BILL ANALYSIS
AB 1863
Page 1
Date of Hearing: May 3, 2000
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Carole Migden, Chairwoman
AB 1863 (Gallegos) - As Amended: April 24, 2000
Policy Committee: HealthVote:9-3
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill modifies eligibility requirements for the Medi-Cal
program as follows:
1)On January 1, 2001, increases the maintenance need income
levels (MNILs) in effect on August 22, 1996, by the percentage
increase in the Consumer Price Index (CPI) between these two
dates, or 20%, whichever is greater. On January 1 of every
subsequent year, the MNIL would be increased by the increase
in the CPI.
2)Conditions the increases in #1 on federal financial
participation (FFP) and requires the Department of Health
Services (DHS) to seek, by March 1 of each year, any state
plan amendments and other approvals necessary to secure FFP.
The bill specifies that the state is under no obligation to
use state-only funds to pay for the increases.
3)Requires DHS to adopt the federal option that permits states
to offer Medi-Cal without share of cost to low-income persons
with disabilities and seniors age 65 or over. Net countable
income cannot exceed 100% of the federal poverty level (FPL),
and net assets must be within allowable federal limits.
4)For purposes of computing net countable income in #3, provides
for income deductions, exemptions, and disregards allowed
under federal law. Additionally, allows special income
deductions of $200 for individuals and $400 for couples, as
authorized by federal law.
5)Makes benefits for #3 available starting April 1, 2001, only
to the extent that FFP is available. DHS is required to seek
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any necessary federal approvals.
FISCAL EFFECT
1)Unknown GF costs, likely over $18 million in FY 2000-01 (half
year) and $36 million annually thereafter, to increase the
Medi-Cal MNIL by 20% on 1/1/01. If 50,000 people have a
higher MNIL of $720 per month (instead of the current $600),
total Medi-Cal costs would increase by $72 million annually,
of which half ($36 million) would be GF costs.
2)Unknown GF costs, likely over $275,000 in FY 2001-02 (half
year) and $550,000 annually thereafter, to provide an annual
CPI increase to the MNIL. If the CPI increases by 3% each
year, total costs would be $1.1 million annually, of which
half would be GF costs.
3)Unknown GF costs, likely over $12.3 million in FY 2000-01 (3
months) and $49 million annually thereafter, to provide
Medi-Cal without share of cost to an estimated 53,000 aged,
blind and disabled persons under provision #3.
4)Negligible impact on county administrative costs for Medi-Cal
eligibility determinations for #3. These persons would shift
from one Medi-Cal component (Medically Needy) to another
(no-cost Medi-Cal).
COMMENTS
1) Purpose . This bill, sponsored by Protection and Advocacy,
Inc. and the Western Center on Law and Poverty, is intended to
improve access to health care for low-income elderly and
disabled persons in two ways. First, it increases the income
eligibility limit to qualify for no-cost Medi-Cal by raising
the level to 100% FPL as well as allowing an additional
deduction of $200 for individuals and $400 for couples. In
effect, the income limits are increased to about 114% FPL for
individuals and 142% for couples from the current levels of
90% and 104% FPL, respectively. By raising the income limit,
more people will qualify for no-cost Medi-Cal, thereby
shifting them from the Medically Needy program, where they
currently pay a share of their medical costs.
Second, for those persons remaining in the Medically Needy
program, this bill increases the amount of income they are
allowed to keep before they incur a share of cost. A one-time
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adjustment equal to the greater of 20% or cumulative CPI
increases between 8/22/96 and 1/1/01, is required for the MNIL
on January 1, 2001. Thereafter, the MNIL will increase
annually each January 1 by the amount of the CPI increase.
2) MNIL and Medically Needy Program . Persons whose incomes are
too high to qualify them for no-cost Medi-Cal may receive
Medi-Cal benefits under the Medically Needy program after they
pay a share of cost based on the MNIL. The MNIL is the amount
of income a beneficiary is allowed to keep for living
expenses, with all countable income above that required as the
person's share of cost before qualifying for Medi-Cal. The
current MNILs of $600 for individuals and $934 for couples
have not been adjusted since 1989. Federal law allows the
MNIL to be increased by cost of living increases since 1996.
By increasing the MNIL, this bill responds to the large number
of complaints from seniors and others about their high share
of cost. According to the author, this financial burden
discourages early diagnosis and treatment and compliance with
prescription medications. By allowing beneficiaries to keep
more of their incomes (thereby reducing their share of cost),
this bill will help them keep pace with inflation and access
needed medical care.
3) Governor's Budget Proposal . The Governor proposes to
eliminate the Medi-Cal share of cost for disabled and elderly
individuals (but not couples) with incomes under the FPL
(currently $696 per month). According to the Legislative
Analyst's Office (LAO), this would shift about 13,000
individuals who have a share of cost below $100 in the
Medically Needy program to no-cost Medi-Cal at a GF cost of $6
million annually. The LAO indicates another 47,000 aged,
blind and disabled Medi-Cal beneficiaries have a share of cost
between $100 and $500. This bill would enhance the Governor's
proposal by including couples and expanding eligibility to
individuals with $896 monthly income and couples with $1,338
income.
4) Related Legislation . The author previously carried AB 2125 in
1998 and AB 497 in 1999 to reduce share of cost requirements
for Medically Needy beneficiaries. AB 2125 was held in the
Senate Appropriations Committee, while AB 497 was amended in
this committee to deal with dentistry. This year, AB 2500
(Ashburn), which would have established an income deduction in
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the Medically Needy program at 150% FPL, failed passage in the
Assembly Health Committee.
Analysis Prepared by : Joyce Iseri / APPR. / (319) 319-2081