BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1517 (Wolk) - County Medical Services Program.
Amended: April 9, 2012 Policy Vote: Health 9-0
Urgency: No Mandate: No
Hearing Date: May 24, 2012 Consultant: Brendan McCarthy
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 1517 would authorize the Department of Finance
to loan up to $30 million to the County Medical Services Program
for the implementation of a Low Income Health Program.
Fiscal Impact: Minor costs to program participants (Local Fund).
Background: Under current law and the existing federal Medi-Cal
hospital waiver, locally operated Low Income Health Programs are
authorized to extend health care coverage to individuals between
19 and 64 years of age, with incomes up to 200 percent of the
federal poverty level, who are not otherwise eligible for
Medi-Cal. (The operator of the program can set more restrictive
enrollment criteria.) The costs of Low Income Health Programs
are split between local funds and federal funds at a 50 percent
federal participation rate. Under current law, cities, counties,
cities and counties, a consortium of counties, or a health
authority may establish a Low Income Health Program.
By January 1, 2014, participants in Low Income Health Programs
will be transitioned either to an expanded Medi-Cal program or
will be required to purchase coverage through the California
Health Benefit Exchange or in the individual market.
Low Income Health Programs are operated and financed by local
government entities and the federal government. Current law
prohibits the use of General Fund monies for their operation.
The Department of Health Care Services may play a role in the
drawdown of federal funds and the distribution of those funds to
local government agencies. Current law requires any
administrative costs incurred by the Department to be reimbursed
by program operators.
In 34 rural counties, the County Medical Services Program uses
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local funding to provide basic healthcare coverage to adults
with incomes less than 200 percent of the federal poverty level,
who are not eligible for Medi-Cal or other state healthcare
programs. Current law authorizes the Department of Finance to
loan up to $30 million to the County Medical Services Program to
allow the program to reimburse providers and counties for
services rendered.
Proposed Law: SB 1517 would expand the existing $30 million loan
authority, to allow the Department of Finance to loan funds to
the County Medical Services Program to cover costs incurred in
the operation of a Low Income Health Program. The bill also
changes the required payment schedule from counties to the
County Medical Services Program governing board from monthly
payments to ten payments per fiscal year.
Related Legislation: SB 1081 (Fuller) would authorize a
nondesignated public hospital to operate a Low Income Health
Program if it is located in a county that does not have a county
hospital and the county does not intend to operate a such a
program. That bill is on the Senate Floor.
Staff Comments: The County Medical Services Program has been
spending down its available fund balance over the last few
years, due to increased enrollment during the recession. The
Governing Board is concerned that federal reimbursement for
expenditures under their Low Income Health Program will lag
expenditures by several months, creating a cash-flow problem for
the program. Absent this bill, the Governing Board will likely
need to seek funding in the commercial markets, which is likely
to be more expensive and time consuming than borrowing funds
from the state.
The Governing Board indicates that it is their intention to
repay the loan authorized in this bill by the end of the 2013-14
fiscal year.
Recommended Amendments: Staff recommends the bill be amended to
remove the authorization for additional General Fund loans.
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