BILL ANALYSIS �
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THIRD READING
Bill No: AB 43
Author: Monning (D), et al.
Amended: 8/24/12 in Senate
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).
Senate Floor Amendments of 8/24/12 make changes to state
Medi-Cal law resulting from the enactment of federal health
care reform known as the Patient Protection and Affordable
Care Act (ACA), to implement state policy changes where the
CONTINUED
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ACA provides a state option, and to make other changes
related to Medi-Cal and to the Access for Infants and
Mothers (AIM) Program.
ANALYSIS : Existing law:
1.Establishes the Medi-Cal program, administered by DHCS,
under which health care services are provided to eligible
low-income persons.
2.Requires states, under federal health care reform, known
as ACA, 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. Makes legislative findings and declarations regarding
the number of uninsured in California and the United
States, the ACA and the coverage expansions resulting
from the ACA. States legislative intent to ensure full
implementation of the ACA, including the Medi-Cal
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expansion for individuals with incomes below 138
percent of the FPL.
2. Requires, effective January 1, 2014, women enrolled
in the AIM Program to be able to remain in AIM until
the end of the month following the 60th day postpartum.
3. Expands the definition used in Medi-Cal of
"pregnancy-related services" to mean, at a minimum, all
services required under Medi-Cal unless federal
approval is granted after January 1, 2014 to provide
fewer benefits during pregnancy.
4. Requires DHCS to extend Medi-Cal benefits to a former
foster care adolescent until his or her 26th birthday.
Take effect January 1, 2014 and only to the extent that
federal financial participation is available. Requires
DHCS to develop and implement a simplified
redetermination form for this program, requires these
former foster care adolescents to return the form only
if information previously reported is no longer
accurate, and prohibit failure to return the form from
constituting a basis for termination of Medi-Cal.
Requires the recipient to remain eligible if the form
is returned as undeliverable and the county is
otherwise unable to establish contact.
5. Prohibits, under the Medi-Cal category known as
"1931b" (which provides Medi-Cal eligibility for
parents and children), an asset test or a deprivation
test, effective January 1, 2014.
6. Modifies existing notices to Medi-Cal beneficiaries
to address the repeal of the semi-annual status reports
and that beneficiaries may (instead of "shall") be
required to submit an annual reaffirmation form.
7. Requires, effective January 1, 2014, county social
service departments to check federal databases for
eligibility redetermination, and to notify individuals
whose eligibility is renewed on that basis and inform
the individual that he or she must inform the county if
the information is inaccurate but is not required to
sign and return the notice. Requires the county to
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make reasonable efforts to minimize multiple notices
and to consolidate all related information.
8. Requires, effective January 1, 2014, counties, if the
county is unable to obtain information to redetermine
eligibility, to send beneficiaries a form containing
information available to the county that is needed to
redetermine eligibility. Requires the form to advise
the individual to provide any necessary information via
the internet, phone, mail in person or through other
commonly available means, and to sign the renewal form.
Prohibit counties from requesting information from
non-applicants necessary to make an eligibility
determination.
9. Requires, effective January 1, 2014, a
redetermination form to be determined as though the
form was timely if it is submitted within 90 days,
instead of 30 days in existing law.
10. Requires, effective January 1, 2014, a county to
consider blindness as continuing until the reviewing
physician determines that a beneficiary's vision has
improved beyond the definition of blindness contained
in the plan.
11. Requires, effective January 1, 2014, the county to
consider disability as continuing until the review team
determines that a beneficiary's disability no longer
meets the definition of disability contained in the
plan.
12. Requires, effective January 1, 2014, if a county has
enough information available to it to renew eligibility
with respect to all eligibility criteria, the county to
begin a new 12-month eligibility period.
13. Requires, effective January 1, 2014, counties, for
individuals determined ineligible for Medi-Cal, to
determine eligibility for other state health subsidy
programs and comply with specified procedures.
14. Requires, effective January 1, 2014, any renewal form
or notice to be accessible to persons who are limited
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English proficient and persons with disabilities,
consistent with all federal and state requirements.
15. Requires DHCS to seek federal approval from the US
Secretary of Health and Human Services to establish a
benchmark benefit package in Medi-Cal that includes the
same benefits, services, and coverage that is provided
to all other full-scope Medi-Cal enrollees,
supplemented by the benefits, services, and coverage
included in the essential health benefits benefit
package adopted by the state and approved by the
Secretary.
16. Requires that a person who wishes to apply for a
state health subsidy program be allowed to file an
application on his or her own behalf and that the
individual has the right to be accompanied, assisted,
and represented in the application and renewal process
by an individual or organization of his or her own
choice. Permits, if an individuals is unable to apply
or renew on his or her own behalf, the following
individuals to file the application for the applicant:
A. The individual's guardian, conservator, or
executor;
B. A public agency representative; or
C. The individual's legal counsel, relative, friend
or other spokesperson of his or her choice.
1. Prohibits the use of an assets or resources test for
individuals whose income is determined based on
Modified Adjusted Gross Income (MAGI), effective
January 1, 2014.
2. Requires DHCS to adopt an equivalent income level for
each eligibility group whose income level will be
convereted to MAGI. Requires the equivalent income
level to be not less than the dollar amount of all
income exemptions, exclusions, deductions and
disregards in effect on March 23, 2010, plus the
existing income level expressed as a percent of the
federal poverty level for each eligibility group so as
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to ensure that the use of the MAGI income methodology
does not result in populations who would have been
Medi-Cal- or AIM-eligible losing coverage.
3. Requires that a person who wishes to challenge a
decision concerning his or her eligibility for or
receipt of benefits from a state health subsidy program
has the right to represent himself or herself or use
legal counsel, a relative, a friend, or other
spokesperson of his or her choice.
4. Requires DHCS to implement the five percent income
disregard for individuals whose income eligibility is
determined based on MAGI, effective January 1, 2014.
5. Sunsets, effective January 1, 2014, the requirement
that certain adult Medi-Cal beneficiaries file
semi-annual status reports.
6. Requires, effective January 1, 2014, to the extent
required by federal law or regulation, the eligibility
of Medi-Cal beneficiaries whose financial eligibility
is determined using MAGI, to be renewed once every 12
months, and no more frequently than every 12 months.
7. Requires, beginning January 1, 2014, the schedule of
Medi-Cal benefits to include any benefits, services,
and coverage not otherwise described in existing law
that are included in the essential health benefits
package adopted by the state and approved by the US
Secretary of Health and Human Services.
8. Requires state health subsidy programs to accept an
individual's attestation, without further documentation
from the individual, for age, date of birth, family
size, household income, state residence, pregnancy, and
any other applicable eligibility criteria for which
attestation is permitted by federal 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
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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 MAGI
for certain 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
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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
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
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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.
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
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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.
SUPPORT : (Verified 8/27/12)
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 8/27/12)
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
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supports the requirement in this bill for a process to
transition childless adults from the LIHP as early as July
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 8/27/12 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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