BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1560 (Fuentes) - CalFresh: categorical eligibility.
Amended: May 25, 2012 Policy Vote: Human Services 4-2
Urgency: No Mandate: Yes
Hearing Date: August 6, 2012
Consultant: Jolie Onodera
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1560 would waive the gross income test for
CalFresh for any individual who is categorically eligible for
CalFresh and who is a member of a household that receives, or is
eligible to receive, assistance under the Medi-Cal program, as
specified.
Fiscal Impact: For every 10 to 25 percent of the potentially
eligible caseload - consisting of 1) 1.2 million existing
Medi-Cal recipients currently eligible but not participating in
CalFresh, 2) households with gross income below 200 percent of
the federal poverty level (FPL) containing at least one Medi-Cal
recipient, and, 3) effective 2014, approximately 2 million
individuals newly eligible for Medi-Cal pursuant to federal
health care reform - who would participate in CalFresh due to
categorical eligibility (Cal-El), potential ongoing future costs
would be as follows:
Potential ongoing state costs of $16 million to $40 million
(General Fund) for CalFresh administration and California
Food Assistance Program (CFAP) benefits.
Increased federal funding potentially in the range of $450
million to over $1 billion in federal SNAP benefits. These
increased benefits could generate up to $10 million to $25
million (General Fund) through increased sales tax revenues.
For every 100,000 newly eligible children directly
certified for free school meals under the National School
Lunch Program (SLP) and School Breakfast Program (SBP),
increased federal funding of $75 million could be received
and state reimbursement of $8 million (General Fund) would
be required.
Background: Existing federal law provides for the Supplemental
Nutrition Assistance Program (SNAP), known as CalFresh in
California, which provides financial assistance to low-income
households to purchase food. Existing federal law also
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establishes the Medicaid health care program, known as Medi-Cal
in California, which provides for a variety of medical services
for children and adults with limited income and resources.
Under existing law, the gross income threshold for CalFresh is
130 percent of the federal poverty level (FPL). Medi-Cal
eligibility income thresholds vary, however, for different
applicants. Categorical eligibility is the system by which
individuals qualify for CalFresh benefits based on their
participation in other federal or state programs, such as cash
and non-cash benefits under the Temporary Assistance for Needy
Families (TANF) program. Use of categorical eligibility permits
states to raise the gross income threshold and remove asset
limits for nutrition assistance by providing applicants access
to a TANF-funded benefit, such as a brochure or referral to a
toll-free hotline. Extending a TANF-funded benefit to a
population even though they are not formally enrolled in TANF
(CalWORKs in California) authorizes a state to consider the
population income-eligible for CalFresh. According to the
Congressional Budget Office (CBO) report released on SNAP in
April 2012, three-fourths of all SNAP recipients qualified for
benefits on the basis of categorical eligibility, of which
two-thirds (or 50 percent of total SNAP recipients) qualified
through the receipt of noncash benefits from TANF.
Current law also establishes a direct certification process
whereby children who are enrolled in public benefits programs
such as CalWORKs and CalFresh are automatically enrolled in the
National School Lunch Program (SLP) and School Breakfast Program
(SBP), the free and reduced-price meal programs funded
predominantly by the U.S. Department of Agriculture and
supplemented by state funds.
As these programs are federal entitlement programs, federal
funds will be provided as long as recipients meet eligibility
criteria. In 2010-11, the state received $358.0 million for the
SBP and $1.3 billion for the SLP. State funds augmented the
program by $44.2 million for SBP and $101.1 million for SLP.
According to the CDE, on an average day, more than 4.5 million
nutritious meals are served at approximately 20,000 locations
statewide. Income eligibility is 130 percent of federal poverty
guidelines for free meals and 185 percent of federal poverty
guidelines for reduced-price meals.
Proposed Law: This bill seeks to remove a CalFresh income
barrier for Medi-Cal recipients and their families.
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Specifically, this bill would require the DSS, to the extent
permitted by federal law, to waive the gross income test for
CalFresh for any individual who is categorically eligible for
CalFresh and who is a member of a household that receives, or is
eligible to receive, assistance under the Medi-Cal program.
Related Legislation: AB 433 (Beall) Chapter 623/2008 established
categorical eligibility for CalFresh beneficiaries with income
below 130 percent of the federal poverty level, regardless of
the level of assets. Early versions of the bill included
proposed categorical eligibility for Medi-Cal recipients, but
the language was removed from the enacted version of the bill.
AB 2205 (Evans) 2006 would have established categorical
eligibility for CalFresh for Medi-Cal recipients if they were
eligible for or receiving CalWORKs services. This bill was
vetoed by the Governor with the following message:
While I support efforts to increase participation in the Food
Stamps program through improved outreach efforts and more
streamlined administrative requirements, I am unable to support
Assembly Bill 2205 as it would expand eligibility for food
stamps increasing state costs by tens of millions of dollars.
Our state continues to face a significant structural deficit.
Accordingly, the outreach and eligibility expansions proposed by
AB 2205 are more appropriately addressed in the budget. For this
reasons, I am returning AB 2205 without my signature.
H.R. 6083 (Lucas), the Federal Agriculture Reform and Risk
Management (FARRM) Act, proposes to restrict categorical
eligibility to only those households receiving cash assistance
from SSI, TANF, or other state general assistance programs. This
federal legislation would specify that receiving a TANF-funded
brochure or referral to an "800" number hotline would no longer
automatically make a household eligible for SNAP. This bill
passed out of the House Committee on Agriculture on July 11,
2012.
Staff Comments: This bill will increase CalFresh participation
among existing and new Medi-Cal recipients, as well as Medi-Cal
eligible individuals, resulting in a significant increase in
federal benefits, as well as costs and revenues to the state.
It is estimated that 1.2 million existing Medi-Cal recipients
are eligible for CalFresh but are not currently participating in
the program. Should expanding Cat-El increase participation in
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CalFresh by 10 to 25 percent of the eligible Medi-Cal
population, it would result in an additional 120,000 to 300,000
individuals receiving nutritional benefits. Based on the average
monthly CalFresh benefit for a non-CalWORKs case of $335 (three
individuals per case), this would result in increased federal
benefits of $159 million to $398 million, as well as additional
state costs for food benefits of $1.6 million to $4 million
(General Fund) for the California Food Assistance Program
(CFAP). Administrative costs for these individuals would be $8
million to $20 million, slightly over 50 percent of which would
be costs to the General Fund. The increase in benefits could
also generate General Fund sales tax revenue of $3.6 million to
$9 million, as studies have shown that a percentage of food
benefits are spent on taxable goods.
Based on a recent Mathematica Policy Research estimate (2012),
it is estimated that approximately 74,000 households will be
newly eligible (with gross income below 200 percent FPL
containing at least one Medi-Cal recipient and not categorically
ineligible for CalFresh). Assuming 10 to 25 percent of the newly
eligible households participate in CalFresh would result in
annual administrative costs of $1.5 million to $3.7 million,
increased federal CalFresh benefits of $29.5 million to $73.7
million, and $0.3 million to $0.7 million (General Fund) in
additional CFAP benefits. Total annual state costs including
administration and CFAP benefits are estimated at approximately
$1.1 million to $2.6 million (General Fund).
With the forthcoming implementation of federal health care
reform, effective January 1, 2014, it is estimated an additional
two million Californians will enroll in the Medi-Cal program.
Removing barriers to CalFresh enrollment through Cat-El could
result in significant increases in CalFresh participation. It is
unknown what portion of the new Medi-Cal caseload will
participate, but for every 10 to 25 percent of the more than two
million individuals newly eligible for Medi-Cal pursuant to
federal health care reform who apply and participate in CalFresh
due to Cat-El would result in ongoing increased state costs of
$9.3 million to $23.3 million (General Fund) for CalFresh
administration and CFAP benefits, and increased federal funding
potentially in the range of $265 million to $650 million in SNAP
benefits. The increased benefits could generate $6 million to
$14.9 million (General Fund) through increased sales tax
revenues.
Children in households that receive CalFresh are automatically
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certified for free school meals under a rule known as direct
certification. To the extent this bill increases the number of
families enrolled in CalFresh will have the effect of increasing
the number of children eligible for free school meals under the
National School Lunch (SLP) and School Breakfast Programs (SBP).
It is unknown how many additional newly qualified children would
participate in the SLP/SBP, but for every 100,000 additional
children, increased federal funding of $75 million for free
school lunches and breakfasts could be received, and $8 million
(General Fund) in state reimbursement would be required. This
estimate is based on federal reimbursement of $2.72 per lunch
and $1.48 per breakfast, and state reimbursement of
approximately $0.22 per meal.
In order to be categorically eligible for CalFresh, these new
families would need to receive some form of TANF-funded benefit
or service. This service may be as minimal as providing families
with a brochure that outlines available TANF employment
services. The cost of printing additional copies of existing
publications is not estimated to be significant.