BILL ANALYSIS Ó AB 1296 Page 1 Date of Hearing: May 3, 2011 ASSEMBLY COMMITTEE ON HEALTH William W. Monning, Chair AB 1296 (Bonilla) - As Amended: April 25, 2011 SUBJECT : Health Care Eligibility, Enrollment, and Retention Act. SUMMARY : Enacts the Health Care Eligibility, Enrollment, and Retention Act. Specifically, this bill : 1)Requires, by January 1, 2012, the California Health and Human Services Agency (CHHSA), in consultation with the Department of Health Care Services (DHCS), Managed Risk Medical Insurance Board (MRMIB), the California Health Benefit Exchange (Exchange), counties, health care services plans, consumer advocates, and other stakeholders to undertake a planning process to develop plans and procedures to implement the federal Patient Protections and Affordable Care Act (PPACA) related to eligibility, enrollment, and retention with regard to public health coverage programs. 2)Requires CHHSA to submit a report to the health committees of both houses of the Legislature by April 1, 2012 regarding policy changes needed to develop the eligibility, enrollment, and retention system for health coverage. 3)Defines Medi-Cal, public health coverage programs, and real-time determination for the purposes of this bill. 4)Requires that a person have the option to apply for public health coverage in person, by mail, online, and by telephone. 5)Requires DHCS to develop, in consultation with MRMIB and the Exchange, a single standardized paper, electronic, and telephone application form to be used by all entities authorized to make eligibility determinations and that meets specified criteria as follows: a) Uses simple, user friendly language and instructions; b) Requires only the information necessary to determining eligibility for the applicant's particular circumstances; and, AB 1296 Page 2 c) May be used for screening, but shall be an application. 6)Requires the entity receiving the application to treat it as an application for all public coverage programs and enroll the applicant in the most beneficial program the applicant is eligible for. 7)Prohibits an applicant from being required to submit new information that is not necessary to determine eligibility if an application is transferred to other entities for processing and requires the applicant to be informed as to how to obtain information regarding the status of the application. 8)Requires the application and process to be designed to identify infants who are in the category to be deemed eligible at birth and to be automatically enrolled without the necessity of completing the application process. 9)Authorizes the existing provider-based application and process used for the Child Health and Disability Prevention (CHDP) Gateway and presumptive eligibility for pregnant women in families with income up to 200% of the federal poverty level (FPL) program to be modified in the simplest possible way and used as an application for ongoing coverage for Medi-Cal and the Healthy Families Program (HFP) and for a program of accelerated enrollment from the medical point of service. Requires DHCS to adopt a process for prenatal care providers to submit the application form for pregnant women online and for hospitals to enroll eligible infants online immediately without an application. 10)Requires applicants or recipients seeking renewal to be provided with an option that prepopulates the application fields or is electronically verified in real time or both and includes opportunities to provide additional information or make corrections. 11)Requires eligibility and enrollment into a public coverage program to be granted immediately if possible, and if not, requires presumptive eligibility until a determination of ineligibility to the fullest extent permitted under federal law and also requires that prior to the online enrollment of a person into the Exchange, the person is to be informed of overpayment penalties and the ability to avoid them by prompt AB 1296 Page 3 reporting, the penalty for failure to have minimum coverage, and is given the option to decline immediate enrollment while final eligibility is determined. 12)Requires the eligibility, enrollment, and retention system to ensure assistance with understanding decisions to be made including hardship exemptions, individual mandate, premium tax credit and cost sharing reductions for the Exchange, penalties for overpayments, verification, and plan choice. 13)Requires applicants and recipients to be given an opportunity to provide information that ensures enrollment in the most beneficial program for which they are eligible. 14)Requires seamless transition between programs at application, renewal, and transition without breaks in coverage and without the person being required to provide duplicative or unnecessary verification, forms, or other information. 15)Requires DHCS to develop procedures to ensure continuity at specified changes in circumstances. 16)Requires DHCS, in coordination with MRMIB and the Exchange to streamline and coordinate eligibility rules and requirements among the Medi-Cal, HFP, and Exchange premium tax credit and reduced cost-sharing programs using the least restrictive rules and requirements to ensure that applicants with family income under 400% FPL obtain enrollment and that all entities that are processing applications use the least restrictive methodologies. 17)Requires renewal procedures to be coordinated across all public health coverage programs so as to enable the use of relevant information already in a person's or parent or child's case file or electronic database, as allowable under federal law, to in order to renew or transfer seamlessly and without a break in coverage. 18)Requires renewal procedures to be as simple and user-friendly as possible, requires only the provision of information that has changed and allows face-to-face, telephone, and online renewal. 19)Requires, to the maximum extent permitted under federal law, a recipient be allowed to update eligibility information at AB 1296 Page 4 any point and an option to renew eligibility 20)Requires all programs to use standardized forms and notices to timely inform recipients in advance regarding the information required for renewal, whether transfer to another program is to occur and how the transfer will affect the recipients cost, access to care, delivery system, and responsibilities. 21)Requires the eligibility, enrollment, and retention system to be transparent and accountable by requiring DHCS, CHHSA, MRMIB, and the Exchange to provide a public forum on a regular basis for in person feedback including public or private entities providing application screening and other activities. 22)Requires DHCS, MRMIB, and the Exchange to provide for a publicly available evaluation of the information technology programming by an independent expert. 23)Requires a publicly available annual postimplementation evaluation by an independent expert using data points developed in consultation with stakeholders. 24)Specifies that the duties of the CHHSA, MRMIB, DHCS and the Exchange include the duty to monitor and oversee private as well as public entities that are screening for eligibility. 25)Requires that DHCS , MRMIB, and the Exchange ensure that all privacy and confidentiality rights under specified state and federal law are strictly incorporated and followed to ensures: a) Only information strictly necessary is requested; b) Verification from a third party or database is sought only with regard to information required under federal law; c) Applicants and recipients are given clear and complete information regarding the use of the information; d) Informed consent is obtained and an option to decline online screening and electronic verification; e) A plan to respond to any breach including notice to anyone whose personal information has been the subject of unauthorized access. AB 1296 Page 5 EXISTING LAW : 1)Establishes the federal Medicaid Program, Medi-Cal in California, administered by DHCS, to provide comprehensive health care services and long-term care to pregnant women, children, and people who are aged, blind, and disabled. 2)Requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that makes qualified health plans available to qualified individuals and qualified employers. 3) Requires, under federal law, by January 2014, that states offer Medicaid coverage to all adults, under age 65, with income up to 133% of FPL and authorizes a phase-in. 4)Requires, under federal law, by January 2014, that state enrollment systems for persons eligible for health subsidy programs meet specified standards. 5)Establishes MRMIB and authorizes it to administer HFP, the Access for Infants & Mothers (AIM) Program, the Major Risk Medical Insurance Program (MRMIP), and the Pre-Existing Condition Insurance Pan (PCIP). 6) Requires DHCS to seek federal approval of a Comprehensive Medicaid Demonstration Waiver and establishes the county-optional Low-Income Health Program (LIHP) and Medicaid Coverage Expansion as a Demonstration Waiver. FISCAL EFFECT : This bill has not been analyzed by a fiscal committee. COMMENTS : 1)PURPOSE OF THIS BILL . According to the author, AB 1602 (John A. Pérez), Chapter 655, Statues of 2010, and SB 900 (Alquist) Chapter 659, Statutes of 2010, initiated the process to offer health care coverage options to Californians by, among other things, creating the structure and basic duties of the Exchange. The author argues that the prior bills did not AB 1296 Page 6 establish the system required by PPACA to determine eligibility for enrolling consumers in health coverage. According to the author, the PPACA requires a seamless "no wrong door" application system so that wherever a consumer applies he/she is enrolled into the program for which he/she is eligible. The author explains that by enacting the Health Care Eligibility, Enrollment and Retention Act, this bill implements the PPACA requirement to create a single statewide application to be used by all entities accepting and processing applications for enrolling consumers in health coverage. The author argues that the system must be available to apply by phone, in person, by mail, or online for enrolling into Medi-Cal, HFP, the Exchange, and county health programs. 2)BACKGROUND . Under the new federal health reform law, most U.S. citizens and legal residents will be required to have health insurance beginning in 2014. It is estimated that 4.7 million California children and adults who were uninsured during some part of 2009 will be eligible for health coverage under PPACA. The new law establishes a state-based system of health insurance Exchanges and expands Medicaid to make coverage readily available to millions of uninsured people. The PPACA requires states to change their Medicaid and State Children's Health Insurance Program (SCHIP), (HFP in California) eligibility rules in three fundamental ways: a) states must change the way income is counted for the purpose of determining eligibility; b) states must eliminate the asset test for most populations; and, c) states must make a series of changes intended to improve the process for determining and maintaining eligibility for their public programs. According to a Kaiser Family Foundation (KFF), October 2010 Report, "Explaining Health Reform: Building Enrollment Systems that Meet the Expectation of the Affordable Care Act" Congress included strong provisions designed to ensure that state enrollment policies and procedures and supporting technology systems genuinely help individuals and families enroll and stay covered, and also foster efficient administration. 3)EXCHANGE . California exercised the option under PPACA to establish a California Exchange. The Exchange Board has five members (four of which have been appointed) and held its first meeting April 20. 2011. The Board voted to pursue a Level II AB 1296 Page 7 federal planning grant to support the establishment of the Exchange and to submit the grant on September 30, 2011. The Board will meet next on May 11of this year and will discuss health insurance markets, program integration of public health care programs, public health and social services programs, the Basic Health Plan option, and the Small Business Health Options Program Exchange requirements. California previously received a $1 million State Planning and Establishment Grant. 4)ENROLLMENT SIMPLIFICATION . The PPACA includes provisions aimed at simplifying eligibility and enrollment procedures for Medicaid and SCHIP, and ensuring coordination with coverage available through the newly created state Exchanges. According to the KFF Report, by January 1, 2014, California must implement a series of procedures that simplify enrollment in Medi-Cal and HFP and coordinate with the State's Exchange, or risk losing federal Medi-Cal and HFP funding. Required enrollment simplification and coordination procedures include: a) Utilizing a single, streamlined application form for Medi-Cal, HFP, subsidies for coverage through the Exchange, and the Basic Health Program; b) Establishing a Website that permits individuals to apply to, enroll in, and renew enrollment in Medi-Cal, and to consent to enrollment or reenrollment in such coverage through electronic signature; c) Ensuring that individuals who seek coverage through Medi-Cal, HFP, or the Exchange are concurrently screened for eligibility for all three options (including Exchange coverage subsidies and the Basic Health Program) and referred to the appropriate program for enrollment, without having to submit additional or separate applications for each program; d) Requiring development of secure electronic interfaces to exchange available data to the maximum extent practicable to establish, verify, and update eligibility; and, e) Establishing procedures for conducting outreach to and enrolling vulnerable populations, including children, homeless youth, children and youth with special health care needs, pregnant women, and racial and ethnic minorities. AB 1296 Page 8 5)CURRENT ELIGIBILITY AND ENROLLMENT . There are a multiplicity of existing rules and mechanisms for the enrollment, eligibility and renewal for persons covered by public programs which varies depending on the program and the person's individual circumstances. Below is a non-exhaustive description of the most significant: a) Automatic eligibility . Some individuals may be eligible for Medi-Cal without an application such as persons who are low-income seniors or persons with disabilities. These individuals also qualify for programs such as the Supplemental Security Income/State Supplementary Payment (SSI/SSP) program. Individuals or families in other cash assistance programs such as Cal WORKS and Foster Care children are also automatically eligible but an application must be processed by the county. b) Application submission . Generally, those who do not get Medi-Cal automatically must apply. Applications can be submitted in person, by mail, or online to the local Department of Social Services. The application process can also be started over the phone with the county, though the process must be completed in person or by mail. This category includes children and families and the eligibility rules vary depending on the child's age and the income level of the family which is expressed as a percentage of FPL. c) Seniors and Persons with Disabilities not on SSI . Seniors and Persons with Disabilities, including children, in addition to those receiving SSI, may be eligible for Medi-Cal but must submit an application and there are maximum income and property limits. d) Medi-Cal/HFP Single Point of Entry (SPE) . SPE screens pregnant women and children for eligibility in either Medi-Cal or HFP and an application may be submitted by mail or online through Health-e-App. SPE conducts an initial screening for Medi-Cal and HFP. Enrollment in HFP is through a vendor. e) Non HFP children . For a child who appears eligible for Medi-Cal after the SPE screening, the actual Medi-Cal eligibility determination does not occur until the application is forwarded to the county and a county AB 1296 Page 9 eligibility worker makes the Medi-Cal eligibility determination. Children are continuously eligible for one year without the requirement of a redetermination. Children who appear to qualify for full-scope, no share of cost Medi-Cal and whose joint application is sent to SPE are eligible for Accelerated Enrollment. Accelerated Enrollment for children offers temporary, free Medi-Cal benefits after the child's application has been screened by SPE and is awaiting a final Medi-Cal determination by the county welfare department. f) Out stationing . Pregnant women and children can complete a short-form application at certain hospitals and clinics where county eligibility workers are stationed. California provides temporary Medi-Cal coverage to pregnant women while their Medi-Cal applications are being processed. Pregnant women who have completed a shortened application and are found to be presumptively eligible for Medi-Cal receive ambulatory prenatal services. For pregnant women found to be eligible for regular Medi-Cal, their presumptive eligibility period ends when the positive Medi-Cal determination is made. For those women found to be ineligible for regular Medi-Cal, their presumptive eligibility period ends the last day of the month in which the negative Medi-Cal determination is made. g) Infants . Infants born to a mother on Medi-Cal are automatically eligible for Medi-Cal for their first year. The mother is required to notify the county eligibility office. h) Provider eligibility . Doctors can request immediate temporary Medi-Cal coverage for pregnant women and children while they apply for the Medi-Cal Program. i) Breast and Cervical Cancer Treatment Program (BCCTP) . Women who appear to qualify for the federal BCCTP can also obtain Accelerated Enrollment. Under Accelerated Enrollment, they receive temporary, full-scope Medi-Cal coverage while the State's eligibility specialist makes a final eligibility determination. j) CHDP . Children receiving CHDP Program services may pre-enroll in Medi-Cal or HFP through the CHDP provider while they await an eligibility determination for those AB 1296 Page 10 programs. The temporary services are provided for two months, or until the child is determined eligible for Medi-Cal or HFP, whichever comes later. aa) Express Lane Eligibility . Families who receive food stamps can permit information from their Food Stamp Program application to be used to determine their eligibility for Medi-Cal and HFP. Additionally, Express Lane Eligibility allows schools to release information from a child's National School Lunch Program application in order to pre-enroll a child receiving free meals into Medi-Cal until a final determination is made by the county welfare department. bb) Program transfer . A Medi-Cal beneficiary's eligibility for all Medi-Cal programs must be evaluated before the individual's benefits can be terminated. If the beneficiary is found eligible for another Medi-Cal program an eligibility worker into that program can automatically transfer the enrollee into the other program. This process should always occur without the need for a beneficiary to submit a new application. If, however, continued Medi-Cal eligibility cannot be established by ex parte review, then the county must attempt to contact the beneficiary by telephone. cc) AIM, MRMIP and PCIP . MRMIB also administers AIM, MRMIP and PCIP. AIM is a subsidized insurance program for mid-income pregnant women and the application is by mail. Children born to AIM mothers are eligible for HFP. MRMIP and PCIP are subsidized insurance programs for persons who are uninsurable due to pre-existing conditions. There is a joint application for the two programs and it is done by mail. dd) County health programs . Counties are required to provide medical services for medically indigent persons. Each county establishes its own eligibility and application process. The Section 1115 Medi-Cal Demonstration waiver "Bridge to Reform" and AB 342 (John A. Pérez), Chapter 723, Statutes of 2010, establishes the county-optional LIHP and Medicaid Coverage Expansion as a Demonstration Waiver to cover low-income childless adults under age 65. Counties are allowed to set eligibility levels up to 200% of FPL but must cover up all persons up to 133% FPL before allowing AB 1296 Page 11 persons above 133% to enroll. Counties set eligibility income standards, methodologies, and procedures. The federal Center for Medicare and Medicaid Services (CMS) required eligibility determination to be made by state or local government employees. 6)SUPPORT . Western Center on Law and Poverty (WCLP), sponsor of this bill, states in support that in today's health care market the onus is largely on the consumer to figure out what health coverage program to apply for and to submit a new application when moving from one health coverage program for another. For example, a consumer who applies for California's high risk pools but is eligible for Medi-Cal would have to submit a separate application to Medi-Cal. According to WCLP, there is currently no mechanism for the state to transfer an adult's application for one program to initiate an application for another program. WCLP further argues that the PPACA changes that - requiring that for example if someone applies for Medi-Cal but is eligible for the Exchange they are enrolled into the Exchange, and vice versa. According to WCLP, California does have a joint application for children for Medi-Cal and HFP, but will now have to integrate the process for applying for the Exchange and county health coverage programs with applying for Medi-Cal. This will require a new level of coordination among agencies and departments including CHHSA, DHCS which administers the Medi-Cal Program, MRMIB which administers HFP, the new California Exchange Board, and counties which determine eligibility for Medi-Cal and administer their own county health programs. WCLP further states that it is important both that these entities coordinate on developing and implementing the eligibility, enrollment, and retention system and that if a particular department or entity has overall responsibility for a particular component of the system that that is explicitly laid out. Clear lines of authority are needed so that if problems arise stakeholders know what entity has responsibility for what pieces of the system. 7)RELATED AND PRIOR LEGISLATION . a) AB 714 (Atkins) of 2011 requires a notification to individuals who have ceased to be enrolled in specified public health care coverage programs and to individuals receiving services under specified health programs regarding potential eligibility for health care coverage AB 1296 Page 12 through the Exchange. AB 714 is pending in the Assembly Appropriations Committee. b) AB 792 (Bonilla) of 2011 requires the disclosure of information on health care coverage through the Exchange, under specified circumstances, by health care service plans, health insurers, employers, employee associations, the Employment Development Department, upon an initial claim for disability benefits, or by the court, upon the filing of a petition for dissolution of marriage, nullity of marriage, legal separation, or adoption. AB 792 is pending in the Assembly Appropriations Committee. c) AB 43(Monning) of 2011 expands Medi-Cal coverage to persons with income that does not exceed 133% FPL, effective January 1, 2014. AB 43 is pending in the Assembly Appropriations Committee. d) AB 1066 (John A. Pérez) of 2011 enacts technical and conforming statutory changes necessary to conform to the Special Terms and Conditions required by CMS in the approval of the Bridge to Reform Demonstration, including changing the name of the LIHP from Coverage Expansion and Enrollment Projects to Medi-Cal Coverage Expansion and the Health Care Coverage Initiative. AB 1066 is pending in the Assembly Appropriations Committee. e) AB 342 (John A. Pérez), Chapter 723, Statutes of 2010, enacted the LIHP and Coverage Expansion and Enrollment Projects to provide health care benefits to uninsured adults up to 200% of the FPL, at county option through a Medi-Cal waiver demonstration project. f) SB 208 (Steinberg), Chapter 714, Statutes of 2010, implemented provisions of the 2010 Section 1115 replacement waiver including the Delivery System Reinvestment and Improvement Pool, authorized DHCS to require the mandatory enrollment of seniors and people with disabilities in a Medi-Cal managed care plan and required DHCS to implement pilot projects to provide coordinated care to children in the California Children's Services and to persons who are eligible for Medi-Cal and Medicare. g) AB 1595 (Jones) of 2010, would have required DHCS to expand Medi-Cal eligibility to individuals with family AB 1296 Page 13 income up to 133% of FPL without regard to family status by January 1, 2014. AB 1595 died on suspense in the Assembly Appropriations Committee. h) AB 1602 (John A. Pérez), Chapter 655, Statutes of 2010, establishes the Exchange as an independent public entity to purchase health insurance on behalf of Californians with incomes of between 100% and 400% FPL and employees of small businesses. Clarifies the powers and duties of the board governing the Exchange relative to the administration of the Exchange, determining eligibility and enrollment in the Exchange, and arranging for coverage under qualified carriers i) SB 900 (Alquist), Chapter 659, Statutes of 2010, establishes the Exchange. Requires the Exchange to be governed by a five-member board, as specified. 8)TECHNICAL AMENDMENTS . The author is proposing the following technical amendments: a) Page 3 line 16: (b) An individual shall have the option to apply for public health coverage programs in person, by mail, online,andor by telephone. b) Page 3 line 22: (c) A single, standardized paper, electronic, and telephone application form for public health coverage programs shall be developed by the department in consultation with MRMIB and the Exchange Board and shall be used by all entities authorized to make an eligibility determination for any of the public health coverage programs and by their agents. The department shall consult with stakeholders including counties and consumer advocates in the development of the application. The application shall be tested and operational by July 1, 2013. The application forms: c) Page 3 line 28: screening. The application forminsteadshall be an application d) P. 5 line 6: electronically verified in real time, or both, using person al AB 1296 Page 14 e) Page 5 line 25: (2) An applicant or recipient who chooses electronic real-time verification shall be permitted to provide additional eligibility information and to correct information retrieved from a database any time before or after a final eligibility determination is made. An applicant shall not be denied eligibility for any public health coverage program without being given a reasonable opportunity, of at least the kind provided for in Medi-Cal for citizenship documentation, to resolve discrepancies concerning any information provided by a verifying entity. Applicants shall receive the benefits for which they otherwise qualify pending this reasonable opportunity period. f) Page 6 line 17: (i) The Eligibility, Enrollment, and Retention system shall ensure that applicants and recipients receive assistance with their application or renewal for public health coverage programs to understand decisions they may make, including but not limited to those concerning hardship exemptions from the individual mandate, the premium tax credit and cost-sharing reductions for the Exchange and penalties for overpayments, verifications, and plan choice. Applicants and recipients shall also be given a meaningful opportunity to provide information on their applications and renewal forms that ensures their enrollment in, and retention of, health care coverage, in the most beneficial program for which they are eligible. g) Page 7 line 32: (1)To the maximum extent allowed under federal law, aA recipient shall be permitted to update her or his eligibility information at any pointand thereby restart the period for her or his annual redetermination. A recipient providing an update to his or her eligibility information in-between renewal dates shall be given the option to renew eligibility at the time of the update. (2) Eligibility for public health coverage programs shall be automatically renewed whenever any public benefits program renewal with sufficient information to renew health coverage is conducted. AB 1296 Page 15 REGISTERED SUPPORT / OPPOSITION : Support Western Center on Law and Poverty (sponsor) 100% Campaign American Federation of State, County and Municipal Employees, AFL-CIO California Academy of Family Physicians California Children's Health Initiative California Communities United Institute California Mental Health Directors Association California Pan-Ethnic Health Network California Rural Legal Assistance Foundation California School Health Centers Association California State Association of Counties Children Now Children's Defense Fund Contra Costa County Board of Supervisors County Health Executives Association of California County Welfare Directors Association Health Access California National Alliance on Mental Illness, California PICO California The Children's Partnership United Nurses Association of California/Union of Health Care Professionals United Way Urban Counties Caucus Youth Law Center Opposition None on file. Analysis Prepared by : Marjorie Swartz / HEALTH / (916) 319-2097