BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 18
AUTHOR: Leno and Hernandez
AMENDED: August 18, 2014
HEARING DATE: August 27, 2014
CONSULTANT: Bain
PURSUANT TO SENATE RULE 29.10.
SUBJECT : Medi-Cal renewal.
SUMMARY : Requires the Department of Health Care Services to
accept contributions by private foundations in the amount of at
least $6 million for the purpose of providing Medi-Cal renewal
assistance payments starting January 1, 2015. Requires
authorized payments to be made to counties by DHCS for
distribution of funds to community-based organizations providing
renewal assistance to Medi-Cal beneficiaries.
Existing law:
1.Establishes the Medi-Cal program, which is administered by the
Department of Health Care Services (DHCS), under which
qualified low-income individuals receive health care services.
2.Requires, pursuant to AB 82 (Committee on Budget), Chapter 23,
Statutes of 2013, DHCS to accept funding from private
foundations in the amount of at least $12.5 million to provide
allocations for the management and funding of Medi-Cal
outreach and enrollment plans.
3.Establishes the Healthcare Outreach and Medi-Cal Enrollment
Account (Account) to collect and allocate non-General Fund
(GF) public or private grant funds for expenditure, upon
appropriation of the Legislature, for outreach to and
enrollment of target Medi-Cal populations and to compensate
Medi-Cal in-person assisters. Sunsets this provision January
30, 2018.
4.Requires counties, except where the county has facts clearly
demonstrating that a Medi-Cal beneficiary cannot be eligible
for Medi-Cal due to an event, such as death or change of state
residency, to perform redeterminations of eligibility for
Medi-Cal beneficiaries every 12 months, and to promptly
Continued---
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redetermine eligibility whenever the county receives
information about changes in a beneficiary's circumstances
that may affect eligibility for Medi-Cal benefits.
5.Required DHCS to seek federal approval to extend the annual
redetermination date for a three-month period for those
Medi-Cal beneficiaries whose annual redeterminations were
scheduled to occur between January 1, 2014, and March 31,
2014.
This bill:
1.Requires DHCS to accept contributions by private foundations
in the amount of at least $6 million for the purpose of
providing Medi-Cal renewal assistance payments starting
January 1, 2015.
2.Requires these contributions to be deposited in the Account
that has been created in the Special Deposit Fund within the
State Treasury for the purposes specified in this bill.
3.Appropriates to DHCS the following sums for the purposes
specified in this bill:
a. $6 million from the Healthcare Outreach and
Medi-Cal Enrollment Account, to be available for
encumbrance or expenditure until December 31, 2016;
and,
b. $6 million from the Federal Trust Fund, to be
available for encumbrance or expenditure until
December 31, 2016.
4.Permits DHCS to expend a portion of the $500,000 authorized
for expenditure by SB 101 (Committee on Budget and Fiscal
Review, Chapter 361, Statutes of 2013) to administer the
activities described in this bill. Requires private foundation
funding expended by DHCS to administer the activities
described in this bill to be expended only for filled
positions and administrative expenses directly related to this
bill.
5.Permits DHCS to make allocations to fund Medi-Cal renewal
assistance activities as described in this bill in a manner
that the DHCS director provides. Permits DHCS to determine the
number of allocations and the application process, and permits
the DHCS director to consult or obtain technical assistance
from private foundations in implementation of the application
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and allocation process.
6.Permits the DHCS director, at his or her discretion, to give
consideration to distributing funds to community-based
organizations (CBOs) in an area or region of the state if a
county or counties, acting jointly, do not seek an allocation
or if funds are made available.
7.Requires renewal assistance payments to be distributed to CBOs
providing renewal assistance to Medi-Cal beneficiaries.
Requires authorized payments to be made to counties by DHCS
for distribution of funds to CBOs. Permits counties to retain
an amount for administrative costs that have been approved by
DHCS.
8.Requires DHCS, in collaboration with the County Welfare
Directors Association and legal services organizations, to
develop renewal assistance training for employees of CBOs that
are consistent with the counties' human services agencies
Medi-Cal redetermination timeframes and process. Requires CBO
employees providing assistance to have completed the renewal
assistance training in order to be eligible for renewal
assistance payments under this bill.
9.Requires the funds allocated under this bill to be used only
for the Medi-Cal renewal assistance activities and may
supplement, but not supplant, existing local, state, and
foundation funding of county renewal assistance activities.
10.Permits DHCS to recoup or withhold all or part of an
allocation for failure to comply with any requirements or
standards set forth by DHCS for the purposes of this bill.
11.Requires DHCS to require progress reports, in a manner as
determined by DHCS, from those receiving allocations under
this bill.
12.Requires DHCS to seek federal matching funds for the
contributions to the extent permissible for training, testing,
certifying, supporting, and compensating persons and entities
providing renewal assistance and for any other permissible
renewal assistance related activities and to seek all
necessary federal approvals for purposes of obtaining federal
funding for activities conducted under this bill.
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13.Requires, to the extent federal funding is received for the
services specified in this bill, reimbursements for costs
incurred under the approved allocations to be made in
compliance with federal law.
14.Permits DHCS to implement, interpret, or make specific this
section by means of all-county letters, provider bulletins, or
similar instructions without adopting regulations pursuant to
the Administrative Procedures Act.
15.Requires this bill to cease to be implemented when all of the
private contributions and any federal matching funds have been
exhausted.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1.Expenditures of $12 million beginning in January 2015
(assuming costs are shared 50 percent private foundation
funding, 50 percent federal funds) on grants to CBOs to assist
with Medi-Cal renewal. This bill appropriates $6 million from
the specified special fund (the Healthcare Outreach and
Medi-Cal Enrollment Account, which was created through an
uncodified trailer bill section, Section 5 of SB 101
(Committee on Budget), Chapter 361, Statutes of 2013) and $6
million in federal matching funds.
2.Costs for Medi-Cal benefits in 2015 likely in the tens of
millions of dollars (GF/federal). This estimate assumes the
renewal assistance effort results in significant numbers of
enrollees who otherwise would not have renewed their Medi-Cal
eligibility. The GF share of costs could be in excess of $10
million to the low tens of millions in the first year for
additional Medi-Cal benefits. Actual GF costs would depend on
how many new renewals are generated for individuals who
otherwise may not have renewed, and the corresponding federal
share of cost. The one-time renewal assistance will likely
result in higher ongoing costs as well, since a greater number
of beneficiaries will likely maintain enrollment in the
program in future years.
3.To the extent greater continuous Medi-Cal enrollment results
in more beneficiaries receiving regular care for chronic
conditions, increased up-front benefits costs could
potentially be offset somewhat by fewer expensive
complications from uncontrolled chronic conditions. Such
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costs offsets would be nebulous, but could be reflected in
lower managed care payments in future years.
COMMENTS :
1.Author's statement. According to the author, as part of its
work in leading the nation on the implementation of the
Affordable Care Act, California has developed an outreach and
enrollment infrastructure of CBOs and county employees. These
organizations and county employees have assisted millions of
Californians enroll in Covered California and Medi-Cal. These
Californians will need to renew their coverage in order to
keep it for 2015. Renewal assistance will be particularly
important in 2014 and 2015 as existing Medi-Cal families move
from welfare-based income and household rules to tax-based
rules. Additional support will be needed to help families
complete these forms and continue Medi-Cal enrollment. Keeping
eligible beneficiaries enrolled in coverage assures ongoing
access to medically necessary care and reduces administrative
overhead due to avoidable churning of enrollment.
2.Medi-Cal Expansion. On March 23, 2010, President Obama signed
the Affordable Care Act (ACA) into law (Public Law 111-148),
as amended by the Health Care and Education Reconciliation Act
of 2010 (Public Law 111-152). The ACA greatly expands health
insurance coverage in California, resulting in millions of
low- and middle-income Californians gaining access to coverage
under the expansion of Medi-Cal, through easier enrollment
requirements established for Medi-Cal, and through premium and
cost-sharing subsidies offered through the California Health
Benefit Exchange (known as Covered California). The new
requirements for California's Medi-Cal program established by
the ACA include:
a. Requiring Medicaid coverage of adults under age 65 who
are not currently eligible with incomes up to 138 percent
of the Federal Poverty Level (FPL) or below $15,856 in 2013
for an individual (the Supreme Court ruling in National
Federation of Independent Business v. Sebelius in June 2012
effectively allowed states to opt-out of the expansion);
b. Requiring primary care rates to be equal to Medicare
rates for 2013 and 2014;
c. Extending Medi-Cal coverage to former foster youth up to
age 26;
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d. Allowing individuals to apply for Medi-Cal in person,
via phone, by mail, and through the Internet or facsimile;
e. Eliminating the asset test for certain groups of
applicants to Medi-Cal; and,
f. Establishing a new methodology for counting income in
Medi-Cal, known as modified adjusted gross income (MAGI).
AB X1 1 (P�rez), Chapter 3, Statutes of 2013, implemented the
Medi-Cal expansion to adults without minor children who are
under age 65. In the 2014 May Budget Revise, DHCS estimated
1.4 million newly eligible beneficiaries will enroll in
Medi-Cal by June 2014, growing to 1.6 million by June 2015
(DHCS refers to this population as the "optional expansion"
population, and benefit costs for this population is 100
percent federally funded for the first three years of the
expansion, declining to 90 percent in 2020).
In addition, DHCS expects the eligibility simplification and
outreach efforts to result in a significant number of
currently eligible but not enrolled Medi-Cal beneficiaries
becoming certified eligibles (DHCS refers to this population
as the "mandatory expansion" population). DHCS estimates an
additional 630,798 eligibles will have enrolled in Medi-Cal by
June 2014, growing to 826,950 by June 2015. Medi-Cal is
projected to expand from 7.9 million beneficiaries prior to
implementation of the ACA, to 11.5 million by the end of
fiscal year 2014-15.
Despite the increase in Medi-Cal enrollment, the enrollment
process has been lengthy for many individuals and has been a
subject of concern from Medi-Cal applicants, legal services
entities, health care providers and advocates, and the federal
Centers for Medicare and Medicaid Services. The number of
pending Medi-Cal applications was 900,000 in March 2014,
600,000 at the end of June, and there was 401,000 people with
pending applications as of August 4, 2004.
1.Previous private contributions for Medi-Cal outreach and
enrollment. In 2013, the California Endowment committed $26.5
million to the state in an effort to help increase and enhance
outreach and enrollment efforts in Medi-Cal. The funding
supported enrollment assistance payments to individuals who
were certified by Covered California to assist people in
signing up for Medi-Cal, and to counties for new Medi-Cal
outreach and enrollment activities for targeted groups. AB 82
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(Committee on Budget), Chapter 23, Statutes of 2013, the
health budget trailer bill, authorized DHCS to accept
contributions by private foundations in the amount of at least
$26.5 million, and to seek matching federal funds, for the
purposes of funding in-person enrollment assistance payments
and Medi-Cal outreach and enrollment plans. SB 101 (Committee
on Budget), Chapter 361, Statutes of 2013 appropriates funding
for activities described in AB 82 and establishes the
Healthcare Outreach and Medi-Cal Enrollment Account in the
Special Deposit Fund.
2.Support. The Western Center on Law and Poverty (WCLP), a
co-sponsor of this bill, states that the role of CBOs in
assisting consumers with enrollment into Medi-Cal has been
critical to the progress California has made in expanding the
program and streamlining eligibility rules. WCLP states it is
similarly important to have CBOs assist beneficiaries in
renewing their Medi-Cal coverage, particularly given the shift
under the ACA to MAGI eligibility rules. WCLP states that
there are different eligibility rules for children and adults
that could result in families having parents enrolled in a
Covered California plan and children enrolled in Medi-Cal. As
such, renewal assistance is vital to ensure eligible children
keep their Medi-Cal coverage. WCLP asserts that the new
Medi-Cal renewal application is confusing, and that while
there should be many improvements to the renewal process in
2015, due to the implementation of ex parte review and the use
of prepopulated forms, this will be a different type of
renewal process for which beneficiaries must adapt. WCLP also
states that this bill provides resources to CBOs to assist
consumers with renewals, thereby allowing state and county
workers to rightfully focus on reducing the state's
significant backlog of Medi-Cal applications.
Health Access California, also a co-sponsor of this bill, states
that the California Endowment has generously offered $6
million to assist consumers who are enrolled in Medi-Cal to
renew their coverage, and that this bill would allow a federal
match for those dollars. Health Access states that keeping
eligible beneficiaries enrolled in coverage assures ongoing
access to medically necessary care and reduces administrative
overhead due to avoidable churning of enrollment. Further,
Health Access California states that this bill uses the same
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mechanism in place today to grant money to CBOs that assist
consumers in signing up for Medi-Cal, thereby building upon an
existing infrastructure of enrollment assistance at no cost to
the GF.
3.Opposition. The Department of Finance (DOF) writes in
opposition to this bill, arguing this bill results in
additional GF costs of approximately $8.7 million, imposes
additional workload on DHCS, and is unnecessary because
counties currently provide assistance to Medi-Cal
beneficiaries who are renewing their eligibility and because
federal health care reform has made simplifications to
Medi-Cal renewals. DOF concludes that it is unclear that that
MAGI rules have created confusion for beneficiaries since the
rules were implemented in January 2014.
SUPPORT AND OPPOSITION :
Support: Western Center on Law & Poverty (co-sponsor)
Health Access California (co-sponsor)
AARP
Alliance for Boys and Men of Color
American Cancer Society - Cancer Action Network
Asian Americans Advancing Justice - Los Angeles
Asian Law Alliance
California Black Health Network
California Children's Health Coverage Coalition
California Coverage and Health Initiatives
California Immigrant Policy Center
California Optometric Association
California Pan Ethnic Health Network
California Primary Care Association
Children's Defense Fund California
Children Now
Congress of California Seniors
Korean Community Center of the East Bay
National Health Law Program
PICO California
Project Inform
San Francisco Community Clinic Consortium
SEIU United Healthcare Workers - West
SIREN - Services, Immigrant Rights, and Education
Network
The Children's Partnership
United Ways of California
Vision y Compromiso
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Oppose: Department of Finance
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