BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB X1 1
AUTHOR: John A. P�rez
AMENDED: June 4, 2013
HEARING DATE: June 12, 2013
CONSULTANT: Bain
SUBJECT : Medi-Cal: eligibility.
SUMMARY : Implements the Medicaid provisions (Medicaid is known
as Medi-Cal in California) in the federal Patient Protection and
Affordable Care Act , including the expansion of federal
Medicaid coverage to low-income adults with incomes between 0
and 138 percent of the federal poverty level, establishes the
existing Medi-Cal benefit package supplemented by the essential
health benefits adopted by the Legislature last session as the
benefit package for the expansion population, and requires the
existing Medi-Cal population to receive the essential health
benefits adopted by the Legislature. Implements a number of the
Medicaid Affordable Care Act provisions to simplify the
eligibility, enrollment and renewal processes for Medi-Cal.
Background:
On March 23, 2010, President Obama signed the Affordable Care
Act (ACA) into law (Public Law 111-148), as amended by the
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152). The ACA greatly expands health insurance coverage in
California. Beginning in 2014, millions of low- and
middle-income Californians will gain access to coverage under
the expansion of Medi-Cal, through easier enrollment
requirements established for Medi-Cal, and through premium and
cost-sharing subsidies offered through the California Health
Benefit Exchange (the Exchange, which is now known as Covered
California). As a result of the coverage expansions under the
ACA, between 89 and 91 percent of non-elderly Californians are
predicted to have health coverage under the ACA, and the number
of uninsured is projected to decrease by between 1.8 and 2.7
million by 2019. According to the UC Berkeley Labor Center, over
1.4 million Californians are estimated to be newly eligible for
Medi-Cal under the expansion.
The ACA establishes new requirements for California's Medi-Cal
program, including:
Continued---
AB X1 1 | Page 2
� Requiring Medicaid coverage of adults under age 65 who are not
currently eligible with incomes up to 138 percent of the
Federal Poverty Level (FPL) or below $15,856 in 2013 for an
individual (the Supreme Court ruling in National Federation of
Independent Business v. Sebelius in June 2012 effectively
allowed states to opt-out of the expansion);
� Requiring primary care rates to be equal to Medicare rates for
2013 and 2014;
� Extending Medi-Cal coverage to former foster youth up to age
26;
� Allowing individuals to apply for Medi-Cal in person, via
phone, by mail, and through the Internet or facsimile;
� Eliminating the asset test for certain groups of applicants to
Medi-Cal; and,
� Establishing a new methodology for counting income in
Medi-Cal, known as modified adjusted gross income (MAGI).
In addition to these ACA requirements, California has a number
of policy options in implementing the Medicaid provisions.
Options include whether to implement the Medi-Cal expansion, the
type of benefits and services the expansion population will
receive in Medi-Cal, whether to cover former foster youth in
Medi-Cal who arrive in California from other states, whether to
include domestic partners within the definition of caretaker
relative, and whether to adopt options contained in the ACA to
make it easier for individuals to enroll in coverage and remain
enrolled in coverage through the use of electronic verification
for eligibility-related information without submitting paper
documentation. Implementing the requirements and options in the
Medicaid provisions of the ACA and its implementing regulations
requires extensive changes to California's Medi-Cal law.
This bill contains the following major provisions:
Medi-Cal Expansion to Adults
1.Requires Department of Health Care Services (DHCS) to
implement the ACA expansion of Medi-Cal coverage to adults and
parents up to 133 percent of the FPL (adults without minor
children are generally not eligible for Medi-Cal unless aged
or disabled, and parents applying for Medi-Cal are eligible if
they have family incomes at or below 100 percent of the FPL).
Implements the ACA requirement that a five percent income
disregard applies to individuals whose income eligibility is
determined based on MAGI, effectively making income
eligibility 138 percent of the FPL ($15,856 for an individual
and $26,951 for a family of 3 in 2013)
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2.Require that individuals who qualify for the Medi-Cal
expansion and who are currently enrolled in the Low Income
Health Program (LIHP) coverage is provided under a Medicaid
waiver until January 1, 2014) to be transitioned to the
Medi-Cal program, and to be notified of their medical home and
coverage options.
3.Makes recent immigrant adults age 21 and older who do not have
minor children, who are ineligible for full-scope services
under Medicaid under federal law, eligible for state-only
funded Medi-Cal until they are eligible for coverage through
the Exchange with premium assistance, cost-sharing and
benefits that are equivalent to Medi-Cal coverage (referred to
as a "Medi-Cal wrap"). Makes such an individual ineligible for
state-only Medi-Cal only when the Medi-Cal wrap is available
in the Exchange. Requires disenrollment from state-only funded
Medi-Cal to occur only during an available enrollment period
in the Exchange. Makes immigrant adults age 21 and older
ineligible for state-only funded Medi-Cal coverage after
January 1, 2015 if the individual is eligible for and does not
enroll in coverage offered through the Exchange with the
Medi-Cal wrap.
Former Foster Youth Medi-Cal Expansion
4.Requires, to the extent federal financial participation (FFP)
is available, DHCS to provide Medi-Cal benefits to any
individual who is in foster care on his or her 18th birthday
until the individual turns age 26. Requires DHCS to adopt the
federal option to provide Medi-Cal benefits to individuals
that were in foster care and enrolled in Medicaid in any other
state.
5.Requires DHCS to develop procedures to identify and enroll
individuals who meet the criteria for Medi-Cal eligibility,
including individuals who lost Medi-Cal coverage as a result
of turning 21 years of age but who are now eligible under the
ACA, requires DHCS to work with counties to identify and
conduct outreach to former foster care adolescents who lost
Medi-Cal coverage as a result of turning age 21 during 2013,
requires DHCS to develop and implement a simplified
redetermination form, and requires DHCS to seek federal
approval to institute a renewal process that allows a
beneficiary receiving benefits to remain in fee-for-service
Medi-Cal after a redetermination form is returned as
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undeliverable and the county is otherwise unable to establish
contact.
Medi-Cal Benefits
6.Requires DHCS to seek federal approval to establish a benefit
package for the Medi-Cal expansion population that includes
the same benefits, services, and coverage that are provided to
all other full-scope Medi-Cal enrollees, supplemented by any
benefits, services, and coverage included in the essential
health benefits (EHB) package adopted by the state (the
Legislature adopted the Kaiser Small Group Product [Kaiser
Product] as the state's EHB for the individual and small group
health insurance market last session).
7.Requires the existing Medi-Cal benefit package for the current
Medi-Cal population to also include any benefits, services,
and coverage not otherwise described in existing law that are
included in the approved EHB package (the Kaiser Product).
Residency and self-attestation of eligibility information for
Medi-Cal
8.Requires insurance affordability programs (such as Medi-Cal
and subsidized coverage through the Exchange) to accept an
individual's self-attestation, without further documentation,
for age, date of birth, family size, household income, state
residency, pregnancy, and any other applicable eligibility
criteria for which attestation is permitted by federal law.
9.Requires DHCS, in determining an individual's residency, to
electronically verify an individual's state residency using
information from the federal Supplemental Nutrition Assistance
Program, the CalWORKS program, the Exchange, the Franchise Tax
Board, the Department of Motor Vehicles, the Employment
Development Department, and the federal data hub. If DHCS is
unable to electronically verify an individual's state
residency using these electronic data sources, an individual
may establish state residency by providing specified
documents.
10. Outlines, for Medi-Cal eligibility, how state
residency is established, depending upon the age of the
individual, whether he or she is capable of indicating intent,
and whether he or she resides in an institution. Allows a
person over age 21 to establish state residency by declaring
under penalty of perjury that he or she cannot produce any of
specified residency-related documents, that he or she intends
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to reside in this state and does not have a fixed address, or
that the individual has entered the state with a job
commitment or is seeking employment in the state. Requires
DHCS to adopt emergency regulations to implement the
residency-related provisions.
Eligibility and enrollment process
11. Requires DHCS to retain or delegate the
authority to perform Medi-Cal eligibility determination, as
set forth in this bill. Permits the Exchange and DHCS, via the
CalHEERS system (the Exchange's enrollment system) to
determine MAGI-based Medi-Cal eligibility for individuals who
apply through an electronic or paper application that can be
processed by CalHEERS using only the information provided and
that do not require further staff review to verify the
accuracy of the submitted information (this has been referred
to as the "happy path"). Requires the county of residence to
be otherwise responsible for eligibility determinations and
on-going case management for Medi-Cal. Requires CalHEERS to be
jointly managed by DHCS and the Exchange. Permits the Exchange
to provide information on Medi-Cal managed care health plan
selection options for MAGI-eligible individuals, and allows
these individuals to choose a plan. Sunsets these provisions
July 1, 2015.
12. Requires the Exchange to implement a work-flow
transfer protocol for individuals who call the customer
service center operated by the Exchange to apply for coverage
that asks questions to determine whether the individual's
household includes individuals who are potentially eligible
for Medi-Cal (this transfer protocol is referred to as the
"quick sort"). Requires, after the quick sort, the Exchange to
refer callers from a household that has an individual who
appears to be potentially Medi-Cal eligible to the county to
complete the assessment and any required eligibility
determination.
13. Requires the quick sort transfer protocol and
referral procedures used by the Exchange to be developed and
implemented in conjunction with and subject to review and
approval by DHCS.
14. Requires, during the initial open enrollment period
until June 30, 2014, the Exchange to proceed with the
assessment and eligibility determination for a household that
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appears to have individuals both potentially eligible for
Medi-Cal using the MAGI-income assessment and individuals who
are not Medi-Cal eligible (referred to as "mixed coverage
households").
15. Requires the Exchange to refer individuals who are
pregnant or potentially eligible for Medi-Cal on a basis other
than MAGI (disabled, 65 or older or in need on long-term care
services) to his or her county of residence. Requires the
county of residence to be responsible for final confirmation
of Medi-Cal eligibility determinations.
16. Requires the Exchange to assess for eligibility if
the caller's household appears to only include individuals not
potentially eligible for Medi-Cal.
17. Requires DHCS, the Exchange and county consortia to
enter into an interagency agreement which specifies the
operational parameters and performance standards pertaining to
the transfer protocol.
18. Requires DHCS, in collaboration with the Exchange,
the counties, consumer advocates, and the Statewide Automated
Welfare System consortia, to develop and prepare one or more
reports that are issued at least quarterly and are made
publicly available within 30 days following the end of each
quarter, for the purpose of informing the California Health
and Human Services Agency, the Exchange, the Legislature, and
the public about the enrollment process for all insurance
affordability programs.
19.Adopts the ACA requirement that requires an individual be
allowed to be accompanied, assisted, and represented in the
application and renewal process by an individual or
organization of his or her choosing.
Income Counting Changes
20.Requires DHCS, effective January 1, 2014, to implement an
equivalent income level for each eligibility group whose
income level will be converted to MAGI. Requires the
equivalent income level to be not less than the dollar amount
of all income exemptions, exclusions, deductions, and
disregards in effect on March 23, 2010, plus the existing
income level expressed as a percent of the FPL for each
eligibility group so as to ensure that the use of MAGI income
methodology does not result in populations, who would have
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been eligible for either the Medi-Cal Program or the Healthy
Families Program, losing coverage.
21.Requires DHCS to adopt procedures to take into account
projected future changes in income and family size, for
individuals whose Medi-Cal income eligibility is determined
using MAGI-based methods, in order to grant or maintain
eligibility for those individuals who may be ineligible or
become ineligible if only the current monthly income and
family size are considered.
Coverage of pregnant women
22. Expands the scope of services for pregnant Medi-Cal
beneficiaries by requiring, to the extent required by federal
law, coverage for all "pregnancy-related services," defined to
mean, at minimum, all services provided under Medi-Cal.
23. Extends the duration of coverage through the Access
for Infants and Mothers Program (AIM) by requiring coverage to
be provided until the end of the month in which the 60th day
occurs, rather than terminating coverage mid-month 60 days
following the end of the pregnancy.
Asset test and repeal of current semi-annual status report
requirement
24.Prohibits the use of an asset or resource test for
individuals whose financial eligibility for Medi-Cal is
determined based on MAGI to conform to ACA requirements.
25. Repeals the semi-annual status report requirement
for individuals' whose income is determined using MAGI (state
law requires adult Medi-Cal beneficiaries to file a
semi-annual status report in order to remain eligible for
Medi-Cal) to conform to ACA requirements.
Requirements prior to terminating Medi-Cal coverage
26. Modifies, re-enacts and conforms existing
state law requirements for counties prior to terminating
Medi-Cal eligibility under legislation known as SB 87
(Escutia), Chapter 1088, Statutes of 2000. Changes include:
a. Requiring counties to gather additional
eligibility-related information relevant to the Medi-Cal
beneficiary's eligibility prior to contacting the
beneficiary, rather than "making every reasonable effort"
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to gather that information in existing law;
b. Requiring counties to check federal databases for
purposes of gathering information to conduct eligibility
redeterminations, and requiring the county, in cases of
annual redetermination where the county is able to make a
determination of continue eligibility, to notify the
individual of the eligibility determination and inform
the beneficiary of his or her obligation to inform the
county if any information on the notice is inaccurate but
that the beneficiary is not required to sign and return
the notice if all information is accurate;
c. Requiring the use of a prepopulated form in annual
redeterminations in cases where the county is unable to
determine continued Medi-Cal eligibility, and requiring
the county to attempt to reach the beneficiary to collect
the necessary information via the Internet, by telephone
or through other commonly available electronic means (for
example, email or text) in counties where such electronic
means are available;
d. Requiring counties to attempt to contact the
beneficiary in the 60 day period from the date the form
was sent to collect the necessary information, including
when information provided is not complete;
e. Adopting the federal requirement that requires, if a
Medi-Cal beneficiary is terminated from coverage, but
that former beneficiary submits a completed form within
90 days of termination (instead of 30 days in existing
law), the county to determine eligibility as though the
form was submitted in a timely manner;
f. Requiring a county, if it has enough information
available to it to renew eligibility with respect to all
eligibility criteria, to begin a new 12-month eligibility
period;
g. Requiring counties, for individuals determined
ineligible for Medi-Cal, to determine eligibility for
other insurance affordability programs, and if the
individual is eligible, requiring the county, as
appropriate, to transfer the individual's electronic
account to other insurance affordability programs via a
secure electronic interface; and,
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h. Requiring any renewal form or notice to be
accessible to persons who are limited English proficient
and persons with disabilities consistent with all federal
and state requirements.
Other Changes
27. Requires DHCS to develop, by January 1, 2015,
pre-populated renewal forms for use with beneficiaries whose
eligibility is determined using non-MAGI-based methods
(federal regulations require a prepopulated form for MAGI
eligibility redeterminations.)
28. Adopts the ACA option and current DHCS practice to
include individuals under 19 years of age (or under 21 in the
case of full-time students) in the household for purposes of
determining Medi-Cal eligibility.
29. Requires DHCS to adopt the federal eligibility
determination options to: (a) consider blindness as continuing
until the reviewing physician determines that a beneficiary's
vision has improved beyond the definition of blindness
contained in the state's Medicaid State Plan; and (b) consider
disability as continuing until the review team determines that
a beneficiary's disability no longer meets the definition of
disability contained in the plan. DHCS indicates these
provisions adopt its current policy.
30. Adopts the ACA option to repeal the "deprivation"
requirement under which at least one parent in the family must
be absent, deceased or disabled, or the principal wage earner
must be unemployed or underemployed in order to receive
Medi-Cal coverage.
31. Adopts the ACA option to include domestic partners
within the definition of caretaker relatives for Medi-Cal
eligibility purposes.
32. Permits the use of old Medi-Cal applications until
January 1, 2016, and continues to allow the use of a joint
application for insurance affordability programs (such as
Medi-Cal and subsidized Exchange coverage), CalWORKS, and
CalFresh.
33. Requires the eligibility, enrollment and retention
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system to offer assistance with insurance affordability
programs through mail or through other commonly available
electronic means (in addition to in person and over the phone
and online in existing law). Requires renewal procedures to
include mail and renewal through other commonly available
electronic means.
34. Requires counties, as part of updating Medi-Cal
beneficiary contact information using information received
from Medi-Cal managed care plans, to attempt to verify the
information it receives from the Medi-Cal managed care health
plan is accurate, which could include making contact with the
beneficiary. Repeals the requirement that DHCS develop a
consent form to be used by counties to record the
beneficiary's consent to use the information received from the
plan to update the beneficiary's file.
35.Requires DHCS to meet the ACA requirement to provide
assistance to any Medi-Cal applicant or beneficiary that
requests help with the application or redetermination process
to the extent required by federal law. Requires the assistance
provided to be available in person, over the telephone, and
online and in a manner that is accessible to individuals with
disabilities and those who have limited English proficiency.
36.Require a person who wishes to apply for an insurance
affordability program to be allowed to file an application on
his or her own behalf or on behalf of his or her family.
Permits an individual also would have the right to be
accompanied, assisted, and represented in the application and
renewal process by an individual or organization of his or her
choosing (known as an authorized representative). Requires
DHCS to implement policies and prescribe forms, notices and
other safeguards to ensure the privacy and protection of the
rights of applicants who appoint an authorized representative
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis of the previous version of this bill, state
and local fiscal impacts of this bill are complex and subject to
substantial uncertainty. This stems from imprecision inherent in
projecting future-year costs based on numerous assumptions about
factors such as the number of people who will be newly eligible
for Medi-Cal and the number who will actually enroll, as well as
from uncertainty related to outstanding state and federal policy
decisions.
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The fiscal effects are divided into two categories:
1.The effect of optional Medi-Cal eligibility expansion to all
adults below 138 percent FPL; and,
2.The effect of other state options.
1.Effect of optional Medi-Cal eligibility expansion to adults
below 138 percent of FPL
a.Health care services costs for newly eligible individuals are
funded 100 percent by the federal government for calendar
years 2014, 2015, and 2016. Beginning in 2017, the state will
have a 5 percent share of total health care services costs,
and the state's share will increase gradually to 10 percent by
2020.
If 1.2 million newly eligible adults enroll by 2016, the
state's share would be in the range of $120 million, with the
federal government paying the remainder of the $4.7 billion
total for 2016-17, and $275 million in state General Fund (GF)
(out of $5.0 billion total funds) in 2017-18. This cost is
projected to increase to $600 million GF annually by 2020-21,
which is the state's 10 percent share of $6 billion total
funds based on enrollment growth, medical inflation, and the
state's increased share of total medical services costs.
b.Administrative costs for newly eligible individuals are shared
equally by the state and federal government. The addition of
the optional population is expected to result in half-year
administrative cost pressure in the range of $12 million GF
($24 million total funds) beginning in 2013-14, and full-year
cost pressure in the range of $30 million GF ($60 million
total funds) annually beginning in 2014-15. This estimate is
uncertain, as administrative funding is provided as a lump sum
to counties as part of the annual Medi-Cal budget and total
funding does not directly grow based on enrollment numbers.
In addition, per capita administrative costs for counties may
change significantly in future years as new systems and
processes are implemented.
c.Reduced costs for other state-funded programs, such as the
Genetically Handicapped Persons Program (GHPP) and the Breast
and Cervical Cancer Treatment Program (BCCTP), to the extent
some people receiving services in these types of targeted
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medical programs become eligible for Medi-Cal.
d.Potential reductions in inmate health care spending of up to
$60 million GF annually, beginning after January 1, 2014, to
the extent the state implements a process for identifying and
claiming enhanced federal funding for eligible inpatient
services provided to inmates newly eligible for Medi-Cal.
1.Effect of other state options .
Several eligibility-related provisions in this bill appear to go
beyond what is minimally required to comply with federal rules,
and may have the effect of increasing Medi-Cal costs. In some
cases, additional federal guidance or approval would be required
in order to evaluate whether a provision goes beyond what is
required for strict compliance with federal rules.
Key provisions that may exceed what is minimally required for
federal compliance, and may have associated costs, include the
following:
a. Requiring adoption of the current Medi-Cal benefit
package for populations with income eligibility determined
by MAGI;
b. Requiring DHCS to develop specific procedures that
ensure continued Medi-Cal eligibility for eligible foster
youth;
c. Expanding the scope of benefits provided to pregnant
women with income between 138 percent and 200 percent of
the FPL from pregnancy-only benefits to full-scope
coverage, unless federal approval for fewer services is
granted after January 1, 2014;
d. Requiring DHCS to adopt specific income eligibility
verification procedures that take into account projected
future changes in income and family size, in order to deem
certain individuals Medi-Cal eligible who would not be
found eligible based on current monthly income;
e. Requiring the state to use self-attestation as
verification for any documentation for which
self-attestation is allowable under federal rules; and,
f. Modifying the definition of residency for purposes of
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establishing Medi-Cal eligibility.
Given the ambiguity about whether these provisions exceed what
is minimally required for federal compliance and how they
compare with alternative means of compliance that could also
meet federal standards, as well as uncertainty related to how
these provisions will impact enrollment and retention, specific
fiscal impacts of these provisions are unknown.
COMMENTS :
1.Author's statement. According to the author, AB X1 1
implements the expansion of federal Medicaid coverage in
California. Major provisions of these bills expand Medi-Cal
coverage to low-income adults with incomes between 0 and 138
percent of the FPL, establish the Medi-Cal benefit package for
this expansion population, and require the existing Medi-Cal
program to cover the EHB contained in the Kaiser Product
adopted by the Legislature last session under the ACA.
2.Should the state adopt the Medicaid expansion? Under existing
federal law, prior to the enactment of the ACA, adults were
generally not eligible for Medi-Cal coverage unless they were
low income and meet categorical eligibility requirements, such
as having minor children living at home, having a disability,
being over the age of 65, or being pregnant. The 2014 Medicaid
expansion's largest enrollment impact will be from the
Medicaid expansion to non-disabled adults without minor
children who have incomes at or below 138 percent of the FPL
(for a single adult, 138 percent of the FPL is $1,321 per
month or $15,856 per year in 2013).
Counties currently draw down federal Medicaid matching funds
to cover low-income adults without minor children under
California's "Bridge to Reform" Section 1115 Medicaid waiver
as a transition to implementation of the ACA Medicaid
expansion through the Low Income Health Program (LIHP). Over
500,000 individuals are covered under the LIHPs, but not all
counties have LIHPs. Coverage under the LIHPs ends December
31, 2013.
AB X1 1 would expand Medi-Cal coverage to most adults who are
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at or below 138 percent of the FPL. This coverage expansion
applies to non-elderly, non-pregnant adults under the age of
65. The policy and fiscal reasons for implementing the
Medicaid expansion in California is that it would:
a. Reduce the number of uninsured in California;
b. Reduce mortality, improves access to health care,
improve financial security and improve self-reported
health status for eligible individuals;
c. Provide significantly enhanced federal funding for
California as the cost of Medicaid benefits for the
expansion population are 100 percent federally funded for
the first three years (2014-2016), 95 percent federally
funded in 2017, 94 percent federally funded in 2018, 93
percent federally funded in 2019 and 90 percent federally
funded in 2020 and thereafter;
d. Provide more funding for safety net health care
providers that currently care for Medi-Cal beneficiaries,
the uninsured and low-income populations, and reducing
health care providers' uncompensated care costs in
treating the estimated 3.1 to 4 million individuals who
will remain uninsured following implementation of the
ACA;
e. Ensure the lowest-income adults are treated
equitably in being eligible for health care as moderate
income adults have premium and cost-sharing subsidies
while low income adults without minor children will not
be eligible for any public program or premium subsidies
if the expansion is not adopted;
f. Result in lower premium increases in the individual
market in the Exchange (according to the American Academy
of Actuaries) because individuals 100 percent to 138
percent of FPL who otherwise would have been eligible for
Medicaid will have access to premium subsidies in the
Exchange and these individuals are projected to have
higher health care needs.
g. Unfairly penalize hospitals that will receive
reduced "disproportionate share" hospital (DSH) payments
even if the state does not adopt the expansion. If
California does not expand Medi-Cal, the need for DSH
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funding to address uncompensated care will continue,
while the amount of DSH funds that were previously used
to subsidize some of the costs of that care will decrease
substantially.
3.Medi-Cal benefit package. Under existing federal law (since
2006), state Medicaid programs have had the option to provide
certain groups of enrollees with an alternative benefit
package known as "benchmark" or "benchmark-equivalent"
coverage. One of the four benchmarks is federal
"Secretary-approved coverage," which can include the Medicaid
benefit package offered in that state. The ACA requires states
to select a benefit package for the Medi-Cal expansion
population using "benchmark" or "benchmark-equivalent"
coverage. The ACA also requires any Medicaid benchmark benefit
package to also provide coverage for the EHB. CMS indicates a
state is not required to select the same EHB benchmark
reference plan it selected for the individual and small group
market (the Kaiser Product in California) as the state's EHB
benchmark plan in legislation last session).
AB X1 1 would require DHCS to seek federal approval to establish
a benchmark benefit package that includes the same benefits,
services, and coverage that are provided to all other
full-scope Medi-Cal enrollees. In addition, these benefits
would be supplemented by any benefits, services, and coverage
included in the EHB package adopted by the state. AB X1 1
would also require the existing Medi-Cal benefit package for
the non-expansion population to include any benefits,
services, and coverage that are included in the EHB package
(the Kaiser Product) that are not currently covered by
Medi-Cal. One area where the Kaiser Product generally provides
broader coverage than the existing Drug Medi-Cal Program is in
coverage for substance use disorders.
The policy and fiscal reasons for having the same Medi-Cal
benefit package for the expansion and currently eligible
population are:
a. Aligning benefits received by the existing Medi-Cal
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population will provide a consistent benefit package to
both the currently eligible and the expansion population,
and will ensure continuity of care by eliminating the
need to shift benefit packages if Medi-Cal beneficiaries
move into a different eligibility category because of a
change in eligibility;
b. One uniform benefit package for both the newly
eligible expansion population and current Medi-Cal
program will be administratively simpler for the state,
counties, health plans, and health care providers to
administer;
c. Aligning benefits eliminates the incentive to shift
from benchmark coverage to the existing Medi-Cal benefit
package for enhanced benefits not available to expansion
population at higher state cost under the traditional
state Medicaid matching rate (50/50), rather than the
enhanced matching rate available for the expansion
population;
d. A broader benefit package provides enhanced federal
funding by drawing down additional federal Medicaid funds
into the California economy because the expansion
population is eligible for 100 percent federal financing
for the first three years of the expansion, reduced to 95
percent in 2017, 94 percent in 2018, 93 percent in 2019
and 90 percent in 2020 and thereafter; and,
e. Exemptions from benchmark benefit packages would be
costly to administer and federal Medicaid law prevents
certain groups from being required to enroll in benchmark
or benchmark equivalent benefits (such as medically frail
individuals). In addition, federal regulations require
states to offer exempt individuals the option to enroll
in benchmark coverage but require states to inform
individuals that enrollment is voluntary, that they may
disenroll at any time, require states to inform
individuals of the difference in the benefit packages
prior to enrollment, and to document that the individual
was informed prior to enrollment in the individual's
eligibility file.
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4.Related legislation
SB X1 1 (Hernandez and Steinberg) is identical to this measure.
SB X1 1 is scheduled to be heard in the Assembly Health
Committee on June 12, 2013.
SB X1 3 (Hernandez) would require Covered California to
establish a bridge plan option. SB X1 3 is scheduled to be heard
in the Assembly Health Committee on June 12, 2013.
SB 28 (Hernandez and Steinberg) would, among other provisions,
require DHCS to designate Covered California and county human
services departments as qualified entities for determining
eligibility for accelerated enrollment under Medi-Cal for
children. SB 28 is currently in the Assembly Health Committee.
AB 50 (Pan) implements various provisions of the ACA related to
allowing hospitals to make a preliminary determination of
Medi-Cal eligibility, allows forms for renewal to be
prepopulated with existing available information and requires
the process for Medi-Cal enrollees to choose a plan to be
coordinated with the Exchange. AB 50 is currently on the
Assembly Floor.
5.Prior legislation
AB 43 (Monning) and SB 677 (Hernandez) of the 2011-2012 session
were substantially similar to the introduced version of SB 28 of
this session. SB 677 died on the Assembly Inactive File and AB
43 died on the Senate Inactive File.
SB 1487 (Hernandez) also from the 2011-2012 session would have
required DHCS to extend Medi-Cal eligibility to youth who were
formerly in foster care and who are under 26 years of age,
subject to FFP being available and to the extent required by
federal law. SB 1487 would have also made legislative findings
and declarations regarding the ACA, stated legislative intent to
ensure full implementation of the ACA, and to enact into state
law any provision of the ACA that may be struck down by the
United States Supreme Court. SB 1487 was held on the Senate
Appropriations Committee suspense file.
6.Support. This bill is supported by Consumers Union, Health
Access California, Western Center on Law & Poverty, the
Congress of California Seniors, the California Labor
AB X1 1 | Page 18
Federation, the California Primary Care Association, the
California Academy of Family Physicians, the American Cancer
Society Cancer Action Network, and the American Heart
Association, among others. Generally, proponents argue this
bill is the largest expansion of Medi-Cal since 1966, will
make 1.4 million Californians eligible for coverage and draw
down an estimated $2.1 to $3.5 billion in federal funds in
2014 alone. This will help create jobs in the health care
workforce, improve worker productivity, and increase local and
state tax revenues. Proponents argue expanding Medi-Cal will
extend lifesaving health coverage to millions, provide
preventive care and improve health outcomes for those who
receive coverage. Proponents cite specific provisions of the
bill and federal law that they support, including the enhanced
federal matching rate for the expansion population, the
Medi-Cal coverage expansion to former foster youth and
low-income adults, the extension of full scope benefits to
pregnant women, the addition of the EHB to Medi-Cal coverage,
the elimination of the deprivation and asset tests, and the
program simplification provisions. Los Angeles County writes
in support that there are 2.2 million uninsured people in Los
Angeles County, and half of these individuals will be eligible
for Medi-Cal benefits, including many of the 240,000
participants in its LIHP.
7.Policy Issues:
a.Policy issues still under discussion with Administration.
Discussions between the Legislature and the Administration on
this bill and SB X1 1 (Hernandez and Steinberg), which are
identical measures, are on-going. Several of the major policy
issues being discussed are the benefit package to be provided
to the expansion population and the current Medi-Cal
population, the scope of benefits to be provided to pregnant
women in Medi-Cal (discussed below in b), and whether to rely
self-attestation and electronic verification of income and
residency (discussed below in c).
In addition, the Administration has proposed amendments to the
expansion bills that include two provisions to cease
implementation of the Medi-Cal-related changes in the ACA to
the extent allowed by federal law if the federal matching
assistance percentage (FMAP) is reduced or eliminated (the
FMAP is the percentage of each Medi-Cal dollar spent that is
reimbursed by federal funds; the expansion population is 100
percent federally funded in the first three years and
AB X1 1| Page
19
eventually phases down to 90 percent in 2020 and thereafter).
The second provision would provide DHCS with the authority to
reinstitute the semi-annual status report requirement that was
in place and "some or all" of the eligibility determination
and redetermination processes and procedures there were in
place on the date the ACA was enacted, to the extent allowed
by federal law.
b.Coverage for pregnant women in Medi-Cal and the Exchange. AB
X1 1 would expand the scope of benefits provided to pregnant
women enrolled in Medi-Cal, to the extent required by federal
law, to require coverage for all "pregnancy-related services,"
defined to mean, at minimum, all services provided under the
state Medicaid Plan, effectively providing the pregnant women
with full Medi-Cal coverage. However, prior to becoming
pregnant and becoming eligible for Medi-Cal pregnancy benefits
under existing law, women in this income eligibility range may
be eligible for coverage in the Exchange, and eligible for an
advance payment of the premium tax credit and cost-sharing
reductions. If these women are enrolled in the Exchange, they
could keep their coverage after the end of their pregnancy, as
compared to potentially losing eligibility for Medi-Cal
coverage.
In lieu of having eligible pregnant women drop Exchange coverage
and move into Medi-Cal, the Administration has proposed a
"pregnancy wrap" whereby pregnant women with Exchange coverage
would keep their Exchange plan as primary coverage, but would
also receive services not typically covered by Exchange plans
but covered by Medi-Cal for pregnant women (such as dental
care). In addition, under the Administration's proposal,
Medi-Cal would pay for premiums or cost-sharing (co-payments,
co-insurance or deductibles) a woman owed for the Exchange
plan. However, not all women would be able to receive this
option, either because of their immigration status or because
enrollment is limited to annual and special enrollment periods
for women not already enrolled in the Exchange. One advantage
of the Administration's proposal is that women could keep
their Exchange coverage and preserve continuity of care but
still receive enhanced benefits and the state would pay for
their premiums and cost-sharing. In addition, the state would
achieve General Fund savings because Medi-Cal would only cover
the services not covered by the Exchange plan. This option is
still under discussion with stakeholders and the
Administration.
AB X1 1 | Page 20
c.Implementation of ACA option for attestation of
application-related information. One of the policy goals of
the ACA was to make the Medicaid eligibility determination
process simpler. Federal regulations implementing the ACA
allow the agency determining eligibility (counties in
California) to accept attestation of information needed to
determine the eligibility of an individual for Medicaid
without requiring further information (including
documentation), with the exception of citizenship status and
immigration. Current state law authorizes, but does not
require, state insurance affordability programs (such as
Medi-Cal) to accept self-attestation with respect to
information needed to determine eligibility, to the extent
permitted by state law and federal law.
AB X1 1 would require state health subsidy programs to accept an
individual's attestation, without further documentation, for
age, date of birth, family size, household income, state
residency, pregnancy, and any other applicable eligibility
criteria for which attestation is permitted by federal law.
The purpose of the self-attestation provision in AB X1 1 is to
implement the ACA option, to reduce program administrative
costs, and to move the state toward electronic verification
and away from the existing burdensome paper-based application
process. Allowing an individual to self-attest his or her
state residency and income when applying for Medi-Cal are
outstanding issues in discussions with the Administration.
d.Eligibility verification and reasonably compatible. If
eligibility information obtained through the state's
verification process is reasonably compatible with the
information provided by an individual applying for coverage,
it must be used to determine eligibility without requesting
further information. The definition of reasonably compatible
is left to the states. This bill permits self-attestation
where allowed under federal law, but does not yet include the
specifications of a verification plan, such as what will be
considered reasonably compatible and how discrepancies are to
be resolved. Additional amendments are needed to include these
details.
e.MAGI Conversion. Beginning January 1, 2014, the FMAP for a
state that expands its Medicaid program to include newly
eligible adults under the ACA will be increased to 100 percent
for 2014 through 2016; decreasing to 95 percent for 2017; 94
AB X1 1| Page
21
percent for 2018; 93 percent for 2019; and 90 percent for 2020
and all subsequent years. On April 2, 2013, CMS issued
regulations providing guidance to states on the increased FMAP
rates and the threshold methodologies states will be required
to use to document claims for the increased FMAP. According
to CMS, it is designed to provide a simplified methodology
that does not require states to maintain two sets of
eligibility rules or to solicit information from applicants
that is not necessary to determine eligibility. Further
amendments to this bill may be required to provide authority
to DHCS to implement the methodology.
f.Hospital presumptive eligibility (PE). Beginning in January
2014, the ACA allows hospitals that provide Medicaid services
to begin making PE decisions giving temporary Medicaid (and/or
CHIP) coverage to children, pregnant women, parents and adults
covered under the Medicaid expansion. Before the ACA, PE was
only available as a state option for children and pregnant
women. Additional amendments are needed to include the PE
option in state law.
g.Additional federal options. On May 17, 2013, CMS issued a
State Health Official/State Medicaid director letter that
outlined five specific targeted enrollment strategies and
provides guidance for states interested in adopting them:
i. Implementing the early adoption of MAGI-based
rules. During the 2013 open enrollment period for
coverage in the Exchange or an insurance affordability
program (October 1, 2013 to December 31, 2013),
eligibility for certain applicants will be determined
using MAGI-based methodologies for coverage scheduled
to start on January 1, 2014. In addition, during this
period, people applying for or renewing Medicaid for
coverage in 2013 will also need to have their
eligibility assessed based on existing Medicaid rules.
As a result, states will need to be able to determine
Medicaid eligibility under both MAGI-based rules and
current rules during this limited period of time. To
avoid having to operate two sets of rules for
children, parents and caretaker relatives, pregnant
women and other non-disabled, non-elderly adults that
may be eligible for Medicaid or CHIP enrollment during
this period, CMS is offering states the opportunity to
begin using the new MAGI-based methodology for these
AB X1 1 | Page 22
populations effective October 1, 2013, to coincide
with the start of the open enrollment period.
ii. Extending the Medicaid renewal period so that
renewals that would otherwise occur during the first
quarter of calendar year (CY) 2014 (January 1, 2014 -
March 31, 2014) occur later. Under the ACA, a person
enrolled in Medicaid on or before December 31, 2013,
is prohibited from being found ineligible solely
because of the application of MAGI and new household
composition rules before March 31, 2014, or the
individual's next regular renewal date, whichever is
later. To adhere to this policy, states will need to
be able to apply both pre-MAGI rules and MAGI rules to
anyone whose renewal date falls between January 1 and
March 31, 2014. To avoid the need to operate two sets
of eligibility rules during this period of time and to
limit the risk of errors, CMS is offering states the
option to extend the Medicaid renewal period, pushing
the date of the renewals scheduled during the
transition period beyond March 31, 2014, to enable
states to begin applying only MAGI-based eligibility
rules to all regularly scheduled renewals beginning on
April 1, 2014.
iii. Enrolling individuals into Medicaid based on
Supplemental Nutrition Assistance Program (SNAP)
eligibility. Generally, in order to qualify for SNAP
(known as CalFresh in California), a household's gross
income cannot exceed 130 percent of the federal
poverty level, and the income of most SNAP
participants is lower. In addition, the household
income data used to determine SNAP eligibility must be
rigorously verified and are often no more than 6
months old at any point. Many Medicaid programs
already consider income data from SNAP to be reliable
and use it to renew Medicaid eligibility. In addition,
some states use SNAP data to make initial Medicaid
determinations for children under the Express Lane
Eligibility option.
Recent studies by both the Center on Budget and Policy
Priorities and the Urban Institute find that, despite
the differences in household composition and
income-counting rules, the vast majority of
non-elderly, non-disabled individuals who receive SNAP
AB X1 1| Page
23
benefits are very likely also to be financially
eligible for Medicaid. Based on these analyses, CMS is
offering states the opportunity to streamline the
enrollment into Medicaid of these non-elderly,
non-disabled SNAP participants. Enrolling SNAP
participants in Medicaid without having to conduct a
separate MAGI-based income determination can help ease
the administrative burdens states may experience as
they continue to transition to the new eligibility
system and process what is likely to be an increased
number of applications. In addition, in states that
are creating new health care eligibility systems that
they plan to link to their human services systems,
this strategy provides an interim "safeguard" that
avoids the duplicative and unnecessary effort
associated with state eligibility workers having to
enter the same information into two different systems.
iv. Enrolling parents into Medicaid based on
children's income eligibility. In states implementing
the Medicaid eligibility expansion, a large number of
parents whose children are already enrolled in
Medicaid are likely to meet the MAGI-based income
eligibility standards. To assist states in the initial
phases of implementing new eligibility and enrollment
systems, CMS is offering states the opportunity to
facilitate the Medicaid enrollment of parents whose
children are currently enrolled in Medicaid and who
are likely to be Medicaid-eligible. This opportunity
is available for a temporary period and could remain
in effect until such time as the initial influx of
applications is addressed or the state is able to
handle the demands associated with the new system most
efficiently.
v. Adopting 12-month continuous eligibility for
parents and other adults. Since 1997, states have had
the option to guarantee a full year of coverage to
children in their Medicaid and CHIP programs by
providing 12 months of continuous eligibility. Under
this option, children retain coverage for 12 months
regardless of changes in family circumstances, such as
income or household size. For children, 12-month
continuous eligibility means a stable source of health
insurance with no disruptions in necessary ongoing
AB X1 1 | Page 24
care. For states, the option can mitigate the problems
associated with "churning," the enrollment and
re-enrollment of eligible people when they lose
coverage due to procedural reasons or slight
fluctuations in income. As of January 2013, 32 states
have adopted 12-month continuous eligibility in their
Medicaid or CHIP programs for children, with 23 states
implementing the option in both programs. States have
the opportunity to adopt 12-month continuous
eligibility for parents and other adults. This will
afford adult beneficiaries and states the same
advantages derived when the option for children is
implemented. In addition, coverage will be better
coordinated for whole families, especially in states
that otherwise would have 12-month continuous
eligibility only for children. Otherwise, in these
states, parents might have to renew their coverage
more frequently than children.
CMS anticipate that the five strategies described will
provide opportunities to ensure that eligible individuals
get access to Medicaid coverage in a simple and streamlined
manner, and that states should find the strategies helpful
in achieving program efficiencies and in relieving some of
the pressures associated with getting new systems up and
running. CMS also states that enhanced federal matching
funds (at a 90 percent rate for development and a 75 percent
rate for operations) are available to help cover the costs
of any systems changes that may be needed to undertake these
activities, as long as those systems meet applicable
requirements. The author may wish to consider including some
or all of these recently outlined options.
h.Medi-Cal plan choice. CalHEERS is developing online tools to
assist consumers with choosing a health plan based on
extensive research and testing by organizations with
experience in consumer behavior and preferences. However,
individuals applying through CalHEERS who are eligible for
Medi-Cal will initially not be able to choose a plan through
CalHEERS. Medi-Cal currently uses a Health Care Options (HCO)
process, through which the individual receives a paper choice
form to pick a Medi-Cal managed care plan. If the individual
does not choose a plan and is in a mandatory enrollment
county, they are defaulted into a plan. Additional amendments
are needed to reconcile the existing HCO process with the new
simplified and streamlined enrollment process and to allow a
AB X1 1| Page
25
Medi-Cal or CHIP eligible individual to be able to choose a
plan at the point of application, either through the Exchange
or through county social services agencies.
i.Regulations versus all plan letters and all county letters.
The Administrative Procedures Act (APA) requires every
department, division, office, officer, bureau, board or
commission in the executive branch of state government to
follow the rulemaking procedures of the APA and regulations
adopted by the Office of Administrative Law (OAL), unless
expressly exempted by statute from some or all of these
requirements. The APA requirements are designed to provide the
public with a meaningful opportunity to participate in the
adoption of regulations or rules that have the force of law by
California state agencies, and to ensure the creation of an
adequate record for the public, OAL and judicial review. There
are provisions for adoption of emergency regulations with an
abbreviated process. DHCS has regularly requested to be exempt
from these requirements and has sought legislative authority
to adopt policy changes by means of all-county letters,
provider bulletins, all-plan letters or other similar
instructions. In the process of identifying the changes that
must be made to current law to conform to the ACA, it became
apparent that this lack of a coherent statutory and regulatory
framework, makes it very difficult to determine what the law
is. This bill attempts to codify, as much as possible,
provisions required to implement the ACA. This includes
codifying or revising existing regulations or superseding
policy adopted without regulation. The extent to which
guidance to implement the ACA is done through regulation
versus all-plan or all-county letters is still under
discussion.
PRIOR VOTES :
Assembly Health: 13- 6
Assembly Appropriations:12- 5
Assembly Floor: 54- 22
SUPPORT AND OPPOSITION :
Support: AARP
Advancement Project
American Cancer Society Cancer Action Network
American Federation of State, County and Municipal
Employees, AFL-CIO
American Heart Association
AB X1 1 | Page 26
The Arc and United Cerebral Palsy California
Collaboration
Asian Pacific American Legal Center
Autism Speaks
Binational Center for the Development of Oaxacan
Indigenous Communities
Cal-Islanders Humanitarian Association
California Association of Addiction Recovery Resources
California Association of Alcoholism and Drug Abuse
Counselors
California Association of Public Hospitals and Health
Systems
California Black Health Network
California Chiropractic Association
California Family Resource Association
California Hospital Association
California Immigrant Policy Center
California Labor Federation
California Latino Legislative Caucus
California Medical Association
California Nurse-Midwives Association
California Nurses Association
California Pan-Ethnic Health Network
California Primary Care Association
California School Employees Association, AFL-CIO
California School Health Centers Association
California State Council of the Service Employees
International Union
California State Parent Teacher Association
California Teachers Association
Californians for Safety and Justice
Child and Family Center
Chinese Progressive Association of San Francisco
Consumers Union
County of Santa Clara Board of Supervisors
County Welfare Directors Association of California
Department of Insurance
Friends of the Family
Greenlining Institute
Guam Communications Network
Health Access California
Health Officers Association of California
Hillview Mental Health Center, Inc
Junior Blind
Latino Health Alliance
March of Dimes Foundation
AB X1 1| Page
27
National Association of Social Workers
National Health Law Program
Planned Parenthood Affiliates of California
Planned Parenthood Mar Monte
Planned Parenthood of Orange and San Bernardino
Counties
Planned Parenthood of Santa Barbara
Private Essential Access Community Hospitals
Six Rivers planned Parenthood
Street Level Health Project
United Nurses Associations of California/Union of
health Care Professionals
Urban Counties Caucus
Over 70 individuals
Oppose:None received
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