BILL ANALYSIS
Appropriations Committee Fiscal Summary
794 (Chu)
Hearing Date: 6/16/05 Amended: 6/9/05
Consultant: John Decker Policy Vote: Jud 5-2
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BILL SUMMARY: AB 794 would authorize the state to receive
additional federal matching funds for financing prenatal
health care. To achieve full current- and budget-year
savings, the state must take additional statutory,
administrative and budgetary actions prior to July 1, 2005.
The federal government must also grant a waiver.
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Fiscal Impact (in thousands)
Major Provisions 2005-06
2006-07 2007-08 Fund
State AIM* Savings $50,376 $61,880
$65,000 Prop. 99**
State Medi-Cal Savings $94,440 $97,288
$100,000 General**
Federal Matching Funds $144,815 $159,169
$165,000 Federal**
* Access for Infants and Mothers (AIM)
** Assuming the federal government approves the entire
waiver request to be submitted by the Administration and
that the Governor signs SB 88 (Ducheny) before June 30,
2005.
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STAFF COMMENTS: This bill is consistent with the Governor's
January budget proposal and was recommended by the Senate
budget subcommittee's staff (c.f., hearing agenda on April
4, 2005).
In 2002, the federal government issued regulations
authorizing states to apply for federal funds to finance
prenatal care under the State Children's Health Insurance
Program (SCHIP). According to the Legislative Analyst's
Office, seven states (Arkansas, Illinois, Massachusetts
Michigan, Minnesota, Rhode Island and Washington) received
subsequent federal approval. They have used the federal
funds to offset the cost of services provided to
undocumented immigrants, incarcerated pregnant women, and
other low-income pregnant women. Two of the state's
prenatal health programs are almost exclusively financed
with state funds:
Access for Infants and Mothers (AIM) extends
comprehensive health care (during the pregnancy and 60
days after delivery) to low- to moderate-income women.
The program is financed with tobacco tax revenue
generated under the provisions of Proposition 99.
Under current law, these revenues cannot be used to
meet federal match requirements. (SB 88 (Ducheny),
enrolled on June 8, 2005 and pending action by the
Governor, would authorize the state to leverage
Proposition 99 allocations against federal match
requirements.)
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AB 794 (Chu)
Medi-Cal provides prenatal, delivery and
post-partum services to undocumented immigrants. The
prenatal and post partum services are entirely
supported with General Fund.
The Governor's budget assumes that the Legislature will
adopt the fiscal changes included in this bill. If both AB
794 and SB 88 (Ducheny) are signed and the federal
government approves the state's waiver application before
June 30, 2005, then the state could shift over $300 million
(General Fund and Proposition 99 revenues) from state to
federal funds in the current and budget years. Of this
amount, the General Fund costs would fall by about $192
million for the two-year period. In the future, the
savings would be around $100 million annually.
The Legislative Analyst notes (c.f., Analysis of the
2005-06 Governor's Budget) that the state may not be able
to successfully claim a federal match for the post-partum
services currently provided by AIM and Medi-Cal. As such,
the savings may be less than the full $300 million listed
in the fiscal impact.