BILL ANALYSIS Ó
AB 763
Page 1
Date of Hearing: April 7, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
AB 763
(Burke and Bonilla) - As Introduced February 25, 2015
SUBJECT: Medi-Cal: program for aged and disabled persons.
SUMMARY: Increases the amount of income that is disregarded in
calculating eligibility for purposes of the Medi-Cal aged and
disabled (A&D) program which effectively increases the upper
limit of financial eligibility to 138% of the federal poverty
level (FPL).
EXISTING LAW:
1)Establishes the Medi-Cal program as California's version of
the federal Medicaid program. Medi-Cal provides comprehensive
health benefits to low-income children, their parents or
caretaker relatives, pregnant women, elderly, blind or
disabled persons, nursing home residents, and refugees who
meet specified eligibility criteria.
2)Requires Medi-Cal coverage of adults under age 65 who are not
currently eligible with incomes up to 138% of the FPL or below
$15,856 in 2013 for an individual.
3)Establishes, to the extent that federal financial
participation is available, the Medi-Cal A&D program. Sets
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the upper limit of financial eligibility for this program at
100% FPL plus a specified additional amount ($230 for an
individual; $310 for a couple) that is disregarded in
calculating eligibility.
4)Prohibits the income standard for the A&D program from being
less than the Supplemental Security Income/ Supplemental State
Payment (SSI/SSP) payment level for a disabled individual or,
in the case of a couple, the SSI/SSP payment level for a
disabled couple.
5)Permits the financial eligibility requirements for the A&D
program to be adjusted upwards to reflect the cost of living
in California, contingent upon appropriation in the annual
Budget Act.
FISCAL EFFECT: This bill has not been analyzed by a fiscal
committee.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, the A&D
Program income level loses value every year because of
inflation, thereby pushing the program out of reach of some
seniors and people with disabilities. The author points out
the income level for the A&D Program is 100% FPL plus $230 for
an individual and 100% FPL plus $310 for a couple, which was
the equivalent of 133% FPL in 2000 when the program was
started. With 15 years of inflation, the income limit for the
A&D Program is the equivalent of 123% FPL. The author argues
the effects are widespread, pointing to the estimate of the
Department of Health Care Services (DHCS) that approximately
55,827 'Aged' Californians had Medi-Cal with a share of cost,
in January 2013.
The author explains that if someone's income is $1.00 over the
allowable A&D Program income level, he or she ends up with a
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very high share of cost - referred to as the share of cost
cliff. A share of cost is the difference between a
beneficiary's countable income and the Maintenance Need Income
Level (MNIL), or what the state considers to be the base
amount of income a person needs to survive on a monthly basis.
The MNIL is $600 per month and has not changed since 1989.
As a result, anything an individual earns over $600 a month
(or a low-income family of four earns over $1,100), becomes
that individual's share of cost. For example a 65 year-old
individual with a monthly income of $1,250 would have a $650
share of cost, even though if she was 64 she could be eligible
for free Medi-Cal without a share of cost.
The author explains the unfair effects have been exacerbated by
the Affordable Care Act and state legislation which increased
the income level for most adults to 138% FPL ($16,243 for an
individual), but seniors who don't fall into the new income
category have their Medi-Cal eligibility based on a 26 year
old MNIL that assumes people can live on $600 per month.
The author notes that federal law allows states to adjust their
maintenance need levels for inflation and to adopt more
generous income exemptions through a state plan amendment and
that low income seniors and adults with disabilities shouldn't
have to choose between putting food on the table and going to
the doctor. The author concludes that adjusting the income
level in California to more accurately reflect the true cost
of living will help thousands of vulnerable individuals access
the care that they need.
2)BACKGROUND.
a) A&D Program. AB 2877 (Thomson), Chapter 93, Statutes of
2000, the health budget trailer bill, established the A&D
FPL program, a no share-of-cost Medi-Cal benefit for many
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elderly and disabled recipients who previously had to pay a
significant share of cost to access Medi-Cal services. The
income cutoff under the A&D FPL program was set at 100% FPL
plus either $230 a month for individuals or $310 a month
for couples. At the time of enactment that formula created
an income cutoff of approximately 133% FPL. However, with
time and increases in the cost of living, that formula has
not kept pace with the cost of living. As a result, the
upper limit of financial eligibility is now 124% FPL. That
number will continue to drop when the cost of living
increases, making fewer people eligible for the program.
Formerly eligible beneficiaries, whose Social Security
income rises with the cost of living, are forced off the
A&D FPL program on to the more costly share-of-cost
Medi-Cal, if they choose to retain Medi-Cal coverage.
b) Medi-Cal for people with disabilities. People with
disabilities have more ways they can qualify for Medi-Cal
if they don't meet the standard income eligibility rules.
The A&D program is one way, another is the aged, blind, and
disabled medically needy program Medi-Cal program (ABD-MN).
For the A&D program, while income is an important factor
in determining eligibility, there are various calculations
made in eligibility determination which can result in
people with higher incomes being eligible. This reflects
one of the goals of the program which is to allow disabled
people to work without forfeiting eligibility for the
program. To determine eligibility for the A&D program,
there are different deductions from earned and unearned
income. Earned income is not entirely counted and
deductions are made for specified work expenses and payment
of any health insurance premiums. A maintenance need
allowance based on family size is also deducted. It is the
remaining amount that must be below the upper income limit
of eligibility, $1,188 for a single individual.
c) Medically needy. If an individual cannot meet the
requirements of the A&D program, they may be able to
qualify for ABD-MN. The ABD-MN program requires a share of
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cost and the payment can be a very large proportion of
income for the beneficiary. A single individual whose
income is $1.00 greater than the countable income maximum
of $1,188 in the A&D program faces a share of cost of
approximately $700 monthly. The share of cost is
calculated by taking the applicants net income, higher than
countable, and deducting $600 for monthly needs. The
beneficiary must then live on the monthly needs amount and
can easily devote more than 50% of their gross income to
paying for Medi-Cal.
3)SUPPORT. The Western Center on Law and Poverty, the sponsor
of this bill, notes that the A&D program is a critical part of
the Medi-Cal program and it provide free, comprehensive
coverage to persons over the age of 65 and those with
disabilities while simultaneously allowing them to have a
monthly income. The A&D program was enacted in 2000, with an
income eligibility standard of 199% FPL plus income
disregards, making the eligibility criteria equivalent to 133%
of the FPL. However, the disregards lose real value every
year, with the resulting income standard today at only 123% of
the FPL. When a senior has even a small increase in their
income that puts them over 123% FPL, they are forced into the
Medi-Cal Medically Needy program with a high share of cost.
Supporters argue this bill will help Californians by
increasing the income disregards and thereby increasing
eligibility. They note that senior citizens should not have
to choose between their health and basic necessities, such as
food and housing. Supporters also note that in an era when
almost all other adults who quality for free Medi-Cal have
income up to 138% of the FPL, it is particularly unfair to
require only medically frail and vulnerable individuals to pay
possible more than half their income before they can receive
no-cost care.
4)PREVIOUS LEGISLATION.
a) AB 2025 (Dickinson) of 2014, was very similar to this
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bill. AB 2025 was held in the Assembly Appropriations
Committee.
b) AB 1 X1 (John A. Pérez), Chapter 3, Statutes of 2013-14
First Extraordinary Session, implements the Medicaid
provisions (Medicaid is known as Medi-Cal in California) in
the federal ACA, including the expansion of federal
Medicaid coverage to low-income adults with incomes between
0% and 138% of FPL, establishes the existing Medi-Cal
benefit package supplemented by the essential health
benefits (EHBs) adopted by the Legislature last session as
the benefit package for the expansion population, and
requires the existing Medi-Cal population to receive the
EHBs adopted by the Legislature. Implements a number of
the Medicaid ACA provisions to simplify the eligibility,
enrollment, and renewal processes for Medi-Cal.
c) AB 969 (Chan) of 2001 would have incorporated annual
cost of living increases in the A&D FPL formula. AB 969
was held in the Senate Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
Western Center on Law and Poverty (sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
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Asian Law Alliance
Association of Regional Center Agencies
California Advocates for Nursing Home Reform
California Association of Public Authorities
California Optometric Association
California Pan-Ethnic Health Network
California Primary Care Association
California State Council of the Service Employees International
Union
Congress of California Seniors
Disability Rights California
Health Access
Justice In Aging
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Legal Services of Northern California
National Association of Social Workers
United Domestic Workers of America
Opposition
None on file.
Analysis Prepared by:Roger Dunstan / HEALTH / (916) 319-2097