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  




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          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  




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            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  




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            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




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                    Urban Strategies Council
                    Women's Foundation of California
          
          Oppose:   California State Sheriffs Association (unless amended)




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