BILL ANALYSIS Ó SB 508 Page 1 SENATE THIRD READING SB 508 (Ed Hernandez) As Amended August 18, 2014 Majority vote SENATE VOTE :28-8 HEALTH 13-6 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |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, |Nays:|Bigelow, Donnelly, Jones, | | |Mansoor, Nestande, | |Linder, Wagner | | |Patterson, Wagner | | | | | | | | ----------------------------------------------------------------- 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. FISCAL EFFECT : According to the Assembly Appropriations Committee: 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 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. SB 508 Page 2 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% General Fund, 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 : According to the author, this bill is a follow-up bill to SB 1 X1 (Ed Hernandez), 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 SB 508 Page 3 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 the Department of Health Care Services (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 to DHCS, according to the author. 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 accurately reflects how DHCS has defined the new MAGI standards for purpose of eligibility of various groups. The California Primary Care Association supports the provisions to extend Medi-Cal benefits to Independent foster adolescents. Western Center on Law and Poverty states in support that 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. Analysis Prepared by : Roger Dunstan / HEALTH / (916) 319-2097 FN: 0005022