The state Senate unanimously approved legislation March 23 that would make California eligible for $8.3 billion in federal stimulus money for Medi-Cal, the state’s health care program for the poor.

Although California is slated to receive more than $31 billion in federal money, a change in eligibility rules for Medi-Cal made as part of this year’s budget prevents California from qualifying for more than 25 percent of those  federal funds.

In order to do so, the state must have the same Medi-Cal eligibility rules today as those in place July 1, 2008.

The problem was caused by an attempt to save $70 million by changing eligibility rules for children receiving care from Medi-Cal was contained in the 85-day record late budget signed by Gov. Arnold Schwarzenegger last September.

Under the change, children must fill out a report every six months confirming their continuing eligibility along with their parents who were already required to fill out such a report prior to the change in law.

Critics of the requirement say that most of the children who lose eligibility do so because they forget to turn in the paperwork, not because they actually lose eligibility. Sorting out such issues increases Medi-Cal costs to counties, who administer the program locally.

To get the federal money, the state must change the law before July 1, 2009 so that kids don’t need to fill out the report. The bill would do that.

On February 25, the federal government made some of its increased funding available to cover Medi-Cal expenses from the previous six months.

But California can’t get any of it until the law is changed and the Department of Health Care Services, which oversees Medi-Cal, certifies to the federal government that the six-month status report requirement has been repealed.

The bill, by Sen. Elaine Alquist, a Santa Clara Democrat, must be approved by both houses. The Assembly could vote on the measure as early as March 26. The GOP governor is expected to sign the bill when it reaches his desk.

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