HEALTH ACCESS UPDATE: Saturday, June 15, 2013
* Budget includes historic expansion of Medi-Cal to over one million Californians, under the Affordable Care Act.
* Medi-Cal coverage to improve, including restoration of most dental services for 3 million California adults in May 2014; Also restoration of enteral nutrition benefits, improvement of mental health and substance abuse services, and extension of coverage for former foster youth until ACA options kick in.
* Budget to cut $300 million from county health services in first six months, and hundreds of millions more in future years, reducing capacity of the county safety-net to provide care and coverage to the remaining uninsured.
* Votes today on key health trailer bills; Also perhaps on newly amended Medi-Cal expansion bills, SB 1×1 and AB 1×1.

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Yesterday, the California Legislature passed an overall 2013-14 state budget that includes a historic expansion of Medi-Cal to over one million Californians, and the restoration of most dental services to over three million Californians.
Today, in a special Saturday session, the Legislature is expected to vote on critical health budget trailer bills, including a managed care plan fee to fund health services, a significant reallocation of county safety-net funds, and perhaps newly amended bills to officially expand and simplify Medi-Cal under the Affordable Care Act.
IMPROVING MEDI-CAL: The budget allows California to take advantage of federal funds to expand Medi-Cal, where the newly eligible will be 100% federally funded for the first three years, and no less than 90% afterward. The plan also books expected savings from the ACA coverage expansion and budgets for an increase in enrollment by those already eligible, for whom we get 1:1 matching federal dollars, and who are expected to get on Medi-Cal due to the salesmanship and streamlining associated with the Affordable Care Act.

Under this budget, benefits would be improved in Medi-Cal, most notably by restoring most dental services that were cut in 2009 for 3 million adults, including: preventative care, examinations, floride treatments, restorations, crown, root canal therapy, full dentures and repairs, and emergency care. (Not included are partial dentures and other specific services.) This $77 million/year restoration, and a $13.6 million/year restoration of enteral nutrition benefits for patients who can’t chew will start in May 2013 for both existing and newly eligible Medi-Cal recipients. Finally, the budget improves mental health and substance abuse services to align with the ACA, at a cost of 66.7 million/year. Like other Medi-Cal benefits, the costs would be matched 50-50 by federal dollars, and starting in 2014, benefits for the over one million newly eligible will be 100% funded by the federal government.

The budget also includes some eligibility changes to better take advantage of opportunities under the ACA, including extending coverage for former foster youth up to age 26 until January 1, 2014 when ACA coverage options kicks in ($3 million general fund), and extending Medi-Cal coverage for newly qualified legal immigrant parents (2.8 million), until wrap-around coverage is available for them in Covered California.
· Setting a floor on benefits of the existing Medi-Cal benefit package plus essential health benefits, providing comprehensive benefits to very low income individuals.
· Electronic verification of age, family size, income, and residency through the new federal hub that links to Homeland Security and the Internal Revenue Service as well as appropriate state data bases such as DMV and EDD. (Health advocates had also wanted but did not get self-attestation as well.)

· Moving very low income recent legal immigrants under 138%FPL who are childless adults to the Exchange with affordability and benefits are comparable to Medi-Cal.

NEW AMENDMENTS TO MEDI-CAL BILLS: In addition to the passage of the budget and its specific provisions, new amendments were made to AB1x1 (Speaker Perez/Pan) and SB1x1 (Hernandez/Steinberg), the bills that implement the Affordable Care Act and transforms Medi-Cal into a program that covers all low income citizens and legal residents below 133% (and within income disregards 138%) of the federal poverty level, regardless of whether they have children, disabilities or assets. Under these bills, any low income citizen or legal resident who does not get affordable coverage on the job will be eligible for Medicaid.
About 1.4 million Californians will become eligible for Medi-Cal and millions of families that depend on Medi-Cal today should find it easier to enroll and stay enrolled as a result of the changes in federal law implemented in these bills.

With new amendments taken, AB1x1/SB1x1 take major steps toward implementing these changes:
· Expanding Medi-Cal to low income adults without children at home.

· Conforming Medi-Cal renewal process to federal law, considerably simplifying it.

· Automatically enrolling into Medi-Cal those Californians who are already enrolled in CalFresh or other health and human services, including the parents of Medi-cal (and formerly Healthy Families) children.

· Converting the income threshold to MAGI Medi-Cal which is consistent with Covered California eligibility.
· Eliminating the asset test and deprivation test for MAGI Medi-Cal.

· Shifting to 12 months of coverage and makes other changes to align with Covered California open enrollment periods.

· Allowing a Governor’s Administration to undo the expansion if funding for that population ever goes below 70%, but only until 2018, and only after a year for the Legislature to respond.

These bills are available to be voted on in floor session as early as today. Together, the budget and the bills provide significant help for Californians without medical or dental coverage, preventing them from facing dramatic health and financial consequences, and assisting our health system and economy as a whole.
COUNTY SAFETY-NET CUTS: Included in the deal with these major advances, the Governor has insisted on reclaiming dollars from the county safety-net of public hospitals, clinics, low-income health programs, public health and indigent care services. At the time when the federal government is expanding coverage under the Affordable Care Act, this budget also does cut county safety-net capacity to care and cover those who remain uninsured.

The budget would cut $300 million out of county public health and safety-net services in the first six months of 2014. In future years, the deal allows the state to take hundreds of millions more, as much as 60% of the $1.8 billion in county health care dollars.
The Governor had conditioned the Medi-Cal expansion in the Affordable Care Act on a reallocation of county safety-net dollars, and originally sought more for the state budget, potentially $1.3 billion, as well as a more complicated programmatic realignment to swap various human services with countied. The LAO and others had argued that such a switch could distract from the work of implementing health reform. The passed budget also recognizes differences between counties, giving them a one-time choice about the formula for 2014-15 and beyond:
* To keep 40% of their health realignment allocation for public health and care for the uninsured, and allow the state to take 60%.
* Agree to a cost-based formula that reimburses counties for their costs not covered by revenues, capped at previous years’ spending levels, but have the state take 80% of any savings or unspent funds. This formula is expected to be taken by many counties with public hospitals, who appreciate that the formula recognizes their on-the-ground experience with health reform.
While it is unclear how counties will react under this new regime, rough estimates by Health Access suggest this could leave hundreds of thousands of remaining uninsured Californians, including but not limited to those who are undocumented immigrants, without access to safety-net care or coverage into the future.
MOVING FORWARD ON MEDI-CAL AND THE ACA: Ultimately, this budget allows California to move forward in taking federal dollars to expand Medi-Cal and to restore dental services, bringing new and needed help to millions of Californians.
Key trailer bills to be voted on today include the main health trailer bill that includes the restorations (SB77/AB82), the reallocation of county safety-net dollars (SB80/AB85), and making the Managed Care Organization (MCO) tax permanent to help fund health in the budget. The floor debates on these bills, and perhaps the Medi-Cal expansions bills (AB1x1/SB1x1) can be heard today on the California Channel on TV or online.
This will be a historic day with the passage of the budget and these bills. But there’s more work to do, with now less than four months until open enrollment in coverage, and now less than 200 days until January 1, 2014 when new ACA coverage options start.