BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 720 AUTHOR: Skinner AMENDED: May 24, 2013 HEARING DATE: June 19, 2013 CONSULTANT: Bain SUBJECT : Inmates: health care enrollment. SUMMARY : Requires each county to designate an individual or agency to complete and submit an application for a health insurance affordability program application for individuals detained in county jail for at least 72 hours who appear potentially eligible for Medi-Cal, the Healthy Families Program, or federally subsidized coverage in the California Health Benefit Exchange. Prohibits detained individuals who are currently enrolled in the Medi-Cal program from being terminated from Medi-Cal coverage due to their detention unless required by federal law, or they become ineligible. Existing law: 1.Establishes the Medi-Cal program, administered by Department of Health Care Services (DHCS), which provides comprehensive health benefits to various low-income individuals. 2.Requires, under the federal Patient Protection and Affordable Care Act (ACA), (Public Law 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), states to expand Medicaid coverage of adults under age 65 who are not currently eligible with incomes up to 138 percent of the FPL (at or below $15,856 in 2013 for an individual). Allows states, under the June 2012 Supreme Court decision of National Federation of Independent Business v. Sebelius, to opt-out of the Medicaid expansion required by the ACA. 3.Makes inmates of public institutions (including individuals in prison or county jails) ineligible for Medi-Cal. 4.Requires benefits provided under the Medi-Cal program to an individual less than 21 years of age who is an inmate of a public institution to be suspended on the date he or she becomes an inmate of a public institution. The suspension ends on the date the individual is no longer an inmate of a public Continued--- AB 720 | Page 2 institution or one year from the date he or she becomes an inmate of a public institution. 5.Authorizes the California Department of Corrections and Rehabilitation (CDCR) and DHCS to develop a process to maximize federal financial participation (FFP) through Medicaid for the provision of inpatient hospital services rendered to individuals who, but for their institutional status as inmates, are otherwise eligible for Medi-Cal or for the Low Income Health Program. This bill: 1.Requires each county to designate an individual or agency to complete and submit an application for a health insurance affordability program application for inmates in county jail meeting the criteria in 2) below consistent with federal requirements. Requires the jail administrator, or his or her designee, to coordinate with this individual or agency. 2.Requires the individual or agency to complete and submit an application for a health insurance affordability program on behalf of an inmate in a county jail at any time before release if both of the following conditions are met: a. The inmate has been in detention for at least 72 hours; and, b. The inmate appears potentially eligible to be enrolled in the health insurance affordability program upon release. 3.Defines a "health insurance affordability program" as a program that is one of the following: a. The state's Medi-Cal program; b. The state's children's health insurance program (CHIP), which is known as the Healthy Families Program in California; or, c. A program that makes coverage in a qualified health plan through the California Health Benefit Exchange (Covered California) with federally established advance payment premium tax credits or cost-sharing reductions. 4.Prohibits, consistent with federal regulations, individuals AB 720 | Page 3 who are currently enrolled in the Medi-Cal program from being terminated from the Medi-Cal program due to their detention unless required by federal law, or they become otherwise ineligible. 5.Requires the state to establish a process to enable counties to obtain the maximum available FFP for administrative activities related to this bill. 6.Authorizes the individual or agency in 1) above to act on behalf of an individual detained in county jail for purposes of applying, or a determination of eligibility for, a health insurance affordability program. 7.Permits DHCS to implement this bill by means of all-county letters or similar instructions, without taking regulatory action under the Administrative Procedure Act. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1.Significant state-reimbursable local administrative costs, likely in excess of $4 million, assuming a 50/50 state/federal share of costs. County jails statewide average about $86,000 per month ($1,032,000 per year). This figure includes bookings that do not result in more than 72 hours of detention, as well as multiple releases for the same person. If half of these releases require a Medi-Cal eligibility determination and an application, assuming about 30 minutes per inmate, at a cost of about $30 per hour, the annual cost would be in the range of $8 million. To the extent counties are able to access private funding, such as a recent announcement that the California Endowment will be awarding close to $20 million to groups assisting in the implementation of the Affordable Care Act, state costs could be considerably reduced. 2.To the extent this bill results in providing Medi-Cal services to individuals who might otherwise not avail themselves of the program, the cost in most cases will be fully paid by the federal government for several years, assuming California adopts Medi-Cal expansion to include childless adults at 138 percent of the federal poverty level, until the reimbursement ratio settles at 90:10, federal: state. AB 720 | Page 4 PRIOR VOTES : Assembly Public Safety: 7- 0 Assembly Appropriations: 13- 4 Assembly Floor: 56- 19 COMMENTS : 1.Author's statement. AB 720 would require counties to enroll eligible inmates into the Medi-Cal program before being released. This would address one of the main barriers to re-entry by helping formerly incarcerated inmates access physical, mental health and substance abuse services. Research shows that formerly incarcerated individuals who have access to medical services upon release have reduced recidivism rates, increasing the likelihood they will become productive citizens. A 2009 CDCR report showed a 61 percent recidivism reduction for female inmates who underwent substance abuse treatment and a 29 percent reduction for male inmates who underwent such treatment. 2.Medi-Cal expansion under federal health care reform. On March 23, 2010, President Obama signed the 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 tax credits and cost-sharing subsidies offered through 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. Prior to the enactment of the ACA, adults were generally not eligible for Medi-Cal coverage unless they were low income and met categorical eligibility requirements, such as having minor children living at home, having a disability, being over the age of 65, or being pregnant. The Medicaid expansion's largest enrollment impact will be from the expansion to non-disabled childless adults with 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). Among other provisions, AB X1 1 (John A. Pérez) would implement the Medicaid expansion in California, and SB X1 1 (Hernandez and Steinberg) would AB 720 | Page 5 establish the benefit package for the expansion population and augment the benefit package for the current population. 3.Federal guidance to suspend but not terminate Medi-Cal eligibility. This bill prohibits, individuals who are currently enrolled in the Medi-Cal program from being terminated from coverage unless required by federal law, or they otherwise become ineligible. Federal guidance indicates that, while states cannot claim Medicaid funding for services furnished to people who are incarcerated or served in an Institute for Mental Disease (IMD), it is not a federal requirement that Medicaid eligibility be terminated while individuals are in jail or a mental health facility. Instead, a state may place the person in suspended status and return the individual to active Medicaid eligibility upon release from jail (including release to parole or probation) or discharge from the mental health facility. In 2004, CMS issued a State Medicaid Director Letter to clarify federal policy in this arena In this letter, CMS points out that incarceration or institutionalization: "? does not affect the eligibility of an individual for the Medicaid program. Individuals who meet the requirements for eligibility for Medicaid may be enrolled in the program before, during, and after the time in which they are held involuntarily in secure custody of a public institution or as a resident of an IMD." Instead of terminating Medicaid eligibility, CMS urged states to: "? establish a process under which an eligible inmate or [IMD] resident is placed in a suspended status so that the state does not claim FFP for services the individual receives, but the person remains on the state's rolls as being eligible for Medicaid (assuming the person continues to meet all applicable eligibility requirements). Once discharge from the facility is anticipated, the state should take whatever steps are necessary to ensure that an eligible individual is placed in payment status so that he or she can begin receiving Medicaid-covered services immediately upon leaving the facility." AB 720 | Page 6 4.Double referral. This bill is double referred. Should it pass out of this committee, it will be referred to the Senate Committee on Public Safety. 5.Previous legislation. SB 695 (Hancock), Chapter 847, Statutes of 2011, permits Medi-Cal benefits to be provided to an individual awaiting adjudication in a county juvenile detention facility if the individual is eligible for Medi-Cal at admission or is subsequently determined to be eligible to receive Medi-Cal benefits, the county agrees to pay the state's share of Medi-Cal expenditures and administrative costs, and FFP is available. SB 1091 (Hancock) of 2010 was similar to SB 695 (Hancock). SB 1091 was vetoed by Governor Schwarzenegger. In his veto message, the Governor stated this bill was inconsistent with federal law and exposed the state to potentially significant costs. The Governor concluded his veto message by stating that if the author wishes to craft workable legislation that allows for additional federal funds, but also adheres to federal Medicaid law and regulations, DHCS would be willing to assist in that effort next year. SB 1147 (Calderon), Chapter 546, Statutes of 2007 required, to the extent permitted under federal law, Medi-Cal benefits provided to an individual under 21 years of age who is an inmate of a public institution to be suspended, rather than terminated. 6.Support. This bill is sponsored by Californians for Safety and Justice (CSJ) and is designed to take advantage of newly available Medicaid funds under the ACA, to improve reentry for thousands of Californians being released from county jails, to address key drivers of crime, reduce justice system costs and make communities safer. CSJ argues the first component of this bill (requiring counties to complete and submit an application for coverage) is to address individuals being released from county jails who are uninsured and potentially eligible for coverage, many of whom have chronic conditions and a higher prevalence of mental health and substance abuse disorders. The second portion of the bill (requiring Medi-Cal eligibility be suspended but not terminated) is to allow for continuity of care for individuals, to ensure individuals have are covered upon release, and to provide federal Medicaid matching funds when incarcerated individuals receive inpatient services from AB 720 | Page 7 a facility outside the jail. 7.Oppose unless amended. The California State Sheriffs Association (CSSA) writes opposing this bill unless it is amended, arguing the requirement that counties submit and complete an application on behalf of an inmate in county jail who has been held for at least 72 hours and appears potentially eligible would inadvertently require enrollment for all inmates held for 72 hours, even those who are statutorily ineligible to apply, and would go beyond assisting applicants by authorizing the county to act on the detained individual's behalf. CSSA argues this bill makes it almost a certainty that the sheriffs will be burdened with paperwork requirements needed for the application, and sheriffs will have to make significant housing/program changes in order to allow for enrollment take place in county jails prior to release. CSSA concludes that it does not believe enrolling people prior to discharge is feasible. 8.Policy issues. a. Should state law designate which county entity should complete and submit inmates' applications? This bill requires each county to designate an individual or agency to complete and submit an application for a health insurance affordability program application for inmates in county jail, and requires the jail administrator (or his or her designee) to coordinate with this individual or agency. However, this bill does not specify which individual or entity would make this designation (for example, the county board of supervisors, the sheriff or the county department of human services). The intent of the language in this measure is to provide counties with the maximum flexibility to determine the best agency to receive the application and the timing of the enrollment process. b. Role of county and the role of the inmate in the application process. This bill requires the county-designated individual or agency to complete and submit an application for a health insurance affordability program on behalf of an inmate in a county jail at any time before release if the inmate has been in detention for at least 72 hours, and the inmate appears potentially eligible to be enrolled in the health insurance affordability program upon release. This bill authorizes the county-designed individual or agency to AB 720 | Page 8 act on behalf of an individual detained in county jail for purposes of applying, or an eligibility determination for, health insurance affordability program. Since the inmate does not appear to be required to be informed or consent to having an application or submitted on his or her behalf, this may result in individuals who already have coverage having applications submitted on their behalf. One way to address this issue is to require the inmate be asked whether he or she has health insurance coverage. 9.Clarifying amendment. This bill prohibits individuals Medi-Cal eligibility be suspended rather than terminated due to their detention unless required by federal law, or they become otherwise ineligible. While this bill deals with county jails, this provision uses the phrase "detention" and does not specify that it applies only to county jails (and not state prisons). The author may wish to clarify the types of institutions where Medi-Cal individuals would be detained for purposes of the requirement in this bill that Medi-Cal eligibility be suspended but not terminated. SUPPORT AND OPPOSITION : Support: Californians for Safety and Justice (sponsor) Latino Coalition for a Healthy California Western Center on Law and Poverty Support: Berkeley Organizing Congregations for Action (prior version)California Attorneys for Criminal Justice California Pan-Ethnic Health Network California Public Defenders Association California State Association of Counties City and County of San Francisco Office of the Sheriff Contra Costa County Probation Department County Alcohol and Drug Program Administrators Association of California California Nurses Association Drug Policy Alliance Ella Baker Center for Human Rights Friends Outside Greenlining Institute Housing California Lassen County Legal Services for Prisoners with Children Sacramento County Board of Supervisors Taxpayers for Improving Public Safety AB 720 | Page 9 Urban Strategies Council Women's Foundation of California Oppose: California State Sheriffs Association (unless amended) -- END --