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        
           
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          |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.








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            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
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          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  



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