BILL ANALYSIS �
AB 43
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Date of Hearing: April 26, 2011
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 43 (Monning) - As Amended: April 25, 2011
SUBJECT : Medi-Cal: eligibility.
SUMMARY : Expands Medi-Cal coverage to persons with income that
does not exceed 133% of the federal poverty level (FPL),
effective January 1, 2014. Specifically, this bill :
1)Requires the Department of Health Care Services (DHCS), by
January 1, 2014, to establish eligibility for Medi-Cal
benefits for any person who meets the requirements of a new
Medicaid eligibility category added by the federal Patient
Protection and Affordable Care Act (PPACA).
2)Authorizes DHCS to phase in coverage, as permitted by federal
law.
3)Requires DHCS to prepare and submit for approval from the
Centers for Medicare and Medicaid (CMS), a plan to transition
from the Section 1115 Medicaid Demonstration Waiver entitled
"California's Bridge to Reform" to implementation of the
Medicaid expansion required by PPACA.
4)Requires the transition plans to include a process to ensure
Medi-Cal eligibility for participants in a county Low Income
Health Program (LIHP) developed pursuant to the 2010 Bridge
Demonstration, as well as other persons who meet the
eligibility standards but are not enrolled in a county LIHP.
EXISTING LAW :
1)Establishes the federal Medicaid Program, Medi-Cal in
California, administered by DHCS, to provide comprehensive
health care services and long-term care to pregnant women,
children, and people who are aged, blind, and disabled.
2)Requires, under federal law, by January 2014, that states
offer Medicaid coverage to all adults, under age 65, with
income up to 133% of FPL and authorizes a phase-in
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immediately.
3)Authorizes, under federal law, the waiving of specified
federal Medicaid requirements for demonstration or pilot
projects.
4)Requires DHCS to seek federal approval of a comprehensive
Section 1115 Medicaid Demonstration Waiver to replace the 2005
Medi-Cal Hospital/Uninsured Care Waiver.
5)Establishes a county-optional LIHP.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, the purpose of
this bill is to implement the new federal law to expand
Medi-Cal benefits to low-income adults, including those
without children, as long as their income doesn't exceed 133%
of FPL, or $14,404 annually for individuals. The author
argues that this bill is needed in order to begin the planning
process for a transition from the Bridge to Reform
Demonstration to the Medi-Cal implementation required by PPACA
in 2014. The author points out that this bill is also needed
to ensure that California meets the CMS requirement that the
state submit an initial transition plan by July 1, 2102 and
begin transition activities July 1, 2013. Even though most
counties are expected to enroll and provide coverage to
members of this population by participating in the LIHP in
some capacity, this is not expected to cover the entire
eligible population. Full implementation in 2014 is expected
to include over one million adults. The author states that
the Medi-Cal system must be prepared to absorb this entire
population.
2)BACKGROUND . On March 23, 2010, President Obama signed PPACA.
Among other provisions, PPACA requires, as of January 2014,
that states include all adults with income up to 133% of the
FPL in its Medicaid Program and provides enhanced federal
matching assistance funds (FMAP). PPACA establishes a new
eligibility category for all non-pregnant, non-Medicare
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eligible childless adults under age 65 who are not otherwise
eligible for Medicaid and requires minimum Medicaid coverage
at 133% FPL based on modified gross income with a special
adjustment of 5% to bring effective income eligibility to 138%
FPL. Eligibility is to be determined without assets or
resource tests. In addition, PPACA requires the establishment
of Health Insurance Exchanges for individuals and small groups
who want to enroll in a qualified health plan. California
exercised the option to establish the California Health
Benefits Exchange (Exchange). Effective January 2014,
individuals with income of 100% but not more than 400% of FPL
will receive a refundable tax credit for a percentage of the
cost of premiums that are purchased through the Exchange.
3)BRIDGE TO REFORM . California recently received federal
approval for a new five year Section 1115 Medi-Cal
Demonstration/Pilot Project Waiver, entitled "A Bridge to
Reform." Section 1115 of the Social Security Act authorizes
the federal Secretary of Health and Human Services to allow
states to receive federal Medicaid matching funds without
complying with all of the federal Medicaid rules.
Traditionally designed as research and demonstration programs
to test innovative program improvements and to facilitate
coverage expansions to populations not otherwise eligible,
they are also used to modify benefits structures and financing
mechanisms.
The 2005 Section 1115 Hospital Financing/Uninsured Waiver
included $180 million in the third, fourth and fifth years for
the development and implementation of Health Care Coverage
Initiative (HCCI) programs in 10 counties to expand services
to low-income uninsured adults not otherwise eligible for
Medi-Cal. The total enrollment was approximately 170,000
annually. The 2010 Bridge Demonstration Waiver builds on the
HCCI model and expands it statewide at county option. A
county that chooses to participate will use Certified Public
Expenditures (CPEs) as the matching funds. Under a CPE
arrangement, government provides certify their Medicaid
expenditures to the state, and the state then obtains federal
reimbursement on the basis of the certified expenditures.
4)LIHP . The Special Terms and Conditions (STCs) that
accompanied the Bridge to Reform Demonstration Waiver approval
treat this county-based coverage as a bridge to the more
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significant coverage that is effective in 2014 and considers
this transition a Medicaid Coverage Expansion (MCE). As such
the STCs establish various requirements in order to provide
for a seamless transition for enrollees in 2014. The LIHP is
divided into two components. The MCE covers the adults with
income up to 133% FPL who will become Medi-Cal eligible in
2014. Counties are also authorized to provide coverage under
the LIHP to persons with income up to 200% FPL as an expansion
of the HCCI model, but in a fashion that minimizes the need to
impose a limit on the lower income MCE population.
The STCs allow for variations in the MCE and HCCI programs.
Basically the MCE is similar to Medi-Cal, whereas, HCCI is a
more limited program. For instance, the MCE benefit package
is more expansive and includes a limited mental health
benefit. Both programs require eligibility to be determined
by state or county employees. There is also no limit to the
amount of federal financial participation for the MCE
population, whereas the HCCIs are capped at $180 million per
year for the first three years of the Bridge to Reform
Demonstration.
According to DHCS, voluntary letters of intent to participate
have been received from all 58 counties, the City of Pasadena,
and 12 California Rural Indian Health programs in 11 counties.
Thirty-four of the counties are planning to participate
through the County Medical Services Program which provides
medical and dental care to indigent adults in thirty-four
small and rural counties but is administered through DHCS.
5)NEW MEDICAID FUNDING . The traditional FMAP for California has
been 50% federal funds, 50% state funds. The American
Recovery and Reinvestment Act (ARRA) provided an enhanced FMAP
until January 2011. The ARRA enhancement for California
changed the sharing ratio to 62% federal, 38% state. The
Education, Jobs, and Medicaid Assistance Act extended the
availability of increased FMAP but phased it out over the
additional six months by providing an increased FMAP of 8.77%
for January 2011 through April 2011 and an increased FMAP of
5.66% for April 2011 through June 2011. For newly eligible
individuals, the federal PPACA provides full 100% federal
funding for 2014-2016; 95% for 2017; 94% for 2018; 93% for
2019; and, 90% for 2020 and beyond. PPACA provided that if a
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state enacted early expansion, it is done at the current FMAP
until 2019 when it goes to 93% and in 2010 to 90%. The Bridge
to Reform Demonstration allows California to phase in an early
expansion but still benefit from the 100% match in 2014.
6)SUPPORT . Health Access California writes in support that
there are potentially over 1.7 million newly eligible Medicaid
patients. The supporters argue that in order to enroll these
individuals into Medi-Cal and take advantage of federal
matching funds, we must begin working now. The supporters
further state that this bill would play an important role in
creating a smooth transition toward full Medicaid expansion
under the PPACA. The American Federation of State, County and
Municipal Employees, AFL-CIO also in support, writes that this
bill would conform to federal health reform by expanding
eligibility for Medi-Cal to adults up to 133% of FPL. The
supporters also state that this would build on California's
recent 1115 Medi-Cal waiver by providing a plan to transition
those uninsured adults who receive services through the waiver
to enrollment in Medi-Cal while assuring adequate provide
networks.
7)RELATED AND PRIOR LEGISLATION .
a) AB 1066 (John A. P�rez), enacts technical and conforming
statutory changes necessary to conform to the STCs required
by CMS in the approval of the Bridge to Reform
Demonstration, including changing the name of the LIHP from
Coverage Expansion and Enrollment Projects to MCE and HCCI.
AB 1066 is pending in the Assembly Appropriations
Committee.
b) AB 342 (John A. P�rez), Chapter 723, Statutes of 2010,
enacted the LIHP and Coverage Expansion and Enrollment
Projects to provide health care benefits to uninsured
adults up to 200% of the FPL, at county option through a
Medi-Cal waiver demonstration project.
c) SB 208 (Steinberg), Chapter 714, Statutes of 2010,
implemented provisions of the 2010 Section 1115 replacement
waiver including the Delivery System Reinvestment and
Improvement Pool, authorized DHCS to require the mandatory
enrollment of seniors and people with disabilities in a
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Medi-Cal managed care plan and required DHCS to implement
pilot projects to provide coordinated care to children in
the California Children's Services and to persons who are
eligible for Medi-Cal and Medicare.
d) AB 1595 (Jones) of 2010, would have required DHCS to
expand Medi-Cal eligibility to individuals with family
income up to 133% of FPL without regard to family status by
January 1, 2014. AB 1595 died on suspense in the Assembly
Appropriations Committee.
e) AB 1602 (John A. Perez), Chapter 655, Statutes of 2010,
establishes the Exchange as an independent public entity to
purchase health insurance on behalf of Californians with
incomes of between 100% and 400% FPL and employees of small
businesses. Clarifies the powers and duties of the board
governing the Exchange relative to the administration of
the Exchange, determining eligibility and enrollment in the
Exchange, and arranging for coverage under qualified
carriers
f) SB 900 (Alquist), Chapter 659, Statutes of 2010,
establishes the Exchange. Requires the Exchange to be
governed by a five-member board, as specified.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
California Alliance for Retired Americans
California Communities United Institute
California Primary Care Association
California State Association of Counties
Congress of California Seniors
County Health Executives of California
County Welfare Directors Association
Health Access California
Laborers' Locals 777 & 792
National Association of Social Workers
Urban Counties Caucus
Western Center on Law and Poverty
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Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097