BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1319


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          Date of Hearing:  April 28, 2015


                            ASSEMBLY COMMITTEE ON HEALTH


                                  Rob Bonta, Chair


          AB 1319  
          (Dababneh) - As Introduced February 27, 2015


          SUBJECT:  Medi-Cal benefits:  share of cost requirements.


          SUMMARY:  Raises the current $20 per month incidental needs  
          deduction to $50 for Medi-Cal beneficiaries who qualify for  
          personal and incidental needs deductions and are residing in a  
          community care facility, provided all necessary federal  
          approvals can be obtained.


          EXISTING LAW:  


          1)Establishes California's Medicaid program, Medi-Cal, through  
            which eligible low-income individuals receive health care  
            services.

          2)Requires Medi-Cal coverage of adults under age 65 who are not  
            currently eligible with incomes up to 138% of the federal  
            poverty level (FPL) or below $15,856 in 2013 for an  
            individual.

          3)Establishes that medically needy persons and families are  
            entitled to health care services in the Medi-Cal program  
            provided they meet their monthly share of cost requirements.









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          4)Requires the Department of Health Care Services to establish  
            the income levels for maintenance need at the lowest levels  
            that reasonably permit medically needy persons to meet their  
            basic needs for food, clothing, and shelter, and for which  
            federal financial participation will still be provided. 

          5)Requires certain aged, blind, and disabled Medi-Cal recipients  
            are required to pay a share of cost as a condition of  
            eligibility, with the share of cost determined in accordance  
            with specified requirements. 
          6)Establishes, for purposes of determining the share of cost, a  
            formula to calculate the personal and incidental needs  
            deduction for an individual residing in a licensed community  
            care facility.  Under this formula these seniors only have $20  
            a month to cover all expenses not covered by Medi-Cal or  
            provided by their home facility.


          FISCAL EFFECT:  This bill has not been analyzed by a fiscal  
          committee.


          COMMENTS:  


          1)PURPOSE OF THIS BILL.  According to the author, seniors on a  
            fixed income who receive a Medically Needy Only (MNO) benefit  
            need extra help in purchasing everyday items (toothpaste,  
            soap, clothes, etc.) due to their high medical expenses.   
            Currently seniors in the MNO program that live in assisted  
            living facilities only keep the $20 income deduction portion  
            of their income every month.  That $20 is expected to cover  
            all items the senior needs from shampoo and toothpaste to  
            clothing and other incidentals, but falls short.  This bill  
            seeks to increase the $20 per month incidental needs deduction  
            to $50 for Medi-Cal beneficiaries who qualify for personal and  
            incidental needs deductions. This bill is needed to allow  
            seniors and the disabled to have more money to pay for  
            everyday expenses.  This amount has not been raised since 1970  








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            and $20 covers very few expenses.  Thus, raising the amount to  
            $50 allows for a modest increase in the quality of life for  
            these seniors.


          2)BACKGROUND.  The MNO program is a way to extend Medi-Cal  
            eligibility to individuals with high medical expenses whose  
            income exceeds the income eligibility threshold for Medi-Cal.   
            The program functions as a last resort for those whose incomes  
            are modest and are surpassed by their significant medical  
            expenses.  Medically needy eligibility allows a beneficiary to  
            gain access to Medi-Cal services, but the access is contingent  
            upon a beneficiary sharing the cost.


            Beneficiaries typically use the program in one of three ways:


             a)   Catastrophic coverage.  It covers medical expenses for a  
               major health events such as an injury or accident;


             b)   Long term care coverage.  Support for nursing home care,  
               community care facilities, or in-home supportive services;  
               or,


             c)   Coverage for costly chronic conditions.  Health care  
               services for an illness that is costly and/or chronic  
               enough to generate high monthly expenses.


            This "share of cost" arrangement is different than cost  
            sharing or co-pay requirements that are familiar to so many.   
            Share of cost requires recipients to take full responsibility  
            for health care expenses up to a predetermined amount.  Once  
            they meet the full share of cost they are certified and  
            Medi-Cal will cover eligible medical expenses for that month.   
            The share of cost requirement begins anew the following month,  








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            so it is a month by month eligibility which is quite different  
            than the remainder of Medi-Cal.  In any given month only a  
            small proportion, approximately one in six, of the  
            beneficiaries meet their share of cost obligation and receive  
            Medi-Cal.  For those in nursing homes, the proportion is much  
            greater with nearly all meeting their share of cost each  
            month.


            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 beneficiary is  
            now faced with over half of her income paying for Medi-Cal.



            Determining eligibility for the medically needy program is  
            somewhat rigid.  If a beneficiary's income is $1.00 over the  
            allowable amount for say, the aged and disabled program income  
            level, he or she ends up with a very high share of cost -  
            commonly referred to as the share of cost cliff.  A share of  
            cost is the difference between a beneficiary's countable  
            income and the 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 those beneficiaries residing in a community care facility,  
            the share of cost calculation allows for a personal and  
            incidental needs deduction.  The amount is set in statute and  








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            is currently $20. 


          1)SUPPORT.  The American Federation of  State County and  
            Municipal Employees supports this bill because seniors on a  
            fixed income need the extra help in purchasing these everyday  
            items due to their high medical expenses.  The Commission on  
            Aging supports this bill because medically needy individuals  
            who must pay a share-of cost for their Medi-Cal community care  
            facilities are left with few resources to cover the cost of  
            personal items they need.  The Ventura County Board of  
            Supervisors points out that seniors and others living in  
            licensed community care facilities and receiving benefits from  
            Medi-Cal are already the most vulnerable in society and the  
            current incidental needs deduction is just too small.   
            California Advocates for Nursing Home Reform argue the share  
            of cost cliff impoverishes individuals making it almost  
            unaffordable to even pay for small everyday items.


          2)RELATED LEGISLATION.  


             a)   AB 763 (Burke) 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).  This bill is on the  
               suspense file of the Assembly Appropriations Committee.


             b)   AB 1235 (Gipson) establishes the home upkeep allowance  
               for certain Medi-Cal eligible long-term care facility  
               residents.  This bill is set for hearing in Assembly Health  
               on April 28, 2015.


          REGISTERED SUPPORT / OPPOSITION:









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          Support


          American Federation of State, County, and Municipal Employees,  
          AFL-CIO
          California Advocates for Nursing Home Reform
          California Commission on Aging
          Ventura County Board of Supervisors




          Opposition




          None on file.


          Analysis Prepared by:Roger Dunstan / HEALTH / (916) 319-2097