BILL ANALYSIS Ó
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 36
S
AUTHOR: Simitian
B
AMENDED: As Introduced
HEARING DATE: March 23, 2011
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CONSULTANT:
6
Bain
SUBJECT
County Health Initiative Matching Fund
SUMMARY
Allows local County Health Initiative Matching Fund (CHIMF)
programs to draw down federal matching funds to provide
health insurance coverage to eligible children with family
incomes at 400 percent federal poverty level (FPL), instead
of up to 300 percent of the FPL in existing law. Allows
CHIMF programs to draw down federal matching funds for
children age 18 and under who are eligible for HFP, but who
are unable to enroll as a result of enrollment policies
initiated by the Managed Risk Medical Insurance Board
(MRMIB) due to insufficient funding.
CHANGES TO EXISTING LAW
Existing federal law:
Establishes the Children's Health Insurance Program (CHIP)
which provides federal matching funds for state health
insurance programs through a block grant allotment to
states. California's federal share of CHIP funding is
currently 65 percent and the state share is 35 percent.
Existing state law:
Establishes the Healthy Families Program (HFP) to provide
health, dental, and vision coverage to uninsured children
who do not qualify for free Medi-Cal and who are generally
in families at or below 250 percent of FPL (at or below
Continued---
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$46,325 for a family of 3 in 2011). The Managed Risk
Medical Insurance Board (MRMIB) administers HFP.
Establishes the CHIMF program, which allows counties,
county agencies, local initiatives (LIs) and county
organized health systems (COHS) (COHS and LIs are local
Medi-Cal managed care plans) to provide funding to MRMIB
for the purpose of drawing down federal matching funds to
provide comprehensive health insurance coverage to any
child or adult who meets citizenship and immigration status
requirements for HFP, but who does not qualify for either
HFP or free Medi-Cal. Income eligibility for CHIMF for
children is currently limited to children with family
incomes at or below 300 percent of FPL (at or below $55,875
for a family of 3 in 2011).
Coverage provided through the CHIMF programs is not an
entitlement, and existing law prohibits costs in providing
these services from accruing to the state. All expenses
incurred by MRMIB and the Department of Health Care
Services in administering CHIMF are required to be paid
from the CHIMF or directly by applicants, except that MRMIB
can accept funding from a not-for-profit group or
foundation, or from a governmental entity providing grants
for health-related activities, to administer the CHIMF.
Implementation of the CHIMF program is subject to federal
financial participation being available and approved.
This bill:
Allows CHIMF programs to draw down federal matching funds
to provide health insurance coverage to eligible children
with family incomes at 400 percent of the FPL ($74,120 for
a family of 3 in 2011), instead of up to 300 percent of the
FPL in existing law.
Allows CHIMF programs to draw down federal matching funds
for children age 18 and under who are eligible for HFP, but
who are unable to enroll in HFP as a result of enrollment
policies initiated by MRMIB due to insufficient funding.
Makes implementation of the provisions of this bill, and
the existing law income eligibility provisions, conditioned
on MRMIB obtaining necessary federal approval.
FISCAL IMPACT
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This bill has not been analyzed by a fiscal committee.
According to the Assembly Appropriations Committee analysis
of an identical measure last year:
§ No General Fund impact for MRMIB to expand the
administration of CHIMF to support the counties' access
to federal funding.
§ Premium expenditures of $300,000 (50 percent federal/50
percent local) to $500,000 (50 percent federal/50 percent
local) to extend coverage to 300 to 500 previously
ineligible children.
BACKGROUND AND DISCUSSION
According to the author, this bill will allow county
entities that receive federal funds through the CHIMF to
draw down federal funds to provide health care coverage to
children whose family income is at or below 400 percent of
FPL and children who are unable to enroll in HFP due to
enrollment policies initiated by MRMIB due to insufficient
funds. The author states that federal law permits states
to draw down federal funds for children with family incomes
above 300 percent of the FPL and changes to the federal
CHIP statute in 2009 made it substantially more likely that
counties could obtain federal matching funds for children
above 300 percent of the FPL by modifying the CHIP funding
allotment formula and by reiterating that federal funds are
available to states to cover these children. The author
argues California is currently failing to utilize
approximately $400 million in federal funds that it could
be accessing, and this bill would allow counties to draw
down those federal funds to provide health care coverage to
children.
Additionally, the author argues state law currently
prevents counties from drawing down federal funds in
providing health coverage to children through CHIMF if they
are eligible for HFP, but, as a result of the state budget
deficit, are on a HFP waiting list. This bill would enable
CHIMF entities to receive federal funds for children they
cover who are eligible for HFP, but who are unable to
enroll in HFP as a result of enrollment policies initiated
by MRMIB due to insufficient funding.
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Background
AB 495 (Diaz), Chapter 648, Statutes of 2001, established
the CHIMF to allow county entities to use county funds to
draw down federal dollars from California's federal CHIP
allotment. There are three counties that provide coverage
drawing down federal funds through CHIMF to cover children
who would be eligible for HFP but who do not qualify for
HFP because of their family income. The three
participating CHIMF counties are San Mateo, San Francisco,
and Santa Clara. San Francisco and Santa Clara cover
children with incomes at or below 300 percent of FPL, while
San Mateo covers children up to 400 percent of FPL. In the
2009-10 fiscal year, there were 1,156 subscribers in the
CHIMF. Estimated CHIMF enrollment and local and federal
CHIP funds used to support the CHIMF programs in the
2011-12 fiscal year are shown in the chart below:
----------------------------------------------------------
| | | | | |
|---------+--------------------+---------+---------+-------|
|County |Enrollment as of |CHIM |Federal |Total |
| |June 30, 2012 |Fund |Funds |Funds |
|---------+--------------------+---------+---------+-------|
|Santa | 308 |$ |$ |$ |
|Clara | | 122,000| 226,000| 348,000|
|---------+--------------------+---------+---------+-------|
|San | 399 |$ |$ |$ |
|Mateo | | 132,000| 246,000| 378,000|
|---------+--------------------+---------+---------+-------|
|San | 437 |$ |$ |$ |
|Francisco| | 198,000| 367,000| 565,000|
| | | | | |
|---------+--------------------+---------+---------+-------|
|Total | 1,144 |$ |$ |$1,291,|
| | | 452,000| 839,000|000 |
----------------------------------------------------------
Existing state law allows funds from CHIMF entities to be
matched with federal CHIP funds only if federal funds are
available, and only if MRMIB determines that federal CHIP
funds remain available after providing funds for all
current HFP enrollees and eligible children who are likely
to enroll in HFP, as well as (to the extent they receive
federal CHIP funds), the Access for Infants and Mothers
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(AIM) Program and the Medi-Cal program. California
overspent its federal CHIP allocation in previous years and
relied on carryover funds from prior federal fiscal years
(FFY) to provide coverage under these programs. However,
in FFY 2010, California's CHIP allocation ($1.6 billion)
exceeded actual expenditures ($1.2 billion) by $442
million. California is projected to receive a CHIP
allotment of $1.2 billion in federal funds in FFY 2011.
Federal law currently extends CHIP funding until 2015.
San Mateo County indicates there were 363 children in the
San Mateo CHIMF program with family incomes between 250 and
300 percent of FPL in December 2010. San Mateo County
estimates this bill would enable it to draw down $156,000
in federal funds for 350 children between 300 percent and
400 percent of FPL which the San Mateo CHIMF program
already covers, but for whom it does not receive federal
matching funds. In addition to the three CHIMF counties,
there are an additional twenty-five counties that make
coverage available for children ineligible for Medi-Cal or
HFP due to immigration status or income through local
programs which do not receive federal CHIP funding.
According to data from the 2009 California Health Interview
Survey, there are 954,000 children in families with incomes
between 300 and 400 percent of FPL, of whom 6 percent or
56,000 children are uninsured.
The Healthy Families Program
The Healthy Families Program was established in 1997 to
enable California to implement federal CHIP. CHIP provides
matching funds to states to provide health insurance for
low-to moderate-income children in families with incomes
too high to be served by state Medicaid programs (Medi-Cal
in California). HFP is for children ages 0-18 in families
with incomes between 100 percent to 250 percent FPL who are
ineligible for free Medi-Cal, and for children up to age
two in families with incomes between 250 and 300 percent
FPL who are born to women enrolled in the state AIM
Program. Subscribers must be U.S. citizens or have
qualified immigrant status. Monthly premiums are
determined by family size, net income and insurance plan
selected. Monthly premiums per child range from a low of
$4 per child in families with an income between 100 to 150
percent of the FPL to a high of $24 per child in families
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with incomes between 200 and 250 percent of the FPL, up to
a maximum of $72 per family.
HFP services are provided through contracts with managed
care plans. At least one health plan is offered in each of
California's 58 counties. The federal government provides
funding for 65 percent of total HFP expenses (not including
subscriber premiums and cost-sharing paid by HFP
subscribers). The state covers the remaining 35 percent.
Under federal health care reform, the federal share will
increase by 23 percent starting in 2015. For individuals
with incomes at or above 300 percent of the FPL, the
federal matching rate is the state's Medicaid matching rate
(California is usually 50 percent), instead of the higher
CHIP 65 percent matching rate.
As of February 28, 2011, there were 865,480 children
enrolled in HFP, and the Governor's budget projects
enrollment of 916,029 children at the end of the budget
year. Due to a funding shortfall, MRMIB had a HFP waiting
list from July 17, 2009 to September 17, 2009.
The Governor's budget proposes to eliminate vision coverage
in HFP, increase copayments for hospital inpatient and
emergency department services, increase premiums for
subscribers with family incomes between 150 and 250 percent
of FPL, and to make a temporary gross premiums tax on
Medi-Cal managed care plans that helps fund HFP permanent.
The budget conference committee adopted the premium and
cost-sharing increases and extended but did not make
permanent the gross premiums tax on Medi-Cal managed care
plans, and rejected the elimination of vision benefits and
instead reduced the vision care benefit by $3 million GF.
After the conference committee action, the extension of the
gross premium tax on Medi-Cal managed care plans was
stricken from the health budget trailer bill.
Prior legislation
SB 1431 (Simitian) of 2010 was identical to this measure.
That bill was vetoed by Governor Schwarzenegger. In his
veto message, the Governor cited the state of the economy,
the low participation rate in the current program, and the
new federal maintenance of effort requirements for the HFP
in arguing that expanding eligibility for this local
program was not necessary. In addition, the Governor
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stated the practical impact of that measure would be
short-lived because families with eligible children will
have the opportunity to purchase subsidized insurance
through the health insurance exchange in 2014.
AB 1085 (Ruskin) of 2005 would have enabled CHIMF programs
to draw down federal matching funds for children in
families with incomes up to 400 percent of the FPL, instead
of 300 percent of the FPL in existing law. That measure
was held on the Assembly Appropriations Suspense file.
AB 1130 (Diaz) Chapter 687, Statutes of 2003, renamed the
Children's Health Initiative Matching Fund as the County
Health Initiative Matching Fund and is the implementing
legislation for AB 495.
AB 1524 (Richman) Chapter 866 Statutes of 2003 expanded the
scope of the County Health Initiative Matching Fund to
allow these programs to draw down federal matching funds
for providing health insurance coverage for adults.
AB 495 (Diaz), Chapter 648, Statutes of 2001, established
the Children's Health Initiative Matching Fund to allow
local funds from counties with children's health
initiatives to be used to draw down federal dollars from
California's CHIP allotment.
Arguments in support
This bill is sponsored by San Mateo County, which states
that during the 2009-10 budget deliberations, an enrollment
cap in HFP resulted in thousands of children statewide
being placed on a waiting list for coverage while children
in higher income brackets were able to enroll in locally
funded programs. In addition, without the statutory
authority to draw down federal funding for children between
300 and 400 percent FPL, hundreds of children in San Mateo
County and others across the state could go without
important health coverage.
COMMENTS
1.Due to federal maintenance of effort requirements, one
provision of this bill is unlikely to be needed. Federal
health care reform prohibits states from having
eligibility standards, methodologies or procedures in
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place that are more restrictive than those in effect as
of the date of enactment of federal health care reform in
order to continue to receive federal Medicaid and CHIP
funds. This federal maintenance of effort requirement
for children's coverage continues until September 30,
2019. Any effort to limit enrollment in HFP, by either
establishing a waiting list or reducing eligibility,
would put over $24 billion in federal Medicaid and CHIP
funds at risk. As such, the provisions of this bill that
allows CHIMF programs to draw down federal matching funds
to enroll children who are eligible for the HFP but who
are unable to enroll as a result of enrollment policies
initiated by MRMIB due to insufficient funding to receive
coverage through the CHIMF is unlikely to be used unless
federal law is changed. Subject to the availability of
federal funds, the provisions of this bill allowing CHIMF
programs to receive federal funds for children with
higher incomes (above 300 percent of the FPL) could be
used by counties with programs exceeding that income
level. San Mateo County is currently the only county
that is a CHIMF program that provides coverage above 300
percent of the FPL.
2.Drafting clarity. The intent of this bill is to give
counties the option to expand their CHIMF program to two
additional populations: children in family incomes
between 300 and 400 percent of the FPL, and children
eligible for but unable to enroll in HFP due to
enrollment policies initiated by MRMIB due to
insufficient funds. Staff recommend amendments to
clarify the author's intent to allow CHIMF applicants to
make a determination on whether to expand income
eligibility for purposes of drawing down federal funds up
to 400 percent FPL or some lower amount (for example, 350
percent FPL), and to allow local entities to determine
whether to cover children not enrolled in HFP due to
insufficient funding. If MRMIB initiated restricted HFP
enrollment due to insufficient funds, this bill could
result in CHIMFs covering children with higher incomes
with local funds and federal funds, while lower income
HFP-eligible children would be subject to the MRMIB
restriction resulting from the state budget. However, as
indicated in 1) above, this scenario is unlikely to occur
because of the federal maintenance of effort requirement.
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POSITIONS
Support: San Mateo County Board of Supervisors (sponsor)
Alameda County Board of Supervisors
California Chapter of the American College
of Emergency Physicians
California Children's Health Initiatives
California Children's Hospital Association
California Chiropractic Association
California Communities United Institute
California District of the American Academy of
Pediatrics
California Optometric Association
California Psychiatric Association
California School Employees Association
California State Association of Counties
California State PTA
Health Improvement Partnership of Santa Cruz
County
Lucile Packard Children's Hospital
Peninsula Interfaith Action
Santa Clara County Board of Supervisors
Urban Counties Caucus
Oppose: None received
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