BILL ANALYSIS Ó
SB 508
Page 1
Date of Hearing: June 17, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 508 (Ed Hernandez) - As Amended: June 5, 2014
SENATE VOTE : 28-8
SUBJECT : Medi-Cal: eligibility.
SUMMARY : Makes 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 Patient
Protection and Affordable Care Act (ACA), in particular
conforming existing law to the federal requirement to use
modified adjusted gross income (MAGI) for eligibility
determination. Specifically, 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:up to109% of
the federal poverty level (FPL);
b) Pregnant women: up to 208%t of the FPL; and,
c) Children: up to 261%t of the FPL.
2)Increases the income level at which premiums for Medi-Cal
coverage for children is assessed, to apply premiums for
children in families with incomes above 160% up to 261% of the
FPL, instead of children in families with incomes from 150% to
250% of the FPL.
3)Requires Medi-Cal income eligibility for coverage of
tuberculosis-related services to be determined pursuant to
MAGI-based financial methods effective January 1, 2014.
4)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.)
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5)Clarifies that former foster youth are eligible for Medi-Cal
coverage up to age 26 if the individual lost his or her
eligibility for foster care assistance due to having reached
the maximum age for that assistance.
6)Deletes obsolete references to previous Medi-Cal income
eligibility provisions.
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 ACA expansion of Medi-Cal coverage
to adults and parents up to 133% of 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 three
in 2013).
FISCAL EFFECT :
1)Minor administrative costs to DHCS (General Fund).
2)No expected change in Medi-Cal enrollment or costs. While this
bill does change eligibility standards and requirements for
the Medi-Cal program, these changes are intended to either
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clarify changes already made by the Legislature when enacting
the Medi-Cal expansion 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.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is a
follow-up bill to SB 1 X1 (Ed Hernandez and Steinberg),
Chapter 4, Statutes of 2013-14 First Extraordinary Session and
AB 1 X1 (John A. Pérez), Chapter 3, Statutes of 2013-14 First
Extraordinary Session, 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 X 1 and SB 1 X 1
were enacted, the Medi-Cal income eligibility standards
expressed in terms of MAGI were not known but have
subsequently been established administratively by DHCS. The
author states 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 (CMS) to DHCS, according to
the author.
2)BACKGROUND .
a) Federal health care reform. The ACA requires states to
change the way they calculate income for purposes of
determining Medicaid eligibility. Beginning January 1,
2014, eligibility for the federal Medicaid and the
Children's Health Insurance Programs are determined using
methodologies based on MAGI. For California, the Medi-Cal
program is funded through these two federal programs and
must change its eligibility requirements to comply.
Pre-ACA eligibility determinations under California law
used asset or resource tests and state income disregards,
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simply meaning certain types of income is not counted in
determining Medi-Cal eligibility. Under the ACA, these
state requirements had to be altered to conform. The ACA
requires states to change eligibility criteria to
MAGI-based methods without significantly changing who is
eligible for Medi-Cal. As an example, infants who
previously were eligible if they were in families with
income up to 200% of FPL are now eligible if the family
income is below 209% of the FPL.
b) Deprivation requirement. The ACA allows states to
eliminate the "deprivation" requirement. 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. AB 1 X1 eliminated the
deprivation requirement. The purpose of the elimination
was it was seen as an administratively burdensome and
outdated welfare-based rule when individuals are subject to
an individual mandate and are eligible for Medi-Cal
coverage. This bill repeals deprivation requirement in the
medically needy Medi-Cal program because CMS informed
California if it eliminates the deprivation requirement in
the 1931(b) program, it must also eliminate the deprivation
requirement in the medically needy program as well.
c) Medi-Cal coverage for former foster youth until age 26.
SB 1 X1 requires DHCS to implement the ACA requirement to
provide Medi-Cal benefits to an individual who is in foster
care on his or her 18th birthday until his or her 26th
birthday. Previously, Medi-Cal provided coverage to former
foster youth up to age 21 under a federal option. DHCS
states that CMS informed the state that replacing the
former optional foster care program with the mandatory care
program is a violation of the federal ACA maintenance of
effort. The state needs to keep both programs operational
because there are former foster care adolescents eligible
under the prior optional program who are not eligible under
the new expanded mandatory program. This bill addresses
that issue, and clarifies that children who age out of
foster care after age 18 are eligible for Medi-Cal coverage
up to age 26.
3)SUPPORT . Supporters state this bill codifies the new federal
income standards used by DHCS for determining Medi-Cal
eligibility. They argue this bill ensures California law
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accurately reflects how DHCS has defined the new MAGI
standards for purpose of eligibility of various groups. The
California Primary Care Association supports the provisons to
extend Medi-Cal benefits to Independent foster adolescents.
Western Center on Law and Poverty states this bill finishes
the job started in the special session Medi-Cal bills of
eliminating the deprivation requirement in Medi-Cal. The
deprivation test is an old welfare rules test whereby only
parents of a deprived child qualify for Medi-Cal including
when a parent is deceased, disabled, unemployed, or
underemployed. This complicated rule is no longer needed when
all low-income adults will be eligible for Medi-Cal.
4)PREVIOUS LEGISLATION .
a) AB 1 X1 implemented specified Medicaid provisions of the
ACA, including the expansion of federal Medicaid coverage
to low-income adults with incomes up to 138% of the federal
poverty level. AB 1 X1 also implemented a number of the
Medicaid ACA provisions to simplify the eligibility,
enrollment and renewal processes for Medi-Cal.
b) SB 1 X1 established the existing Medi-Cal benefit
package as the benefit package for the expansion population
eligible under the ACA and expanded the Medi-Cal benefit
package for the existing population and newly eligible
under the ACA to include mental health services and
substance use disorder services required under the
essential health benefit legislation adopted in 2012 that
were not currently covered by Medi-Cal. SB 1 X1 also
implemented a number of the Medicaid ACA-related provisions
to simplify the eligibility, enrollment and renewal
processes for Medi-Cal.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL=CIO
California Council of Community Mental Health Agencies
California Primary Care Association
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California State Association of Counties
County Welfare Directors Association of California
SEIU California
Western Center on Law and Poverty
Opposition
None on file.
Analysis Prepared by : Roger Dunstan / HEALTH / (916) 319-2097