BILL ANALYSIS Ó AB 191 Page 1 Date of Hearing: April 17, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 191 (Bocanegra) - As Introduced: January 28, 2013 Policy Committee: Human ServicesVote:5 - 2 Urgency: No State Mandated Local Program: Yes Reimbursable: Yes SUMMARY This bill eliminates the CalFresh gross income test for any individual who is a member of a household that includes someone who receives, or is eligible to receive, medical assistance under the Medi-Cal program and is determined to be categorically eligible for CalFresh. Applicants, however, would still be subject to a net income test to determine benefit levels. FISCAL EFFECT 1)Based on a 2012 Mathematica Policy Research estimate, approximately 74,000 new households (227,000 individuals) would become eligible for CalFresh. However, given California's low participation rate, Mathematica's estimate assumes that only 5,000 households (9,000 individuals) will actually participate. Administrative costs for those 5,000 new cases could be up to $400,000 ($200,000 GF) per year and result in approximately $8 million in additional federal Supplemental Nutritional Assistance Program (SNAP) (CalFresh) funding. Those federal benefits would generate over $200,000 in GF revenue through increased sales taxes. 2)There are 1.2 million Medi-Cal recipients currently eligible for CalFresh but not participating in the program. If expanding categorical eligibility causes five percent of these recipients to participate in CalFresh because a barrier to participation is removed and it becomes easier to apply for and receive benefits, it would result in an additional 60,000 individuals receiving nutrition benefits. AB 191 Page 2 Administrative costs for those individuals would be approximately $1.5 million ($750,000 GF) and based on the average monthly benefit for a non-CalWORKs CalFresh case ($335.34) this bill could result in up to $80 million in additional federal SNAP (CalFresh) funding. Those federal benefits would generate close to $2 million in GF revenue through increased sales taxes. 3)In 2014, approximately 2 million cases will be added to the Medi-Cal caseload as a result of federal healthcare reform. Of those cases, a portion will be eligible for CalFresh under this legislation. If 10,000 of those cases participate in the CalFresh program, administrative costs for the new cases would be $787,000 ($393,000 GF). Those cases would bring in an additional $40 million in federal CalFresh benefits. The federal benefits would generate over $1 million in GF revenue through increased sales taxes. 4)The California Food Assistance Program (CFAP) provides nutrition benefits for those recent, legal immigrants who are ineligible for federal SNAP benefits. This program is funded with state General Fund. It is assumed that approximately 750 new cases will participate in CFAP due to this legislation. The total annual GF costs for those cases (both benefits and administration) will be approximately $3 million. The nutrition benefits provided to those families will generate approximately $80,000 in state sales tax revenue. COMMENTS 1)Purpose . The intent of this legislation is to utilize an enrollment strategy that streamlines CalFresh eligibility for Medi-Cal recipients by removing the gross income test for CalFresh for families that have at least one person who has already been deemed eligible for Medi-Cal. Further, once enrolled in CalFresh, any children in those families would be automatically certified for free school meals. The author notes, however, that families will still be subject to a net income test to determine both their eligibility and their benefit level. Generally, families with high housing, healthcare or child care costs would benefit from this legislation. The author argues that connecting CalFresh eligibility to AB 191 Page 3 Medi-Cal eligibility in this way helps ensure that low-income households can support healthy living because nutrition assistance would now be offered hand-in-hand with Medi-Cal, thus connecting nutrition as a key component of proper healthcare. Medi-Cal currently reaches 7 million low-income Californians. The sponsors, the California Food Policy Advocates (CFPA) note that this legislation provides an opportunity to more easily connect those recipients with CalFresh and subsequently, free school meals. In 2014, with the implementation of health care reform, an additional 2 million people will enroll in Medi-Cal; aligning program eligibility now will have a significant impact on current participants and will ensure that new enrollees also receive these federal nutrition benefits. 2)Background . CalFresh eligibility is based on several factors including income, disability, age, and citizenship status. The maximum allowable gross income is 130% of the Federal Poverty Guidelines (FPG). Households with elderly or disabled members are not subject to gross income criteria but must have a net monthly income at or below the FPG. Other households must meet both gross and net monthly income tests. Federal law gives states options to improve access to nutrition assistance. Families authorized to receive any benefit or service funded by the federal Temporary Assistance for Needy Families (TANF) block grant can be deemed categorically eligible for SNAP benefits and do not need to make a separate application and meet additional eligibility or paperwork requirements. While categorical eligibility based upon receipt of cash aid was long a feature of federal policy, in 1999 the United States Department of Agriculture (USDA) issued guidance under the 1996 welfare reform law and expanded the scope of the option to include receipt or eligibility for services as well as cash. In addition, once eligible for food stamps, the federal Child Nutrition and WIC Reauthorization Act of 2004 provides that children are automatically certified to receive free school meals. In 2008, California used categorical eligibility to successfully remove the asset test from CalFresh (AB 433 (Beall), Chapter 625, Statutes of 2008). Other recent legislation removed additional barriers to CalFresh by, for AB 191 Page 4 example, changing from quarterly to semi-annual reporting, and eliminating finger imaging requirements, AB 6 (Fuentes), Statutes of 2011. 3)Food Stamps and Hunger . According to research by the University of California at Los Angeles, over 2.2 million Californians cannot always afford enough food and almost one-third, or 658,000 of these adults experience episodes of hunger. According to the US Department of Agriculture, only about half of eligible food stamp recipients participate in the program due to programmatic and administrative barriers. California ranks last in the nation with a participation rate of 39% by eligible people. 4)School Meals Program . School meal programs are also underutilized. Only half of income eligible students receive lunch at school, and 18% receive school breakfasts. Some low-income children with incomes between 133% and 185% of the federal poverty level, currently ineligible for food stamps, may not receive school meals because their families cannot afford the 40 cents required for a reduced price lunch and 30 cents for breakfast. The children in new food stamps households would be eligible for free school meals. 5)Additional Federal Child Welfare Services Funds. The federal government awards funding to states through the Promoting Safe and Stable Families (PSSF) program that can be used in the Child Welfare Services program for efforts to reduce the incidences of child abuse and neglect, and to promote stability and permanency for at-risk children within families. The federal government sets a capped amount for funding and then awards those funds to states and territories based upon the number of children in each state who are receiving food stamps. Despite serving over 25% of the national child welfare caseload, California receives less than 15% of the federal PSSF funds because of the low food stamps participation rate. To the extent this legislation increases food stamps participation among families with children, California's share of the PSSF funding should increase. 6)Related Legislation . a) AB 1560 (Fuentes), 2012, a virtually identical bill, was held on the Senate Appropriations Committee Suspense File. AB 191 Page 5 b) AB 433 (Beall), Statutes of 2008, originally included a proposal to make Medi-Cal recipients categorically eligible for CalFresh. That bill was amended to eliminate the language pertaining to the gross income test and retain the language removing the asset test for CalFresh applicants. c) AB 2205 (Evans), 2006, included Categorical Eligibility to remove the asset test and raise the income threshold for Medi-Cal recipients in order to boost CalFresh participation. That bill was vetoed due to cost concerns. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081