BILL ANALYSIS Ó SB 18 Page 1 SENATE THIRD READING SB 18 (Leno and Ed Hernandez) As Amended August 18, 2014 Majority vote SENATE VOTE :Vote not relevant HEALTH 13-5 APPROPRIATIONS 12-0 ----------------------------------------------------------------- |Ayes:|Pan, Ammiano, Bonilla, |Ayes:|Gatto, Bocanegra, | | |Bonta, Chesbro, Gomez, | |Bradford, | | |Gonzalez, | |Ian Calderon, Campos, | | |Roger Hernández, | |Eggman, Gomez, Holden, | | |Lowenthal, Nazarian, | |Pan, Quirk, | | |Ridley-Thomas, Rodriguez, | |Ridley-Thomas, Weber | | |Wieckowski | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Maienschein, Chávez, | | | | |Mansoor, Patterson, | | | | |Wagner | | | | | | | | ----------------------------------------------------------------- SUMMARY : Requires the Department of Health Care Services (DHCS) to accept contributions by private foundations in the amount of at least $6 million for the purposes of providing Medi-Cal renewal assistance payments, starting January 1, 2015. EXISTING LAW : Authorizes DHCS to accept contributions by private foundations in the amount of at least $26.5 million, and to obtain an equal amount of federal matching funds, to support and fund Medi-Cal outreach and enrollment activities, as well as payments for in-person Medi-Cal enrollment assistance. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1)Expenditures of $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 SB 18 Page 2 through an uncodified trailer bill section, Section 5 of SB 101 (Budget and Fiscal Review Committee), Chapter 361, Statutes of 2013) and $6 million in 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 : According to the author, this bill provides the mechanism necessary to obtain federal matching dollars for $6 million. The California Endowment (The Endowment), a private health foundation that provides grants to community-based organizations throughout California, is willing to contribute to help individuals renew their Medi-Cal coverage. The author states, as part of its work in leading the nation on the implementation of the ACA, 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, and that renewal assistance will be particularly important in 2014-15 as existing Medi-Cal enrollees move from welfare-based income and household eligibility rules to modified adjusted gross income (MAGI)-based eligibility rules. SB 18 Page 3 In 2013, The Endowment committed $26.5 million to the state in an effort to help increase and enhance outreach and enrollment efforts in Medi-Cal, and support enrollment for up to 450,000 Medi-Cal applicants. AB 82 (Budget Committee), Chapter 23, Statutes of 2013, authorizes DHCS to accept the private foundation funds, and to secure an equal amount in federal matching funds, to be used for Medi-Cal in-person enrollment assistance payments and local Medi-Cal outreach and enrollment efforts. A portion is also used to supplement counties' existing funding for Medi-Cal outreach and enrollment efforts associated with implementation of Patient Protection and Affordable Care Act (ACA). The Western Center on Law and Poverty (WCLP), a cosponsor of this bill, states that the role of community-based organizations in assisting consumers with enrollment into Medi-Cal has been critical to the progress California has made in expanding the program and streamlining eligibility rules. WCLP states it is similarly important to have community-based organizations assist beneficiaries in renewing their Medi-Cal coverage, particularly given the shift under the ACA to MAGI eligibility rules. WCLP asserts that the new Medi-Cal renewal application is confusing, and that while there should be many improvements to the renewal process in 2015, due to the implementation of ex parte review and the use of prepopulated forms, this will be a different type of renewal process for which beneficiaries must adapt. Health Access California, also a cosponsor of this bill, states that The Endowment has generously offered $6 million to assist consumers who are enrolled in Medi-Cal to renew that their coverage, and that this bill would allow a federal match for those dollars. Health Access states that keeping eligible beneficiaries enrolled in coverage assures ongoing access to medically necessary care and reduces administrative overhead due to avoidable churning of enrollment. Analysis Prepared by : Roger Dunstan / HEALTH / (916) 319-2097 FN: 0005046 SB 18 Page 4