BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1235 (Gipson) - Medi-Cal: beneficiary maintenance needs:
home upkeep allowances: transitional personal needs funds
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|Version: July 7, 2015 |Policy Vote: HEALTH 8 - 0 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: August 17, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1235 would require the home upkeep allowance for
Medi-Cal beneficiaries in long-term care facilities to be based
on the actual cost to maintain the beneficiary's home. The bill
would allow Medi-Cal beneficiaries in long-term care facilities
that do not have a home to establish a transitional needs fund
to set aside up to $7,500 for the purpose of securing a home.
Fiscal
Impact:
One-time administrative costs in the hundreds of thousands for
the Department of Health Care Services to develop a state plan
amendment, develop regulations, and make necessary programming
changes (General Fund and federal funds).
Unknown increased Medi-Cal spending, at least in the millions,
due to the increase in the home upkeep allowance (General Fund
and federal funds). For example, for each 1,000 eligible
beneficiaries who participate in the program under the bill
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(about 2% of the average Medi-Cal long-term care population),
the annual costs would be about $5 million per year.
The bill increases the maximum home upkeep allowance over
existing regulations, from $209 per month to the minimum
amount necessary to maintain the beneficiary's home. The
actual cost of the bill will depend on the number of
participating beneficiaries, which is not known at this time.
The Department does not have information on the number of
current participants in the home upkeep allowance program or
the number of beneficiaries who would participate in the
expanded program. Current participation in the program is
thought be very low. However, since the financial benefits of
the proposed program are much more substantial, increased
participation is likely. According to the Department of
Housing and Urban Development, the average rent for a one
bedroom apartment in California's metropolitan areas is over
$900 per month.
Unknown increased Medi-Cal spending, at least in the millions,
due to Medi-Cal beneficiaries using the established
transitional needs personal fund (General Fund and federal
funds). Similar to above, the Department does not have
information on the potentially eligible population. For each
1,000 participants (about 2% of the average long-term care
population) annual costs would be about $9 million per year.
Unknown impact on Medi-Cal spending due to individuals
previously eligible for Share of Cost Medi-Cal newly becoming
eligible for full scope Medi-Cal (General Fund and federal
funds). The bill requires that the income set aside for both
the increased home upkeep allowance and the new transitional
needs account would not be counted when determining Medi-Cal
eligibility. By setting aside a significant amount of monthly
income, the bill is likely to shift some individuals from
being eligible for Share of Cost Medi-Cal to full scope
Medi-Cal. In doing so, the bill would increase state Medi-Cal
spending substantially, by eliminating the requirement that
the individual pay any amount of the cost of care.
Background: Under state and federal law, the Department of Health Care
Services operates the Medi-Cal program, which provides health
care coverage to low income individuals, families, and children.
AB 1235 (Gipson) Page 2 of
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Medi-Cal provides coverage to childless adults and parents with
household incomes up to 138% of the federal poverty level and to
children with household incomes up to 266% of the federal
poverty level. The federal government provides matching funds
that vary from 50% to 90% of expenditures depending on the
category of beneficiary.
Under current law, an individual whose income exceeds the
Medi-Cal eligibility threshold can become eligible for Share of
Cost Medi-Cal by "spending-down" his or her income due to
significant health care costs (these beneficiaries are referred
to as "medically needy"). Under this program, an individual must
spend down all his or her monthly income (less certain set
asides, for example a fixed amount to maintain their home for
non-institutionalized patients or the personal needs allowance
and home upkeep allowance for individuals in long-term care
facilities). Once an individual has spent down his or her income
(paying directly to health care providers or long-term care
facilities) the state will pay the remaining costs for care
through Medi-Cal. Under current regulation, the home upkeep
allowance available to individuals in a long-term care facility
is limited to $209 per month.
Proposed Law:
AB 1235 would require the home upkeep allowance for Medi-Cal
beneficiaries in long term care facilities to be based on the
actual cost to maintain the beneficiary's home. The bill would
allow Medi-Cal beneficiaries in long-term care facilities that
do not have a home to establish a transitional needs fund to set
aside up to $7,500 for the purpose of securing a home.
Specific provisions of the bill would:
Authorize a home upkeep allowance for a long-term care
facility resident who intends to return to an existing
home;
Require the home upkeep allowance to be set aside from
the income otherwise be required to meet the individual's
share of cost;
Require the home upkeep allowance to be an exempt
resource for the purposes of determining Medi-Cal
eligibility;
Provide that the individual would only be eligible for
the home upkeep allowance if a physician has certified
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that the individual is likely to return home within six
months;
Authorize a transitional personal needs fund for
individuals in a long-term care facility who do not have a
home, but intend to return to the community;
Require the funds in the transitional personal needs
fund to be set aside from the income that would otherwise
be required to meet the individual's share of cost;
Limit the maximum amount in the fund to $7,500;
Require the money in the fund to be an exempt asset for
the purposes of determining Medi-Cal eligibility;
Require the fund to be used to allow the individual to
secure a home in the community;
Make operation of the bill contingent on federal
financial participation;
Require the Department to perform specified outreach
activities.
Related
Legislation: AB 1319 (Dababneh) would increase the personal and
incidental needs allowance for Medi-Cal beneficiaries residing
in a community care facility from $20 to $50. That bill will be
heard in this committee.
Staff
Comments: As noted above, the provisions of the bill that would
set-aside the expanded home upkeep allowance and the new
transitional needs fund from the calculation of income when
determining Medi-Cal eligibility have the potential to
significantly increase Medi-Cal spending on qualifying
individuals. An individual over age 65 with income at or below
$1,200 per month is eligible for full-scope Medi-Cal with no
cost sharing. Over income of $1,200 per month, an individual
would have to "spend down" all of his or her income (less the
existing allowances) before Medi-Cal would pay the remaining
costs of care. In California, the average monthly cost of a
place in a skilled nursing facility is over $7,000 per month.
For example, under current law, an hypothetical individual over
age 65 with a monthly income of $2,000 (and rent of $900 per
month) would have to spend about $1,700 per month on his or her
care (accounting for allowances) before the state would begin
spending. Under the bill, that individual's income for
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calculating Medi-Cal eligibility would be $1,100 per month
($2,000 in income less the actual cost of rent, in this case
$900 per month). That individual would then be eligible for
full-scope Medi-Cal coverage and the state would be required to
pay the full cost of that coverage, $1,700 per month more than
under current law.
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