BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                      AB 1319

                                                                      Page  1


          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  

          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  

          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  

          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  

          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  

          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: