BILL ANALYSIS                                                                                                                                                                                                    

                                                                     AB 763

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          Date of Hearing:  April 22, 2015


                                 Jimmy Gomez, Chair

          763 (Burke) - As Introduced February 25, 2015

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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   



                                                                     AB 763

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          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 123% of the federal poverty level, to 138% of the  
          federal poverty level. 

          FISCAL EFFECT:

          1)Increased net costs to the Medi-Cal program of around $60  
            million (50% GF/50% federal funds).  Enrollment in the A&D FPL  
            program is projected to increase by approximately 20,000.   
            Costs in this program could increase by $100 million, with  
            offsetting cost decreases in the "Share of Cost" (SOC) program  
            of $40 million, leaving a net cost of $60 million.  Population  
            estimates have been refined based on new data since a similar  
            bill was introduced last year.

            This estimate assumes Medi-Cal pays half as much on average  
            for an enrollee in SOC Medi-Cal as compared to an enrollee in  
            the full-scope A&D FPL program, that the average annual cost  
            for A&D FPL enrollee is $5,100 and that 80% of individuals  
            gaining full-scope coverage due to this bill are currently  
            enrolled in SOC Medi-Cal. 

          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  

          3)Costs for programming eligibility changes are expected to be  
            minor and absorbable. 


                                                                     AB 763

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          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: (1)  
            it brings income eligibility for elderly and disabled  
            individuals in line with that for non-elderly, non-disabled  
            individuals, and (2) it allows these individuals to qualify  
            for comprehensive Medi-Cal benefits instead of the  
            "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 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 more complicated old 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.


                                                                     AB 763

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          3)Prior Legislation.  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.  

            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.

            AB 55 (Dymally) of 2007 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 2025 (Dickinson) of 2014 was substantially similar to this  
            bill and was held on the Suspense File of this committee.

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