BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 508 (Hernandez) - Medi-Cal: eligibility.
Amended: January 9, 2014 Policy Vote: Health 7-0
Urgency: No Mandate: Yes
Hearing Date: January 21, 2014
Consultant: Brendan McCarthy
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: SB 508 would make several changes to the
eligibility requirements for the Medi-Cal program, to codify
existing eligibility levels or clarify changes made to the
program's eligibility requirements when the state expanded
eligibility under the federal Affordable Care Act.
Fiscal Impact:
Minor administrative costs to the Department of Health Care
Services (General Fund).
No expected change in Medi-Cal enrollment or costs. While
the bill does change eligibility standards and requirements
for the Medi-Cal program, these changes are intended to
either clarify changes already made by the Legislature when
enacting the Medi-Cal expansion (through AB X1 1 and SB X1
1 of 2013) or to fix technical errors made in the drafting
of those bills. This bill is not expected to increase
enrollment beyond what was anticipated when the Legislature
enacted those bills.
Background: Under state and federal law, the Department of
Health Care Services operates the Medi-Cal program, which
provides health care coverage to pregnant women, children and
their parents with incomes below 100% of the federal poverty
level, as well as blind, disabled, and certain other
populations. In addition, under a federal option, the state
provided Medi-Cal eligibility to former foster youth up until
age 21. Under prior law, eligibility for Medi-Cal was based on
the applicant's income (including various "disregards" for
certain types and amounts of income) and assets.
SB 508 (Hernandez)
Page 1
The federal Affordable Care Act allows states to expand Medicaid
(Medi-Cal in California) eligibility to persons under 65 years
of age, who are not pregnant, not entitled to Medicare Part A or
enrolled in Medicare Part B, and whose income does not exceed
133% of the federal poverty level (effectively 138% of the
federal poverty level as calculated under the Affordable Care
Act). Federal law also requires states to provide eligibility to
former foster youth up until age 26. California has opted to
expand eligibility for Medi-Cal up to 138% of the federal
poverty level.
The Affordable Care Act generally requires states to use a
different method for calculating an applicant's income (known as
Modified Adjusted Gross Income or MAGI) with a single 5% income
disregard.
The Affordable Care Act provides a significantly enhanced
federal match for the Medicaid expansion. Under the law, the
federal government will pay for 100% of the cost of the Medicaid
expansion in 2013-14 declining to a 90% federal match in the
2020 federal fiscal year and thereafter.
AB X1 1 (J. Perez, Statutes of 2013) and SB X1 1 (Hernandez and
Steinberg, Statutes of 2013) implement the expansion of Medi-Cal
and include a number of changes to the eligibility and
enrollment process for the Medi-Cal program.
Proposed Law: SB 508 would make several changes to the
eligibility requirements for the Medi-Cal program, to codify the
new eligibility levels or clarify changes made to the program's
eligibility requirements when the state expanded eligibility
under the federal Affordable Care Act.
Specific provisions of the bill would:
Put in statute the MAGI converted income standards for
Medi-Cal eligibility;
Increase the income level at which premiums for Medi-Cal
coverage for children are assessed (to reflect the MAGI
converted income standards);
Eliminate the deprivation requirement for the medically
needy Medi-Cal program;
Clarify that former foster youth are eligible for Medi-Cal
until age 26 if the individual lost foster care assistance
due to reaching the maximum age for that assistance;
SB 508 (Hernandez)
Page 2
Delete obsolete references to income eligibility standards.
Related Legislation: AB X1 1 (J. Perez, Statutes of 2013) and SB
X1 1 (Hernandez and Steinberg, Statutes of 2013) implement the
expansion of Medi-Cal authorized in the Affordable Care Act and
include a number of changes to the eligibility and enrollment
process for the Medi-Cal program.
Staff Comments: As noted above, the bill generally conforms
current law to existing requirements in federal law. For
example, current law requires the Department of Health Care
Services to use the new MAGI standards for determining
eligibility for Medi-Cal. At the time of enactment of AB X1 1
and SB X1 1, the MAGI converted income standards had not yet
been developed, therefore specific income thresholds were not
changed in statute at that time.
Under current law, the Medi-Cal medically needy program provides
coverage to persons whose income is too high for traditional
Medi-Cal coverage. Some beneficiaries must also demonstrate that
they are "deprived" of financial support. This bill eliminates
the deprivation requirement for the medically needy program,
because the expanded Medi-Cal program is available to all
childless adults who meet the new income standards, making
deprivation standard unnecessary.
Finally, the federal government has indicated that the
redrafting of prior law governing the eligibility for Medi-Cal
of former foster youth could have the effect of eliminating
eligibility for some former foster youth (for example former
foster youth who have moved into the state or who were
previously eligible for Medi-Cal, but not enrolled). This was
not the intent of AB X1 1 or SB X1 1 and this bill redrafts that
code section to be clear that all former foster youth are
eligible for Medi-Cal up to age 26.