The Honorable Richard Pan, M.D.
Chair, Assembly Health Committee
State Capitol, Room 6005
Sacramento, CA 95814
Re: Support for AB 2025
Dear Chairman Pan,
California Health Advocates supports AB 2025 (Dickinson), which would raise the income level of the Aged and Disabled Medi-Cal program (A&D program) to 138% FPL, creating consistent income eligibility for different Medi-Cal programs and parity for seniors and disabled Medi-Cal beneficiaries. AB 2025 would allow more people to transition from expanded Medi-Cal to the A&D program, thus fewer people would suffer a sudden increase in out-of-pocket costs when they become eligible for Medicare.
California Health Advocates is a not-for-profit organization dedicated to providing quality Medicare and related healthcare coverage information, education and policy advocacy. California Health Advocates supports the work of local Health Insurance Counseling & Advocacy Programs (HICAP) which provide benefits counseling and community education on Medicare. Many Medicare beneficiaries HICAPs that serve are lower income and some qualify for Medi-Cal.
Begun in 2001, the A&D program provides free, full-scope Medi-Cal to low-income seniors and persons with disabilities. For seniors and persons with disabilities who also have Medicare, the A&D program pays the Medicare Part B premium and Medicare cost-sharing, such as the 20% coinsurance for Medicare Part B services. When the A&D program was created, income eligibility was set at 100% FPL, plus income disregards of $230 and $310 for individuals and couples, respectively. In 2001, the disregards brought the income limit to 133% FPL. But because the income disregards have not been adjusted for cost-of-living increases, the income eligibility limits lose value every year and is currently 124% FPL, or $1,188 a month for an individual.
Under the Affordable Care Act, our state expanded Medi-Cal by raising the income limit to 138% with no asset test. By raising the income eligibility limit for the A&D program, AB 2025 would facilitate the transition for people when they become eligible for Medicare. Without AB 2025, fewer people who qualify for expanded Medi-Cal will qualify for the A&D program when they become eligible for Medicare. If they do not qualify for the A&D program, their out-of-pocket costs will be higher than when they had expanded Medi-Cal, even with Medicare.
Some individuals who qualify for expanded Medi-Cal may qualify for Medicare Savings Programs when they become eligible for Medicare. But they would still have higher out-of-pocket costs than they had with expanded Medi-Cal. Medicare Savings Programs (MSP) help lower-income Medicare beneficiaries with some out-of-pocket costs.
The Qualifying Individual and SLMB programs pay the Part B premium for individuals who qualify. Individuals in these programs automatically qualify for Extra Help, federal financial assistance that lowers their Medicare Part D out-of-pocket costs. But beneficiaries in the Qualifying Individual and SLMB programs are responsible for other out-of-pocket costs, including Medicare cost-sharing, such as the Part B annual deductible ($147 in 2014) and 20% coinsurance for most Part B services. Thus for an individual who does not qualify for the A&D program but qualifies for the Qualifying Individual or SLMB program, the difference in out-of-pocket costs is considerable.
When a person’s income is above the A&D or Qualifying Individual eligibility limits, s/he can be moved into the Medically Needy program with a share of cost, which relegates an individual to spending all of her monthly income, except $600, on healthcare before Medi-Cal will pay any healthcare expenses. Take for example a person earning $1,335 monthly, or above 135% FPL (income limit for the Qualifying Individual program). The Medically Needy program subtracts $600 from that person’s countable income, and the person is expected to spend the remaining $735 on healthcare monthly before Medi-Cal would cover any healthcare costs. People in the Medically Needy program do not automatically qualify for Extra Help.
We acknowledge that not everyone who qualifies for expanded Medi-Cal will qualify for the A&D program even if the income limit is raised to 138% because the A&D program has asset limits whereas expanded Medi-Cal does not. However, by aligning the income eligibility limit for the A&D program with expanded Medi-Cal’s limit, fewer people will suffer a sudden decrease in benefits and increase in out-of-pocket costs when they become eligible for Medicare.
For the reasons stated above, California Health Advocates supports AB 2025 and respectfully asks for your support of this important legislation to allow more lower-income seniors and persons with disabilities to be able to transition from expanded Medi-Cal to the A&D program when they become eligible for Medicare.
Elaine Wong Eakin
CC: Vanessa Cajina, Western Center on Law and Poverty (sponsor)