BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SB 771
S
AUTHOR: Alquist
B
AMENDED: December 16, 2009
HEARING DATE: January 13, 2010
7
CONSULTANT:
7
Dunstan/cjt
1
SUBJECT
Medi-Cal: continuous eligibility
SUMMARY
Lengthens the period for which Medi-Cal would allow
12-month continuous Medi-Cal eligibility for children, in
order for the state to qualify for additional federal funds
via a temporary increase in the Federal Medical Assistance
Percentage (FMAP), contingent upon adoption of certain
federal legislation. Makes the reinstatement of 12-month
continuous eligibility effective only during the time
period that the increased FMAP is available.
CHANGES TO EXISTING LAW
Existing federal law:
Establishes the Medicaid program to provide comprehensive
health benefits to low-income persons. Allows states to
provide continuous eligibility for children in Medicaid,
which means that the eligibility determinations are for a
set period, regardless of changes in the income and
resources of applicants.
The federal American Recovery and Reinvestment Act of 2009
Continued---
STAFF ANALYSIS OF SENATE BILL SB 771 (Alquist)Page 2
(ARRA), provides an increase in FMAP, retroactively from
October 2008 until December 31, 2010, to qualifying states.
Provides that the increased FMAP is available for state
Medicaid, foster care and adoption assistance programs.
Requires that states, to be eligible for the increased
FMAP, may not have more restrictive eligibility standards,
methodologies or procedures in place than those that were
in effect as of July 1, 2008.
Existing state law
Establishes the Medi-Cal program as California's Medicaid
program, administered by the Department of Health Care
Services (DHCS), which provides comprehensive health care
coverage for certain low-income individuals and their
families; pregnant women; elderly, blind, or disabled
persons; nursing home residents; and refugees who meet
specified eligibility criteria. Requires most Medi-Cal
enrollees to file semi-annual status reports to maintain
Medi-Cal enrollment.
Existing law establishes 12 months of continuous
eligibility in Medi-Cal for children. Limits the period of
12-month continuous eligibility to the period that
increased federal financial participation is available
through Medicaid under ARRA. Provides that 12 months of
continuous eligibility is inoperative when the Director of
the DHCS executes a declaration specifying that increased
federal financial participation is no longer available
under ARRA. Provides that upon the execution of the
declaration, a 6-month period of continuous eligibility
will be used for children in Medi-Cal, with a required semi
annual report. Provides that the 6-month period of
continuous eligibility expires on July 1, 2012, after which
a 12-month period of continuous eligibility is reinstated.
This bill:
Provides that the 12-month period of continuous eligibility
for Medi-Cal for children will become inoperative when the
Director of DHCS executes a declaration specifying that
increased federal financial participation is no longer
available under ARRA, or any subsequent federal
legislation, including an amendment to ARRA, which
maintains or extends increased federal financial
participation.
STAFF ANALYSIS OF SENATE BILL SB 771 (Alquist)Page 3
FISCAL IMPACT
This bill would potentially result in the state qualifying
for increased federal funds. The specific amount, if any,
will depend on final form of legislation that is enacted.
Given the current higher FMAP in ARRA and assuming an
extension for two quarters, an estimated $2.5 billion in
additional federal funds would be available to California.
If the experience with ARRA continues, approximately 80
percent of the funds would go to the state, but other
entities, such as counties, that provide the match for
Medicaid would also receive increased federal funds.
The state would incur additional costs from extending the
12-month continuous eligibility, as opposed to the 6 month.
BACKGROUND AND DISCUSSION
According to the author, this bill extends the 12-month
continuous eligibility with annual reporting provisions
contained in SBX3 24 (Alquist); potentially allowing the
state to received increased federal Medicaid funds.
Congress is currently debating extending the increased FMAP
and this bill would keep California eligible for those
increased federal funds. Since SBX3 24 suspended
semi-annual reporting only for the period of ARRA, SB 771
is necessary to suspend semi-annual reporting for
additional time should, as expected, the increased FMAP is
available for a longer period.
STAFF ANALYSIS OF SENATE BILL SB 771 (Alquist)Page 4
Background
Title V of the ARRA increased the federal share of Medicaid
(Medi-Cal in California) program costs by increasing the
FMAP for 27 months (October 1, 2008 through December 2010).
The FMAP increase applies only if a state conformed to
certain specified requirements as contained in ARRA. One
of the key federal requirements is that states may not have
eligibility standards, methodologies or procedures in place
that are more restrictive than those that were in effect as
of July 1, 2008. Any state that implemented more
restrictive policies after July 1, 2008 had until July 1,
2009 to rescind them. The state would then be fully
eligible for the enhanced match, retroactive to October 1,
2008.
ARRA provides several different formulas for increasing
FMAP. Using the applicable formula, California received an
increase in FMAP of 11.59 percentage points from ARRA,
which provides for a 61.59 percent FMAP for Medi-Cal as
opposed to the customary 50 percent. This enhanced FMAP
provides California with approximately $10 billion in
additional federal funds for the 27-month period.
The state was at risk of not being eligible for the
increased FMAP because it had changed from 12-month
continuous eligibility to 6 months, with required
semi-annual reporting, for children enrolled in Medi-Cal.
This amendment was contained in AB 1183, Statutes of 2008
(Omnibus Health Trailer Bill), which was enacted after July
1, 2008 and was considered to be a more restrictive
eligibility standard, methodology or procedure under
federal law. SBX3 24 temporarily reinstated 12-month
continuous eligibility to comply with the federal
requirement.
Congress is currently deliberating the Jobs for Main Street
Act (HR 2847). This legislation will extend the increased
FMAPs established in ARRA. Estimates are that California
will obtain an additional $2.5 billion if the act is
enacted.
Prior legislation
SBX3 24 (Alquist), Chapter 24, Statutes of 2009,
temporarily reinstates 12-month continuous Medi-Cal
eligibility for children in order for the state to qualify
for approximately $10 billion in federal stimulus funds via
STAFF ANALYSIS OF SENATE BILL SB 771 (Alquist)Page 5
a temporary increase in the FMAP during the period that
increased federal funding is available through the federal
economic stimulus legislation.
AB 1183 (Committee on Budget), Chapter 758, Statutes of
2008 (Omnibus Health Trailer Bill), contained a provision
that required 6 month continuous eligibility with
Semi-Annual Reporting for children and provided that annual
reporting for children (aged 19 years or younger) would be
reinstated January 1, 2012.
Arguments in support
Supporters argue that SB 771 will allow California to
participate in the proposed extension of the enhanced FMAP
and allow counties and public hospitals to receive funds
for Medi-Cal, foster care and adoption assistance programs,
by assuring that the state complies with federal
requirements regarding eligibility for Medicaid services.
They argue that these funds are critical to counties for
the operation of desperately needed health and human
services programs, particularly in light of the
unprecedented demands for services that counties are seeing
due to the economic crisis. They state that without the
increased FMAP funding, these critical safety net programs
are in jeopardy. The 100% Campaign points out those
requiring children to reapply every six months, instead of
annually buries them in paperwork so those who cannot keep
up are dropped from coverage.
POSITIONS
Support: 100% Campaign, a collaborative of Children
Now, Children's Defense
Fund, The Children's Partnership and PICO
California
California Association of Health Plans
California Communities United Institute
California Medical Association
California Mental Health Directors Association
California State Association of Counties
County Health Executives Association
County Welfare Directors Association
Health Access California
STAFF ANALYSIS OF SENATE BILL SB 771 (Alquist)Page 6
Regional Council of Rural Counties
Urban Counties Caucus
Western Center on Law and Poverty
Oppose: None received
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