BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 18
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          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  








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            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.  









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          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  



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