BILL ANALYSIS Ó
SB 36
Page 1
SENATE THIRD READING
SB 36 (Simitian)
As Amended August 26, 2011
Majority vote
SENATE VOTE :26-13
HEALTH 15-4 APPROPRIATIONS 12-5
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|Ayes:|Monning, Ammiano, Atkins, |Ayes:|Fuentes, Blumenfield, |
| |Bonilla, Eng, Gordon, | |Bradford, Charles |
| |Hayashi, | |Calderon, Campos, Davis, |
| |Roger Hernández, Bonnie | |Gatto, Hall, Hill, Lara, |
| |Lowenthal, Mitchell, | |Mitchell, Solorio |
| |Nestande, Pan, | | |
| |V. Manuel Pérez, Smyth, | | |
| |Williams | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Garrick, Mansoor, |Nays:|Harkey, Donnelly, |
| |Silva | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Expands eligibility for children in families whose
income is at or below 400% of the federal poverty level (FPL),
from the current level of 300% of FPL, and allows enrollment in
the County Health Initiative Matching (CHIM) Fund Program using
local funds to match federal Children's Health Insurance Program
(CHIP) funds, and 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, conditioned on obtaining federal approval.
FISCAL EFFECT : According to the Assembly Appropriations
Committee minor costs to MRMIB to expand the administration of
CHIM to support the counties access to federal funding. Any
additional administrative costs would be reimbursed by
participating counties and premium expenditures through the CHIM
special fund, potentially in the hundreds of thousands of
dollars (50% federal/50% local) to extend coverage to additional
children.
SB 36
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COMMENTS : According to the author, this bill is intended to
allow counties that participate in the CHIM Fund 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
Children's Health Insurance Program Reauthorization Act 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.
There are currently three counties, San Francisco, San Mateo,
and Santa Clara that were approved to draw down federal
financial participation (FFP) under a State Plan Amendment (SPA)
that was approved in 2004. 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. The MRMIB 2011 May Revision estimates 1,258
children enrolled in the current year at a cost of $449,000
local funds and $449,000 federal funds. Similar enrollment is
expected in fiscal year (FY) 2011-12.
Each state is allocated a specific amount of federal CHIP funds.
In federal FY 2010, California's allotment was $1.63 billion.
The state used $1.19 billion leaving approximately $440 million
in unused funds. Future allotments are expected to be the
similar. If a state does not use its entire allotment, the
funds revert to other state CHIPs around the country.
The Patient Protection and Affordable Care Act (Public Laws
111-148) (PPACA) extends the authorization of federal CHIP for
an additional two years, through September 30, 2015. PPACA
requires states to maintain current income eligibility levels
for CHIP through September 30, 2019. States 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. California would put over $25 billion Medicaid and
CHIP federal matching funds annually in jeopardy if it were to
not fulfill this Maintenance of Effort (MOE) requirement. Thus,
it is unlikely that counties would need to use the authority in
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this bill to enroll children that are eligible for HFP, but who
are unable to obtain coverage due to a budget deficit-related
administrative action by MRMIB that limits eligibility because
such an action would violate the MOE.
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. Additionally, MRMIB projected that over
600,000 children would need to be disenrolled. A three-part
funding solution was devised. The California Children and
Families Commission voted to grant $81 million to MRMIB to cover
children age zero to five; $157 million in gross premiums taxes
on Medi-Cal managed care plans was enacted which yields $97
million in additional federal funds for HFP; and, savings from
program changes to HFP, including increased family premiums and
other program changes being adopted by MRMIB.
SB 1431 (Simitian) of 2010, a nearly identical bill was vetoed
by the Governor. In his veto message, the Governor wrote, "the
practical impacts of this bill will be short-lived, given that
families with eligible children will have the opportunity to
purchase subsidized insurance through the health insurance
exchange in 2014."
Analysis Prepared by: Marjorie Swartz / HEALTH / (916) 319-2097
FN: 0002253