BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 508| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 508 Author: Hernandez (D) Amended: 1/9/14 Vote: 21 SENATE HEALTH COMMITTEE : 7-0, 1/15/14 AYES: Hernandez, Beall, De León, DeSaulnier, Monning, Pavley, Wolk NO VOTE RECORDED: Anderson, Nielsen SENATE APPROPRIATIONS COMMITTEE : 4-1, 1/21/14 AYES: De León, Hill, Padilla, Steinberg NOES: Gaines NO VOTE RECORDED: Walters, Lara SUBJECT : Medi-Cal: eligibility SOURCE : Author DIGEST : This bill codifies the Medi-Cal income eligibility thresholds for parents and caretaker relatives, children, and pregnant women whose income eligibility for Medi-Cal is determined based on modified adjusted gross income (MAGI), increases the income levels at which premiums are assessed for coverage in Medi-Cal for children, eliminates the deprivation requirement for the Medically Needy Medi-Cal program, and clarifies that Medi-Cal eligibility for former foster youth expansion up to age 26 includes individuals who lost eligibility due to having reached the maximum age for foster care assistance. CONTINUED SB 508 Page 2 ANALYSIS : Existing law: 1.Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which low income individuals are eligible for medical coverage. 2.Requires DHCS to implement the Affordable Care Act (ACA) expansion of Medi-Cal coverage to adults and parents up to 133% of the federal poverty level (FPL) (adults without minor children are generally not eligible for Medi-Cal unless aged or disabled, and parents applying for Medi-Cal are eligible if they have family incomes at or below 100% of the FPL). 3.Requires DHCS to establish income eligibility thresholds for those Medi-Cal eligibility groups whose eligibility will be determined using MAGI-based financial methods. 4.Requires, effective January 1, 2014, when determining eligibility for Medi-Cal benefits for non-elderly non-disabled adults, an applicant's or beneficiary's income and resources to be determined, counted, and valued in accordance with the requirements of a provision of the ACA, which prohibits the use of an assets or resources test for individuals whose income eligibility is determined based on MAGI. 5.Implements the ACA requirement that a 5% income disregard applies to individuals whose income eligibility is determined based on MAGI, effectively making income eligibility 138% of the FPL ($15,856 for an individual and $26,951 for a family of 3 in 2013). This bill: 1.Establishes income eligibility thresholds for Medi-Cal coverage whose income is determined based on MAGI as follows: A. Parents and caretaker relatives: 0-109% of the FPL; B. Pregnant women: 0-208% of the FPL; C. Children: 0-261% of the FPL. 1.Increases the income level at which premiums for Medi-Cal CONTINUED SB 508 Page 3 coverage for children are assessed, to apply premiums for children in families with incomes above 160 to 261% of the FPL, instead of children in families with incomes from 150 to 250% of the FPL. 2.Requires Medi-Cal income eligibility for coverage of tuberculosis-related services to be determined pursuant to MAGI-based financial methods effective January 1, 2014. 3.Eliminates the deprivation requirement for the medically needy Medi-Cal program by repealing the deprivation requirement from the medically needy family person definition. (Medically needy is a category of Medi-Cal eligibility that provides Medi-Cal coverage for individuals who fit into a federal benefit category [such as aged, blind or disabled] but whose income or resources are too high.) 4.Clarifies that former foster youth are eligible for Medi-Cal coverage up to age 26 if the individual lost his/her eligibility for foster care assistance due to having reached the maximum age for that assistance. 5.Deletes obsolete references to previous Medi-Cal income eligibility provisions. Comments MAGI income conversion eligibility thresholds . The ACA requires states to change the way they calculate income for purposes of determining Medicaid eligibility. Beginning January 1, 2014, eligibility for Medicaid (Medi-Cal in California) for most individuals, as well as for the Children's Health Insurance Program (CHIP, formerly the Healthy Families Program in California before children were shifted into Medi-Cal), is determined using methodologies based on MAGI, as defined in the Internal Revenue Code of 1986. Eligibility for advance premium tax credits for the purchase of private insurance coverage through states exchanges will also use MAGI. The ACA allows states to eliminate the deprivation requirement. Under the ACA, previous state income disregards and asset or resource tests no longer apply when calculating income eligibility for most non-elderly non-disabled adults (under income disregards, certain types of income is not counted or CONTINUED SB 508 Page 4 "disregarded" in determining Medi-Cal eligibility). To make the change from the prior income methodologies to MAGI-based methods without significantly changing current coverage levels, the ACA requires states to establish income eligibility thresholds for populations that are not less than the effective income eligibility levels that applied under Medicaid on the date of enactment of the ACA. The intent of this provision was for states to establish MAGI-equivalent standards that protect individuals eligible for Medicaid from losing coverage after 2014. States must convert their current financial eligibility income standards from net standards (which include disregards) to an equivalent MAGI income standard. Repeal of deprivation requirement in medically needy program . Under the Medi-Cal 1931(b) program, Medi-Cal covers children up through age 18 (and up to age 19 if they are expected to graduate from school) who are "deprived" of full parental support, and parents and caretaker relatives. Deprivation means at least one parent in the family must be absent, deceased or disabled, or the principal wage earner must be unemployed or underemployed. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: Minor administrative costs to DHCS (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 SB 1 1X, Hernandez and Steinberg, Chapter 4, Statutes of 2013-14 First Extraordinary Session, and AB 1 1X, J. Perez, Chapter 3, Statutes of 2013-14 First Extraordinary Session) 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. SUPPORT : (Verified 1/21/14) AFSCME CONTINUED SB 508 Page 5 California Primary Care Association California State Association of Counties County Welfare Directors Association of California Western Center on Law and Poverty ARGUMENTS IN SUPPORT : According to the author, this bill is a follow-up bill to SB 1 1X and AB 1 1X, the Medi-Cal ACA implementation bills. This bill would place into state law the MAGI converted Medi-Cal income eligibility standards for parents and caretaker relatives, children, and pregnant women, would eliminate the deprivation requirement in the medically needy Medi-Cal program, and would clarify eligibility for the former foster youth Medi-Cal expansion. When AB 1 1X and SB 1 1X were passed by the Legislature in June 2013, the MAGI-converted Medi-Cal income eligibility standards were not known but have subsequently been established administratively by DHCS. Placing these amounts into state law provides greater transparency regarding eligibility thresholds and updates current law to reflect current income eligibility standards. This bill also contains clean-up language to the former foster youth Medi-Cal expansion and eliminates the deprivation requirement in the medically needy Medi-Cal program in response to concerns raised by the federal Centers for Medicare and Medicaid Services to DHCS. The Western Center on Law and Poverty (WCLP) supports this bill to codify the new income levels for Medi-Cal under the ACA. WCLP states that this bill makes some technical changes regarding the Medi-Cal program for former foster youth to ensure that California complies with federal law and provides this vulnerable population with the health care benefits to which they are entitled. JL:nl 1/22/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED