BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 792 (Bonilla) Hearing Date: 8/25/2011 Amended: 8/17/2011 Consultant: Katie Johnson Policy Vote: Health 5-3 Judiciary 3-2 _________________________________________________________________ ____ BILL SUMMARY: AB 792 would require courts, health care service plans, health insurers, and employers to provide a notice of the availability of coverage in the California Health Benefit Exchange (Exchange), effective January 1, 2014. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Potential state potentially significant, depending onGeneral/ cost avoidance actual take up of coverage Federal/ or cost Other _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. This bill would require on various effective dates commencing January 1, 2012, and ongoing, as specified, the courts, health care service plans, health insurers, and employers, to provide a notice of the availability of coverage in the California Health Benefit Exchange (Exchange), effective January 1, 2014. Any costs to the courts would be minor and absorbable. This bill would require health plans, health insurers, and employers, for employees or dependents who have experienced a death, loss of employment or a reduction in hours, divorce or the loss of dependent status that results in a loss of health insurance, to transfer information to the Exchange to initiate an application for enrollment in the Exchange if the individual consents. This bill would require an individual electing to decline coverage from the Exchange to do so in writing. There could be cost avoidance to the extent that individuals who AB 792 (Bonilla) Page 1 would have otherwise enrolled in state programs such as the Major Risk Medical Insurance Program (MRMIP), Access for Infants and Mothers program (AIM), the Preexisting Condition Insurance Program (PCIP), and the AIDS Drug Assistance Program (ADAP), purchase health care coverage through the Exchange. However, to the extent that individuals, upon application to the Exchange, are found eligible for state programs such as those listed above or Medi-Cal or the Healthy Families Program, there could be significant state health care coverage costs. ADAP and other publicly funded programs administered by the California Department of Public Health costs would be shared amongst a variety of state and federal funds; Medi-Cal costs would be shared 50 percent General Fund and 50 percent federal funds, except that newly eligible Medi-Cal individuals' coverage would be paid by 100 percent federal funds until 2016; Healthy Families Program costs would be shared 35 percent General Fund and 65 percent federal funds; AIM would be shared 35 percent state Proposition 99 funds and 65 percent federal funds; MRMIP would be shared state Proposition 99 funds and subscriber premiums; PCIP would be funded 100 percent federal funds and shares of enrollee premiums; Family Planning, Access, Care, and Treatment program costs would be shared 10 percent General Fund and 90 percent federal funds. Exchange costs would consist of enrollee premiums and potentially federal subsidies. Federal Exchange Funding On August 12, 2011, California was awarded a Level One Exchange establishment grant by the federal Department of Health and Human Services in the amount of $39,421,383 for the purposes of developing policy goals, securing consultants and experts, and engaging stakeholders in the Exchange planning process. It is unclear whether or not these funds could be utilized to implement this bill. The state previously received a $1 million Exchange Planning Grant to start up the Exchange on September 29, 2010. The August 17 amendments remove the requirement on EDD to furnish notices and reduce the costs of the bill accordingly. There would continue to be cost avoidance to the extent that individuals who would have otherwise enrolled in state programs such as MRMIP, AIM, PCIP, and ADAP, purchase health care coverage through the Exchange. Additionally, there would continue to be significant costs to the extent that individuals, AB 792 (Bonilla) Page 2 upon application to the Exchange, are found eligible for state programs such as those listed above or Medi-Cal or the Healthy Families Program.