BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 1579 (Stone) - CalWORKs: pregnant women. Amended: May 27, 2014 Policy Vote: Human Services 3-0 Urgency: No Mandate: Yes Hearing Date: August 14, 2014 Consultant: Jolie Onodera SUSPENSE FILE. AS AMENDED. Bill Summary: AB 1579 would, beginning July 1, 2015, provide CalWORKs benefits to a pregnant woman three months earlier, to include the month in which the birth is anticipated and for the six-month period immediately prior to the month in which the birth is anticipated. Fiscal Impact (as approved on August 14, 2014): Ongoing increased costs of $7.2 million (General Fund) to provide CalWORKs benefits three months earlier than provided for under existing law, assuming continuing operation of the CalLearn Program. This estimate is based on 3,025 pregnant women each year being impacted by the provisions of this bill. Should the CalLearn Program be suspended in the future, potential loss of savings in excess of $20 million (General Fund) annually, as over 9,000 pregnant teens would have otherwise been eligible for CalWORKs benefits only during their third trimester under existing law upon suspension of the CalLearn Program. One-time potentially significant costs to the DSS for automation changes necessary due to changing eligibility criteria for this program. Unknown, potential future cost savings in health and other governmental program services costs to the extent the provision of assistance earlier during a woman's pregnancy results in healthier children and better overall life outcomes for these families. Background: Under existing law, CalWORKs aid is required to be provided to a pregnant woman, regardless of age, in a family without a needy child for the month in which the birth is anticipated and for the three-month period immediately prior to AB 1579 (Stone) Page 1 the month in which the birth is anticipated. Existing law additionally provides that, when the CalLearn Program is operative, CalWORKs aid payments shall be paid at any time after verification of pregnancy if a pregnant teen and the child, if born, would have otherwise qualified for CalWORKs aid. The Cal-Learn Program was established to provide intensive case management to assist teen parents to obtain education, support services, and a comprehensive range of health and social services, as well as provide payments for necessary child care, transportation, and educational expenses to enable pregnant and parenting teens to attend school. Successful participation is encouraged through the provision of bonuses earned through report card results and graduating or attaining an equivalent high school diploma. The Cal-Learn Program was suspended for one year from July 1, 2011, through June 30, 2012. Pursuant to SB 1041, Chapter 47/2012, the human services budget trailer bill, the Cal-Learn Program became fully operative commencing April 1, 2013. For the period July 1, 2012, to March 1, 2013, existing law provides that counties were provided with full or partial year funding, depending on their phase-in to full implementation of the Cal-Learn Program by April 1, 2013, as specified. Proposed Law: This bill would, beginning July 1, 2015, provide that when a family does not include a needy child qualified for aid under the CalWORKs program, aid shall be paid to a pregnant woman for the month in which the birth is anticipated and for the six-month period immediately prior to the month in which the birth is anticipated. Prior Legislation: AB 1640 (Mitchell) Chapter 778/2012 extends CalWORKs aid to a pregnant teen at any time after verification of pregnancy, regardless of whether she is eligible for the CalLearn Program. Staff Comments: This bill will result in the provision of CalWORKs benefits to a pregnant woman three months earlier than provided for under existing law. Under existing law, CalWORKs aid is not provided until a pregnant woman's third trimester unless the pregnant woman is eligible for Cal-Learn and the Cal-Learn Program is operative. As a result, the provisions of AB 1579 (Stone) Page 2 this bill are estimated to provide an additional three months of CalWORKs aid earlier than otherwise would have been provided for pregnant women. The DSS has indicated an average monthly caseload of approximately 252 pregnant women would be eligible three months earlier under the provisions of this bill. The estimated CalWORKs grant, services, and administrative costs for this caseload would be $6.6 million (TANF/General Fund) in 2015-16, and $7.2 million ongoing. This estimate is based on an average monthly CalWORKs grant cost of $387, which includes a five percent grant increase effective April 2015, the $47 per month pregnancy special need payment, services costs for 90 percent of cases of $382 per month, and minor administrative costs. It is assumed these cases would reach the CalWORKs 48-month time limit three months sooner, and because the average time on aid is approximately 24 months, it is assumed an additional three months of aid would be provided for each of these cases. Should the Cal-Learn Program be suspended at some point in the future, this bill would provide that aid to both Cal-Learn eligible and non-eligible pregnant teens be provided in the month in which the birth is anticipated and for the six-month period immediately prior to the month in which the birth is anticipated. Under existing law, these pregnant teens would have only received benefits for the three-month period immediately prior to the birth during the suspension of the CalLearn Program. As a result, the potential loss of savings in the event of the future suspension of the Cal-Learn Program would be substantial, potentially in excess of $20 million (General Fund) annually to provide three additional months of CalWORKs benefits, including the monthly supplemental payment, to over 9,000 pregnant teens each year. To the extent the provision of assistance three months earlier in a woman's pregnancy results in healthier children born to families could serve to reduce health care and other services costs to these families in the future. Recommended Amendments: The author may wish to consider an amendment for consistency to change the references to "pregnant mothers" in Welfare and Institutions Code § 11450(c), which provides for the pregnancy special needs monthly payment of $47, to "pregnant women." AB 1579 (Stone) Page 3 Author amendments make various technical changes, including the recommended amendment noted above.