BILL ANALYSIS Ó
AB 1655
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Date of Hearing: April 6, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1655 (Dodd) - As Introduced January 13, 2016
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill increases the personal needs allowance (PNA) amount
from $35 to $80 per month for Medi-Cal-eligible individuals who
live in a medical institution or nursing facility, or receive
services from a Program of All-Inclusive Care for the Elderly
(PACE) organization.
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It also 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).
FISCAL EFFECT:
1)Assuming all eligible beneficiaries make use of the higher
PNA, costs to Medi-Cal would be $23.6 million ($11.8 million
General Fund based on 50% matching ratio).
Since increasing the PNA reduces the contribution certain
individuals pay for their own institutional care, costs to
Medi-Cal will increase commensurate with the increase in the
PNA. The cost to Medi-Cal is $45/month per person to whom the
bill applies -those residing in an institution or receiving
PACE services. Medi-Cal pays for an estimated 530,000 months
of institutional care and PACE annually on behalf of Medi-Cal
eligible "Share of Cost" beneficiaries to which this bill
would apply.
2)The California CPI adjustment will also increase costs,
assuming positive CPI growth. For example, a hypothetical CPI
of 2.5% would increase costs by around $600,000 for the first
year of adjustment, and costs would grow on a similar basis in
each future year.
3)This bill is tagged as a reimbursable mandate, but is not
expected to result in mandate claims due to the reimbursement
structure for Medi-Cal administration. Eligibility for
Medi-Cal is administered by counties, and administrative costs
are reimbursed through contract with the state. This change
will require minor adjustments in county policies and
practices. The total cost pressure associated with this small
change is unknown but likely minor. Minor information
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technology automation changes may be required as well.
COMMENTS:
1)Purpose. This bill updates the PNA to better reflect the costs
of personal items like clothing, hair and body products, and
outside activities for individuals residing in nursing
facilities.
2)Share of Cost Medi-Cal and the PNA. Through the Medically
Needy/Share of Cost program, individuals whose income is
otherwise too high to qualify for Medi-Cal can become
eligible. Under this program, Medi-Cal will pay for services
in a particular month if a beneficiary incurs high health care
costs and pays a significant amount out of pocket first
(called their "share of cost").
Once a beneficiary incurs their share of cost for a month,
they are "certified," which means Medi-Cal will cover eligible
medical expenses in that month. Although share-of-cost
certification is a determined month-by-month, given the high
cost of long-term care, individuals receiving such care
generally meet their share of cost and become certified.
For someone receiving care in a facility or through a PACE
program, the beneficiary share of cost is calculated as the
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following:
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| | | | | |
| |= |Countable |minus|"Maintenance income |
| | |income | |needs level" (the lowest |
|Share | |(income, minus | |income levels that |
|of cost | |specified | |reasonably permit |
| | |deductions) | |medically needy persons |
| | | | |to meet their basic |
| | | | |needs for food, |
| | | | |clothing, and shelter.) |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
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The maintenance income needs level includes a variety of
allowances, including a PNA of $35 that was established in
1985. Increasing the PNA to $80 would increase this
maintenance needs income level by $45 and reduce an
individual's share of cost by the same amount. The state's
costs would then increase, because the state pays whatever
costs remain after a beneficiary's share of cost has been met.
The General Fund pays half of the increased cost and federal
funds pay the other half, based on the state's 50% Medi-Cal
matching rate for this population.
3)DHCS can increase PNA. Current law authorizes DHCS, by
regulation, to annually increase the PNA amount as
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necessitated by increasing costs of personal and incidental
needs. However, DHCS has never increased the PNA and it
remains at $35. In order to ensure the amount is adjusted to
reflect the cost of living, this bill requires DHCS to
increase the amount annually by the California CPI.
4)Related Legislation.
a) AB 1235 (Gipson) of 2015 established a home upkeep
allowance and transitional personal needs fund for certain
Medi-Cal eligible long-term care facility residents. 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
Appropriations Committee.
c) AB 789 (Campbell) of 1999, which was vetoed, increased
the PNA to $40.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081
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