Cal-Learn Program is operative. As a result, the provisions of this bill are estimated to provide on average an additional three months of CalWORKs aid than otherwise would have been provided for pregnant teens who are not otherwise eligible for Cal-Learn. Based on data from July to December 2011, there would be a small average monthly caseload of approximately 260 pregnant women who are 18 years of age or younger and who are not eligible for Cal-Learn who would be newly eligible under the provisions of this bill. The estimated CalWORKs grant, services, and administrative costs for this caseload would be $0.9 million (TANF/General Fund) in 2012-13, and up to $3.0 million ongoing. AB 1640 (Mitchell) Page 3 Under existing law, any month in which a recipient is exempt from participation pursuant to specified conditions, including pregnancy, is not counted against the 24-month time limit on aid, so it is assumed an additional three months of aid would be provided for each of these cases. Staff notes this bill removes the provision in existing law conditioning the receipt of CalWORKs aid for a pregnant mother who is 18 years of age or younger after verification of pregnancy upon the operability of the Cal-Learn Program. Should the Cal-Learn Program be suspended in the future, this bill would provide that aid to both Cal-Learn eligible and non-eligible pregnant teens be provided at any time after verification of pregnancy, regardless of the program's operability. As a result, the potential costs to the DSS in the event of the future suspension of the Cal-Learn Program would be substantial, potentially in excess of $100 million (TANF/General Fund) annually to provide three additional months of CalWORKs benefits, including the monthly supplemental payment, to approximately 9,000 pregnant teens. To the extent future services costs would have been more expensive in the absence of earlier eligibility could serve to reduce costs somewhat, however, it is estimated that potential costs would still likely be in the tens of millions of dollars (TANF/GF). Under existing state law, all low-income pregnant women with income below 200 percent of the federal poverty level (FPL) are eligible for Medi-Cal. Under Medi-Cal pregnancy-only coverage, certain services are not covered if deemed unrelated to a woman's pregnancy. However, because existing state law provides for the automatic linkage between CalWORKs and Medi-Cal eligibility, any family eligible for CalWORKs benefits is categorically eligible for full scope Medi-Cal benefits without a share of cost. By providing CalWORKs eligibility earlier than otherwise would have occurred under existing law, this bill will result in some individuals becoming newly eligible for Medi-Cal sooner than they otherwise would have under existing law. This will result in increased Medi-Cal costs for full-scope coverage for this small group of pregnant teens. The Department of Health Care Services (DHCS) may also incur one-time automation costs for MEDS reprogramming to establish earlier eligibility for a subset of pregnant women in the Medi-Cal 1931(b) program. AB 1640 (Mitchell) Page 4