BILL ANALYSIS �
AB 1 X1
Page 1
( Without Reference to File )
CONCURRENCE IN SENATE AMENDMENTS
AB 1 X1 (John A. P�rez)
As Amended June 14, 2013
Majority vote
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|ASSEMBLY: |54-22|(March 7, 2013) |SENATE: |28-8 |(June 15, |
| | | | | |2013) |
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Original Committee Reference: HEALTH
SUMMARY : Enacts statutory changes necessary to implement the
coverage expansion, eligibility, simplified enrollment benefits,
and retention provisions of the federal Patient Protection and
Affordable Care Act of 2010 as amended by the Health Care and
Education Reconciliation Act of 2010 (collectively referred to
as the Affordable Care Act or ACA) related to the Medicaid
Program (Medi-Cal in California) and the California Children's
Health Insurance Program. Contains the provisions of the ACA
relating to Medi-Cal benefits. Makes the enactment of this bill
contingent upon enactment of SB 1 X1 (Ed Hernandez).
Specifically, this bill :
1)Expands Medi-Cal coverage, effective January 1, 2014, to
adults who are under age 65, not pregnant, and not otherwise
currently eligible for Medi-Cal coverage, with incomes up to
133% of the federal poverty level (FPL) plus a 5% income
disregard and provides full-scope Medi-Cal benefits, as
supplemented with mental health and substance abuse disorder
benefits.
2)Requires the transition of persons currently enrolled in a
Low-Income Health Program (LIHP) under California's Bridge to
Reform Section 1115(b) waiver to the new Medi-Cal expansion
program in accordance with the state transition plan that was
approved by the federal Centers for Medicare and Medicaid
Services.
3)Converts Medi-Cal income eligibility to a Modified Adjusted
Gross Income (MAGI)-based standard, effective January 1, 2014,
for most categories, except seniors and people who are blind
or disabled and prohibits use of an asset or resources test.
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4)Establishes a minimum MAGI eligibility level at 133% FPL, plus
a standardized 5% income disregard, in effect setting the 133%
FPL standard at 138%.
5)Simplifies and streamlines, effective January 1, 2014, the
Medi-Cal application, eligibility and redetermination process
by requiring the Department of Health Care Services (DHCS) to
convert the existing income eligibility standard to a
MAGI-based income equivalency level (as defined in the
Internal Revenue Code), as applied to families, children, and
non-disabled adults under age 65.
6)Repeals the requirement that adults file mandatory semiannual
status reports regardless of whether there have been any
changes in income, family size, or other factors that affect
continued eligibility for the MAGI-based categories and
establishes annual eligibility determinations, unless there
has been a change in circumstances.
7)Eliminates the deprivation requirement and any asset or
resources limits for the MAGI population.
8)Repeals the requirement of an annual reaffirmation and
provides that Medi-Cal eligibility is to be renewed annually
and no more frequently than once every 12 months for
individuals whose financial eligibility is determined by use
of the MAGI-based standard.
9)Revises the process for Medi-Cal eligibility redetermination
by adding requirements, as specified in federal regulations,
that information useful to verifying financial eligibility,
such as wages or enrollment or eligibility in other similar
income-based programs, should be obtained from other state and
federal agencies or electronically from federal and state
databases prior to contacting the individual.
10)Revises procedures in the case of an incomplete application
to require additional attempts to contact the individual and
extends from 30 to 90 days the period for rescission of a
termination if the individual submits a completed form.
11)Requires, in the case of an individual establishing
eligibility on the basis of disability, the county to consider
blindness and disability to be continuing until a
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determination is made otherwise, as specified.
12)Defines caretaker relative as a relative of a dependent child
by blood, adoption, or marriage with whom the child is living,
who assumes primary responsibility for the child's care, and
is one of a specified list of relatives such as parent,
stepparent, grandparent, sibling, cousin, aunt or uncle, or
the spouse or registered domestic partner of one of the listed
relatives.
13)Makes other conforming and technical changes.
The Senate amendments :
1)Delete the requirement that the maximum eligibility level is
to be established at a level that is not less than the
equivalent amount in effect on March 23, 2010, to ensure that
any population eligible for Medi-Cal, the Access for Infants
and Mothers Program (AIM), or the Healthy Families Program
does not lose coverage and instead require DHCS to establish
thresholds using financial methodologies as prescribe by the
ACA and implementing guidance, require DHCS to convene
stakeholders, and report to the Legislature regarding the
results of the converted standards.
2)Require, for purposes of determining eligibility using the
MAGI-based standard, individuals less than 19 years of age, or
in the case of full-time students, individuals up to age 21 to
be included in the household.
3)Delete provisions that, commencing January 1, 2014, provides,
to the extent federal financial participation (FFP) is
available, an adolescent who is in foster care on his or her
18th birthday to be deemed eligible until age 26.
4)Delete the requirement that all state health subsidy programs,
(Medi-Cal, AIM, enrollment in a qualified health plan through
the California Health Benefit Exchange (Exchange), now known
as Covered California, and a Basic Health Plan, if there is
one) accept self-attestation, instead of requiring production
of documentation for income, state residency, and any other
applicable criteria permitted under the ACA.
5)Allow updated contact information obtained by a Medi-Cal
managed care plan (MCP) to be provided to the county as
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specified.
6)Revise and simplify the application and the redetermination
process, effective January 1, 2014.
7)Revise the provisions relating to the transition of a person
enrolled in a LIHP to a Medi-Cal MCP or fee-for-service
Medi-Cal.
8)Delete the procedures to be used for cases of fluctuating
income or family size to ensure that eligible individuals do
not lose or are denied eligibility.
9)Delete provisions relating to establishing residency.
10)Require DHCS to verify the accuracy of information supplied
in an application by obtaining information that is available
electronically, effective January 1, 2014, as specified.
Require DHCS to make the verification plan public, including
updated information on the use of data sources.
11)Establish standards for when information provided by the
individual is reasonably compatible with information obtained
through electronic sources, effective January 1, 2014.
12) Delete the provisions relating to an authorized
representative.
13)Provide that DHCS is to retain or delegate the authority to
perform Medi-Cal eligibility determinations, effective October
1, 2013, through July 1, 2015, as specified. Provide a
process for the establishment of Medi-Cal eligibility
processed by the California Healthcare Eligibility,
Enrollment, and Retention System (CalHEERS), authorize
CalHEERS to provide information regarding Medi-Cal MCP
choices.
14)Require the Exchange to establish workflow transfer protocol
to determine if a member of an applicant's household is
potentially eligible for Medi-Cal and provides for the
transfer of the applicant to the county, as appropriate,
effective October 1, 2013. Provide for procedures for
households that appear to include both individuals who appear
to be potentially eligible and not potentially eligible for
Medi-Cal. Provide for the county to be responsible for final
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determinations and notice.
15)Establish procedures for transfer or establishment of
eligibility of individuals who are eligible for Medi-Cal on a
basis other than MAGI or who are eligible for Exchange based
coverage, effective October 1, 2013.
16)Allow DHCS and the Exchange to electronically determine
eligibility for Medi-Cal of an applicant who applies using an
electronic or paper application processed by CalHEERS after an
assessment and verification of potential eligibility, using
only the information initially provided online or through the
written application and using the MAGI-based income standard,
without further staff review to verify the accuracy. Provide
the county of residence is to be responsible for
determinations and ongoing case management for the Medi-Cal
program in other cases.
17)Provide for performance standards and an assessment of the
efficacy of the operational parameters and customer service
centers operated by the Exchange and the county customer
service centers.
18)Establish, unless otherwise provided, the county of residence
as responsible for eligibility determinations and ongoing case
management for the Medi-Cal program and require DHCS, the
Exchange, and each county consortia to enter into an
interagency agreement specifying operational parameters and
performance standards, in consultation with specified
interested stakeholders and requires, prior to October 1,
2014, DHCS to review, in consultation with specified
stakeholders, the efficacy of the enrollment procedures
established by this bill.
19)Revise provisions related to informing an individual who is
eligible for Medi-Cal regarding his or her choices with regard
to Medi-Cal managed care; require those assisting a person to
pick a plan through CalHEERS to undergo training, effective
January 1, 2014, as specified.
20)Delete provisions that provide for premium assistance to
qualified immigrants.
21)Require specified data reporting, make legislative findings
and declarations and state it is the intent of the Legislature
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to ensure full implementation of the ACA, including the
Medi-Cal expansion for individuals with incomes below 133% of
the FPL, so that millions of uninsured Californians can
receive health care coverage.
22)Provide that implementation of the expansion of Medi-Cal to
citizens and legal immigrants between the ages of 19 and 65,
who are not eligible for other programs, is contingent upon:
a) if the federal medical assistance percentage (FMAP) payable
to the state under the ACA for the optional expansion of
Medi-Cal benefits to adults is reduced below 90%, that
reduction is to be addressed in a timely manner through the
annual state budget or legislative process; and, b) if prior
to January 1, 2018, the FMAP payable to the state under the
ACA for the optional expansion of Medi-Cal benefits to adults
is reduced to 70% or less, the implementation of the optional
expansion is to cease 12 months after the effective date of
the federal law or other action reducing the FMAP.
FISCAL EFFECT : According to the Senate Appropriations
Committee, based on an earlier version:
1)The Mandatory Expansion. By simplifying the process for
determining eligibility for Medi-Cal and enrolling program
participants, this bill will increase enrollment in the
program. The Legislative Analyst's Office (LAO) projects that
the total costs due to increased enrollment of people already
eligible for the program will be about $620 million in 2014-15
($290 million General Fund (GF) at traditional cost sharing),
rising to about $1.1 billion in 2020-21 ($460 million GF).
Note that these costs will occur due to changes mandated by
federal law.
2)The Optional Expansion. By expanding Medi-Cal eligibility to
all childless adults under age 65 with household income below
138% of FPL, this bill substantially increases the eligible
population, increasing program costs. Under the ACA, FFP will
be substantially higher than current practice, starting at
100% and declining to 90% by 2020 and thereafter.
a) State Medi-Cal health care costs. The LAO projects
that, under reasonable assumptions, about 1.8 million
additional people will be eligible for Medi-Cal under this
bill and that about 65% of eligible persons will enroll in
the program. In 2014-15, total projected costs for medical
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services under the optional expansion are projected to be
about $3.5 billion per year, entirely funded by the federal
government. In 2020-21, the total costs for medical
services under the optional expansion are projected to be
$6 billion per year, including about $605 million per year
in GF costs (based on the ultimate 90% federal matching
rate for the optional expansion population).
b) State Medi-Cal administrative costs. In addition to the
direct costs to provide medical services to the expansion
population, there will be administrative costs to make
eligibility determinations and enroll beneficiaries in
Medi-Cal. Due to the changes to eligibility and enrollment
processes under this bill, per capita administrative costs
associated with the expansion population may be lower than
current per capita administrative costs. Administrative
costs are subject to the standard 50% federal matching
rate. By 2020-21, state GF administrative costs are likely
to be in the low tens of millions per year.
c) State savings in other health care programs and in
corrections. The LAO also indicates that the state will
see substantial savings in other state health-subsidy
programs, such as the Genetically Handicapped Persons
Program, the Breast and Cervical Cancer Treatment Program,
and other programs. As Medi-Cal eligibility increases,
some participants in these state programs will be eligible
for full scope health benefits from Medi-Cal and may no
longer need services from these specialized programs.
There is a good deal of uncertainty about the impact of the
Medi-Cal expansion on these programs, but the LAO indicates
that state savings could be in the low hundreds of millions
per year. In addition, the state could experience GF
savings up to $60 million per year due to the shift of
certain outpatient medical costs for inmates to Medi-Cal
under the expansion.
d) County health care savings. Under current law, county
governments are responsible for providing certain health
care services to medically indigent adults who do not
qualify for other public health care programs. Under the
proposed expansion of Medi-Cal, a portion of that
population would transition from county responsibility to
the Medi-Cal program. While there is a great deal of
uncertainty regarding how many people would transition from
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county-provided health care coverage to Medi-Cal and the
cost savings to the counties, the LAO indicates that the
counties are likely to realize cost savings in the range of
$800 million to $1.2 billion per year. It is important to
note that under this bill, all county savings would be
retained by the counties and would not be shared with the
state.
3)Policies that will impact enrollment and costs. In addition
to the general uncertainty in projecting future Medi-Cal
enrollment levels and health care costs, there are certain
policy issues addressed by this bill that are likely to have
impacts on enrollment levels or per capita costs. The fiscal
impacts of these policy choices are not fully known at this
time. Key policy choices made in this bill include:
a) The benefit package provided to the expansion
population. Federal law provides some flexibility to the
state to design a benefit package for the expansion
population (although the benefit package must provide the
essential health benefits (EHBs) required under the ACA).
This bill requires DHCS to seek federal approval to provide
the same benefit package to the expansion population as is
provided under the current Medi-Cal population, as well as
providing coverage required under the EHB package. In
addition, this bill requires the existing Medi-Cal
population to also receive the same EHB benchmark coverage.
In general, the existing Medi-Cal benefit package is
broader than the EHB benchmark plan the state has selected
(the Kaiser Small Group plan), particularly in coverage of
long-term services and supports. However, the Kaiser plan
provides some additional benefits such as some acupuncture
services and more generous substance abuse benefits.
The fiscal projections above assume that the expansion
population receives the existing Medi-Cal benefit package.
There may be additional costs, for both the existing
Medi-Cal eligible population and the expansion population,
by requiring both populations to receive benefits
equivalent to the Kaiser benchmark plan.
b) Self-attestation by applicants. Federal law and
regulations allow states to accept self-attestation by
applicants of certain information, such as age, date of
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birth, household income, and state residency (not
immigration status). This bill requires DHCS to accept
self-attestation of this information. By allowing
applicants to self-attest (rather than requiring them to
provide documentation) this provision simplifies the
application process and is likely to increase enrollment.
c) Full scope pregnancy-related coverage. Under current
state law, pregnant women with incomes up to 200% of FPL
are eligible for Medi-Cal. Some of these beneficiaries are
eligible for full-scope benefits during pregnancy, while
other beneficiaries are only entitled to pregnancy-related
benefits, depending on a variety of eligibility factors.
Draft federal regulations indicate that Medicaid programs
must provide full scope benefits to pregnant women, unless
the federal government specifically authorizes states to
limit such benefits. This bill requires that all pregnant
women enrolled in Medi-Cal (up to 200% of FPL) are to be
provided with full scope benefits, unless approval is
granted by the federal government to provide lesser
benefits. (The author indicates that the intent of this
bill is to require full-scope benefits to be provided to
all pregnant women enrolled in Medi-Cal.)
d) Elimination of the existing deprivation requirement.
Under current state law, the Medi-Cal program covers
children and caretaker relatives who are "deprived" of full
parental support (i.e., one parent is absent, deceased,
disabled, unemployed, or underemployed). Federal law allows
states to eliminate this requirement and this bill does so.
It is not clear whether eliminating this requirement would
actually increase the number of eligible individuals for
the program.
e) Projection of annual income. Federal guidance to date
indicates that projected annual income (rather than an
applicant's current monthly income) can be used to
determine income eligibility. This bill requires DHCS to
allow applicants to use projected annual income to
determine income eligibility. The counties (who currently
perform eligibility determinations) have indicated that
they already allow some projection of income when making
eligibility determinations, so it is not clear whether this
would actually increase overall enrollment in Medi-Cal.
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COMMENTS : On January 24, 2013, Governor Brown issued a
proclamation to convene the Legislature in Extraordinary Session
to consider and act upon legislation necessary to implement the
ACA in: 1) the areas of California's private health insurance
market, rules and regulations governing the individual and small
group market; 2) California's Medi-Cal program and changes
necessary to implement federal law; and, 3) options that allow
low-cost health coverage through Covered California,
California's Exchange, to be provided to individuals who have
income up to 200% of the FPL. This bill, along with SB 1 X1 (Ed
Hernandez), address the second of the three areas identified in
the Governor's proclamation, that is to adopt the provisions of
the ACA related to changes in Medi-Cal. Specifically, this bill
adopts the state option of expanding Medi-Cal coverage to
non-disabled citizen and qualified resident childless adults,
between the ages of 19 and 65 who are not currently eligible for
other full-scope Medi-Cal programs and provides a full scope
benefit package, as allowable under federal law. This category
is limited to those with income under 138% of the FPL and the
person must meet other citizenship and immigration status
requirements. This bill also enacts the ACA requirement that
the state Medicaid program extend coverage to former foster
youth until age 26, without regard to income or assets. The ACA
establishes a new simplified income standard for families,
children and the new expansion population. It does not apply to
seniors or person with disabilities. This bill includes
provisions necessary to convert to the new MAGI methodology and
income standard. Finally, this bill includes a number of
provisions that implement the goal of the ACA of reducing the
number of uninsured by creating a continuum of coverage options
for individuals with family incomes up to 400% FPL, streamlining
and simplifying eligibility determinations and increasing
reliance on electronically available data.
According to a model of California insurance markets known as
the California Simulation of Insurance Markets, 5.6 million
Californians were without health insurance in 2012 or 16% of the
population under age 65. A recent study estimates that when
California implements the Medi-Cal provisions, more than 1.4
million of these individuals will be newly eligible, of which
between 750,000 and 910,000 are expected to be enrolled at any
point in time by 2019. This study, "Medi-Cal Expansion under
the Affordable Care Act: Significant Increase in Coverage with
Minimal Cost to the State," published by UC Berkeley Center for
Labor Research and Education and UCLA Center for Health Policy
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Research in January 2013, also finds that about 2.5 million
Californians are already eligible for Medi-Cal but not enrolled
and between 240,000 and 510,000 of them are expected to be
enrolled at any point in time by 2019 as a result of
implementing the ACA. According to this report, most of the
increase will happen regardless of the expansion due to the
other mandatory provisions such as the individual minimum
coverage requirements, simplified eligibility and enrollment
processes and improved awareness of coverage.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
FN: 0001212