BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1487
AUTHOR: Hernandez
AMENDED: April 17, 2012
HEARING DATE: April 25, 2012
CONSULTANT: Bain
SUBJECT : Medi-Cal: eligibility: former foster youths.
SUMMARY : Requires the Department of Health Care Services (DHCS)
to extend Medi-Cal eligibility, including eligibility for the
Early and Periodic Screening, Diagnosis, and Treatment (EPSDT)
Program, to youth who were formerly in foster care and who are
under 26 years of age, subject to federal financial
participation being available and to the extent required by
federal law.
Makes legislative findings and declarations regarding the
Patient Protection and Affordable Care Act (ACA), and states
legislative intent to ensure full implementation of the ACA and
to enact into state law any provision of the ACA that may be
struck down by the United States Supreme Court (Supreme Court).
Existing law:
1.Establishes the Medi-Cal Program, administered by DHCS, to
provide comprehensive health care and long-term care services
to pregnant women, children, and people who are aged, blind,
and disabled.
2.Authorizes, under federal law, states to continue Medicaid
(Medi-Cal in California) coverage for former foster youth who
are in foster care beyond their 18th birthday until the former
foster youth turns 21 years of age.
3.Implements, in state law, the federal option to extend
coverage to former foster youth until age 21, provided they
were foster youth immediately prior to their 18th birthday and
meet other eligibility requirements.
4.Requires states, beginning January 1, 2012, under the ACA, to
provide Medicaid coverage to former foster youth who are under
age 26, were in foster care when the individual turned age 18
or a higher age the state has elected, were enrolled in
Medi-Cal while in foster care, and meet other specified
criteria.
Continued---
SB 1487 | Page 2
This bill:
1.Requires DHCS to extend Medi-Cal eligibility, including
eligibility for EPSDT Program, to former foster youth who are
under 26 years of age, pursuant to the ACA.
2.Conditions implementation of this Medi-Cal expansion on the
state being required to do so by federal law and federal
financial participation being available.
3.Permits DHCS to implement this bill by adopting regulations in
accordance with the requirements of the Administrative
Procedure Act.
1.Makes legislative findings and declarations regarding the
United States not having a universal insurance coverage, the
importance of the ACA, some of the provisions of the ACA, the
number of people receiving coverage under its provisions, and
the challenge to the ACA before the Supreme Court.
2.States legislative intent to:
a. Ensure full implementation of the ACA so that millions
of uninsured Californians can receive health insurance
coverage and those that have already obtained coverage
under its provisions can keep that coverage.
b. Enact into state law any provision of the ACA that may
be struck down by the Supreme Court and that is necessary
to ensure all Californians receive the full promise of the
ACA.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, this bill
contains two provisions: First, this bill states legislative
intent regarding the historic importance of the ACA in
providing affordable health care coverage to millions of
uninsured Californians. SB 1487 would also state legislative
intent to ensure full implementation of the ACA so that
millions of uninsured Californians can receive health
insurance coverage and those that have already obtained
coverage under the ACA can keep that coverage. In addition, SB
1487 states legislative intent to enact any provision of the
ACA into state law that may be struck by the Supreme Court
necessary to ensure all Californians receive the full promise
SB 1487 | Page
3
of the ACA.
Second, SB 1487 conforms California Medi-Cal law with the
federal health reform requirement to extend Medicaid
eligibility to former foster youth up to age 26, effective
January 1, 2014. Because former foster care children between
the ages of 21 and 26 are likely to be pursuing higher
education or starting a new career, neither of which
guarantees health care coverage, access to Medi-Cal benefits
will be significant to obtaining needed health care services
and maintaining a healthy lifestyle. In addition, this
provision provides a similar benefit to the one provided up to
age 26 to dependent children of parents with private health
insurance. This bill and federal law ensure these former
foster youth will continue to have access to Medi-Cal
coverage.
2.Medi-Cal coverage of foster youth. Foster youth are
categorically eligible for Medi-Cal, meaning that they are
eligible solely because they are in foster care. California
has adopted the state option to provide Medicaid coverage for
independent foster children between the ages of 18 and 21 that
was made available under the federal Foster Care Independence
Act of 1999 through a health budget trailer bill enacted in
2000 (AB 2877 �Thomson], Chapter 93, Statutes of 2000) that
allowed children transitioning out of foster care on their
18th birthday to apply for Medi-Cal and continue coverage
until they reach their 21st birthday. The state does not
require an income or asset test for former foster youth.
3.Federal health care reform. On March 23, 2010, President Obama
signed the ACA (Public Law 111-148), as amended by the Health
Care and Education Reconciliation Act of 2010 (Public Law
111-152), into law. Among its many provisions, the new law
makes statutory changes affecting the regulation of private
health insurance, including establishing a minimum medical
loss ratio, requiring dependent coverage to extend to age 26,
prohibiting cost-sharing for preventive care, requiring health
insurers to "guarantee issue" individual coverage, requiring
health insurers to cover "essential health benefits," and
prohibiting lifetime dollar limits on coverage and phasing out
annual limits.
The ACA also expands Medicaid coverage to single childless
adults with incomes less than 138 percent of the federal
poverty level, requires the establishment of health insurance
exchanges where individuals meeting income eligibility
SB 1487 | Page 4
criteria can receive premium and cost-sharing subsidies when
purchasing insurance so coverage and access to health care is
more affordable, and establishes a temporary federally funded
high-risk pool for medically uninsurable individuals.
A January 2011 article entitled "Projecting the Impact of the
Affordable Care Act on California" in the health policy
journal Health Affairs stated the ACA is the most fundamental
legislative transformation of the United States health care
system in 40 years. This article estimates that the ACA will
provide health insurance for an additional 3.4 million people
in California in 2016. This will mean that nearly 96 percent
of documented residents of California under age 65 will be
insured.
4.Former foster youth Medicaid expansion in ACA. One of the
Medicaid provisions in the ACA is a requirement that states
cover former foster care children who:
� Are under 26 years of age;
� Are not eligible or enrolled under existing Medicaid
mandatory eligibility groups (or who are described in any
of the existing Medicaid mandatory eligibility groups but
have income that exceeds the upper income eligibility limit
established under any such group);
� Were in foster care under the responsibility of the
state on the date of attaining 18 years of age (or such
higher age as the state has elected); and
� Were enrolled in the Medicaid state plan or under a
waiver while in foster care.
The ACA also allows states to make "presumptive eligibility"
determinations for these individuals. Medicaid services
rendered to individuals in this new mandatory eligibility
group will be matched at the state's regular federal funds
matching rate, which in California is usually 50 percent
federal funds and 50 percent state funds. This ACA provision
takes effect January 1, 2014.
1.US Supreme Court hearing on ACA. In November 2011, the Supreme
Court agreed to hear an appeal on three petitions concerning
the constitutionality of the ACA. In March 2012, the Court
heard three days of testimony focused on four issues. First,
the Court considered the issue of severability of the
individual mandate from the other provisions of the ACA.
Second, the Court considered the constitutionality of the
individual mandate, and whether the Commerce Clause of Article
SB 1487 | Page
5
I of the Constitution grants Congress the powers to enact the
minimum coverage requirements of the ACA. Third, the Court
considered whether the suit brought by the challenging the
individual mandate is barred by the Anti-Injunction Act
(whether the insurance mandate penalties amount to a type of
tax that can only be challenged after it is collected, rather
than before). Fourth and finally, the Court heard arguments on
the constitutionality of the expansion of the Medicaid program
to individuals earning up to 133 percent of the federal
poverty level (whether the spending conditions that the ACA
imposes on the states in funding additional Medicaid
beneficiaries are effectively "coercive," such that they
amount to an impermissible commandeering of state dollars by
the federal government under the Constitution).
If the Court determines that the individual mandate is
unconstitutional, it must also decide whether the mandate is
severable from the rest of the ACA. If the ACA is found to be
unconstitutional and not severable, the entire ACA could be
struck down. The Court could invalidate some provisions of the
law, but would have to determine whether the rest of the law
can function independently of the individual mandate provision
and whether Congress would have enacted the ACA's other
provisions without the mandate. The Court's decision is
expected in June of 2012.
2.Prior legislation. SB 771 (Alquist) of 2010 was similar to
this bill. SB 771 was held on the Assembly Appropriations
Committee Suspense File.
SB 114 (Liu) of 2009 would have required independent foster
care adolescents to be enrolled in Medi-Cal without
reapplication after April 1, 2010. SB 114 was held on Senate
Appropriations Committee Suspense File.
SB 1132 (Migden) of 2008 contained substantially similar
language to SB 114. SB 1132 was vetoed by the Governor due to
concerns about conflicts with federal law regarding Medi-Cal
eligibility determinations.
SB 147 (Alpert) of 2000 would have required DHCS to eliminate
income and asset tests when determining Medi-Cal eligibility
of independent foster care adolescents. SB 147 was vetoed.
AB 2877, the health budget trailer bill of 2000, extends
Medi-Cal eligibility to foster youth up to age 21, in
SB 1487 | Page 6
accordance with a state option made available under the
federal Foster Care Independence Act of 1999.
3.Support. Western Center on Law & Poverty (WCLP) writes in
support of the focus of this bill on providing comprehensive
and affordable health coverage for former foster youth - a
very vulnerable population with few supportive services. WCLP
states former foster youth often have higher needs for mental
health services and are very low income. Providing the
full-scope Medi-Cal benefits with the program's nominal
cost-sharing will help this vulnerable population access the
health care services they need. Just as more than two million
young Americans under the age of 26 have already been able to
stay on their parents' coverage under the ACA, former foster
children who do not have parents should have Medi-Cal
benefits.
WCLP also writes that it is strong support of Section 1 of the
bill, which makes findings and declarations regarding the
tragic lack of a universal health insurance system in the
United States, the transformative nature of the ACA and the
tangible results already been realized from the federal law.
These results include the millions of young adults on their
parents' health plan, hundreds of thousands of Californians
enrolled in county-operated Low-Income Health Programs,
thousands of Californians receiving health care through the
Pre-Existing Insurance Program, relief for seniors from the
Medicare "donut hole," and insurance market reforms such as a
ban on lifetime benefit limits. WCLP writes that it
wholeheartedly shares the confidence expressed in the bill
regarding the constitutionality of the ACA, and the urgency of
implementing its provisions.
4.Author's amendments. The author intends to propose amendments
to delete the provision of this bill that provides EPSDT
benefits to former foster youth, as this benefit does not
extend to the age group provided coverage by this bill. In
addition, the author intends to offer amendments to delay the
former foster youth coverage expansion until January 1, 2014,
which is when it is required under the ACA.
SUPPORT AND OPPOSITION :
Support: Western Center on Law & Poverty
Oppose: None received.
SB 1487 | Page
7
-- END --