BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           2 (Burton)
          
          Hearing Date:  5/19/03          Amended: 3/18/03       
          Consultant:  George Cate            Policy Vote: INS 6-3  
          H&HS 9-3                 
          ____________________________________________________________ 
          ___
          BILL SUMMARY: 
          SB 2 creates the State Health Purchasing Program (SHPP)  
          that shall be managed by the Managed Risk Medical Insurance  
          Board (MRMIB).  This bill also requires employers, with an  
          unspecified number of employees, to provide health care  
          coverage to employees and dependents, as specified, by  
          purchasing coverage from any health plan, providing  
          coverage through a self-funded employer-sponsored plan, or  
          by paying a fee to SHPP, which would use a purchasing pool  
          to provide coverage.

          In addition, this measure authorizes an employer to require  
          an eligible employee to pay up to 20 percent of the cost of  
          the coverage.  The bill requires the Employment Development  
          Department (EDD) to collect the fee and employee  
          contributions, and deposit them into the newly created  
          State Health Purchasing Fund.  The bill also continuously  
          appropriates money in the Fund to MRMIB for SHPP.   
          Furthermore, this bill authorizes MRMIB to coordinate SHPP  
          coverage with the Medi-Cal program and Healthy Families  
          Program, and requires MRMIB to establish copayments and  
          deductibles for enrollees.
                              Fiscal Impact (in thousands)
           
          Major Provisions        2003-04            2004-05               2005-06   
           Fund  
          
          MRMIB & EDD                  Indeterminate costs  General*
          Medi-Cal          Indeterminate savings           General &
                                                              Federal**
          HFP               Indeterminate savings           General &
                                                              Federal***
          Employers &       Indeterminate costs        Private
            Employees

                * Potential General Fund exposure for start-up costs
               **Medi-Cal is approximately 50% General Fund & 50% federal  










          funds
              ***HFP is approximately 33% General Fund & 67% federal funds

          STAFF COMMENTS:  This bill meets the criteria to be placed  
          on the Suspense file.

          Estimates for the costs and savings associated with this  
          measure are indeterminate at this time.  There would be  
          significant start-up costs for MRMIB, EDD and the  
          Department of Health Services (DHS), some of which may have  
          to be borne by the General Fund.  Once SHPP is up and  
          running there should be substantial savings to both the  
          Medi-Cal program and HFP.