BILL ANALYSIS Ó
AB 792
Page 1
Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 792 (Bonilla) - As Amended: May 10, 2011
Policy Committee: JudiciaryVote:7-2
Health Vote: 13-6
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill establishes notification requirements for individuals
who are experiencing certain life transitions such as divorce,
loss of employment, or loss of health insurance, and begins
"pre-enrollment" activities on behalf of these individuals for
health care coverage through the California Health Benefits
Exchange. Specifically, this bill:
1)Requires a number of entities to send notifications to
individuals regarding health care coverage through the
California Health Benefit Exchange (Exchange). The entities
and circumstances include:
a) Family courts, upon the filing of a petition for
dissolution of marriage, nullity of marriage, or legal
separation, must notify the petitioner and the respondent.
b) Family courts, upon the filing of a petition for
adoption, must notify the petitioner.
c) Health plans and insurers, upon an individual ceasing to
be enrolled in a group or individual health plan, must
notify former employees or former dependents of an
employee.
d) The Employment Development Department (EDD), upon
receiving claims for unemployment or disability, must
notify the claimant.
2)Requires health plans and insurers to obtain the consent of
enrollees to transmit their information to the Exchange in the
event that the enrollee ceases to be enrolled in coverage.
3)Requires health plans, insurers, and the EDD, under certain
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circumstances, to transmit information about individuals
receiving the notifications to the Exchange, and requires the
provision of this information to initiate an application for
health care coverage through the Exchange.
4)Requires an individual, in order to decline health care
coverage from the Exchange under the provisions of this bill,
to do so by notifying the Exchange in writing within 63
calendar days from the date of termination of health care
coverage.
5)Modifies the notification provided to individuals eligible for
continuation coverage upon disenrollment from a group health
plan, effective January 1, 2012.
FISCAL EFFECT
1)Estimated costs in the range of $800,000 to $3 million
annually (special fund) to the Employment Development
Department to provide notifications, depending upon the number
of individuals seeking employment benefits.
2)Estimated one-time costs exceeding $150,000 (GF) to the family
court system to provide notifications in 2012. In future
years, the notifications could easily be incorporated into
existing forms.
3)Unknown, potentially significant state information technology
costs to transfer data from EDD (special fund) to the
Exchange. It is unknown whether federal grant funding
available for exchange activities would be available for this
purpose.
4)As currently drafted, the bill is unclear about whether
screening and enrollment functions are performed upon
provision of information about potential enrollees to the
Exchange, or whether additional steps are necessary. Further
specification of the enrollment process is necessary in order
to assess potential costs. If screening and enrollment is
conducted upon provision of information about potential
enrollees, there could be significant state screening and
enrollment costs to the Exchange and/or Medi-Cal that would
otherwise not occur, in the range of millions to tens of
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millions of dollars.
5)Potentially significant state Medi-Cal costs, if more
individuals enroll in Medi-Cal more quickly than would
otherwise occur. If individuals are found to be eligible for
Medi-Cal under existing eligibility rules, the cost associated
with these individuals will be funded 50% through the GF.
Medi-Cal costs for newly eligible individuals are 100%
federally funded through 2016.
6)Reduced cost pressure to counties to fund otherwise
uncompensated care, to the extent this bill results in more
individuals enrolled more quickly into comprehensive health
care coverage.
COMMENTS
1)Rationale . In 2014, the Patient Protection and Affordable Care
Act (PPACA) institutes an individual mandate provision, which
requires everyone to have insurance. This bill helps ensure
that Californians comply with the individual mandate even when
they are faced with life changing situations such as
unemployment, divorce, adoption, and loss of employment-based
coverage. The author contends that this bill ensures the
design of the Exchange and the redesign of Medi-Cal take into
account the need to serve short-term uninsured as well as
provide long-term coverage; and that it will help ensure
Californians are provided notices that they are automatically
enrolled into either the Exchange or Medi-Cal. The author
contends that the auto-enrollment process and notices are
essential to ensure that when life changing situations occur,
people are aware of their health care options.
2)California Health Benefit Exchange . California was the first
state in the nation to enact legislation creating a health
benefit exchange under PPACA. AB 1602 (John A. Pérez),
Chapter 655, Statutes of 2010, and SB 900 (Alquist), Chapter
659, Statutes of 2010, established the Exchange as an
independent entity in state government governed by a
five-member executive board. According to California's health
care reform Website (www.healthcare.ca.gov), the Exchange will
enhance competition and provide the same advantages available
to large employer groups by organizing the private insurance
market, including a more stable risk pool, greater purchasing
power, more competition among insurers and detailed
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information about the price, quality, and service of health
coverage. In addition, federal subsidies for purchasing
health insurance coverage for individuals between 133% and
400% of poverty, will only be available through the Exchange.
The federal government awarded California $1 million to fund
preliminary planning efforts related to the development of an
exchange. An additional federal implementation grant was
announced in January of this year. After 2014, the Exchange
must be self-supporting from fees paid by health plans and
insurers participating in the Exchange.
3)Medicaid Expansion . PPACA significantly expands the Medicaid
program. This is accomplished primarily by mandating coverage
of certain population groups not previously required, such as
childless adults. Until this mandate takes effect, Medicaid
beneficiaries generally need to have a low income and to be in
certain specific categories, such as pregnancy or a
disability. Beginning January 1, 2014, federal law will
require coverage of all individuals under age 65 (children,
parents, and childless adults) with incomes at or below 133
percent of the FPL regardless of disability or other
categories. Furthermore, states will be eligible for 100%
federal reimbursement for these new eligibility categories
through 2016. For individuals who newly enroll in Medi-Cal
after 2014, but who would be eligible under existing law (for
example, a low-income pregnant woman), the federal matching
rate remains 50%.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081