BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          SB 1081 (Fuller) - Medi-Cal: demonstration projects
          
          Amended: April 10, 2012         Policy Vote: Health 8-0
          Urgency: Yes                    Mandate: No
          Hearing Date: April 30, 2012                           
          Consultant: Brendan McCarthy    
          
          This bill does not meet the criteria for referral to the 
          Suspense File. 
          

          Bill Summary: SB 1031 would authorize a nondesignated public 
          hospital to operate a Low Income Health Program if it is located 
          in a county that does not have a county hospital and the county 
          does not intend to operate a such a program.

          Fiscal Impact: 
              Unknown, but likely minor, state costs. All state costs to 
              be fully reimbursed by participating nondesignated public 
              hospitals. 
              Additional local government reimbursements up to $2.7 
              million (federal funds).

          Background: Under current law and the existing federal Medi-Cal 
          hospital waiver, locally operated Low Income Health Programs are 
          authorized to extend health care coverage to individuals between 
          19 and 64 years of age, with incomes up to 200 percent of the 
          federal poverty level, who are not otherwise eligible for 
          Medi-Cal. (The operator of the program can set more restrictive 
          enrollment criteria.) The costs of Low Income Health Programs 
          are split between local funds and federal funds at a 50 percent 
          federal participation rate. Under current law, cities, counties, 
          cities and counties, a consortium of counties, or a health 
          authority may establish a Low Income Health Program. 
          Nondesignated public hospitals (public hospitals that are not 
          one of 22 specified University of California or county public 
          hospitals) are not permitted to operate Low Income Health 
          Programs.

          By January 1, 2014, participants in Low Income Health Programs 
          will be transitioned either to an expanded Medi-Cal program or 
          will be required to purchased health insurance through the 








          SB 1081 (Fuller)
          Page 1


          California Health Benefit Exchange.

          Low Income Health Programs are operated and financed by local 
          government entities and the federal government. Current law 
          prohibits the use of General Fund monies for their operation. 
          The Department of Health Care Services may play a role in the 
          drawdown of federal funds and the distribution of those funds to 
          local government agencies. Current law requires any 
          administrative costs incurred by the Department to be reimbursed 
          by program operators.

          As of February 2012, about 340,000 participants were enrolled in 
          Low Income Health Programs. Three counties (San Luis Obispo, 
          Tulare, and Santa Barbara) have put their development of a Low 
          Income Health Program on hold and Fresno County has decided not 
          to proceed with one. There is no nondesignated public hospital 
          in Fresno County, so this bill would not apply there. 

          Proposed Law: SB 1081 would authorize a nondesignated public 
          hospital to operate a Low Income Health Program provided that it 
          is located in a county that does not have a county hospital and 
          does not intend to operate a Low Income Health Program.

          Staff Comments: At this point, staff is only aware of plans in 
          Tulare County for a nondesignated public hospital to set up a 
          Low Income Health Program under this bill. The sponsors of this 
          bill estimate that between 7,000 and 8,000 residents of Tulare 
          County could be enrolled in a Low Income Health Program. The 
          sponsors estimate that up to $2.7 million in federal funds could 
          be drawn down, based on current expenditures in Tulare County 
          for care of the medically indigent.

          This bill is an urgency measure.

          Because federal funds for Low Income Health Programs are 
          continuously appropriated in statute and this bill expands the 
          entities that may participate in that program, this bill makes 
          an appropriation.