California Assembly Health and Budget Committee considers if Medi-Cal asset limits are outdated

The Assembly Health and the Assembly Budget Subcommittee No. 1 on Health and Human Services held an informational hearing on Tuesday on the Medi-Cal Asset Test and some options for change. 

 

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In this hearing, legislators debated whether the current asset limits for Medi-Cal coverage outdated. Under current Medi-Cal general property limitations, people who are not eligible for Medi-Cal under their Modified Adjusted Gross Income (MAGI) have certain ‘asset limits’ that they must abide by to receive and maintain coverage. To be eligible for Medi-Cal, their countable property must not exceed the property reserve limits of $2,000 for one person and $3,000 for a married couple. 

Assets that are counted in these limits are cash, stocks, bonds, investments, credit union, savings and checking accounts, and real estate where the person does not reside. Some exemptions are personal belongings, household furnishings, one car, irrevocable burial trusts and a primary home.

In the hearing, Assembly Member Wendy Carrillo called these limits antiquated. Carrillo introduced AB 683 in the 2019-2020 session to remove some of these asset limits from the consideration for Medi-Cal eligibility, but the bill died on the floor after leaving committee.

“The Medi-Cal assets test is antiquated. It’s a policy that no longer works, it actually never has, and California can’t be behind other states across the nation in terms of how we take care of the 40 million people that call California home.”

The asset limits force people who need coverage but don’t qualify to spend down their assets in order to qualify for coverage, said Felicia Sze, a managing partner at Athene Law.

“The important thing to understand is, for a lot of these individuals, they would eventually spend down to qualify for Medi-Cal. So it’s a question of when they become eligible, rather than whether or not they would ever become eligible … and if they don’t have to spend down they’d be able to retain some of those assets and achieve eligibility earlier, but then they would still be receiving the benefits they would later down the line anyway.”

In an issue paper, Understanding Medi-Cal’s Asset Test for Seniors and People with Disabilities, done by the California Health Care Foundation, they laid out three possible options for mitigating the barrier to entry that are caused by asset limits. These options are increasing the asset limit for non-Medical Savings Program (MSP) populations and/or MSP populations, protect additional assets from being considered when calculating available resources and eliminating asset tests altogether for seniors and persons with disabilities. 

The issue paper also recommends that when policymakers are considering their options for California they consider the administrative costs of verifying assets, the savings distribution among seniors and persons with disabilities, whether the limits allow people to have adequate rainy-day funds available and whether the process involved in verifying assets has a chilling effect on joining Medi-Cal. 

In the hearing there were discussions on what the added cost would be of enacting the three possible options. Assemblymember Phil Ting cited that there would not be a one-for-one addition of cost by adding these populations into the Medi-Cal program.

“Even if we got rid of the asset test and even if people slowly were able to come on to the Medi-Cal rolls, which actually would be a goal of ours, we wouldn’t necessarily see a complete one-for-one addition of cost, that there would be some cost savings and obviously there is administrative savings, so we actually don’t exactly know how much it would cost. Last year in [the] Budget Subcommittee we had pretty significant disagreements with the Department of Finance over their pretty inflated cost estimates.” 

Cathy Senderling, executive director of the County Welfare Directors Association, was asked by Assemblymember Jim Wood her opinion on the assets people are being asked about and should policymakers just remove asset limits completely. She said that in her opinion there is no need to ask someone about their burial plot or retirement accounts because then you’re just penalizing someone for preparing for their future. 

“To the extent that there could be changes in some of the more archaic parts of the [limits]. I mean certainly we’d say throw the whole thing out, I think would be our preference from my association’s perspective, but if that’s not possible or ends up not being the final discussion… [Policymakers need to take into account] There is a need, especially in a state with a high cost of living like California, to build a nest egg, some kind of fall back for emergencies that go beyond just health coverage.” 

Assemblymember Devon Mathis, who did a quick google search during the hearing, said the median income in 2019 in California was around $78,000 a year and if people are expected to save around 3 to 6 months of income in case of an emergency, these limits punish people for planning.

“Just based on simple numbers and a simple google search, even moving the asset limit to $10,000, I honestly don’t think is enough, because we’re punishing people who have worked hard their entire lives …  we get into all of these discussions on what we’re going to do and some people work their entire lives to hold onto the family farm, the family business and etcetera and if we’re gonna make California, and yes I’m a Republican saying California-for-All, but if we’re gonna do this in a way that makes sense for families out there struggling to increase our pool for insurance, we have to get rid of this assessment. I mean the basic numbers just dictate that.”

There was also testimony from Jen Flory, a policy advocate for the Western Center on Law and Poverty, who said that these asset limits can also perpetuate poverty because people are afraid to save because they will lose their health care coverage if they go above the limits.