BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 43 (Monning) - Medi-Cal eligibility.
Amended: May 27, 2011 Policy Vote: Health 5-2
Urgency: No Mandate: Yes
Hearing Date: August 16, 2012
Consultant: Brendan McCarthy
SUSPENSE FILE.
Bill Summary: AB 43 would extend Medi-Cal eligibility to all
non-pregnant, non-Medicare eligible, childless adults with
income below 138 percent of the federal poverty level, pursuant
to a requirement of the federal Affordable Care Act.
Fiscal Impact: By expanding Medi-Cal eligibility to all
childless adults under 65 years of age with household income
below 138 percent of the federal poverty level, the bill
substantially increases the eligible population, increasing
program costs. Recent simulations performed by researchers at
the University of California indicate that between 1.2 million
and 1.6 million additional people will enroll in Medi-Cal under
the expansion. Under the Affordable Care the federal financial
participation will be substantially higher than current practice
- starting at 100 percent and declining to 90 percent by 2020.
Costs and savings associated with the bill include:
Increased federal spending for Medi-Cal - up to $5.5
billion per year starting in 2015-16, rising to about $6.5
billion per year in 2018-19
Increased General Fund spending for Medi-Cal - up to $155
million per year in 2016-17, rising up to $452 million per
year in 2018-19.
Increased costs to perform eligibility determinations and
provide case management of about $300 million per year (50%
General Fund and 50% federal funds).
General Fund savings to other state health subsidy programs
- up to $290 million per year in 2013-14 rising up to about
$760 million per year by 2018-19.
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The state operates many programs to provide health coverage
to certain populations, such as the Major Risk Medical
Insurance Program, the AIDS Drug Assistance Program, and
others. Under the Affordable Care Act and this bill, a
significant number of people enrolled in those programs will
be eligible for Medi-Cal and will no longer need services
from those programs. Because of the enhanced federal match
for the newly eligible Medi-Cal population (and the varying
level of federal financial participation in those other
programs) the state will see significant General Fund
savings from the transition of some of those populations to
Medi-Cal.
Note that the cost estimates above assume all newly-eligible
persons enroll in Medi-Cal. In practice, even with a mandate to
have health coverage, not all eligible persons will enroll,
therefore the costs above represent a likely upper bound of
additional costs.
Also, AB 43 does not eliminate any of the state's existing
health subsidy programs. While it is reasonable to assume that
many participants in those programs would transition to Medi-Cal
under the bill, some program participants may wish to remain in
their existing programs, for example if the program has access
to a more specialized network of providers than is available for
Medi-Cal beneficiaries. Therefore, the savings estimates above
may ultimately overstate the potential savings to the state,
absent changes to those other programs.
Background: Under state and federal law, the Department of
Health Care Services operates the Medi-Cal program, which
provides health care coverage to pregnant women, children and
their parents with incomes below 100 percent of the federal
poverty level, as well as blind, disabled, or certain other
populations. Generally, the federal government provides a 50
percent federal match for state Medi-Cal expenditures. Under
federal law, most Medi-Cal services are only available to
citizens and legal immigrants.
The federal Affordable Care Act requires states to expand
Medicaid (Medi-Cal in California) eligibility to persons under
65 years of age, who are not pregnant, not entitled to Medicare
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Part A or enrolled in Medicare Part B, and whose income does not
exceed 133 percent of the federal poverty level (effectively 138
percent of the federal poverty level as calculated under the
Affordable Care Act).
The Affordable Care Act provides a significantly enhanced
federal match for the Medicaid expansion. Under the law, the
federal government will pay for 100 percent of the cost of the
Medicaid expansion in 2013-14 declining to a 90 percent federal
match in the 2020 federal fiscal year.
Proposed Law: AB 43 would implement the Medicaid expansion in
California, by expanding eligibility for Medi-Cal to all legal
residents under 65 years of age, who are not pregnant, not
eligible for Medicare, and whose income does not exceed 138
percent of the federal poverty level.
The bill would permit the Department to phase in coverage for
these newly eligible individuals.
The bill would require the Department (in accordance with the
state's existing Bridge to Reform Medicaid Waiver) to prepare a
transition plan to Medi-Cal for individuals who are eligible for
the Medicaid expansion and who are or will be covered as part of
the Bridge to Reform waiver.
Related Legislation:
SB 677 (Hernandez) would prohibit the use of asset tests
for determining eligibility for Medi-Cal, with certain
exceptions. The bill would also require the use of modified
adjusted gross income when determining Medi-Cal eligibility,
with certain exceptions. That bill is in the Assembly Health
Committee.
SB 1487 (Hernandez) would extend Medi-Cal eligibility to
former foster youth up to 26 years of age. The bill would
also state legislative intent to enact in state law any
provisions of the Affordable Care Act that are struck down
by the Supreme Court. That bill was held on this committee's
Suspense File.
Staff Comments: The bill is keyed as a reimbursable mandate
because county social service programs perform eligibility
determinations for Medi-Cal and are responsible for certain case
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management. Those costs to the counties are reimbursed through
the Medi-Cal program.