BILL ANALYSIS Ó
AB 1655
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Date of Hearing: March 15, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
AB 1655
(Dodd) - As Introduced January 13, 2016
SUBJECT: Medi-Cal: beneficiary maintenance needs: personal
needs allowance.
SUMMARY: Increases the personal needs allowance (PNA) amount
from $35 to $80 per month for Medi-Cal-eligible individuals who
live in a medical institution, nursing facility, or receive
services from a Program of All-Inclusive Care for the Elderly
(PACE) organization. Requires the Department of Health Care
Services (DHCS) to annually increase the PNA based on the
percentage increase in the California Consumer Price Index
(CPI).
EXISTING LAW:
1)Establishes the Medi-Cal program within DHCS, as California's
Medicaid program, to provide qualifying aged, blind, disabled,
and low-income individuals health care and a uniform schedule
of benefits.
2)Requires DHCS to establish the income levels for the lowest
levels of maintenance need that reasonably and adequately
allow medically needy individuals to meet their basic
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requirements for food, clothing, and shelter, and for which
federal financial participation (FFP) will still be provided,
as specified.
3)Requires the amount of the income level for maintenance per
month to be calculated by multiplying the federal financial
participation rate by defined factors, based on family size,
as specified.
4)Requires DHCS to establish regulations for the method of
computation of the maintenance per month for a person living
in a medical institution or nursing facility or receiving
services from a PACE organization. Requires the regulations
to provide the following:
a) A personal needs allowance in an amount of not less than
$35 per month for a qualified patient and authority for
DHCS to increase the amount as necessary through
regulation;
b) The upkeep and maintenance of the home;
c) The support and care of a patient's minor children, or
any disabled relative for whose support he or she has
contributed regularly, if there is no community spouse;
d) The support and care of an institutionalized person's
community spouse or his or her minor or dependent children,
dependent parents, or dependent siblings of either spouse
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providing they are living with the community spouse, as
specified; and,
e) A community spouse monthly income allowance and a family
allowance for each member residing with the community
spouse, to be established at the maximum amount permitted
by federal law.
5)Requires DHCS to establish regulations to calculate the
maintenance per month for a person living in a licensed
community care facility, to provide for the support and care
of his or her spouse, minor children, or any disabled relative
for whose support he or she has contributed regularly.
6)Defines the "FFP rate," as 133.3%, or as otherwise defined in
federal law.
FISCAL EFFECT: This bill has not yet been analyzed by a fiscal
committee.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, the PNA is
crucial to enhancing the quality of life of residents in
nursing homes by covering the costs of haircuts, clothes,
shoes, personal care items, reading materials, postage, and
meals outside the facility. The author states that the
current PNA does not adequately fund the cost of these needs
and limits opportunities for recreation and enrichment that
could promote better health outcomes for these individuals.
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The author contends that because California's payment to
long-term care (LTC) facilities is matched by the federal
government at a rate of 50%, increasing the PNA will serve to
draw down more matching funds from the federal government to
further support needy individuals.
2)BACKGROUND.
a) Medicaid, Nursing Homes, and Post-Eligibility Treatment
of Income. Medicaid is the nation's major
publicly-financed health insurance program, covering the
acute and long-term services and supports (LTSS) needs of
millions of low-income Americans of all ages. Existing
federal law requires Medicaid to cover LTC or nursing home
services to all eligible people 21 years of age and older.
Medicaid also covers home and community-based services for
people who would be in a nursing home if they did not
receive home care services.
Federal law requires that state Medicaid agencies reduce
costs by using available income from beneficiaries to cover
LTSS provided to most Medicaid beneficiaries. Each state
calculates the available income for a beneficiary once they
become eligible for Medicaid. When making the
post-eligibility calculation, states deduct certain
allowances for patient's basic needs, including an
allowance for personal needs, i.e., PNA, maintenance of the
patient's spouse or family, and other expenses. Federal
law requires the PNA for each state to be at least $30 per
month. Once allowances have been deducted, any remaining
income is contributed toward the cost of the beneficiary's
care in the facility.
b) PNAs in California vs. other states. California's
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current PNA is $35 per member per month, a rate that has
been constant since 1985. DHCS does not have data on the
number of individuals using their PNA, however its
anecdotal evidence demonstrates that patients typically do
use it. DHCS stated an increase in the PNA has not been
proposed by DHCS, thus the allowance has remained the same.
A report by the AARP Public Policy Institute demonstrates
that in 2009, California had one of the lowest PNAs in the
country, with only Alabama, Illinois, Missouri, and North
Carolina using a lower allowance. The value of state PNAs
vary greatly from state to state. According to their state
Websites, the PNAs per month in 2015 for Connecticut,
Colorado, Minnesota, and Texas, were $60; $77.25; $97; and
$60, respectively. The 2015 PNA for New York ranged
between $40 and $55 per month, depending on the type of
financial assistance the beneficiary was receiving. Many
states have introduced or passed legislation to increase
their PNAs to higher than the federal minimum of $30 per
month per eligible beneficiary. Some states, such as
Colorado, have included an automatic annual adjustment to
the allowance.
c) CPI. The CPI is a measure of the average change over
time in the prices paid by urban consumers for a fixed
market basket of goods and services. The CPI provides a
way to compare what a particular market basket of goods and
services costs at one time point with what the same market
basket costs at a different time point. The CPI market
basket is developed from detailed expenditure information
provided by families and individuals on what they have
purchased in the past. The CPI is typically used for three
major purposes: i) as an economic indicator; ii) as a
deflator of other economic series; and, iii) as a means of
adjusting dollar values. While the CPI is often used to
cost-of-living adjustments, it is not actually a
cost-of-living index because it does not account for
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changes in buying patterns that consumers make to adjust to
relative price changes. For example, if the price of beef
increases significantly relative to that of chicken,
consumers will often opt to purchase the chicken; the CPI
does reflect this type of short-term adjustment as a
cost-of-living index does.
3)SUPPORT. Supporters of this bill state the current PNA is
inadequate and that this bill will help promote a healthy
lifestyle that will help to ensure California's neediest
patients can receive proper care. Supporters assert that the
personal possessions of nursing home residents are often a
last remaining symbol of their independence, and that
increasing the PNA to reflect the current cost of living will
help restore dignity to the state's most vulnerable
individuals living in these facilities.
4)PREVIOUS LEGISLATION.
a) AB 1235 (Gipson) of 2015 would have required the home
upkeep allowance for eligible Medi-Cal beneficiaries in LTC
facilities to be based on the actual minimum cost of
maintaining the resident's home. AB 1235 would have
allowed a LTC facility resident who does not have a home to
establish a transitional personal needs fund of up to
$7,500, 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 LTC facility. AB 1235 was held in
the Senate Appropriations Committee.
b) AB 1319 (Dababneh) of 2015 would have increased the
personal and incidental needs deduction for Medi-Cal
beneficiaries residing in a licensed community care
facility from $20 to $50. AB 1319 was held in the Senate
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Appropriations Committee.
c) AB 789 (Campbell) of 1999 would have increased the PNA
to not less than $40 per month. AB 789 was vetoed by the
Governor with the following message:
"This bill would increase the minimum monthly
personal and incidental needs allowance for age,
blind or disabled Medi-Cal beneficiaries in
institutional care. This bill, while well
intentioned, would result in estimated new annual
General Fund costs in excess of $2 million that
was not included in the 1999-2000 budget. Any
increase in the personal and incidental needs
allowance should be considered as part of the
annual budget deliberations."
REGISTERED SUPPORT / OPPOSITION:
Support
California Senior Legislature (sponsor)
American Federation of State, County and Municipal Employees
(AFSCME), AFL-CIO
California Advocates for Nursing Home Reform
California Dialysis Council
California Long-Term Care Ombudsman Association
County of San Bernardino
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Justice in Aging
United Domestic Workers of America - AFSCME Local 3930 / AFL-CIO
Opposition
None on file.
Analysis Prepared by:An-Chi Tsou / HEALTH / (916) 319-2097