BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: AB 1269
A
AUTHOR: Brownley
B
AMENDED: April 14, 2009
HEARING DATE: July 8, 2009
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CONSULTANT:
2
Dunstan/
6
9
SUBJECT
Medi-Cal eligibility: California Working Disabled Program
SUMMARY
Effective March 1, 2010, extends, and increases eligibility
for, the Medi-Cal California Working Disabled Program (CWD
program).
CHANGES TO EXISTING LAW
Existing law:
Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), which provides
comprehensive health care coverage for low-income
individuals and their families; pregnant women; elderly,
blind, or disabled persons; nursing home residents; and
refugees who meet specified eligibility criteria.
Establishes the federal/state Supplemental Security
Income/State Supplemental Payment program (SSI/SSP) which
provides cash assistance to eligible aged, blind, and
disabled individuals and couples. SSI is a federal program
and the state supplements the grants through the SSP
program.
Continued---
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Establishes the CWD program within Medi-Cal for working
disabled individuals with net countable family income of up
to 250 percent of the federal poverty level (FPL). Exempts
from income used to determine eligibility all disability
income and specific categories of retirement income. In
addition, eligibility for the program is subject to federal
limits on assets, including that the assets and income of a
spouse must be considered in determining eligibility.
Requires that Medi-Cal benefits offered under the CWD
program shall be identical to those received by persons
eligible under the Medi-Cal categorically needy eligibility
category.
Requires beneficiaries in the CWD program to pay monthly
premiums on a sliding scale that ranges from $20-$250 for
individuals and $30-$375 for couples, depending on income.
Existing law requires that the spouse's income be
considered in determining the premium.
This bill:
Permits individuals otherwise eligible for the CWD program,
but who are temporarily not working, to remain in the
program for up to 26 weeks, provided the individuals
continue to pay premiums during the temporary nonworking
period. Makes this provision subject to federal financial
participation (FFP).
Clarifies that, to the extent that FFP is available, the
retained earned income of an eligible individual who is
receiving health care benefits under the CWD Program will
be considered exempt when held in a separately identifiable
account and not commingled with other resources.
Exempts for purposes of eligibility for CWD, to the extent
permitted under federal law, social security disability
benefits that convert to social security income upon
retirement of an individual. Requires DHCS to submit a
state plan amendment to the federal government and this
exemption shall be implemented only if the state plan
amendment is approved.
Requires assets that were exempt under the CWD program to
continue to be exempt under any other Medi-Cal program for
which the beneficiary becomes available where eligibility
is based on age, blindness, or disability. Requires DHCS
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to submit a state plan amendment to the federal government
and this exemption shall be implemented only the state plan
amendment is approved.
Requires that after an individual is determined eligible
for the CWD program, the countable income shall be used to
determine the amount of the required premium payment.
States that disability income and retained earned income
that is excluded from eligibility determination shall be
counted for determining the premium payment.
Requires individuals determined eligible for the CWD
program to pay a monthly premium that is equal to five
percent of their individual countable income. Provides
that if a non eligible spouse's income is counted, the
premium shall equal five percent of both spouses income.
Does not alter the minimum or maximum payment in current
law.
Provides that the provisions of the bill be implemented by
March 1, 2010. Provides for reimbursement of any local
costs that constitute a mandate.
FISCAL IMPACT
According to the Assembly Appropriations Committee, there
will be annual increased costs of $300,000 to $500,000 (50
percent General Fund) to the extent the eligibility changes
regarding income and asset disregards increase CWD
enrollment. Costs associated with prior versions of this
bill do not apply, as the CWD program was made permanent in
the budget act last year and those provisions are no longer
contained in this legislation. The actual fiscal impact of
this bill may be less, depending how many on enrollees
transfer from other Medi-Cal programs versus new enrollees
who have either been uninsured or covered by private
insurance. Due to the low annual income ($27,000 in 2009)
and assets required for eligibility, as well as the
significant disabilities of individuals in this program,
most of the CWD beneficiaries will remain eligible for
other Medi-Cal programs, regardless of employment status.
Several provisions of this bill should reduce churning, the
cycling on and off of coverage or between coverage
programs.
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Caseload estimates over the past 10 years for this very
small Medi-Cal program have been continually overestimated,
as can happen with small programs with specific and complex
eligibility criteria. In addition, small programs like CWD
often grow slowly. Initial estimates for this program in
1999 were 7,000 to 14,000 individuals enrolled annually.
However, five years after the creation of the program, only
about 1,500 were enrolled. Now 10 years later, only 3,500
are enrolled. This bill reduces enrollment barriers and
should increase caseloads, but not significantly.
BACKGROUND AND DISCUSSION
According to the author, this bill, which provides
affordable health coverage for working disabled
individuals, is intended to reform program eligibility so
more disabled individuals can join the workforce and save
their earnings without penalties. The author states that
this bill is expected to increase the number of
participating disabled individuals by extending Medi-Cal
coverage during periods of unemployment and permitting
savings from other public sources. The author notes that
the provision in this bill to continue eligibility for the
CWD program if an enrollee is unable to work, is similar to
the federal Consolidated Omnibus Budget Reconciliation Act
of 1986 which allows individuals to keep their job-based
insurance for eighteen months after they leave employment
if the individual pays the full cost of the coverage.
Background
The federal Balanced Budget Act of 1997 provided states the
option to provide services to people with disabilities who
are working and in families that would otherwise meet SSI
eligibility criteria but for the amount of their earnings.
The program also calls for the payment of premiums or other
cost-sharing charges set on a sliding scale that the states
may determine. Currently, 250 percent of the FPL is
$25,525 per year for an individual.
The CWD program was implemented in 2000. The program uses
federal Supplemental Security Income rules for income,
including earned income disregards (which disregard the
first $20 of income regardless of source, the first $65 of
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earnings; and, half of the remaining earnings). For
married applicants, a portion of the income of the spouse
may be counted as the applicant's income. Enrollees pay
monthly premiums of $20 to $375 based on income and marital
status. All of the applicant's disability related income
is exempt from income calculation. Certain retirement
accounts and property are also exempt from the asset
calculation.
Enrollees are required to provide proof of employment. If
they lose employment due to "good cause," they can retain
CWD program coverage for two months. Under the program,
good cause includes hospitalization, inability to work as a
result of the individual's disability or other reasons
beyond the control of the enrollee.
When it was enacted, the Department of Health Services
projected CWD program enrollment to be between 7,000 and
14,000 by June 2002. However, actual enrollment is
approximately 4500 individuals.
In April 2003, the Lewin Group prepared a report, The
California Working Disabled Program: Lessons Learned,
Looking Ahead . The report made a number of findings,
including:
The target population includes an estimated 150,000
uninsured working disabled adults;
potential enrollees lack awareness of the program;
eligibility workers lack knowledge, but effective
training may be difficult to achieve;
There is little coordination with other agencies;
some aspects of the program detract from its
attractiveness, including difficulty in obtaining
information about the CWD program, Medi-Cal program
requirements, and the need to change to and find
providers enrolled in Medi-Cal; and,
expanding eligibility rules alone will yield small
gains in enrollment given the current enrollment
trends.
On January 26, 2006, the Governor's Committee on Employment
of People with Disabilities released a report, "California
Comprehensive Strategy for the Employment of People with
Disabilities." The recommended committee actions related
to the CWD program include increasing participation,
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evaluating program effectiveness, and making
recommendations for improvement in the CWD program, such as
adding a grace period for temporary lapses in employment
similar to the provisions of this bill.
Prior legislation
AB 1183 (Committee on Budget), Chapter 758, Statutes of
2008 made the CWD program permanent by deleting the
September 1, 2008 sunset date.
AB 851 (Brownley) of 2008, which was similar to this bill,
was held on the Senate Appropriations suspense file.
AB 1113 (Brownley) of 2007, which was similar to this bill,
was vetoed by Governor Schwarzenegger. In his veto message,
the Governor stated:
While I strongly support the California 250
Percent Working Disabled Program and
appreciate its role in promoting work among
persons who are aged and disabled, I cannot
support this bill. This bill contains a
drafting error that would result in unequal
treatment of similarly situated aged persons,
in direct conflict with federal Medicaid law.
Given my strong support of services for
persons with disabilities to allow them to
safely remain at home and lead productive and
independent lives, I am directing the DHCS to
pursue legislation to continue and improve
this important program.
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AB 155 (Migden, Chapter 820, Statutes of 1999), established
the CWD program.
Arguments in support
Supporters argue that this bill will encourage people to
enter the labor force and the CWD program, because if they
become unemployed they could continue to receive their
coverage. They argue that many individuals are afraid to
enter the labor force for fear of losing their affordable
Medi-Cal coverage. Supporters argue that the other
eligibility changes will allow more people with
disabilities to become more independent and productive
while ensuring that they have access to critical health
services. Supporters note that it makes fiscal sense to
encourage disabled people to work and contribute to the
cost of health coverage.
PRIOR ACTIONS
Assembly Floor: 50-29
Assembly Appropriations:12-5
Assembly Health: 13-6
POSITIONS
Support: Abilicorp
AIDS Project Los Angeles
American Federation of State, County and Municipal
Employees
Association of California State Employees with
Disabilities
California Communities United Institute
California Foundation for Independent Living Centers
California Medical Association
California Primary Care Association
Disability Rights California
Easter Seals of Southern California
Health Access
National Multiple Sclerosis Society
Pacific Clinics
Project Return Peer Support Network
Resources for Independent Living
San Francisco AIDS Foundation
Southern California HIV Advocacy Coalition (SHAC)
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World Institute on Disability
Several Individuals
Oppose: None received
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