BILL ANALYSIS
AB 1595
Page 1
Date of Hearing: May 12, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1595 (Jones) - As Amended: April 28, 2010
Policy Committee: Health Vote:11-5
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill requires the California Department of Health Care
Services (DHCS) to expand Medi-Cal eligibility to individuals
with family income up to 133% of the federal poverty level (FPL)
without regard to family status. Under current law, most
non-disabled, non-elderly adults are eligible for Medi-Cal only
if their family income is less than 100% of FPL and they have
children living with them. In 2010, 133% of FPL is an annual
income of about $14,000 for an individual and $30,000 for a
family of four and 100% of FPL is an income of about $11,000 for
an individual and $22,000 for a family of four. Specifically,
this bill:
1)Expands Medi-Cal eligibility per requirements of federal
health reform, the Patient Protection and Affordable Care Act
(PL-111-148).
2)Requires DHCS to establish the eligibility expansion by
January 1, 2014.
3)Excludes certain individuals from this Medi-Cal expansion,
including people who are 65 years of age and older, pregnant
women, those eligible for Medicare Part A, those enrolled in
Medicare Part B, or those included in various mandatory
eligibility categories including beneficiaries of Supplemental
Security Income (SSI).
FISCAL EFFECT
1)A recently published insurer estimate of California's Medi-Cal
expansion shows total costs of $34 billion (about $2 billion
GF or 5% GF) for the time period from January 1, 2014 through
AB 1595
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the end of calendar year 2020. According to several published
estimates, up to two million individuals may become eligible
for Medi-Cal and will increase the statewide caseload by more
than 25%.
2)The GF share of this Medi-Cal expansion is only 5% compared
with the usual 50% GF share of total Medi-Cal costs. The
federal health reform law provides full federal financing
(100% federal) for those newly eligible for Medi-Cal from 2014
through 2016. Federal support then phases down the federal
share of costs to 90% by 2020.
3)The actual cost of this coverage expansion will depend on the
scope of benefits provided and the rate at which the expansion
occurs. Under current law, Medi-Cal generally provides health
services that are medically necessary. The medical necessity
standard results in broad health coverage.
Under federal health reform, the expansion population will have
a "benchmark plan" similar in scope to the health coverage
available in separate, yet-to-be-established, state-run health
coverage exchange. The exchange is required to become
operative by January 2014. The benchmark plan scope of
coverage for the exchange has not yet been determined by the
federal government. Therefore it is difficult to establish a
precise per enrollee annual cost.
4)Significant savings of up to hundreds of millions of dollars
to the extent expenditures associated with indigent health
programs are reduced at the local level. For example, more
than $2 billion, combined, is spent annually in the Medically
Indigent Services Program (MISP in California's large urban
counties) and the County Medical Services Program (CMSP in
California's rural counties). As the Medi-Cal expansion
occurs, indigent patients will become Medi-Cal patients,
funded with 90% federal funding. A 10% reduction of indigent
health service need may result in more than $200 million in
reduced local spending.
COMMENTS
1)Rationale . This bill establishes a major Medi-Cal expansion,
per requirements of federal health reform contained in
PL-111-148. The expansion in this bill will be a major factor
in reducing California's proportion of the uninsured.
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California currently has the highest rate of uninsured
residents in the country. According to estimates provided
earlier this year the rate of uninsured residents climbed
substantially due to loss of employer-based coverage.
According to these estimates, more than 8 million, or 25% of
the non-elderly population, lacked health coverage during
some or all of 2009.
2)Medi-Cal provides health services to qualified low-income
persons, primarily families with children and the aged or
disabled. This bill provides Medi-Cal to individuals with
family income up to 133% FPL, regardless of family
configuration. Under current law, low-income adults with no
children living at home are often ineligible for Medi-Cal.
The expansion in this bill ends the historic exclusion of
childless adults from Medi-Cal coverage.
3)Expansion Population . According to research, the uninsured
adults with incomes at or below 133% FPL are a diverse group,
but include many poor and sick individuals for whom coverage
is currently unavailable. These uninsured adults are at an
increased risk of going without medical care and often lack
basic preventive screenings. About 15% of the uninsured in
this income range are 55 to 64 years old and are particularly
vulnerable and at risk of serious health problems. In
addition, all adults who are uninsured may face reduced
health status due to lack of coverage.
4)Pending renewal of the Medi-Cal Waiver . California is in the
process of renewing a federal waiver under authority granted
by Section 1115 of the Social Security Act. Under the waiver,
the federal Centers for Medicare and Medicaid Services has
broad latitude to authorize a range of state program changes.
Waivers can encompass a relatively small portion of the
Medi-Cal program or the entire program including long-term
care and the disproportionate share hospital program. The
current waiver that ends in the fall of 2010 primarily
addresses inpatient hospital funding and some indigent health
programs. The waiver renewal may cover a more broad funding
and programmatic landscape and may include a bridge to the
Medi-Cal expansion addressed in this bill.
5)Related Legislation . Several bills in the current session
address features and requirements of federal health reform:
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a) AB 1602 (J. Perez), also being heard in this committee
today, establishes California's health insurance exchange
and enacts a series of insurance market reforms.
b) AB 1887 (Villines), pending in this committee,
establishes California's temporary high risk pool to expand
the number of insured individuals with pre-existing
conditions.
c) AB 2244 (Feuer), also being heard in this committee
today, addresses insurance market writing reforms for
children and adults with regard to pre-existing conditions
and therenewability of health insurance.
d) AB 2477 (Jones), pending on the Suspense File of this
committee, eliminates mid-year status reports for children
on Medi-Cal.
e) SB 900 (Alquist), pending in the Senate, establishes the
California Health Benefits Exchange within the California
Health and Human Services Agency.
f) SB 1088 (Price), pending in the Senate, increases the
limiting age of dependent health coverage until the
dependent's 26th birthday.
g) SB 1163 (Leno), pending in the Senate, requires detailed
health plan and insurer data and actuarial justification
for premium increases and non-standard premium charges.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081