BILL ANALYSIS Ó
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:
AB 1319
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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