BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2821 (Chiu) - Medi-Cal Housing Program
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|Version: June 16, 2016 |Policy Vote: HEALTH 9 - 0, T. & |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 11, 2016 |Consultant: Brendan McCarthy |
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*********** ANALYSIS ADDENDUM - SUSPENSE FILE ***********
The following information is revised to reflect amendments
adopted by the committee on August 11, 2016
Bill
Summary: AB 2821 would require the Department of Housing and
Community Development to establish a program to fund competitive
grants to pay for rental assistance for homeless Medi-Cal
beneficiaries.
Fiscal
Impact:
Unknown annual costs to provide grants to support rental
assistance for homeless Medi-Cal beneficiaries (General Fund).
The bill does not appropriate any funding for the program nor
does it specify a projected level of funding for future years.
AB 2821 (Chiu) Page 1 of
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Staff notes that the author and other members of the Assembly
had proposed to include $60 million in the current year budget
to fund this bill (as part of a larger program for affordable
housing). That funding was not included in the enacted Budget
Act.
One-time costs of about $500,000 to develop program
requirements, consult with stakeholders, and adopt program
guidelines by the Department of Housing and Community
Development (General Fund). The bill would require the
Department to develop the program immediately, whereas
actually funding grants under the program would be subject to
an appropriation by the Legislature. Therefore, the Department
would incur the upfront administrative costs, regardless of
whether the Legislature appropriated money in future years for
the program.
Ongoing costs of about $300,000 per year to administer the
grant program by the Department of Housing and Community
Development (General Fund). Based on the initial proposal for
$60 million in initial funding, the Department anticipated
needing about $300,000 per year to administer the grant
program.
Ongoing costs, likely in the low hundreds of thousands per
year, to contract with an independent evaluator to analyze
program data, including health care spending data for program
participants (General Fund). The bill requires the Department
of Housing and Community Development to contract for an
independent evaluation. The bill does not place an end date on
the evaluation of the program, therefore staff assumes that
program evaluation will be an ongoing cost.
Ongoing costs, likely in the low hundreds of thousands, for
the Department of Health Care Services to coordinate with the
Department of Community Development and to collect and report
on Medi-Cal expenditures for participating Medi-Cal
beneficiaries (General Fund and federal funds). The bill
requires the independent evaluator to determine changes in
health care costs for participating Medi-Cal beneficiaries.
The Department of Health Care Services will likely incur staff
costs to compile both fee-for-service and managed care
expenditure data.
AB 2821 (Chiu) Page 2 of
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Unknown, but significant future public savings are likely due
to reduced health care costs for participating individuals, to
the extent the program is funded (General Fund, local funds,
federal funds). There are numerous published studies that have
shown significant reductions in public spending when homeless
individuals who are high-utilizers of public services are
provided housing as well as physical and mental health
services. Those studies have shown a strong cost-benefit ratio
to "housing first" pilot projects. To the extent that this
program is funded and funding is targeted towards
high-utilizers of health care services, the program is likely
to generate future cost savings in avoided health care costs
(as well as potential savings due to decreased costs in the
criminal justice system). Cost savings could accrue to the
state due to reductions in hospitalizations at private
hospitals, to local governments due to reductions in
hospitalizations at public hospitals or psychiatric hospitals,
and to the federal government which provides matching funds
for Medi-Cal services. Because of the complexity of financing
for Medi-Cal services, cost savings to the state may or not
fully offset state expenditures.
Author
Amendments: Make operation of the bill contingent on an
appropriation of funding.
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