Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law requires the department to exercise its option under federal law to implement a program for aged and disabled persons, as described. Existing law requires an individual under these provisions to satisfy certain financial eligibility requirements, including, among other things, that his or her countable income does not exceed an income standard equal to 100% of the applicable federal poverty level, plus an income disregard of $230 for an individual, or $310 in the case of a couple, except that the income standard determined shall not be less than the SSI/SSP payment level for a disabled individual or couple, as applicable. Existing law authorizes the department to implement this program by means of all-county letters or similar instructions without taking regulatory action and thereafter requires the department to adopt regulations.

This bill would instead require, upon receipt of federal approval, all countable income over 100% of the federal poverty level, up to 138% of the federal poverty level, to be disregarded, after taking all other disregards, deductions, and exclusions into account for those persons eligible under the program for aged and disabled persons. The bill would provide that the income level determined based on a countable income that does not exceed an income level equal to 100% of the applicable federal poverty level, plus an income disregard of $230 for an individual, or $310 in the case of a couple, shall not be less than the SSI/SSP payment level the individual or couple, as applicable, receives or would receive as a disabled or blind individual or couple. The bill would require a specified provision to be implemented after the Director of Health Care Services determines, and communicates that determination in writing to the Department of Finance, that systems have been programmed for implementation of that provision, but no sooner than January 1, 2019.

The bill would authorize the department to implement, interpret, or make specific the above-described program for aged and disabled persons by means of all-county letters, plan or provider bulletins, or similar instructions until regulations are adopted, and would require the department to adopt regulations no later than July 1, 2021. 2022. The bill would require the department to provide a status report on a semiannual basis to the Legislature until regulations have been adopted. The bill would provide that the program shall be implemented only if and to the extent that any necessary federal approvals have been obtained.

Because counties are required to make Medi-Cal eligibility determinations, and this bill would expand Medi-Cal eligibility by increasing the income disregard amounts and would increase the responsibility of counties in determining Medi-Cal eligibility, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law requires the department to exercise its option under federal law to implement a program for aged and disabled persons, as described. Existing law requires an individual under these provisions to satisfy certain financial eligibility requirements, including, among other things, that his or her countable income does not exceed an income standard equal to 100% of the applicable federal poverty level, plus an income disregard of $230 for an individual, or $310 in the case of a couple, except that the income standard determined shall not be less than the SSI/SSP payment level for a disabled individual or couple, as applicable. Existing law authorizes the department to implement this program by means of all-county letters or similar instructions without taking regulatory action and thereafter requires the department to adopt regulations.

This bill would instead require, upon receipt of federal approval, all countable income over 100% of the federal poverty level, up to 138% of the federal poverty level, to be disregarded, after taking all other disregards, deductions, and exclusions into account for those persons eligible under the program for aged and disabled persons. The bill would provide that the income level determined based on a countable income that does not exceed an income level equal to 100% of the applicable federal poverty level, plus an income disregard of $230 for an individual, or $310 in the case of a couple, shall not be less than the SSI/SSP payment level the individual or couple, as applicable, receives or would receive as a disabled or blind individual or couple. The bill would require a specified provision to be implemented after the Director of Health Care Services determines, and communicates that determination in writing to the Department of Finance, that systems have been programmed for implementation of that provision, but no sooner than January 1, 2019.

The bill would authorize the department to implement, interpret, or make specific the above-described program for aged and disabled persons by means of all-county letters, plan or provider bulletins, or similar instructions until regulations are adopted, and would require the department to adopt regulations no later than July 1, 2021. The bill would require the department to provide a status report on a semiannual basis to the Legislature until regulations have been adopted. The bill would provide that the program shall be implemented only if and to the extent that any necessary federal approvals have been obtained.

Because counties are required to make Medi-Cal eligibility determinations, and this bill would expand Medi-Cal eligibility by increasing the income disregard amounts and would increase the responsibility of counties in determining Medi-Cal eligibility, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2017 - 2018 Regular Session

AB 2430 (Arambula) - Medi-Cal: program for aged and disabled persons

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

Increases income eligibility in the Aged, Blind and Disabled Federal Poverty Level Program (A&D program) from 100 percent of the federal poverty level (FPL), plus the individual or couple standard disregard, to 138 percent of the FPL.

Fiscal Impact:

The Department of Health Care Services estimates:

• For Medi-Cal managed and fee-for-service, $51.4 million total funds ($25.7 General Fund) in fiscal year (FY) 2018-19, FY 2019-2020, $153.6 million total funds ($76.8 million General Fund), in FY 2020-2021 and annually thereafter. Medi-Cal only cases will be $172.2 million total funds ($86.1 million General Fund).
• State operations costs of $130,000 total funds ($65,000 General Fund) in FY 2018-19, $120,000 total ($60,000) in FY 2019-2020 annually, thereafter.

Additionally, the department anticipates impact on the In-Home Supportive Services (IHSS). Specifically, the department assumes in FY 2018-19, $19 million total funds ($8.9 million General Fund), and annualized costs increases to $254 million total funds ($116.9 million General Fund) in FY 2021-22.

Staff notes while there may be increases in IHSS caseload, the assumptions regarding the composition of the population, whether aged, blind, or disabled, warrants further discussion.

By expanding Medi-Cal eligibility by increasing the income disregard amounts, this bill could increase counties’ Medi-Cal eligibility determinations, making the bill a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs (General Fund). The magnitude is unknown.

For additional fiscal assumptions, please see Staff Comments.

Background:

1. AB 2877 (Thomson, Chapter 93, Statutes of 2000), the health budget trailer bill, established the A&D program, a no share-of-cost full scope Medi-Cal benefit for many recipients who were elderly or disabled and previously, had to pay a significant share of cost to access Medi-Cal services. The A&D program has an income limit and an asset limit of $2,000 for an individual and $3,000 for a couple. Income eligibility under the A&D program is 100 percent of the FPL plus $230 a month for an individual and $310 for a couple. In 2018, the A&D program income eligibility limit is $1,242 a month for an individual ($14,904 annually) and $1,682 for a married couple ($20,184 annually, if both are eligible).

At the time of enactment, the A&D income eligibility formula created an income cutoff of approximately 133 percent FPL. However, with fixed amounts ($230 for an individual and $310 for a couple) added to the FPL, A&D income eligibility has declined as a percentage of the FPL, resulting in an income eligibility limit that is effectively 123 percent of the FPL, which will mean fewer individuals are income eligible for the program. Formerly eligible beneficiaries, whose Social Security income increases with the cost of living, are forced off the A&D program on to the more costly share-of-cost Medi-Cal, if they are eligible. In addition, individuals under 65 who were eligible under Medi-Cal expansion for free Medi-Cal at incomes above 124% of the FPL and below 138% of the FPL may no longer be eligible once they turn 65 years old, due to the lower income eligibility threshold for the A&D program.

Individuals whose countable income is above the A&D program limits cannot “spend down” their income to become eligible. Instead, those individuals will need to have their Medi-Cal eligibility determined under the Aged, Blind & Disabled – Medically Needy (A&D-MN) share of cost program, where they will be required to pay a share of cost each month before Medi-Cal will cover services. A share of cost functions similar to a deductible, in that an individual must pay the share of cost amount in any month s/he incurs medical costs. After the individual meets his/her share of cost, Medi-Cal coverage begins. An applicant who has countable income as little as $1 over the A&D program income limit will only be able to qualify under the A&D-MN program with a share of cost in the hundreds of dollars each month. For example, an elderly individual with a countable monthly income of $1,243 in 2018 would be $1 above the A&D income limit would have to “spend down” each month to qualify for A&D-MN Medi-Cal. To do this, the individual would have to spend $643 each month in medical expenses ($1,243 - $600 Maintenance Needs Level for an individual = $643) before Medi-Cal coverage would begin. This is sometimes referred to as the A&D-MN FPL “cliff,” meaning an individual who is only slightly above the A&D limit (and therefore ineligible for the A&D program) must incur a significant share of cost that is much more than the amount s/he is above the A&D program income limit.

Proposed Law:

The bill includes the following provisions, among others:

• Increases income eligibility for the Medi-Cal A&D program to 138 percent of the FPL by disregarding all countable income over 100 percent of the FPL, up to 138 percent of the FPL, after taking all other disregards, deductions, and exclusions into account for eligible A&D individuals.
  
• Requires DHCS to seek federal approval to implement the bill.
• Implements this bill only if, and to the extent that, any necessary federal approvals have been obtained and after and after the DHCS director determines, and communicates that determination in writing to the Department of Finance, that systems have been programmed for implementation, but no sooner than January 1, 2019.
  
• Requires DHCS to implement, interpret, or make specific this bill by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions without taking regulatory action, until regulations are adopted. Requires DHCS to adopt regulations no later than July 1, 2022.
• Requires DHCS to provide a status report to the Legislature on a semiannual basis, until regulations have been adopted. 
• Provides if the Commission on State Mandates determines state-mandated costs, to provide reimbursement to local agencies and school districts for costs.

Related Legislation:

Prior and similar versions of the bill include:

• AB 763 (Burke of 2015) would have increased the income disregard in calculating eligibility for the A&D Program thereby increasing the upper limit of the financial eligibility to 138 percent of the FPL. AB 763 was held on the Assembly Appropriations Committee Suspense File.
• AB 2025 (Dickinson of 2014) was substantially similar to this bill. AB 2025 was held on the Assembly Appropriations Committee suspense file.
• AB 55 (Dymally of 2007) was substantially similar to this bill, but it increased the income threshold to 133 percent of FPL. AB 55 was later amended to a different subject matter.
• AB 969 (Chan of 2001) would have incorporated annual cost-of-living increases in the A&D FPL formula. AB 969 was held on the Senate Appropriations Committee suspense file.
• AB 2877 (Thomson, Chapter 93, Statutes of 2000) the health budget trailer bill, established the A&D program, a no-share-of-cost Medi-Cal benefit for many elderly and disabled recipients who previously had to pay a significant share of cost to access Medi-Cal services.

Staff Comments:

1. The expansion proposed in this bill was discussed as part of the Conference Committee on the 2018-19 Budget, but ultimately, not funded in the final Budget Act of 2018.

The Department of Health Care Services’ estimate assumes the following, among others:

• A caseload increase of 27,298 individuals from the increase in eligibility for the A&D program. Specifically, IHSS caseload assumes an overall average caseload increase of 721 cases in FY 18-19, 8,528 cases in FY 19-20, 9,340 cases in FY 20-21, and 9,815 cases in FY 21-22; and broadly, IHSS take-up rate would be around 35 percent, similar to the SSI/SSP rate, which more of the population is disabled.
• IHSS’ Case Managed Information System (CMIPS) II automation and programming changes is absorbable.
• IHSS cost-sharing ratios remain the same as current law.

Staff notes there is a difference in the field with regards to specific assumptions pertaining to the take-up rate for the IHSS program. Specifically, the department assumes a 35 percent IHSS take-up rate, in order to align it with the SSI/SSP program – a population which, historically, has been comprised of a higher number of individuals who are disabled. Staff notes that advocates suggest 26 or 27 percent rate may be more appropriately reflective of the A&D population, which has a higher percentage of individuals who are aged, and not necessarily disabled and require a lower level of service. Staff also notes there is a difference in assumptions of individuals who are dually eligible for Medicare and Medi-Cal. Because Medicare is the primary payer, individuals who are dually eligible would cost the Medi-Cal program less than those who are eligible for Medi-Cal only. The department assumes 49% would be dually eligible whereas data suggest this is above 90%.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: AB 2430

SUBJECT: Medi-Cal: program for aged and disabled persons.

SUMMARY:

Increases income eligibility in the Aged, Blind and Disabled Federal Poverty Level Program (A&D program) from 100% of the federal poverty level (FPL), plus the individual or couple standard disregard, to 138% of the FPL.

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which low income individuals are eligible for medical coverage. [WIC §14000, et seq.]
   
2. Makes adults and parents with incomes up to 138% of the FPL who are under age 65 eligible for Medi-Cal, and makes children with incomes up to 266% of the FPL eligible for Medi-Cal, including providing full-scope Medi-Cal benefits to undocumented children through age 18. [WIC §14005.60, 14005.64, 14005.27, 14005.64, and 14007.8]
3. DHCS to implement a Medi-Cal program for A&D individuals, to the extent federal financial participation is available. [WIC §14005.40]
4. Establishes income eligibility for the A&D program as countable income that does not exceed 100% of the FPL ($12,140 for an individual and $16,306 for a couple in 2018) plus level, plus $230 for an individual or, $310 for a couple, provided that the income standard so determined is not less than the SSI/SSP payment level for a disabled individual or, in the case of a couple, the SSI/SSP payment level for a disabled couple. [WIC §14005.40]
5. Permits the financial eligibility requirements for the A&D program to be adjusted upwards to reflect the cost of living in California, contingent upon an appropriation in the annual Budget Act. [WIC §14005.40]

This bill:

1. Increases income eligibility for the Medi-Cal A&D program to 138% of the FPL by disregarding all countable income over 100% of the FPL, up to 138% of the FPL, after taking all other disregards, deductions, and exclusions into account for eligible A&D individuals.
   
2. Requires DHCS to seek federal approval to implement this bill.
   
3. Implements this bill only if and to the extent that any necessary federal approvals have been obtained and after and after the DHCS director determines, and communicates that determination in writing to the Department of Finance (DOF), that systems have been programmed for implementation, but no sooner than January 1, 2019.
   
4. Requires DHCS to implement, interpret, or make specific this bill by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions without taking regulatory action, until regulations are adopted. Requires DHCS to adopt regulations no later than July 1, 2022, and requires DHCS to provide a status report to the Legislature on a semiannual basis, until regulations have been adopted. 

FISCAL EFFECT:

According to the Assembly Appropriations Committee:

1. Increased Medi-Cal and In-Home Supportive Services benefits costs of approximately $250 million (50% General Fund (GF)/50% federal funds). Enrollment in the A&D program is projected to increase by approximately 27,000.
2. Potential additional cost avoidance to Medi-Cal, to the extent the individuals who gain comprehensive coverage through this coverage expansion remain healthier and avoid more costly institutional care. Annual per-person costs for institutional long-term care range from $65,000 to $90,000 per year for this population.
3. Costs for programming eligibility changes are expected to be minor and absorbable (GF/federal).

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, there is a major gap in coverage that needs to be addressed for our aged and disabled populations. As of now, adults who are eligible for free Medi-Cal at 64 can lose free Medi-Cal when they turn 65. The A&D program income level loses value every year because of inflation, thereby pushing the program out of reach of some seniors and people with disabilities. Federal law allows states to adjust their maintenance need levels for inflation and to adopt more generous income exemptions through a state plan amendment and that low income seniors and adults with disabilities shouldn’t have to choose between putting food on the table and going to the doctor. Adjusting the income level in California to more accurately reflect the true cost of living will help thousands of vulnerable individuals access the care that they need.
   
2. A&D program. AB 2877 (Thomson, Chapter 93, Statutes of 2000) the health budget trailer bill, established the A&D program, a no share-of-cost full scope Medi-Cal benefit for many elderly and disabled recipients who previously had to pay a significant share of cost to access Medi-Cal services. The A&D program has an income limit and an asset limit of $2,000 for an individual and $3,000 for a couple. Income eligibility under the A&D program is 100% of the FPL plus $230 a month and $310 for a couple. In 2018, the A&D program income eligibility limit is $1,242 a month for an individual ($14,904 annually) and $1,682 for a married couple ($20,184 annually, if both are eligible).
   
   At the time of enactment, the A&D income eligibility formula created an income cutoff of approximately 133% FPL. However, with fixed amounts ($230 for an individual and $310 for a couple) added to the FPL, A&D income eligibility has declined as a percentage of the FPL, resulting in an income eligibility limit that is effectively 123% of the FPL, which will mean fewer individuals are income eligible for the program. Formerly eligible beneficiaries, whose Social Security income increases with the cost of living, are forced off the A&D program on to the more costly share-of-cost Medi-Cal, if they are eligible. In addition, individuals under 65 who were eligible under Medi-Cal expansion for free Medi-Cal at incomes above 124% of the FPL and below 138% of the FPL may no longer be eligible once they turn 65 years old, due to the lower income eligibility threshold for the A&D program.
   

Individuals whose countable income is above the A&D program limits cannot “spend down” their income to become eligible. Instead, those individuals will need to have their Medi-Cal eligibility determined under the Aged, Blind & Disabled – Medically Needy (A&D-MN) share of cost program, where they will be required to pay a share of cost each month before Medi-Cal will cover services. A share of cost functions similar to a deductible, in that an individual must pay the share of cost amount in any month s/he incurs medical costs. After the individual meets his/her share of cost, Medi-Cal coverage begins. An applicant who has countable income as little as $1 over the A&D program income limit will only be able to qualify under the A&D-MN program with a share of cost in the hundreds of dollars each month. For example, an elderly individual with a countable monthly income of $1,243 in 2018 would be $1 above the A&D income limit would have to “spend down” each month to qualify for A&D-MN Medi-Cal. To do this, the individual would have to spend $643 each month in medical expenses ($1,243 - $600 Maintenance Needs Level for an individual = $643) before Medi-Cal coverage would begin. This is sometimes referred to as the A&D-MN FPL “cliff,” meaning an individual who is only slightly above the A&D limit (and therefore ineligible for the A&D program) must incur a significant share of cost that is much more than the amount s/he is above the A&D program income limit.

1. Parallel budget proposal. The expansion proposed in this bill is part of the Conference Committee on the 2018-19 Budget. The Assembly Budget funded the A&D program expansion at $30 million GF in 2018-19 and on-going, while the Senate Budget funded the A&D program expansion at $15 million GF in 2018-19 and $30 million on-going. The DOF released its fiscal estimate of the A&D program expansion in June 2018. DOF assumes a caseload increase of 27,298 individuals from the increase in eligibility, and increased Medi-Cal health care costs of $152.8 million ($76.4 million GF), additional Medicare Part B premium payments of $19.4 million ($9.7 million GF) and In-Home Supportive Services costs of $15 million ($6.9 million GF). DOF projects the DOF costs increase to $188.5 million in 2019-20 ($86.6 million GF). The A&D eligibility expansion was not funded in the final budget agreement.
2. Related legislation. AB 2331 (Weber) would require a county to perform a redetermination every 36 months for a Medi-Cal beneficiary who has a developmental disability and who is determined to be eligible for services by a regional center. AB 2331 was held on the Assembly Appropriations Committee suspense file.
3. Prior legislation. AB 763 (Burke of 2015) would have increased the income disregard in calculating eligibility for the A&D Program thereby increasing the upper limit of the financial eligibility to 138% of the FPL. AB 763 was held on the Assembly Appropriations Committee Suspense File.

AB 2025 (Dickinson of 2014) was substantially similar to this bill. AB 2025 was held on the Assembly Appropriations Committee suspense file.

AB 55 (Dymally of 2007) was substantially similar to this bill, but it increased the income threshold to 133% of FPL instead of 138%. AB 55 was subsequently amended to a different subject matter before its first policy hearing in the Senate.

AB 969 (Chan of 2001) would have incorporated annual cost-of-living increases in the A&D FPL formula. AB 969 was held on the Senate Appropriations Committee suspense file.

AB 2877 (Thomson, Chapter 93, Statutes of 2000) the health budget trailer bill, established the A&D program, a no-share-of-cost Medi-Cal benefit for many elderly and disabled recipients who previously had to pay a significant share of cost to access Medi-Cal services.

1. Support. This bill is jointly sponsored by Western Center on Law & Poverty and Disability Rights California, which state that advocates from around the state have for years attempted to help beneficiaries with a high share of cost. Many A&D program enrollees suffer from conditions that they cannot afford to treat due to their share of cost. Forced between paying for rent and food or their Medi-Cal share of cost, many seniors forego needed medical services, which can prompt them to move into skilled nursing facilities at a high cost to the state and an even higher personal cost to their own independence and well-being. While millions of Californians are now able to qualify for free services because the income threshold was raised, it is inequitable to require a person to pay hundreds of dollars monthly simply due to their age.
   
   The San Francisco AIDS Foundation, the Asian Law Alliance, and the San Francisco Senior and Disability Action state that the current eligibility threshold, coupled with the high share of cost mean that, unlike all the adult beneficiaries covered under the Affordable Care Act who qualify for free Medi-Cal up to 138% of the FPL, seniors and people with disabilities must pay more than half their income before they can access Medi-Cal coverage. This bill provides parity for low-income seniors and persons with disabilities who are currently living with a high share of cost in the Medi-Cal program.

SUPPORT AND OPPOSITION:

Support: Disability Rights California (co-sponsor)

                        Western Center on Law & poverty (co-sponsor)

AARP California

AIDS Healthcare Foundation

Antelope Valley Seniors Network

Asian Law Alliance

Association of California Healthcare Districts

Association of Regional Center Agencies

Bay Area Legal Aid

Blue Shield of CA

California Academy of Family Physicians

California Advocates for Nursing Home Reform

California Advocacy Network for Aging Latinos

California Association of Public Authorities for IHSS

California Association of Health Plans

CaliforniaHealth+ Advocates

California Immigrant Policy Center

California In-Home Supportive Services

California Commission on Aging

California Partnership

California Retired Teachers Association

Center for Independent Living

County Health Executives Association of California

Congress of California Seniors

Consumers Union

County of Monterey

Disability Rights Education & Defense Fund

East Bay Community Law Center

Educate Advocate

Health Access California

Health Consumer Alliance

Health Plan of San Mateo

HICAP

Huntington Senior Care Network

Imperial County Area Agency on Aging

Jewish Family Service of Los Angeles

Justice in Aging

Kaiser Permanente

Korean Resource Center

LA Care

Law Office of Gretchen J. Kenney

Leading Age California

Legal Aid Society of San Diego, Inc.

Life Skills Training & Educational Programs

Los Angeles LGBT Center

Maternal and Child Health Access

Multipurpose Senior Services Program Site Association

National Association of Social Workers – California Chapter

National Health Law Program

Office of the State Long-Term Care Ombudsman

Ombudsman Services of Contra Costa and Solano

Partners in Care Foundation

Redwood Empire Food Bank

San Francisco AIDS Foundation

San Francisco Department of Public Health

San Francisco Senior & Disability Action

Senior Advocates of the Desert

Social Services Coalition of Alameda County

State Council on Developmental Disabilities

St. Anthony Foundation

The Caring Connection

The Center for Independent Living

United Domestic Workers of America – AFSCME Local 3930/AFL-CIO

Western Center on Law and Poverty

Numerous individuals

Oppose: None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2430

Author:(Arambula)

As Introduced Ver:February 14, 2018

Majority vote

SUMMARY: Changes the income eligibility in the Aged and Disabled Federal Poverty Level Program (A&D Program) from 100% of the federal poverty level (FPL), plus the individual or couple standard disregard, to 138% of the FPL. Specifically, this bill:

1. Replaces the provisions making eligibility for the A&D Program based on a countable income that does not exceed an income level equal to 100% of the FPL plus an income disregard of $230 for an individual or $310 for a couple, and instead requires all countable income up to 138% to be disregarded for purposes of eligibility.
2. Requires the Department of Health Care Services (DHCS) to seek federal approval to implement 1) above. Requires implementation of this bill only if and to the extent that any necessary federal approvals have been obtained.
3. Requires the DHCS Director to execute a declaration stating that federal approval has been obtained for 1) above and the date for implementation. Requires the DHCS Director to post the declaration on the DHCS Website.
4. Requires DHCS, without taking any regulatory action, to implement, interpret, or make specific this bill by means of all-county letter, plan letters, plan or provider bulletins, or similar instructions, except that DHCS shall adopt regulations no later than July 1, 2021. Requires DHCS to provide a status report to the Legislature on a semiannual basis until regulations have been adopted.
5. Requires implementation of 1) above after the DHCS Director determines, and communicates that determination in writing to the Department of Finance, that systems have been programmed for implementation, but no sooner than January 1, 2019.

EXISTING LAW:

1. Establishes the Medi-Cal program as California's version of the federal Medicaid program. Medi-Cal provides comprehensive health benefits to low-income individuals, pregnant women, elderly, blind or disabled persons, nursing home residents, and refugees who meet specified eligibility criteria.
2. Requires Medi-Cal coverage of adults under age 65 with incomes up from 100% to 138% of the FPL.
3. Establishes, to the extent that federal financial participation is available, the A&D program. Sets the upper limit of financial eligibility for this program at 100% FPL plus a specified additional amount ($230 for an individual; $310 for a couple) that is disregarded in calculating eligibility.
4. Prohibits the income standard for the A&D Program from being less than the Supplemental Security Income/ Supplemental State Payment (SSI/SSP) payment level for a disabled individual or, in the case of a couple, the SSI/SSP payment level for a disabled couple.
5. Permits the financial eligibility requirements for the A&D Program to be adjusted upwards to reflect the cost of living in California, contingent upon appropriation in the annual Budget Act.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Increased Medi-Cal and In-Home Supportive Services benefits costs of approximately $250 million (50% General Fund (GF)/50% federal funds). Enrollment in the A&D FPL program is projected to increase by approximately 27,000.
2. Potential additional cost avoidance to Medi-Cal, to the extent the individuals who gain comprehensive coverage through this coverage expansion remain healthier and avoid more costly institutional care. Annual per-person costs for institutional long-term care range from $65,000 to $90,000 per year for this population.
3. Costs for programming eligibility changes are expected to be minor and absorbable (GF/federal).

COMMENTS: According to the author, there is a major gap in coverage that needs to be addressed for our aged and disabled populations. As of now, adults who are eligible for free Medi-Cal at age 64 can lose free Medi-Cal when they turn 65. The A&D Program income level loses value every year because of inflation, thereby pushing the program out of reach of some seniors and people with disabilities. Federal law allows states to adjust their maintenance need levels for inflation and to adopt more generous income exemptions through a state plan amendment and that low-income seniors and adults with disabilities shouldn't have to choose between putting food on the table and going to the doctor. According to the author, adjusting the income level in California to more accurately reflect the true cost of living will help thousands of vulnerable individuals access the care that they need.

AB 2877 (Thomson), Chapter 93, Statutes of 2000, the health budget trailer bill, established the A&D Program, a no share-of-cost Medi-Cal benefit for many elderly and disabled recipients who previously had to pay a significant share of cost to access Medi-Cal services. The income cutoff under the A&D FPL program was set at 100% FPL plus the standard disregard or deduction (in 2017, this is $1,005 for an individual plus the standard $230 disregard or $1,354 for couples plus the $310 standard disregard for couples). At the time of enactment that formula created an income cutoff of approximately 133% FPL. However, with time and increases in the cost of living, that formula has not kept pace with the cost of living. As a result, the upper limit of financial eligibility is now at 123% FPL. That number will continue to drop when the cost of living increases, making fewer people eligible for the program. Formerly eligible beneficiaries, whose Social Security income rises with the cost of living, are forced off the A&D FPL program on to the more costly share-of-cost Medi-Cal, if they choose to retain Medi-Cal coverage. In addition, individuals under 65 who were eligible under Medi-Cal expansion for free Medi-Cal at incomes above 124% FPL and below 138% FPL may no longer be eligible once they turn 65 years old, due to lower income eligibility threshold for the A&D Program.

Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097 FN: 0003175

Date of Hearing: May 23, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2430

Author:(Arambula) – As Introduced Ver:February 14, 2018

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill expands income eligibility for Medi-Cal for aged, blind, or disabled individuals through the Aged and Disabled Federal Poverty Line (A&D FPL) program, from a threshold that is effectively 124% of the federal poverty level, to 138% of the federal poverty level.

FISCAL EFFECT

1. Increased Medi-Cal and In-Home Supportive Services (IHSS) benefits costs of approximately $250 million (50% GF/50% federal funds). Enrollment in the A&D FPL program is projected to increase by approximately 27,000.
2. Potential additional cost avoidance to Medi-Cal, to the extent the individuals who gain comprehensive coverage through this coverage expansion remain healthier and avoid more costly institutional care. Annual per-person costs for institutional long-term care range from $65,000 to $90,000 per year for this population.
3. Costs for programming eligibility changes are expected to be minor and absorbable (GF/federal).

COMMENTS:

1. Purpose. The author states increasing the income threshold to allow more aged, blind, and disabled individuals to receive Medi-Cal without a share of cost addresses two problems: (a) it brings income eligibility for elderly and disabled individuals in line with that for non-elderly, non-disabled individuals, and (b) it allows these individuals to qualify for comprehensive Medi-Cal benefits instead of "share-of-cost" Medi-Cal, which effectively amounts to catastrophic coverage for most people who qualify.
2. Medi-Cal Eligibility. Eligibility rules have been simplified for certain populations as a result of the federal Affordable Care Act (ACA). Pursuant to ACA and California's decision to expand Medi-Cal, individuals under 65 are generally able to qualify based strictly on a Modified Adjusted Gross Income (MAGI) of under 138% of the federal poverty level. This creates a so-called "bright line" at 138% of poverty for the majority of enrollees. However, eligibility for certain populations, including the aged, blind, and disabled, is still determined under older, more complicated rules that account for numerous factors such as income levels, income disregards, and a person's assets.

This bill would allow aged, blind, and disabled individuals with incomes between 123% and 138% FPL, many of whom currently qualify for "Share of Cost" (SOC) Medi-Cal, to qualify for comprehensive Medi-Cal benefits without a share of cost. SOC Medi-Cal is effectively catastrophic-only coverage. The individuals targeted by this bill who qualify for SOC Medi-Cal have to "spend down" over $600 out of pocket on health care in a given month before they receive any Medi-Cal benefits. This bill would instead allow them to receive full Medi-Cal with no SOC. Aged, blind, and disabled individuals with incomes over the new 138% threshold would still qualify for SOC Medi-Cal.

1. Related Legislation. A number of bills being heard today in this committee address Medi-Cal eligibility and enrollment.

AB 2718 (Friedman) replaces the initial 6-month eligibility period for families transitioning off CalWORKS with a 12-month eligibility period.

AB 2579 (Burke) creates a streamlined Medi-Cal enrollment gateway through the Women, Infants, and Children (WIC) program.

AB 2331 (Weber) contains multiple requirements intended to facilitate continuous Medi-Cal enrollment for regional center consumers.

AB 2965 (Arambula) provides Medi-Cal coverage regardless of immigration status.

1. Prior Legislation. AB 763 (Burke), of the 2015-16 Legislative Session, and AB 2025 (Dickinson) of the session before that, were both similar to this bill and held on the Suspense File of this committee.

AB 55 (Dymally) of 2007-08 was substantially similar to this bill, but increased the income threshold to 133% of FPL instead of 138%. It was amended to a different subject matter before its first policy hearing in the Senate.

AB 969 (Chan) of 2001-02, which incorporated annual cost-of-living increases in the A&D FPL formula, was held in the Senate Appropriations Committee.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 3, 2018

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 2430

Author:(Arambula) – As Introduced Ver:February 14, 2018

SUBJECT: Medi-Cal: program for aged and disabled persons.

SUMMARY: Changes the income eligibility in the Aged and Disabled Federal Poverty Level Program (A&D Program) from 100% of the federal poverty level (FPL), plus the individual or couple standard disregard, to 138% of the FPL. Specifically, this bill:

1. Replaces the provisions making eligibility for the A&D Program based on a countable income that does not exceed an income level equal to 100% of the FPL plus an income disregard of $230 for an individual or $310 for a couple, and instead requires all countable income up to 138% to be disregarded for purposes of eligibility.
2. Requires the Department of Health Care Services (DHCS) to seek federal approval to implement 1) above. Requires implementation of this bill only if and to the extent that any necessary federal approvals have been obtained.
3. Requires the DHCS Director to execute a declaration stating that federal approval has been obtained for 1) above and the date for implementation. Requires the DHCS Director to post the declaration on the DHCS Website.
4. Requires DHCS, without taking any regulatory action, to implement, interpret, or make specific this bill by means of all-county letter, plan letters, plan or provider bulletins, or similar instructions, except that DHCS shall adopt regulations no later than July 1, 2021. Requires DHCS to provide a status report to the Legislature on a semiannual basis until regulations have been adopted.
5. Requires implementation of 1) above after the DHCS Director determines, and communicates that determination in writing to the Department of Finance, that systems have been programmed for implementation, but no sooner than January 1, 2019.

EXISTING LAW:

1. Establishes the Medi-Cal program as California’s version of the federal Medicaid program. Medi-Cal provides comprehensive health benefits to low-income individuals, pregnant women, elderly, blind or disabled persons, nursing home residents, and refugees who meet specified eligibility criteria.
2. Requires Medi-Cal coverage of adults under age 65 with incomes up from 100% to 138% of the FPL.
3. Establishes, to the extent that federal financial participation is available, the A&D program. Sets the upper limit of financial eligibility for this program at 100% FPL plus a specified additional amount ($230 for an individual; $310 for a couple) that is disregarded in calculating eligibility.
   
4. Prohibits the income standard for the A&D Program from being less than the Supplemental Security Income/ Supplemental State Payment (SSI/SSP) payment level for a disabled individual or, in the case of a couple, the SSI/SSP payment level for a disabled couple.
5. Permits the financial eligibility requirements for the A&D Program to be adjusted upwards to reflect the cost of living in California, contingent upon appropriation in the annual Budget Act.
   

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, there is a major gap in coverage that needs to be addressed for our aged and disabled populations. As of now, adults who are eligible for free Medi-Cal at age 64 can lose free Medi-Cal when they turn 65. The A&D Program income level loses value every year because of inflation, thereby pushing the program out of reach of some seniors and people with disabilities. Federal law allows states to adjust their maintenance need levels for inflation and to adopt more generous income exemptions through a state plan amendment and that low-income seniors and adults with disabilities shouldn’t have to choose between putting food on the table and going to the doctor. According to the author, adjusting the income level in California to more accurately reflect the true cost of living will help thousands of vulnerable individuals access the care that they need.
2. BACKGROUND. AB 2877 (Thomson), Chapter 93, Statutes of 2000, the health budget trailer bill, established the A&D Program, a no share-of-cost Medi-Cal benefit for many elderly and disabled recipients who previously had to pay a significant share of cost to access Medi-Cal services. The income cutoff under the A&D FPL program was set at 100% FPL plus the standard disregard or deduction (in 2017, this is $1,005 for an individual plus the standard $230 disregard or $1,354 for couples plus the $310 standard disregard for couples). At the time of enactment that formula created an income cutoff of approximately 133% FPL. However, with time and increases in the cost of living, that formula has not kept pace with the cost of living. As a result, the upper limit of financial eligibility is now at 123% FPL. That number will continue to drop when the cost of living increases, making fewer people eligible for the program. Formerly eligible beneficiaries, whose Social Security income rises with the cost of living, are forced off the A&D FPL program on to the more costly share-of-cost Medi-Cal, if they choose to retain Medi-Cal coverage. In addition, individuals under 65 who were eligible under Medi-Cal expansion for free Medi-Cal at incomes above 124% FPL and below 138% FPL may no longer be eligible once they turn 65 years old, due to lower income eligibility threshold for the A&D Program.
   
   This year, advocates such as the Western Center on Law and Poverty, Disability Rights California, and Justice in Aging are requesting through the Senate Budget Committee an increase in the amount of income that is disregarded in calculating eligibility for purposes of the A&D Program. Similar increases were requested through the budget process in 2017, 2016, and 2015. The Assembly Appropriations Committee analysis of AB 763 (Burke) of 2015 estimated the cost of this change at $30 million in General Fund ($60 million total with a 50/50 federal match), with a projected increase in enrollment in the A&D Program by approximately 20,000.
3. SUPPORT. According to the Western Center on Law and Poverty and Disability Rights California, cosponsors of this bill, advocates from around the state have for years attempted to help beneficiaries with high shares of cost. Many A&D Program enrollees suffer from conditions that they cannot afford to treat due to their share of cost. Forced between paying for rent and food or their Medi-Cal share of cost, many seniors forego needed medical services, which can prompt them to move into skilled nursing facilities at a high cost to the state and an even higher personal cost to their own independence and well-being. While millions of Californians are now able to qualify for free services because the income threshold was raised, it is inequitable to require a person to pay hundreds of dollars monthly simply due to their age.
   
   The San Francisco AIDS Foundation, the Asian Law Alliance, and the San Francisco Senior and Disability Action state that the current eligibility threshold, coupled with the high share of cost mean that, unlike all the adult beneficiaries covered under the Affordable Care Act who qualify for free Medi-Cal up to 138% FPL, seniors and people with disabilities must pay more than half their income before they can access Medi-Cal coverage. This bill provides parity for low-income seniors and persons with disabilities who are currently living with a high share of cost in the Medi-Cal program.
4. RELATED LEGISLATION. AB 2331 (Weber) would require a county to perform a redetermination every 36 months for a Medi-Cal beneficiary who has a developmental disability and who is determined to be eligible for services by a regional center. AB 2331 is pending in Assembly Health Committee.
5. PREVIOUS LEGISLATION.
   1. AB 763 (Burke) of 2015, would have increased the income disregard in calculating eligibility for the A&D Program thereby increasing the upper limit of the financial eligibility to 138% of the FPL. AB 763 was held in the Assembly Appropriations Committee Suspense File.
      
   2. AB 2025 (Dickinson) of 2014, was substantially similar to this bill and was held on the Assembly Appropriations Committee Suspense File.
      
   3. AB 55 (Dymally) of 2007, was substantially similar to this bill, but increased the income threshold to 133% of FPL instead of 138%. AB 55 was subsequently amended to a different subject matter before its first policy hearing in the Senate.
   4. AB 969 (Chan) of 2001, which incorporated annual cost-of-living increases in the A&D FPL formula, was held in the Senate Appropriations Committee.
   5. AB 2877 (Thomson), Chapter 93, Statutes of 2000, the health budget trailer bill, established the A&D FPL program, a no-share-of-cost Medi-Cal benefit for many elderly and disabled recipients who previously had to pay a significant share of cost to access Medi-Cal services.

REGISTERED SUPPORT / OPPOSITION:

Support
Western Center on Law & Poverty (cosponsor)

Disability Rights California (cosponsor)

AARP California

AIDS Healthcare Foundation

Antelope Valley Seniors Network

Asian Law Alliance

Association of California Healthcare Districts

Association of Regional Center Agencies

Bay Area Legal Aid

California Advocates for Nursing Home Reform

California Association of Public Authorities for IHSS

CaliforniaHealth Advocates

California Immigrant Policy Center

California In-Home Supportive Services

California Partnership

Congress of California Seniors

Consumers Union

Disability Rights Education & Defense Fund

East Bay Community Law Center

Health Access California

HICAP

Imperial County Area Agency on Aging

Jewish Family Service of Los Angeles

Justice in Aging

Kaiser Permanente

Korean Resource Center

Law Office of Gretchen J. Kenney

Leading Age California

Legal Aid Society of San Diego, Inc.

Los Angeles LGBT Center

Multipurpose Senior Services Program Site Association

National Association of Social Workers – California Chapter

National Health Law Program

Office of the State Long-Term Care Ombudsman

Partners in Care Foundation

Redwood Empire Food Bank

San Francisco AIDS Foundation

San Francisco Senior & Disability Action

Senior Advocates of the Desert

Social Services Coalition of Alameda County

St. Anthony Foundation

The Caring Connection

The Center for Independent Living

United Domestic Workers of America – AFSCME Local 3930/AFL-CIO

Numerous individuals

Opposition
None on file.

Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097