BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   AB 792|
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                                 THIRD READING


          Bill No:  AB 792
          Author:   Bonilla (D), et al.
          Amended:  8/24/12 in Senate
          Vote:     21

           
           SENATE HEALTH COMMITTEE  :  5-3, 6/29/11
          AYES:  Hernandez, Alquist, De León, DeSaulnier, Wolk
          NOES:  Strickland, Anderson, Blakeslee
          NO VOTE RECORDED:  Rubio

           SENATE JUDICIARY COMMITTEE  :  3-2, 7/5/11
          AYES:  Evans, Corbett, Leno
          NOES:  Harman, Blakeslee

           SENATE APPROPRIATIONS COMMITTEE  :  5-2, 8/16/12
          AYES:  Kehoe, Alquist, Lieu, Price, Steinberg
          NOES:  Walters, Dutton

           ASSEMBLY FLOOR  :  50-26, 6/1/11 - See last page for vote


           SUBJECT  :    Health care coverage:  California Health 
          Benefit Exchange

           SOURCE  :     Health Access California


           DIGEST  :    This bill requires a court, upon the filing of a 
          petition for dissolution of marriage, nullity of marriage, 
          or legal separation on and after January 1, 2014, to 
          provide a specified notice informing the petitioner and 
          respondent that they may be eligible for reduced-cost 
                                                           CONTINUED





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          coverage through the Exchange or no-cost coverage through 
          Medi-Cal.

           Senate Floor Amendments  of 8/24/12 delete the notice 
          requirements related to COBRA and Cal-COBRA, apply the 
          notice requirements in other provisions of the bill to 
          group health plans and health insurers, and establish a "no 
          later than date" for the regulators to develop the notice.

           ANALYSIS  :    Existing federal law:

          1.Requires, under the federal Patient Protection and 
            Affordable Care Act (PPACA) (Public Law 111-148), as 
            amended by the Health Care Education and Reconciliation 
            Act of 2010 (Public Law 111-152), each state, by January 
            1, 2014, to establish an American Health Benefit Exchange 
            (AHBE) that makes qualified health plans available to 
            qualified individuals and qualified employers.  If a 
            state does not establish an AHBE, the federal government 
            administers the AHBE.  Federal law establishes 
            requirements for the AHBE, for health plans participating 
            in the AHBE, and defines who is eligible to receive 
            coverage in the AHBE.  Among other duties, the AHBE is 
            required to inform individuals of eligibility 
            requirements for the Medicaid program (Medi-Cal in 
            California), the Children's Health Insurance Program (the 
            Healthy Families Program, or HFP, in California), or any 
            applicable state or local public program.  The AHBE is 
            required if, through screening of the application, the 
            AHBE determines that such individuals are eligible for 
            any such program, to enroll such individuals in such 
            program.

          2.Allows through PPACA, effective January 1, 2014, eligible 
            individual taxpayers whose household income equals or 
            exceeds 100%, but does not exceed 400% of the federal 
            poverty level (FPL), an advanceable and refundable tax 
            credit for a percentage of the cost of premiums for 
            coverage under a qualified health plan offered in the 
            Exchange.  PPACA also requires a reduction in 
            cost-sharing for individuals with incomes below 250% of 
            the FPL, and a lower maximum limit on out-of-pocket 
            expenses for individuals whose incomes are between 100% 
            and 400% of the FPL.  Legal immigrants with household 







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            incomes less than 100% of the FPL who are ineligible for 
            Medicaid because of their immigration status are also 
            eligible for the premium tax credit and the cost-sharing 
            reductions. 

          3.Requires, through PPACA, numerous changes to Medicaid, 
            including expanding eligibility to adults without minor 
            children with incomes equal to or less than 133% of the 
            FPL, disregarding (or not counting) an additional 5% in 
            income (making the Medicaid income eligibility 
            effectively 138% of the FPL), eliminating the asset test 
            and switching to a new method for calculating income 
            known as modified adjusted gross income (MAGI) for 
            certain populations.  

          4.Requires, through PPACA, each individual (with specified 
            exceptions), and any dependent of the individual, to 
            maintain minimum essential coverage, provides exemptions 
            from the individual mandate (such as for affordability, 
            hardship, and for individuals with incomes below the 
            income tax filing threshold), and establishes penalties 
            for violations.

          Existing state law:

          1.Requires health plans and health insurers that provide 
            coverage to small employers with 2 to 19 eligible 
            employees to offer continuation coverage to a qualified 
            beneficiary (QB) upon a qualifying event without evidence 
            of insurability.  Requires the QB, upon election, to be 
            able to continue his or her coverage under the group 
            benefit plan.  This body of law is known as Cal-COBRA.

          2.Requires employers, employee associations, or other 
            entities to notify its current and former employees or 
            members and dependents of federal COBRA continuation 
            coverage (which requires continuation coverage be offered 
            to QB experiencing a qualifying event in firms with 20 or 
            more employees) and state law conversion coverage 
            options. 

          3.Regulates the distribution of unemployment compensation 
            or disability benefits by the Employment Development 
            Department (EDD). 







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          4.Sets forth procedures related to a petition for 
            dissolution of marriage, nullity of marriage, or legal 
            separation, or a petition for adoption.

          5.Establishes the Exchange in state government, and 
            specifies the duties and authority of the Exchange.  
            Requires the Exchange be governed by a board that 
            includes the Secretary of the Health and Human Services 
            Agency and four members with specified expertise who are 
            appointed by the Governor and the Legislature.  

          This bill requires a court, upon the filing of a petition 
          for dissolution of marriage, nullity of marriage, or legal 
          separation on and after January 1, 2014, to provide a 
          specified notice informing the petitioner and respondent 
          that they may be eligible for reduced-cost coverage through 
          the Exchange or no-cost coverage through Medi-Cal.

           Background
           
          Federal health care reform makes numerous changes to reduce 
          the number of uninsured Americans.  According to estimates 
          in a recent study in the health policy journal  Health 
          Affairs  by Peter Long and Jonathan Gruber, PPACA will 
          provide health insurance for an additional 3.4 million 
          people in California in 2016.  The authors state this will 
          mean that nearly 96% of documented residents of California 
          under age 65 will be insured.  The authors estimate 
          enrollment in Medi-Cal is expected to increase by 1.7 
          million people, while 4.0 million people are expected to 
          enroll in the state's Exchange.  Employer-sponsored 
          insurance and spending on health insurance will decline 
          slightly.  The authors conclude that low-income households 
          will experience substantial financial benefits, but 
          families at the highest income levels will pay more.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

          According to the Senate Appropriations Committee, 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 







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          the extent that individuals who would have otherwise 
          enrolled in state programs such as Major Risk Medical 
          Insurance Program, Access for Infants and Mothers Program, 
          the Preexisting Condition Insurance Program, and the AIDS 
          Drug Assistance Program, purchase health care coverage 
          through the Exchange. Additionally, there would continue to 
          be significant costs 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.

           SUPPORT  :   (Verified  8/27/12) 

          Health Access California (source) 
          100% Campaign
          American Federation of State, County and Municipal 
          Employees
          California Labor Federation
          California Medical Association
          California Pan-Ethnic Health Network
          California Primary Care Association
          California Rural Legal Assistance Foundation
          Congress of California Seniors
          Consumers Union
          Contra Costa County Board of Supervisors
          Having Our Say
          National Association of Social Workers, California Chapter
          Service Employees International Union
          Unitarian Universalist Legislative Ministry Action 
          Network-California
          United Nurses Associations of California/Union of Health 
          Care Professionals
          Western Center on Law and Poverty

           OPPOSITION  :    (Verified  8/27/12) 

          Association of California Life and Health Insurance 
          Companies
          California Association of Health Plans
          California Association of Health Underwriters

           ARGUMENTS IN SUPPORT :    This bill is sponsored by Health 
          Access California (HAC), which writes that this bill would 
          create mechanisms to maximize enrollment in coverage of 







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          those who face life changes such as loss of a job or loss 
          of dependent coverage due to loss of a spouse.  HAC states 
          that any Californian can become uninsured because of a 
          change in life circumstance (such as aging-off coverage, 
          losing or switching a job, divorce, death or moving), yet 
          state policy does relatively little to help people stay on 
          coverage other than to require the provision of a notice of 
          their ability to continue coverage.  HAC states that, in 
          2014, every one of these individuals is eligible for 
          coverage either in the Exchange or Medi-Cal, yet no 
          mechanism exists to connect these individuals to coverage.  
          HAC states that less than half the uninsured are uninsured 
          for less than a year, almost a quarter of the uninsured for 
          are uninsured one to two years, and the remaining third are 
          uninsured for more than two years.  The design of the 
          Exchange and redesign of Medi-Cal/Healthy Families needs to 
          into take account the need to serve the short-term 
          uninsured as well as providing long-term coverage in order 
          to keep Californians covered and healthy.  
          HAC states this bill would connect to people to the 
          Exchange by providing notice in 2012 and 2013 that low-cost 
          or no-cost coverage will be available through the Exchange 
          and Medi-Cal effective 2014.  Beginning in January 1, 2014, 
          this bill would require insurers and health plans to 
          initiate enrollment into the Exchange as well as COBRA for 
          COBRA-qualifying events, including loss of employment-based 
          coverage, loss of coverage due to loss of a spouse or 
          parent and other COBRA qualifying events.  HAC concludes 
          that in 2014, there is no reason why losing one's job or 
          getting divorced should mean losing health coverage as 
          millions of Californians will be eligible for coverage 
          through the Exchange or Medi-Cal, and this bill will help 
          those Californians get coverage when they need it and when 
          the law requires it.

           ARGUMENTS IN OPPOSITION  :    This bill is opposed by the 
          California Association of Health Plans and the Association 
          of California Life and Health Insurance Companies (ACLHIC). 
           ACLHIC states that this bill requires an insurer to obtain 
          the consent of its insureds to share their information with 
          the Exchange, yet provides no direction as to how to meet 
          that obligation if the individual is simply nonresponsive.  
          ACLHIC states that, in a day of heightened privacy 
          concerns, many individuals may be reluctant to give consent 







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          to share their personal information, and ACLHIC is 
          concerned about potential liability to the insurer that is 
          required to obtain and maintain this information.  ACLHIC 
          states this bill should be amended to provide protection to 
          the insurer that forwards such information to the Exchange 
          in accordance with the requirements of the bill.  ACLHIC 
          also argues this bill requires insurers to send multiple 
          and duplicative notices to an insured of their right to 
          enroll in the Exchange with every change in the insured's 
          coverage, and that this bill should be amended to include 
          its required notice with Cal-COBRA notices in the manner 
          that they are currently required to be sent to insured 
          individuals.  ACLHIC states this would be consistent with 
          all other notices of coverage rights, and would not only be 
          cost effective, but less confusing to the insured. 


           ASSEMBLY FLOOR  :  50-26, 6/1/11
          AYES:  Alejo, Allen, Ammiano, Atkins, Beall, Block, 
            Blumenfield, Bonilla, Bradford, Brownley, Buchanan, 
            Butler, Charles Calderon, Campos, Carter, Cedillo, 
            Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes, 
            Furutani, Galgiani, Gordon, Hall, Hayashi, Roger 
            Hernández, Hill, Huber, Hueso, Huffman, Lara, Bonnie 
            Lowenthal, Ma, Mendoza, Mitchell, Monning, Pan, Perea, 
            Portantino, Skinner, Solorio, Swanson, Torres, 
            Wieckowski, Williams, Yamada, John A. Pérez
          NOES:  Achadjian, Bill Berryhill, Conway, Cook, Donnelly, 
            Fletcher, Beth Gaines, Gatto, Grove, Hagman, Halderman, 
            Harkey, Jones, Knight, Logue, Mansoor, Miller, Morrell, 
            Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Valadao, 
            Wagner
          NO VOTE RECORDED:  Garrick, Gorell, Jeffries, V. Manuel 
            Pérez


          CTW:n   8/27/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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