BILL ANALYSIS                                                                                                                                                                                                    

                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    AB 1319             
          |AUTHOR:        |Dababneh                                       |
          |VERSION:       |February 27, 2015                              |
          |HEARING DATE:  |July 8, 2015   |               |               |
          |CONSULTANT:    |Scott Bain                                     |
           SUBJECT  :  Medi-Cal benefits: share of cost requirements.

           SUMMARY  : Increases the personal and incidental needs deduction for  
          Medi-Cal beneficiaries residing in a licensed community care  
          facility from $20 to $50.

          Existing law:
          1)Establishes the Medi-Cal program, which is administered by the  
            Department of Health Care Services (DHCS), under which  
            qualified low-income individuals receive health care services.  

          2)Establishes Medi-Cal eligibility for medically needy persons  
            and medically needy family persons, provided Medi-Cal  
            eligibility criteria are met. (The medically needy Medi-Cal  
            eligibility category are individuals who fit into a federal  
            benefit program category but whose income or resources exceed  
            eligibility levels. Medically needy individuals become  
            Medi-Cal eligible by having a share of cost whereby the  
            individual "spends down" to Medi-Cal eligibility levels.)

          3)Requires certain aged, blind, and disabled Medi-Cal recipients  
            to pay a share of cost as a condition of eligibility, with the  
            share of cost determined in accordance with specified  

          4)Requires, in determining the countable income of a medically  
            needy individual residing in a licensed community care  
            facility, the individual to have deducted from his or her  
            income $20 as a personal and incidental needs deduction.
          This bill increases the personal and incidental needs deduction  
          for Medi-Cal beneficiary residing in a licensed community care  


          AB 1319 (Dababneh)                                 Page 2 of ?
          facility from $20 to $50, to the extent that federal financial  
          participation is available and DHCS receives any necessary  
          federal approvals.
          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  

          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 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. 



          AB 1319 (Dababneh)                                 Page 3 of ?
          VOTES  :  
          |Assembly Floor:                     |80 - 0                      |
          |Assembly Appropriations Committee:  |17 - 0                      |
          |Assembly Health Committee:          |18 - 0                      |
          |                                    |                            |
          COMMENTS  :
          1)Author's statement. According to the author, this bill will  
            increase the personal and incidental needs deduction from $20  
            a month to $50 a month for an individual who qualifies for the  
            Medically Needy program under Medi-Cal. Medically Needy is a  
            federal Medicaid eligibility category option that provides  
            states with the option to extend Medicaid eligibility to  
            individuals with high medical expenses whose income exceeds  
            the federal poverty line but who would otherwise be eligible  
            for Medi-Cal. This program acts as a safety net for those who  
            are among the most vulnerable in our population -- people  
            whose medical costs overwhelm their income -- including more  
            than 8,000 financially needy older adults. Passing this bill  
            will truly provide seniors with dignity and greater financial  
            stability to cover life's basic necessitates.

          2)Background. Individuals whose income exceeds the income levels  
            or who do not meet eligibility criteria for no-cost Medi-Cal  
            can quality as medically needy individuals. The medically  
            needy program is a way to extend Medi-Cal eligibility to  
            individuals who do not qualify for no-cost Medi-Cal, such as  
            those with high medical expenses whose income is too high to  
            meet the income eligibility threshold for no-cost Medi-Cal.  
            The program functions as a last resort for those whose incomes  
            are modest and are surpassed by their significant medical  

            For Medi-Cal beneficiaries residing in a community care  
            facility, the share of cost calculation allows for a personal  
            and incidental needs deduction. This amount is set in statute,  
            is currently $20, and has been in effect since January 1,  
            1977. This amount is deducted from the individual's income in  
            determining their share of cost. For example, if an individual  
            with a monthly income of $1,300 who is residing in a licensed  


          AB 1319 (Dababneh)                                 Page 4 of ?
            community care facility would have the $20 personal and  
            incidental needs deduction subtracted from his or her monthly  
            income ($1,300 - $20 = $1,280). The $1,280 would be the  
            individual's monthly share of cost. Under this bill, $50 would  
            be subtracted, instead of $20.

          3)Related legislation. 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 percent of the federal poverty level (FPL).  AB 763 was  
            held on the Assembly Appropriations Committee suspense file.

            AB 1235 (Gipson) requires the home upkeep allowance (HUA) for  
            Medi-Cal beneficiaries in long-term care facilities to be  
            based on the actual minimum cost of maintaining the resident's  
            home (the HUA is currently $209 a month). Allows a long-term  
            care facility resident who does not have a home to establish a  
            transitional personal needs fund to be set aside from the  
            income that otherwise would be applied toward the resident's  
            Medi-Cal share of cost for residing in the long term care  
            facility in an amount of up to $7,500. The personal needs fund  
            would be used to cover the costs of securing a home for the  
            individual. AB 1235 is pending in the Senate Appropriations  

          4)Support. The California Advocates for Nursing Home Reform  
            (CAHNR) writes that the $20 deduction is used to offset  
            countable income and could mean the difference between  
            accessing affordable health care to making health care  
            completely unaffordable. CANHR writes that a $30 difference  
            may not seem like a lot, but many seniors are on a fixed  
            income with increasing medical needs and are overwhelmed by  
            the lack of affordable health care options available to them,  
            and this bill would give many seniors and persons with  
            disabilities much needed relief.

          Support:  Los Angeles Jewish Home (sponsor)
                    American Federation of State, County, and Municipal  
                    California Advocates for Nursing Home Reform
                    California Assisted Living Association
                    California Commission on Aging


          AB 1319 (Dababneh)                                 Page 5 of ?
                    Leading Age California
                    Ventura County Board of Supervisors 
          Oppose:   None received

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