Existing law provides for 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 provisions. Qualified individuals under the Medi-Cal program include medically needy persons and medically needy family persons who meet the required eligibility criteria, including applicable income requirements.

Existing law requires the department to establish income levels for maintenance need at the lowest levels that reasonably permit a medically needy person to meet their basic needs for food, clothing, and shelter, and for which federal financial participation will still be provided under applicable federal law. In calculating the income of a medically needy person in a medical institution or nursing facility, or a person receiving institutional or noninstitutional services from a Program of All-Inclusive Care for the Elderly organization, the required monthly maintenance amount includes an amount providing for personal and incidental needs in the amount of not less than $35 per month while a patient. Existing law authorizes the department to increase, by regulation, this amount as necessitated by increasing costs of personal and incidental needs.

This bill would increase the monthly maintenance amount for personal and incidental needs from $35 to $50, and would require that the amount be increased annually, as specified. The bill would make these changes subject to receipt of necessary federal approvals.

Date of Hearing: May 8, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2356

Author:(Wallis) – As Introduced Ver:February 12, 2024

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

SUMMARY:

This bill increases the personal needs allowance (PNA), which is the amount of money a Medi-Cal beneficiary in a medical institution or a nursing facility, or receiving services from a Program of All-Inclusive Care for Elderly (PACE), is allowed to retain, from $35 to $50 per month. The bill makes implementation contingent on obtaining necessary federal approval.

FISCAL EFFECT:

1. Assuming all eligible beneficiaries make use of the higher PNA, costs to Medi-Cal would be approximately $8 million (50% General Fund (GF) and 50% federal funds (FF)).

Increasing the PNA reduces the contribution certain individuals pay for their own institutional care. As a result, costs to Medi-Cal will increase with the increase in the PNA. The cost to Medi-Cal is $15 per month, per beneficiary residing in a medical institution or nursing facility, or receiving PACE services.

1. In addition, programming changes would be needed to county eligibility systems to implement increases to the PNA, with one-time system change costs of $8,000 per county, or $464,000 statewide (50% GF and 50% FF).

According to the Legislative Analyst’s Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years. 

COMMENTS:

1. Purpose. This bill is sponsored by the California Senior Legislature. According to the author:

Our seniors deserve to live with dignity, and raising the PNA will ensure they can access the essential items they need to live healthy lives. The author asserts this need has gone unaddressed for too long and the current PNA set at just $35 does not account for rampant inflation. The author argues California needs to lead on showing how to care for our seniors and it is simply unacceptable that we have one of the lowest PNAs in the nation.

1. Background. For a Medi-Cal beneficiary who has a share of cost (SOC) and is receiving care in a facility or through a PACE program, that SOC is calculated by determining the beneficiary’s countable income and subtracting the PNA. For example, a Medi-Cal beneficiary who has a SOC and a countable income of $1,600 per month and no assets is in a skilled nursing facility (SNF). Under current law, this person is allowed to retain $35 per month for personal needs. The remainder ($1,565) of countable income would go toward the individual’s SOC each month.
   
   Federal law sets a minimum monthly PNA of $30 for an institutionalized individual, and $60 for an institutionalized couple. DHCS is authorized, by regulation, to annually increase the PNA amount as necessitated by increasing costs of personal and incidental needs. However, DHCS has not increased the PNA, which has remained at $35 since 1985.
   
   According to a July 2022 Issue Brief issued by the Kaiser Family Foundation titled “Medicaid Financial Eligibility in Pathways Based on Old Age or Disability in 2022: Findings from a 50-State Survey,” the median PNA for an individual residing in an institution is $50 per month. Three states (Alabama, North Carolina, and South Carolina) set their PNA at the federal minimum of $30 per month. California and Nevada are tied for the fourth and fifth lowest PNA in the country at $35. The state with the highest PNA in the continental U.S. is Florida ($130 per month) and Alaska has a PNA of $200 per month. According to the U.S. Bureau of Labor Statistics Consumer Price Index Inflation Calculator, $35 in 1985 has the same buying power as $102.95 today.
2. Prior Legislation.
   
   1. AB 2077 (Calderon), of the 2021-22 Legislative Session, would have increased the PNA amount from $35 to $80 per month. AB 2077 was vetoed by Governor Newsom, who noted concern about ongoing General Fund costs that were not accounted for in the budget and the desire to prioritize existing obligations and priorities, including education, health care, public safety and safety-net programs.
   2. AB 848 (Calderon), of the 2021-22 Legislative Session, was identical to AB 2077, except that it included an annual adjustment to the PNA. AB 848 was held on this committee’s suspense file.

Numerous other bills have attempted to increase the PNA, but were held in Assembly or Senate appropriations committees.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: April 9, 2024

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 2356

Author:((Wallis) – As Introduced Ver:February 12, 2024

SUBJECT: Medi-Cal: monthly maintenance amount: personal and incidental needs.

SUMMARY: Increases the personal needs allowance (PNA) amount, which is the amount of money a Medi-Cal beneficiary in a medical institution, nursing facility, or receiving services from a Program of All-Inclusive Care for Elderly (PACE) is allowed to retain, from $35 to $50 per month.

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. [Welfare and Institutions Code (WIC) §14000, et seq.]
   
2. Requires DHCS to establish the income levels for maintenance need for Medi-Cal beneficiaries residing in a facility at the lowest levels that reasonably permits a medically needy person to meet their basic needs for food, clothing, and shelter, and for which federal financial participation (FFP) will still be provided. [WIC §14005.12]
   
3. Requires the maintenance need level (MNL) for a person in a medical institution, in a nursing facility, or receiving institutional or noninstitutional services from a PACE to be an amount that considers the following:
4. Personal and incidental needs of at least $35 per month;
5. The upkeep and maintenance of the home, referred to as the “home upkeep allowance;”
6. The support and care of minor children or any disabled relative, if the person does not have a spouse living in the community; and,
7. The support and care of a spouse living in the community, minor or dependent children, dependent parents, or dependent siblings of either spouse, provided the individuals are residing with the spouse living in the community. [WIC § 14005.12]
8. Allows DHCS, by regulation, to increase the $35 PNA amount as is necessitated by increasing costs of personal and incidental needs. [WIC § 14005.12]

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, our seniors deserve to live with dignity, and raising the PNA will ensure they can access the essential items they need to live healthy lives. The author asserts this need has gone unaddressed for too long and the current PNA set at just $35 does not account for rampant inflation. The author argues California needs to lead on showing how to care for our seniors and it is simply unacceptable that we have one of the lowest PNAs in the nation.
2. BACKGROUND.
   1. PNA in Medicaid. Individuals who have income slightly higher than the standard Medi-Cal income eligibility thresholds may be eligible for Medi-Cal with a “share of cost” Once eligible for Medicaid, such individuals in institutions, such as nursing homes, generally must contribute most of their monthly income to the cost of their care, with the exception of a small allowance used to pay for personal needs that are not covered by Medicaid, such as clothing, shoes, personal hygiene items, cards for friends and family members, and haircuts or beauty services beyond a basic trim (which the facility is required to provide). In addition to the PNA, individuals are allowed to retain amounts needed to care for children, relatives, or spouses, as well as home upkeep, as applicable. The federal minimum PNA is $30 per month, though states can choose to adopt a higher amount.
   2. PNA in Medi-Cal. Many Medi-Cal beneficiaries residing in institutions who have income and qualify for Medi-Cal with a share of cost are only eligible to retain the PNA, and the rest of their income goes towards the cost of their care.

For a Medi-Cal beneficiary receiving care in a facility or through a PACE program with a share of cost, the beneficiary’s share of cost is calculated by determining the beneficiary’s countable income (minus deductions) and subtracting the PNA. For example, a single individual (“Mary” in the example below) in a skilled nursing facility with a countable income of $1,600 per month would be allowed to retain $35 per month for personal needs, as shown in the example below:

Mary enters a SNF. Her income is $1,600 month:

* The remaining $35 is Mary’s PNA.

Medi-Cal pays the remainder ($1,565) of her income for the month up to the Medi-Cal reimbursement rate for that facility.

DHCS is required to establish the PNA at the lowest levels that permit an individual to meet their basic needs for which federal financial participation will be provided. California’s PNA of $35 was last increased in 1985 pursuant to AB 2845 (Allen), Chapter 1621, Statutes of 1984. Current law authorizes DHCS, by regulation, to annually increase the PNA amount as necessitated by increasing costs of personal and incidental needs. However, DHCS has never increased the PNA and no increase is pending.

• 1. PNAs in Other State Medicaid Programs. According to a July 2022 Issue Brief issued by the Kaiser Family Foundation entitled “Medicaid Financial Eligibility in Pathways Based on Old Age or Disability in 2022: Findings from a 50-State Survey” the median PNA for an individual residing in an institution is $50 per month. Three states (Alabama, North Carolina, and South Carolina) set their PNA at the federal minimum of $30 per month. California and Nevada are tied for the fourth and fifth lowest PNA in the country at $35. The state with the highest PNA in the continental U.S. is Florida ($130 per month) and Alaska has a PNA of $200 per month.

California is known as a higher-cost state, even when excluding housing. The Legislative Analyst’s Office reports prices have grown about 20% overall since 2020, according to an analysis of the most recent consumer price index data.

According to the U.S. Bureau of Labor Statistics Consumer Price Index Inflation Calculator, $35 in 1985 has the same buying power as $102.95 today.

1. SUPPORT. This bill is sponsored by the California Senior Legislature and supported by seniors and groups advocating on behalf of low-income consumers, who argue this bill provides much needed financial support for some of California’s most vulnerable. Alzheimer’s Los Angeles, Alzheimer’s Orange County, and Alzheimer’s San Diego write that $35 is inadequate to cover expenses such as cell phones and clothing. Justice in Aging writes in support that this bill takes a modest but necessary step to restoring dignity and personal agency to Medi-Cal recipients who have been deprived of this much-needed increase in personal needs allowances for far too long.
2. PREVIOUS LEGISLATION.
   1. AB 2077 (Calderon) of 2022 would have increased the PNA amount from $35 to $80 per month. AB 2077 was vetoed by Governor Newsom, who expressed sympathy with the author's efforts but noted concern about ongoing General Fund costs that were not accounted for in the budget and the desire to prioritize existing obligations and priorities, including education, health care, public safety and safety-net programs.
   2. AB 848 (Calderon) of 2021 would have increased the PNA amount from $35 to $80 per month and required DHCS to annually increase the PNA based on the percentage increase in the California consumer price index. AB 848 was held on the Assembly Appropriations Committee suspense file.
   3. AB 2739 (Weber) of 2020 was identical to AB 848 but was not heard in the Assembly Health Committee due to the shortened Legislative calendar brought on by the COVID-19 pandemic.
   4. AB 1042 (Wood), of 2019, would have increased the maximum dollar value of the "home upkeep allowance" in the Medi-Cal program, which is money a Medi-Cal beneficiary in a LTC facility is allowed for upkeep and maintenance of the home. AB 1042 was held on the Senate Appropriations Committee suspense file.
   5. SB 202 (Dodd) of 2017 was substantially similar to AB 2739. SB 202 was held on the Senate Appropriations Committee suspense file.
   6. AB 1655 (Dodd) of 2016 was identical to SB 202. AB 1655 was held on the Assembly Appropriations Committee suspense file.
   7. AB 1235 (Gipson) of 2015 would have required the home upkeep allowance for eligible Medi-Cal beneficiaries in LTC facilities to be based on the actual minimum cost of maintaining the resident’s home. AB 1235 would have allowed a LTC facility resident who does not have a home to establish a transitional personal needs fund of up to $7,500, to be set aside from the income that otherwise would be applied toward the resident’s Medi-Cal share of cost for residing in the LTC facility. AB 1235 was held on the Senate Appropriations Committee suspense file.
   8. AB 1319 (Dababneh) of 2015 would have increased the PNA deduction for Medi-Cal beneficiaries residing in a licensed community care facility from $20 to $50. AB 1319 was held on the Senate Appropriations Committee suspense file.
   9. AB 789 (Campbell) of 1999 would have increased the PNA to not less than $40 per month. AB 789 was vetoed by Governor Davis. In his veto message, Governor Davis stated that, while well intentioned, this bill would result in estimated new annual General Fund costs in excess of $2 million that was not included in the 1999-2000 budget, and that any increase in the personal and incidental needs allowance should be considered as part of the annual budget deliberations.

REGISTERED SUPPORT / OPPOSITION:

Support

California Senior Legislature (sponsor)

Alzheimer's Greater Los Angeles

Alzheimer's Orange County

Alzheimer's San Diego

Association of Regional Center Agencies

California Advocates for Nursing Home Reform

California Long Term Care Ombudsman Association

California Retired Teachers Association

Justice in Aging

LeadingAge California

Opposition

None on file.

Analysis Prepared by: Lisa Murawski / HEALTH / (916) 319-2097