BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
(Fuentes) - CalFresh: categorical eligibility.
Amended: May 25, 2012 Policy Vote: Human Services 4-2
Urgency: No Mandate: Yes
Hearing Date: August 16, 2012
Consultant: Jolie Onodera
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:
Potential first-year costs of $11.7 million (General Fund)
for CalFresh administration and California Food Assistance
Program (CFAP) benefits and administration. Increased
federal funding in the range of $375 million in CalFresh
benefits, generating $8.5 million (General Fund) through
increased sales tax revenue.
Ongoing costs subsequent to implementation of specific
provisions of federal health care reform on January 1, 2014,
could increase annual benefit and administration costs
substantially assuming an additional 600,000 to 660,000
individuals of the 2 million newly eligible Medi-Cal
recipients could potentially be eligible for CalFresh and
CFAP.
Potentially significant increase in eligible children
directly certified for free school meals under the National
School Lunch Program (SLP) and School Breakfast Program
(SBP), resulting in increased federal funding and state
reimbursement in the millions of dollars (General Fund).
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
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.
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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.
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
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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. Additionally, there are households with gross
income below 200 percent FPL containing at least one Medi-Cal
recipient and not categorically ineligible for CalFresh who
could become newly eligible for the program. Although the extent
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of the impact of Cat-El on participation in CalFresh is unknown,
a USDA Economic Research Service (ERS) article drawn from
various studies noted that recent econometric studies estimate
that SNAP caseloads increased by 6.2 percent in the year
following implementation of the broad-based categorical
eligibility, holding all other factors constant. Utilizing this
assumption would result in increased federal SNAP benefits of
$380 million, as well as additional state costs for
administration and California Food Assistance Program (CFAP)
benefits of approximately $11.8 million (General Fund) in
first-year costs. The increase in benefits could also generate
General Fund sales tax revenue of up to $8.5 million, as studies
have shown that a percentage of food benefits are spent on
taxable goods.
With the implementation of specific provisions 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 and CFAP
participation. It is unknown what portion of the new Medi-Cal
caseload will participate, but as it is estimated that 30 to 33
percent of Medi-Cal recipients are eligible for CalFresh, there
could be an additional 600,000 to 660,000 individuals
potentially eligible for food benefits. The number of
individuals who would participate, and the associated costs, is
unknown at this time but could be significant.
Children in households that receive CalFresh are automatically
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).
A USDA report to Congress in October 2011 on direct
certification in the SLP indicated states and local education
agencies directly certified 78 percent of school age children
from SNAP-participant households categorically eligible for free
school meals in 2010-11. Assuming 85 percent of SNAP households
have children, and applying the 78 percent direct certification
rate on new households could result in over 125,000 children
impacted in the first year. It is unknown how many newly
qualified children would participate in the SLP/SBP, but
increased federal funding and state reimbursement for school
meals could be in the millions of dollars.
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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.