BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 508
                                                                  Page  1

          Date of Hearing:   July 2, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                   SB 508 (Hernandez) - As Amended:  June 5, 2014 

          Policy Committee:                             HealthVote:13-6

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              Yes

           SUMMARY  

          This bill codifies numerous Medi-Cal eligibility requirements  
          related to implementation of the federal Patient Protection and  
          Affordable Care Act (ACA). Specifically, this bill:

          1)Specifies in statute the Medi-Cal income eligibility  
            thresholds (as a percentage of poverty) currently in use for  
            various eligibility groups including children,  whose income  
            is determined based on modified adjusted gross income (MAGI). 

          2)Specifies, for children, the income thresholds subject to  
            premium payments.

          3)Clarifies the state's eligibility rules for former foster  
            youth (FFY) to allow specified FFY Medi-Cal eligibility up to  
            age 26.

          4)Eliminates the deprivation requirement, which requires certain  
            socioeconomic circumstances such as a missing or unemployed  
            parent, from the eligibility criteria for the "medically  
            needy" eligibility category.  

          5)Requires Medi-Cal income eligibility for coverage of  
            tuberculosis-related services to be determined pursuant to  
            MAGI-based financial methods effective January 1, 2014.
           
          FISCAL EFFECT  

          1)This bill has four main components.  The first component, the  
            specification in statute of income thresholds, codifies  
            current administrative practice under existing authority.   
            Therefore, placing these income thresholds in law is not  








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            expected to increase costs. Similarly, the component related  
            to tuberculosis services conforms the income eligibility  
            methodology for these services to that used for most other  
            Medi-Cal categories, and should have a negligible cost impact.

            Two other components, namely, the elimination of the  
            deprivation requirement in the medically needy program and the  
            changes related to former foster youth eligibility, may have a  
            minor fiscal impact. Both changes will potentially increase  
            state costs by expanding the number of people eligible for  
            Medi-Cal.  Assuming average per-person costs in the medically  
            needy program are $10,000 annually, average per-person costs  
            for former foster youth are $2,000 annually, and 50  
            individuals enroll due to the deprivation changes and 10 new  
            former foster youth enroll due to the foster youth program  
            changes, costs would be $520,000 (50% GF, 50% federal).  
            The former foster youth provisions appear to be necessary  
            pursuant to federal maintenance of effort requirements in the  
            ACA, under which states must maintain Medi-Cal eligibility  
            rules in place for children until 2019.  The deprivation  
            change also appears to be required to maintain compliance with  
            federal rules, but based on how the state has chosen to  
            structure related programs.  Since the state chose to  
            eliminate the deprivation requirement for a separate  
            eligibility category, the federal government has, according to  
            the author, stated the deprivation requirement must be  
            eliminated in the medically needy program as well.  Written  
            verification that these specific changes are federally  
            required was unavailable at the time of this analysis.        

          2)This bill is tagged as a potential state-reimbursable mandate  
            because county eligibility workers conduct eligibility  
            screenings on behalf of the state. But no increased  
            administrative costs to counties are expected as a direct  
            result of this bill, since changes should not significantly  
            impact county workload and have already been incorporated into  
            county eligibility operations.  

           COMMENTS  

           1)Purpose  . This bill is a follow-up to SB X1 1 and AB X1 1 of  
            2013, which implemented the state's expansion and  
            simplification of Medi-Cal eligibility pursuant to the federal  
            Patient Protection and Affordable Care Act (ACA).   This bill  
            largely aligns state law with current practice and federal  








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            requirements related to the new Medi-Cal requirements and  
            options the state adopted in these two bills.

           2)Prior Legislation  . 
           
             a)   AB 1 X1 (John Perez), Chapter 3, Statutes of 2013  
               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 (Hernández), Chapter 4, Statutes of 2013  
               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.
           

           
          Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081