BILL ANALYSIS Ó
AB 2821
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GOVERNOR'S VETO
AB
2821 (Chiu and Santiago)
As Enrolled September 7, 2016
Majority vote
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|ASSEMBLY: |63-13 |(June 2, 2016) |SENATE: |36-3 |(August 23, |
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|ASSEMBLY: |63-16 |(August 29, | | | |
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Original Committee Reference: H. & C.D.
SUMMARY: Creates the Housing for a Healthy California Program
(Program) to provide rental assistance to individuals who are
homeless and receive services from the Whole Person Care pilot
program, Health Homes, or another locally controlled funding
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source. Specifically, this bill:
1)Makes legislative findings.
2)Defines an "applicant" to mean a county or a city collaborate
with a county to secure services funding.
3)Defines "fair market value" to mean the rent, including
utilities, as determined by the United States Department of
Housing and Urban Development (HUD) for units by bedroom that
must be paid in the market area are to rent privately owned,
existing, decent safe, and sanitary rental housing of
nonluxury nature.
4)Defines "homelessness" to mean the federal definition in the
Code of Federal Regulations Title 24 Section 578.3.
5)Defines "interim housing" to mean a safe place for a
participate to live temporarily while waiting to move into a
permanent apartment affordable to the participant with rental
assistance, where the participant is not required to pay more
than 30% of his or her income toward the costs of interim
housing. Interim housing may include recuperative or respite
care and shall not be funded for longer than nine months.
6)Defines "long-term rental assistance" to mean a rental subsidy
provided to a housing provider, including a landlord renting
in the private market or developers or developer creating
affordable housing, to assist a tenant to pay the difference
between 30% of the tenant's income and fair market rent or
reasonable market rent as determined by the Department of
Housing and Community Development (HCD).
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7)Defines "permanent housing" to mean an apartment where the
landlord does not limit stay in the apartment, the landlord
does not restrict the movements of the tenant, and the tenant
has a lease that is subject to Civil Code Section 1940 et.al.
8)Defines "Program" to mean the Housing for a Healthy California
Program.
9)Defines "supportive housing" to mean housing with no limit on
length of stay, occupied by the target population, and that is
linked to onsite or offsite services that assist the resident
in retaining the housing, improving his or her health status,
and maximizing his or her ability to live and, when possible,
work in the community.
10)Requires the HCD to do all of the following:
a) On or before October 1, 2017, create the Program;
b) On or before October 1, 2017, draft guidelines for
stakeholder comment to fund competitive grants to eligible
counties to pay for interim and long-term rental assistance
under the Program;
c) On or before April 1, 2018 and every year thereafter,
subject to appropriation by the Legislature, award grants
on a competitive basis to eligible counties and regions
participating in a Whole Person Care pilot or counties and
regions with Medi-Cal managed care plans administering the
Health home Program;
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d) Collect data mid-year and annually from Medi-Cal managed
care plans partnering with participating counties and
regions receiving grants awarded under the Program.
e) No later than April 1, 2018, contract with an
independent evaluator or an evaluator contracted with the
Department of Health Care Services (DHCS), to analyze data
collected to determine potential costs avoided or saved due
to the Medi-Cal Housing Program.
f) By October 1, 2019, and every year thereafter, in which
the Program receives funding, report data collected to the
Assembly Budget Committee, the Senate Budget and Fiscal
Review Committee, the Assembly and Senate Health
committees, the Assembly Housing and Community Development
Committee, and the Senate Transportation and Housing
Committee.
1)Encourages HCD to consult with DHCS where appropriate to
create the Program, draft guidelines, award grants, and
contract with an independent evaluator.
2)Requires the guidelines to include a competitive scoring
criteria that includes but is not limited to scoring that
awards points based on the following:
a) Need which includes consideration of the number of
individuals experiencing homelessness and the impact of
housing cots in the applicants geographic area;
b) Ability of the applicant to administer a program
offering interim and long-term rental assistance of people
experiencing homelessness;
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c) The applicant's documented partnerships with affordable
and supportive housing in the applicants geographic area;
d) A comprehensive plan to connect interim housing,
long-term rental assistance and project based supportive
housing resources; and
e) Coordination with a community based housing and homeless
service providers, behavioral health providers, and safety
net providers, including community health centers.
1)Provides that an applicant is eligible for the Program if the
applicants meets the following requirements:
a) Identifies a source of funding for housing transition
services and tenancy sustain services including but not
limited to one or more of the following:
i) County general funds;
ii) Whole Person Care program funds;
iii) The Health Home Program; and
iv) Other county-controlled funding to provide these
services to eligible participants.
b) Agrees to contribute funding for interim and long-term
rental assistance from an identified source.
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c) Has designated a process for administering grant funds
through agencies administering housing programs;
d) Agrees to collect and report data to HCD.
1)Requires HCD to coordinate with DHCS to match program
participant data, consistent with state and federal privacy
law, to Medi-Cal data to identify outcomes among participants
as well as changes in health care costs associated with
housing and services provided under the Program to the extent
that information is available up to 12 months prior to each
participants move into permanent housing as well as changes in
costs after each participant move into permanent housing.
2)Requires an applicant awarded grant funds to annually and at
midyear intervals report the following data to HCD:
a) Data specified by HCD necessary to measure the costs and
outcomes of the program;
a) The number of participants and the type of interventions
offered through grant funds.
b) The number of participants living in supportive housing
other housing.
1)Requires a county or region to use grants awarded through the
Program for one or more of the following, which may be
administered through a housing pool:
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a) Long-term rental assistance for period up to five years;
b) A capitalized operating reserve for up to 15 years to
pay for operating costs of an apartment or apartments
within a development receiving public funding to provide
supportive housing to people experiencing homeless.
c) Interim housing; or
d) A county's administrative costs for up to 5% of the
total grant awarded.
1)Provides that a county resident is eligible to receive
assistance under the Program if he or she meets all of the
following requirements:
a) Is homeless upon initial eligibility;
b) Is a Medi-Cal beneficiary;
c) Is eligible for Supplemental Security Income;
d) Is assed likely to improve his or her health conditions
with supportive housing; and
e) Is eligible to receive services under a program
providing services promoting housing stability, including,
but not limited to the following:
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i. The Whole Person Care pilot program;
ii. Health Home Program, whichever is relevant to
the participating county or region; and
iii. A locally controlled services program funding
or providing services in supportive housing.
1)Provide that the Program is subject to an appropriation of the
Legislature.
2)Requires the Legislature to consider the impact housing and
supportive services have in changing the utilization and
health care cost in determining future appropriations.
3)Requires HCD to reimburse DHCS for their costs of
collaborating and matching and providing relevant data.
4)Allow HCD to use no more than 5% of funds from the Program for
purpose of administering the program.
5)Provide guidelines adopted, amended, or repealed related to
the Program are not subject to review by the Office of
Administrative Law.
The Senate amendments:
1)Change the name of the program from the Medi-Cal Housing
Program to the Housing for a Healthy California Program.
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2)Change the competitive scoring criteria for awarding grants
that must be included in the guidelines.
3)Add a definition for an "applicant" to mean a county or a city
collaborates with a county to secure services funding.
4)Add a definition for "fair market value" to mean the rent,
including utilities, as determined by the United States
Department of Housing and Urban Development (HUD) for units by
bedroom that must be paid in the market area are to rent
privately owned, existing, decent safe, and sanitary rental
housing of nonluxury nature.
5)Modify dates by which the Program must be established, grants
awarded, and information evaluated.
6)Reduce the role of DHCS in creating the Program.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill does not make an appropriation, but
codifying the program results in cost pressure to fund the
program. A group of Assemblymembers, which includes the author,
has proposed a $650 million package of proposals for affordable
housing, including $30 million to fund the Program (MCHP).
1)Assuming a one-time $30 million General Fund (GF)
appropriation for the grant program, $500,000 to HCD to
develop the grant program criteria, and $335,000 annually
ongoing for the life of the program.
2)Costs to DHCS to consult on program design are expected to be
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absorbable within existing resources. To the extent it is
helpful to the program design to have more involvement from
DHCS staff in the program design, some of the one-time program
development costs could be shifted to DHCS (GF).
There is fairly convincing data that demonstrates that housing
indigent and homeless individuals who are high utilizers of
health care significantly reduces health care costs. A number
of pilot projects have been conducted that demonstrate a clear
return on investment in a fairly short period of time. To the
extent housing grants through this program reduce health care
costs of individuals enrolled in Medi-Cal, there could be
significant savings to the Medi-Cal fee-for-service program and
a reduction in cost growth in Medi-Cal managed care. This bill
suggests any savings generated should be reinvested in the
program, by stating further funding is subject to annual
appropriations by the Legislature based on decreased costs of
care as described in 4) above. This creates ongoing cost
pressure to maintain funding but such reinvestment does not
result in additional costs.
COMMENTS: Background: Homelessness often creates an
institutional circuit, where those experiencing it long enough
cycle through living on the streets, emergency department
visits, inpatient admissions, incarceration, and often nursing
home stays. This circuit is expensive to our public systems.
Homeless individuals cost our public systems an average of
$2,897 per month, two-thirds incurred through the health system.
Half of all homeless people have a history of incarceration.
If homeless when discharged from prison or jail, parolees and
probationers are seven times more likely to recidivate than
people who are housed. Homeless Californians incur
disproportionate Medi-Cal costs and achieve poor health
outcomes. Many experience a combination of chronic medical,
mental health, and substance abuse conditions, as well as social
determinants that negatively impact their ability to access
care.
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Homeless frequent users continue to increase their inpatient
costs despite high Medi-Cal costs because they cannot obtain
sufficient rest, follow a healthy diet, store medications, or
regularly attend appointments so long as they are unhoused.
Two-thirds of frequent users have both medical and behavioral
health conditions, are homeless, and die 30 years younger than
average.
In March 2015, the DHCS proposed using Medi-Cal to fund services
and housing assistance-supportive housing-acknowledging decades
of research demonstrating supportive housing decreases Medicaid
costs among homeless beneficiaries. The Federal Centers for
Medicare & Medicaid Services (CMS) approved use of federal
Medicaid dollars to fund services in supportive housing. Though
CMS rejected using federal Medicaid dollars to pay for housing,
CMS stated the State could use its own State dollars (through
Medi-Cal or otherwise) to fund housing subsidies. In fact, a
number of other states and jurisdictions within California,
including the State of New York and the County of Los Angeles,
pay for housing costs through health systems.
The final 1115 Medicaid Waiver in California includes the Whole
Person Care pilot program, which allows counties to tap into
federal funds to pay for care management supports, services
helping people find housing, and services promoting housing
stability DHCS is also working to implement a new Health Home
Program that would fund services for high-cost homeless
beneficiaries.
Supportive housing, which is affordable housing with intensive
services, allows people experiencing significant barriers to
housing stability to improve their health and decrease their
Medicaid costs. National studies comparing formerly homeless
Medicaid beneficiaries living in supportive housing with
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homeless beneficiaries receiving usual care demonstrate Medicaid
cost savings of almost $9,000 per year after the costs of
services. This bill would create the Housing for a Healthy
California Program to provide rental assistance for homeless
individuals who receive Social Security Income and receive
funding for wrap-around services to help them stay housed
through the Whole Person Care pilot program, Health Homes, or
other service funding.
GOVERNOR'S VETO MESSAGE:
I am returning Assembly Bill 2821 without my signature.
This bill establishes a new program to provide rental assistance
to homeless Medi-Cal beneficiaries.
While the goal of this bill is laudable and the policy could
lead to savings in the health care system, codifying a program
without an identified funding source raises false expectations.
This grant program, like any new expenditure, is best left to
budget discussions.
Analysis Prepared by:
Lisa Engel / H. & C.D. / (916) 319-2085 FN:
0005145
AB 2821
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