BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 508
Author: Hernandez (D)
Amended: 8/18/14
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
SENATE FLOOR : 28-8, 1/27/14
AYES: Beall, Block, Calderon, Cannella, Corbett, Correa, De
León, DeSaulnier, Evans, Galgiani, Hancock, Hernandez, Hill,
Hueso, Jackson, Lara, Leno, Lieu, Liu, Mitchell, Monning,
Padilla, Pavley, Roth, Steinberg, Torres, Wolk, Yee
NOES: Berryhill, Fuller, Gaines, Huff, Knight, Vidak, Walters,
Wyland
NO VOTE RECORDED: Anderson, Nielsen, Wright, Vacancy
ASSEMBLY FLOOR : 57-22, 8/25/14 - See last page for vote
SUBJECT : Medi-Cal: eligibility
SOURCE : Author
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DIGEST : This bill 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.
Assembly Amendments 1) require the Department of Health Care
Services (DHCS) to extend Medi-Cal benefits to individuals under
21 years of age placed in foster homes or private institutions
or for whom a specified adoption agreement is in effect, and
require that all of the income considered when determining an
individual's eligibility under these provisions be disregarded;
and, 2) make various technical changes.
ANALYSIS :
Existing law:
1.Establishes the Medi-Cal program, administered by 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 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.
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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
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 was in foster care on
his/her 18th birthday or such higher age the state has elected
under federal law.
5.Requires DHCS to exercise its option under federal law to
extend Medi-Cal benefits to individuals under 21 years of age
placed in foster homes or private institutions and individuals
under 21 years of age for whom a specified adoption agreement
is in effect. Further requires that all of the income
considered when determining an individual's eligibility under
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these provisions be disregarded.
6.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
"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
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underemployed.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee, 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.
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.
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
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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.
SUPPORT : (Verified 8/26/14)
AFSCME, AFL-CIO
Association of Regional Center Agencies
California Council of Community Mental Health Agencies
California Primary Care Association
California State Association of Counties
County Welfare Directors Association of California
Western Center on Law & 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.
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ASSEMBLY FLOOR : 57-22, 08/25/14
AYES: Achadjian, Alejo, Ammiano, Bloom, Bocanegra, Bonilla,
Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Chesbro, Cooley, Dababneh, Daly, Dickinson, Eggman, Fong, Fox,
Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Hall, Roger Hernández, Holden, Jones-Sawyer, Levine,
Lowenthal, Medina, Mullin, Muratsuchi, Nazarian, Pan, Perea,
John A. Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Weber,
Wieckowski, Williams, Yamada, Atkins
NOES: Allen, Bigelow, Chávez, Conway, Dahle, Donnelly, Beth
Gaines, Grove, Hagman, Harkey, Jones, Linder, Logue,
Maienschein, Mansoor, Melendez, Nestande, Olsen, Patterson,
Wagner, Waldron, Wilk
NO VOTE RECORDED: Vacancy
JL:nl 8/26/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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