BILL ANALYSIS Ó
SB 18
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Date of Hearing: July 2, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 18 (Hernandez) - As Amended: June 18, 2014
Policy Committee: HealthVote:13-5
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires the Department of Health Care Services (DHCS)
to accept private foundation money as the nonfederal share of
costs for activities related to outreach for Medi-Cal renewals,
and appropriates funding for this purpose. Specifically, this
bill:
1)Requires DHCS to accept private contributions of at least $6
million for Medi-Cal renewal assistance starting January 1,
2015, and requires these funds to be deposited in the
Healthcare Outreach and Medi-Cal Enrollment Account.
2)Appropriates $6 million for the specified purposes to DHCS, to
be available for encumbrance or expenditure until December 31,
2016.
3)Allows DHCS to expend a portion of funds previously authorized
pursuant to subdivision (d) of Section 5 of Chapter 361 of the
Statutes of 2013 on administration of the bill's requirements.
4)Requires renewal assistance payments to be distributed to
community-based organizations providing renewal assistance to
Medi-Cal beneficiaries, requires payments to be made to
counties for distribution of funds to community-based
organizations, and allows counties to retain funding for
administrative costs.
5)Specifies the funds allocated are for the specified purposes
only and may supplement, but shall not supplant, existing
local, state, and foundation funding for these purposes.
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6)Requires DHCS to seek federal matching funds and, to the
extent federal funding is received, requires reimbursements be
made in compliance with federal law.
FISCAL EFFECT
1)Expected expenditures of up to $12 million beginning in
January 2015 (assuming costs are shared 50% private foundation
funding, 50% federal funds) on grants to community-based
organizations to assist with Medi-Cal renewal. This bill
appropriates $6 million from the specified special fund (the
Healthcare Outreach and Medi-Cal Enrollment Account, which was
created through an uncodified trailer bill section, Section 5
of SB 101 (Committee on Budget), Chapter 361, Statutes of
2013). It does not, however, appropriate potentially
available federal matching funds.
2)Costs for Medi-Cal benefits in 2015 likely in the tens of
millions of dollars (GF/federal). This estimate assumes the
renewal assistance effort results in significant numbers of
enrollees who otherwise would not have renewed their Medi-Cal
eligibility. The GF share of costs could be in excess of $10
million to the low tens of millions in the first year for
additional Medi-Cal benefits. Actual GF costs would depend on
how many new renewals are generated for individual who
otherwise may not have renewed, and the corresponding federal
share of cost. The one-time renewal assistance will likely
result in higher ongoing costs as well, since a greater number
of beneficiaries will likely maintain enrollment in the
program in future years.
3)To the extent greater continuous Medi-Cal enrollment results
in more beneficiaries receiving regular care for chronic
conditions, increased up-front benefits costs could
potentially be offset somewhat by fewer expensive
complications from uncontrolled chronic conditions. Such
costs offsets would be nebulous, but could be reflected in
lower managed care payments in future years.
COMMENTS
1)Purpose . According to the author, this bill provides the
mechanism necessary to obtain federal matching dollars for $6
million the California Endowment, a private foundation, is
willing to contribute to help individuals renew their Medi-Cal
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coverage. The author states California has developed an
outreach and enrollment infrastructure of community-based
organizations and county employees who have assisted millions
of Californians to enroll in Covered California and Medi-Cal.
The author adds that these Californians will need to renew
their coverage in order to keep it for the year 2015.
2)Previous private contributions for Medi-Cal outreach and
enrollment. In 2013, the California Endowment committed $26.5
million to the state in an effort to help increase and enhance
outreach and enrollment efforts in Medi-Cal. Funding
supported enrollment assistance payments to individuals who
were certified by Covered California to assist people in
signing up for Medi-Cal, and to counties for new Medi-Cal
outreach and enrollment activities for targeted groups. This
funding is intended to build on that outreach and enrollment
infrastructure.
3)Medi-Cal Renewal . Medi-Cal is projected to expand from 7.9
million beneficiaries prior to implementation of the ACA, to
11.5 million by the end of fiscal year 2014-15. Individuals
who are newly eligible are being determined so based on the
new Modified Adjusted Gross Income (MAGI) methodology required
by federal law. The individuals already eligible, and whose
eligibility will be renewed in calendar year 2014, however,
were subjected to different eligibility methodology that is no
longer used in many cases. Therefore, most will be required to
provide different information than was previously required
because they will be assessed for renewal using the MAGI
methodology for the first time. Staff notes dollars will not
be available for renewal assistance in 2014 pursuant to the
January 1, 2015 date specified in this bill.
There have been recent administrative delays in processing
renewals. A February 2014 letter from DHCS instructs county
eligibility workers to put renewals on hold while processes
and forms are developed that can appropriately account for the
transition of previously eligible beneficiaries to the new
MAGI methodology. Over the next several months, counties will
process the January through June 2014 renewals in addition to
the usual volume of renewals. The renewal forms developed for
this purpose have been criticized by beneficiary advocates as
confusing, long, and cumbersome.
4)Related Budget Actions . The Assembly Subcommittee #1 on Health
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and Human Services heard the issue, "Medi-Cal Renewal
Assistance Grant from The California Endowment" and adopted
placeholder trailer bill language similar to this bill on May
5, 2014. The placeholder language required DHCS to accept the
$6 million contribution and seek matching federal funds. The
Senate Subcommittee #3 on Health and Human Services took a
similar action at their May 8, 2014 hearing. This language
was not, however, part of the enacted health trailer bills and
funding was not included in the DHCS budget for these
activities. The language in this bill differs slightly from
the placeholder language adopted by the budget subcommittees.
The most substantive change from a state fiscal perspective is
the timing-beneficiaries renewing coverage in 2014 would all
have been previously eligible, and therefore benefits for
those renewing would be paid for on a 50% state, 50% federal
ratio. This bill specifies funding must be accepted after
January 1, 2015. A portion of beneficiaries renewing in 2015
will be the "optional expansion" population that is 100%
federally funded.
5)Support . Advocates for low-income Medi-Cal beneficiaries argue
that Californians who used counselors for initial enrollment
in Covered California and Medi-Cal are likely to return to
these trusted sources when faced with renewing their coverage.
They believe Medi-Cal renewal forms currently in use are
particularly confusing and may take additional support.
6)Prior Legislation . AB 82 (Committee on Budget), Chapter 23,
Statutes of 2013, the health budget trailer bill, authorizes
DHCS to accept contributions by private foundations in the
amount of at least $26.5 million, and to seek matching federal
funds, for the purposes of funding in-person enrollment
assistance payments and Medi-Cal outreach and enrollment
plans.
SB 101 (Committee on Budget), Chapter 361, Statutes of 2013
appropriates funding for activities described in AB 82 and
establishes the Healthcare Outreach and Medi-Cal Enrollment
Account in the Special Deposit Fund.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081
SB 18
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