BILL ANALYSIS �
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THIRD READING
Bill No: AB 43
Author: Monning (D), et al.
Amended: 5/27/11 in Assembly
Vote: 21
SENATE HEALTH COMMITTEE : 5-2, 6/13/12
AYES: Hernandez, Alquist, DeSaulnier, Rubio, Wolk
NOES: Harman, Anderson
NO VOTE RECORDED: Blakeslee, De Le�n
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : 49-25, 1/23/12 - See last page for vote
SUBJECT : Medi-Cal: eligibility
SOURCE : Author
DIGEST : This bill requires the Department of Health Care
Services (DHCS) to establish Medi-Cal eligibility for any
person under 65 years of age who meets specified criteria
and whose income does not exceed 133 percent of the federal
poverty level (FPL).
ANALYSIS : Existing law:
1.Establishes the Medi-Cal program, administered by DHCS,
under which health care services are provided to eligible
CONTINUED
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low-income persons.
2.Requires states, under federal health care reform, known
as the Patient Protection and Affordable Care Act (ACA)
(Public Law 111-148), as amended by the federal Health
Care and Education Reconciliation Act of 2010 (Public Law
111-152), beginning January 1, 2014, as a condition of
receiving federal Medicaid funds, to provide health care
services to persons who meet all of the following:
A. Under 65 years of age;
B. Not pregnant;
C. Not entitled to, or enrolled for, benefits under
Medicare Part A, or enrolled for benefits under
Medicare Part B; and
D. Income does not exceed 133 percent of the FPL.
1.Requires DHCS, pursuant to federal approval of a
demonstration project, to authorize local Low Income
Health Programs (LIHPs) to provide health care services
to eligible low-income individuals under certain
circumstances. LIHPs are established at local option, and
are authorized to cover individuals up to 200 percent of
the FPL (200 percent of the FPL is at or below $22,340
for an individual in 2012).
This bill:
1.Requires DHCS, by January 1, 2014, to establish
eligibility for Medi-Cal benefits for any person who
meets all of the following, as referenced in federal law:
A. Under 65 years of age;
B. Not pregnant;
C. Not entitled to, or enrolled for, benefits under
Medicare Part A, or enrolled in Medicare Part B;
D. Not otherwise Medicaid-eligible; and
E. Income does not exceed 133 percent of the FPL
applicable to a family of the size involved.
1.Permits DHCS to phase-in coverage for these individuals.
2.Requires DHCS, in accordance with the Special Terms and
Conditions of California's Bridge to Reform Medicaid
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waiver from 2010, to prepare and submit for approval to
the federal Centers for Medicare and Medicaid Services an
initial transition plan that contains all of the
following:
A. An outline of the process for determining
eligibility for persons described in #1 above,
including, but not limited to, the transition of
enrollees in the LIHP that does not require the
enrollees to submit a new application;
B. A plan to manage the transition to new eligibility
levels in 2014 by considering, reviewing, and
preliminarily determining new applications beginning
as early as July 1, 2013, including in counties that
have not established a LIHP or that has limited LIHP
enrollment;
C. Criteria for provider participation and the means
of securing provider agreements for the transition;
D. The schedule of implementation activities for the
state to make the transition plan operational; and
E. The process the state will use to ensure adequate
primary care and specialty provider networks.
1.Requires DHCS to submit the initial transition plan to
the appropriate legislative policy and fiscal committees.
2.Prohibits this bill from being construed to limit
eligibility for Medi-Cal benefits authorized by any other
provision of law.
Background
Medi-Cal eligibility changes. On March 23, 2010, President
Obama signed the ACA into law. The new health care law
aims to increase access to health insurance through more
accessible private insurance and an expansion of Medicaid
(Medi-Cal in California). The ACA makes numerous changes
to Medicaid, including eliminating the asset test and
switching to a new method of counting income known as
Modified Adjusted Gross Income (MAGI) for certain
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populations, and extending coverage to former foster youth
up to age 26.
This bill addresses the expansion of Medicaid coverage
through the ACA to adults without minor children, who are
not currently Medicaid-eligible without a federal waiver.
Currently, adults are not eligible for Medi-Cal coverage
unless they have minor children living at home, have a
disability, are over the age of 65, or are pregnant. Under
the ACA, starting January 1, 2014, Medi-Cal will expand
coverage to most adults who are at or below 133 percent of
the FPL (including disregarding �or not counting] an
additional five percent in income, which makes Medicaid
income eligibility effectively 138 percent of the FPL). For
a single adult, 138 percent FPL is currently approximately
$1,284 per month ($15,415 per year).
Federal regulations issued in March 2012 to implement the
ACA Medicaid provisions simplify the current eligibility
rules and systems in the Medicaid and Children's Health
Insurance Program (CHIP) programs (known as Healthy
Families in California). The federal regulations: (a)
reflect the statutory minimum Medicaid income eligibility
level of 133 percent of the FPL across the country for most
non-disabled adults under age 65; (b) eliminate obsolete
eligibility categories and collapse other categories into
four primary coverage groups: children, pregnant women,
parents, and the new adult group; (c) modernize eligibility
verification rules to rely primarily on electronic data
sources; (d) codify the streamlining of income-based rules
and systems for processing Medicaid and CHIP applications
and renewals for most individuals; and (e) ensure
coordination across Medicaid, CHIP, and the Exchanges.
According to a recent study in the health policy journal
Health Affairs, an additional 1.7 million individuals are
estimated to be enrolled in Medi-Cal in California in 2016
at full implementation of the ACA.
The federal matching rate for newly eligible Medi-Cal
beneficiaries under the ACA is significantly higher than
the state's current rate. For federal fiscal year (FFY)
2014 through FFY 2016, the newly eligible population is 100
percent federally funded. The federal funding percentage
then falls to 95 percent for FFY 2017, to 94 percent for
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FFY 2018, to 93 percent for FFY 2019, and to 90 percent for
FFY 2020 and beyond. This federal matching rate only
applies to the new eligibility category established in this
bill; expenditures for Medi-Cal beneficiaries enrolled
under current eligibility categories are matched at the
state's normal rate of 50 percent.
Federal waiver and early implementation of federal Medicaid
coverage expansion. AB 342 (John A. P�rez), Chapter 723,
Statutes of 2010, and SB 208 (Steinberg), Chapter 714,
Statutes of 2010, were a two-bill package that implements a
new federal demonstration project entitled California's
"Bridge to Reform." AB 342 authorizes the LIHPs
(originally called Coverage Expansion and Enrollment
Demonstration) that built upon the Health Care Coverage
Initiatives (HCCIs) established under the 2005
demonstration project. AB 342 extends the 10 "legacy"
HCCIs funded under the 2005 demonstration project, and
authorized the expansion of the HCCIs statewide using an
early implementation option created by the ACA. The ACA
requires states, by January 1, 2014, to cover adults under
age 65 and with family incomes up to 138 percent of the FPL
(at or below $15,414 in 2012) in their Medicaid program.
Under the ACA, states have the option of drawing down
federal funds for early implementation of this provision.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, by
expanding Medi-Cal eligibility to all childless adults
under 65 years of age with household income below 138
percent of the FPL, 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
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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.
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.
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, this bill 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.
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SUPPORT : (Verified 6/13/12) (per Senate Health Committee
Analysis - unable to verify at time of writing)
American Federation of State, County and Municipal
Employees, AFL-CIO
California Alliance for Retired Americans
California Chiropractic Association
California Commission on Aging
California Communities United Institute
California Mental Health Directors Association
California Primary Care Association
California State Association of Counties
Congress of California Seniors
Council of Community Clinics
County Health Executives Association of California
County Welfare Directors Association
Health Access California
Laborers' Locals 777 & 792
National Alliance on Mental Illness California
National Association of Social Workers
Planned Parenthood Affiliates of California
Santa Clara County Board of Supervisors
Western Center on Law and Poverty
OPPOSITION : (Verified 6/13/12) (per Senate Health
Committee Analysis - unable to verify at time of writing)
Department of Finance
ARGUMENTS IN SUPPORT : The Western Center on Law and
Poverty (WCLP) writes in support of this bill to expand
Medi-Cal to "childless adults" under the ACA and to
transition adults from the county-based LIHPs to Medi-Cal
without requiring LIHP enrollees to submit information they
have already provided or that the county possesses. WCLP
argues Californians have much to gain from this expansion
which will make an estimated three million more people
eligible for Medi-Cal. WCLP states the childless adult
population is largely uninsured today, and Medi-Cal will
provide more comprehensive, stable coverage with statewide
standards and provider networks. Additionally, WCLP
supports the requirement in this bill for a process to
transition childless adults from the LIHP as early as July
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2013, and with an estimated 500,000 people estimated to be
enrolled in the LIHPs by 2013, the state cannot wait until
the last minute to take the steps to transition them into
Medi-Cal. Consumers moving from LIHP to Medi-Cal in
counties with more than one Medi-Cal managed care plan
should have a choice of what plan to enroll into. For
those who do not choose a plan on their own we support
matching them up with the Medi-Cal plan that would allow
them to stay with their LIHP medical home if possible.
WCLP concludes that low-income Californians, our state's
health care economy, and counties will all benefit from the
Medi-Cal expansion.
ARGUMENTS IN OPPOSITION : The Department of Finance wrote
in opposition last year that this bill is premature because
federal guidance on eligibility expansion requirements is
pending, and any expansion activities implemented before
the final federal guidance is released puts the state at
risk of implementing activities not required by the federal
government.
ASSEMBLY FLOOR : 49-25, 1/23/12
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Chesbro,
Dickinson, Eng, Feuer, Fong, Furutani, Galgiani, Gatto,
Gordon, Hall, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Lara, Bonnie Lowenthal, Ma, Mendoza,
Mitchell, Monning, Pan, Perea, V. Manuel P�rez,
Portantino, Skinner, Solorio, Swanson, Torres,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Fletcher, Beth Gaines, Garrick, Grove, Hagman, Harkey,
Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell,
Nestande, Nielsen, Norby, Olsen, Silva, Valadao, Wagner
NO VOTE RECORDED: Cedillo, Davis, Fuentes, Gorell,
Halderman, Smyth
CTW:n 8/20/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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