BILL ANALYSIS Ó AB 1319 Page 1 ASSEMBLY THIRD READING AB 1319 (Dababneh) As Introduced February 27, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+---------------------+---------------------| |Health |18-0 |Bonta, Maienschein, | | | | |Bonilla, Burke, | | | | |Chávez, Chiu, Gomez, | | | | |Gonzalez, Roger | | | | |Hernández, Lackey, | | | | |Nazarian, Patterson, | | | | |Rodriguez, Santiago, | | | | |Steinorth, Thurmond, | | | | |Waldron, Wood | | | | | | | |----------------+------+---------------------+---------------------| |Appropriations |17-0 |Gomez, Bigelow, | | | | |Bonta, Calderon, | | | | |Chang, Daly, Eggman, | | | | |Gallagher, | | | | | | | | | | | | | | |Eduardo Garcia, | | | | |Gordon, Holden, | | | | |Jones, Quirk, | | | | |Rendon, Wagner, | | AB 1319 Page 2 | | |Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: Raises the current $20 per month incidental needs deduction to $50 for the California Medical Assistance Program (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. FISCAL EFFECT: According to the Assembly Appropriations Committee: 1)Increased costs, likely in the range of $100,000 or less (General Fund (GF)/federal), to allow certain Share-of-Cost (SOC) Medi-Cal beneficiaries to retain the additional monthly amount. 2)Unknown, likely significant costs for information technology changes in the three local Medi-Cal eligibility and case management systems (GF/federal). 3)According to the Department of Health Care Services (DHCS), by increasing the income deduction for SOC, individuals in the SOC program with incomes slightly above the income threshold for the Aged, Blind, and Disabled federal poverty level (FPL) program, a full-scope program with no SOC, will be eligible to transition to the FPL program. If this dynamic occurs, increasing the monthly income disregard by $30 would essentially make the income threshold 2.5 percentage points higher than it otherwise would be, for individuals residing in community care facilities. Increased enrollment in the FPL program would cost in the range of $1 million annually (GF/federal) for 200 additional AB 1319 Page 3 beneficiaries. However, staff notes the language appears to apply only to SOC beneficiaries, so whether this shift would actually occur is unclear. 4)This bill is tagged as a reimbursable mandate. Eligibility for Medi-Cal is administered by counties and administrative costs are reimbursed through contract with the state. This change will require notification and minor adjustments in county policies and practices. The total cost pressure associated with this small change is unknown but likely minor, and it will not result in mandate claims due to the reimbursement structure for Medi-Cal county administration. COMMENTS: 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 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. 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 AB 1319 Page 4 services, but the access is contingent upon a beneficiary sharing the cost. SOC 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, 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. 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 is currently $20. 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 AB 1319 Page 5 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 in support, 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, also in support, argues the share of cost cliff impoverishes individuals making it almost unaffordable to even pay for small everyday items. This bill has no known opposition. Analysis Prepared by: Roger Dunstan / HEALTH / (916) 319-2097 FN: 0000675