BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1296| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1296 Author: Bonilla (D) Amended: 8/30/11 in Senate Vote: 21 SENATE HEALTH COMMITTEE : 6-3, 7/6/11 AYES: Hernandez, Alquist, De León, DeSaulnier, Rubio, Wolk NOES: Strickland, Anderson, Blakeslee SENATE APPROPRIATIONS COMMITTEE : 6-3, 8/25/11 AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg NOES: Walters, Emmerson, Runner ASSEMBLY FLOOR : 51-27, 6/2/11 - See last page for vote SUBJECT : Health Care Eligibility, Enrollment, and Retention Act SOURCE : Western Center on Law and Poverty DIGEST : This bill establishes the Health Care Eligibility, Enrollment, and Retention Act. This bill requires the California Health and Human Services Agency, by January 1, 2012, in consultation with other state departments and stakeholders, to have undertaken a planning process to develop plans and procedures to implement these provisions relating to enrollment in public programs and federal law. This bill requires that an individual would have the option to apply for public programs through a variety of avenues, would specify the application form, CONTINUED AB 1296 Page 2 establish presumptive eligibility for all populations, and establish other requirements related to renewal and transfer of coverage between programs. 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 (federal Exchange) that makes qualified health plans available to qualified individuals and qualified employers. If a state does not establish a federal Exchange, the federal government administers the federal Exchange. 2. Establishes requirements for the federal Exchange, for health plans participating in the Exchange, and defines who is eligible to receive coverage in the federal Exchange. Among other duties, the federal Exchange is required to inform individuals of eligibility requirements for the Medicaid program (Medi-Cal in California), the Children's Health Insurance Program (CHIP is known as the Healthy Families Program, or HFP, in California), or any applicable state or local public program. The federal Exchange is required if, through screening of the application, the federal Exchange determines that such individuals are eligible for any such program, to enroll such individuals in such program. 3. Allows through PPACA, effective January 1, 2014, eligible individual taxpayers whose household income equals or exceeds 100 percent, but does not exceed 400 percent 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 percent of the FPL, and a lower maximum limit on out-of-pocket expenses for individuals whose incomes are between 100 percent and 400 percent of the FPL. Legal immigrants with household incomes less AB 1296 Page 3 than 100 percent 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. 4. Requires, through PPACA, numerous changes to Medicaid, including simplifying Medicaid enrollment, requiring coordination with the federal Exchange, expanding Medicaid eligibility to adults without minor children with incomes equal to or less than 133 percent of the FPL, disregarding (or not counting) an additional five percent in income (making the Medicaid income eligibility effectively 138 percent of the FPL), eliminating the asset test for individuals under age 65 and switching to a new method for calculating income known as modified adjusted gross income for certain populations. 5. Requires, through PPACA, the federal Secretary of Health and Human Services (HHS) to establish a system meeting specified requirements under which residents of each state can apply for enrollment, receive a determination of eligibility for participation, and continue participation in, applicable state health subsidy programs (defined as Medicaid, CHIP, Exchange, and the Basic Health Program ÝBHP]). 6. Requires this system to ensure that if an individual applying to an Exchange is found through screening to be eligible for medical assistance under Medicaid, or eligible for enrollment under CHIP, the individual to be enrolled for assistance under such plan or program. 7. 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. Provides for the Medi-Cal program, which is administered AB 1296 Page 4 by the Department of Health Care Services (DHCS), under which qualified, low-income individuals receive health care services. 2. 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 California Health and Human Services Agency (CHHS) and four members with specified expertise who are appointed by the Governor and the Legislature. This bill requires CHHS, by January 1, 2012, in consultation with the DHCS, the Managed Risk Medical Insurance Board (MRMIB), the California Health Benefit Exchange (Exchange), counties, health care service plans, consumer advocates, and other stakeholders, to have commenced a planning process to develop plans and procedures to implement the enrollment and renewal requirements established by these provisions and by PPACA. CHHS would be required to provide information on the process regarding policy changes needed to develop the eligibility, enrollment, and retention system for health care coverage to the Legislature by April 1, 2012. This bill requires DHCS to develop a standardized application for all public health coverage programs. These provisions, except where otherwise specified, become operative January 1, 2014. This bill permits an individual to have the option to apply for public health coverage programs in person, by mail, online, or by telephone. This bill specifies that there should be a program of accelerated enrollment through which children and pregnant women may enter public coverage at the point of medical service, that infants would be deemed eligible without an application at a hospital, real-time verification, information pre-population, and presumptive eligibility for children, pregnant women, and other adults, among other specified requirements. This bill, commencing January 1, 2012, would: 1. Require the planning process to be led by CHHS to allow for stakeholders to provide meaningful input into the AB 1296 Page 5 planning and development of the aspects of eligibility, enrollment, and retention identified in these provisions; 2. Require the planning and development process to consider at least the following issues: A. Whether or not to develop a state specific enrollment form; B. What process to use to establish Medi-Cal eligibility for non-modified adjusted gross income individuals; C. A hospital process to immediately enroll infants eligible for Medi-Cal and the Healthy Families Program; D. What data collection standards should be utilized to collect specified information; E. A process to allow individuals to update eligibility information at times other than renewal and to have the option to renew eligibility at the time of the update; F. Confidentiality protections; G. How to enable applicants to select health plans. This bill, commencing January 1, 2014, would: 1. Permit an individual to apply for coverage via facsimile; 2. Require DHCS to develop a single, accessible application as part of the planning process above and require the form to be used by all entities permitted to determine eligibility for state subsidy programs. 3. Require the application to be tested and operational by the date as required by the CHHS Secretary. 4. Modify the prepopulation requirements to be dependent AB 1296 Page 6 upon the capabilities of the yet to be developed eligibility and enrollment system; 5. Permit state health subsidy programs to accept self-attestation; 6. Require electronic verification in a manner as provided by PPACA; 7. Provide for automatic renewal if the recipient is otherwise eligible for a public health coverage program. Note: According to the Senate Appropriations Committee, the latest version of this bill eliminates "costly provisions of the bill including the requirement to provide presumptive eligibility and other requirements that would have decreased CHHS' flexibility in implementing the PPACA. Thus costs would be reduced significantly. The planning process would likely require resources in the hundreds of thousands of dollars and would be federally funded. Actual expenditures would depend on the scope, extent, and duration of the planning process. It is unknown what the provisions commencing January 1, 2014, would require in terms of resources, but it is likely to be significant and would probably be integrated into the respective Exchange, Medi-Cal, and Healthy Families eligibility divisions as well as the development and implementation of the enrollment information technology system, which would be 100 percent federally funded." Background Federal health care reform and coverage expansions Federal health care reform makes numerous changes to reduce the number of uninsured Americans. According to estimates in a 2011 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 percent of documented residents of California under age 65 will be insured. The authors estimate enrollment in Medi-Cal is expected to increase by AB 1296 Page 7 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. PPACA changes to eligibility and enrollment processing Under state law, counties, except for certain applicants, perform eligibility and enrollment on behalf of the state for Medi-Cal. Medi-Cal eligibility is complex, with over 160 different aid codes, and different income and asset rules for particular groups. Applicants can apply in person and through the internet. Unless there is good cause, counties are required to complete the determination of eligibility as quickly as possible, but no later than any of the following: (a) 45 days following the date the application, reapplication or request for restoration is filed, and (b) 90 days following the date the application, reapplication or request for restoration is filed when eligibility depends on establishing disability or blindness. Federal law requires eligibility determination for participation in a state Medicaid program to be determined by a public agency. In addition to the county eligibility process, Medi-Cal permits a health care provider to "presume" a pregnant woman is eligible for Medi-Cal based on her answers to a few income and residency questions through the presumptive eligibility program. To encourage early prenatal care, a woman can be presumptively enrolled into Medi-Cal through a qualified provider or clinic with the agreement that she will later complete an application for Medi-Cal. The beneficiary must then start the formal Medi-Cal application process by the end of the month following the month the temporary presumptive benefits started. The CHDP Gateway allows eligible children and youth to receive up to two months of full-scope Medi-Cal pre-enrollment eligibility. CHDP providers can pre-enroll eligible patients into Medi-Cal using the CHDP Gateway Internet transaction. MRMIB contracts with enrollment contractors to perform eligibility and enrollment for the four programs it AB 1296 Page 8 administers, and applicants apply by phone and through the mail (and through the internet for the HFP). MRMIB establishes application processing timeframes through regulation (10 to 30 days, depending upon the MRMIB program). California does have a common application that can be used for all public health programs, although the state has a joint application for children for Medi-Cal and HFP that is used to screen applicants to determine if they are income-eligible for either program. Children who complete the joint application apply through the Single Point of Entry (SPE), and those that appear eligible for Medi-Cal receive immediate, accelerated enrollment. Accelerated enrollment begins on the first day of the month that the SPE receives the application and continues until the child is determined eligible for Medi-Cal or the end of the month in which the child is found ineligible. PPACA makes numerous changes to simplify enrollment in public health coverage programs. PPACA requires that an enrollment system be created that allows state residents to apply for enrollment, receive an eligibility determination, and renew participation in state health subsidy programs. In addition, PPACA requires the Secretary of DHHS to develop and provide to each state a single, streamlined form that: 1. May be used to apply for all applicable state health subsidy programs (Medi-Cal, HFP, Exchange, and the BHP); 2. May be filed online, in person, by mail, or by telephone; 3. May be filed with an Exchange or with state officials operating one of the other applicable state health subsidy programs; 4. Is structured to maximize an applicant's ability to complete the form satisfactorily, taking into account the characteristics of individuals who qualify for applicable state health subsidy programs. AB 1296 Page 9 PPACA permits a state to develop and use its own single, streamlined form as an alternative to the federal form if the alternative form is consistent with standards promulgated by the Secretary. PPACA also requires each state to develop, for all applicable state health subsidy programs, a secure, electronic interface allowing an exchange of data, including information contained in the application forms, that allows a determination of eligibility for all such programs based on a single application. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund CHHS planning process likely in the hundreds of thousands of Federal dollars through January 1, 2014, and possibly beyond Ongoing administration unknown, potentially significant, General/ commencing January 1, 2014Federal/ Special *50 percent General Fund, 50 percent federal funds, unless additional federal or private funds are made available. SUPPORT : (Verified 8/29/11) Western Center on Law and Poverty (source) 100% Campaign American Federation of State, County and Municipal Employees California Academy of Family Physicians California Children's Health Initiatives California Chiropractic Association California Communities United Institute AB 1296 Page 10 California Coverage and Health Initiatives California Family Resource Association California Optometric Association California Pan-Ethnic Health Network California Rural Legal Assistance Foundation California School Health Centers Association Children Now Congress of California Seniors Consumers Union Contra Costa County Board of Supervisors Disability Rights California Disability Rights Education and Defense Fund Disability Rights Legal Center First 5 Association of California Having Our Say Health Access California Latino Coalition for a Healthy California Latino Health Alliance Maternal and Child Health Access Children's Defense Fund - California National Alliance on Mental Illness California National Association of Social Workers, California Chapter PICO California Southeast Asia Resource Action Center The Children's Partnership United Nurses Associations of California/Union of Health Care Professionals United Ways of California Youth Law Center ARGUMENTS IN SUPPORT : This bill is sponsored by the Western Center on Law and Poverty (WCLP) to establish the framework for the eligibility, enrollment and retention system for public health coverage programs, as required by PPACA. WCLP states that PPACA requires states to have a seamless, "no wrong door" system for determining eligibility for and enrolling people into public health coverage programs. WCLP states this bill would implement these components of PPACA in a way that works for health care consumers by requiring: 1. The creation of unified applications - paper, telephone and online - for Medi-Cal, the Exchange, HFP, AIM and BHP; AB 1296 Page 11 2. Real-time determination of eligibility when possible; 3. Use of the same eligibility rules regardless of which "application door" a consumer uses; 4. Enrollment of consumers in the most beneficial program for which they are eligible; 5. Assistance for consumers with their application and the ability for consumers to correct or update their information; 6. Seamless renewal between health programs; 7. Disability and language accessibility standards; 8. Transparency and accountability standards for the IT system; and 9. Privacy protections for consumers. WCLP states that 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 to 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, and there is currently no mechanism for the state to transfer an adult's application for one program to initiate an application for another program. PPACA changes this by requiring that if someone applies for Medi-Cal but is eligible for the Exchange, they are enrolled in the Exchange, and vice versa. WCLP states this will require a new level of coordination among agencies and departments, and it is important both that these entities coordinate on developing and implementing the eligibility, enrollment and retention system. In addition to making sure that the initial application process enrolls consumers into the right program, the programs must also coordinate during consumers' annual renewal of coverage, and when circumstances change so that a consumer moves between health coverage programs seamlessly. AB 1296 Page 12 WCLP concludes that California is required to have this new system tested by June 2013 to allow for enrollment to begin in mid to late 2013. With less than two and a half years to make and implement numerous important policy decisions, develop applications and renewal forms and processes, and build and test IT components, this legislation is urgently needed, and significant federal funding (100 percent for the Exchange and 90 percent for Medi-Cal) is available to build the health care infrastructure system. ASSEMBLY FLOOR : 51-27, 6/2/11 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, Gatto, Gordon, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Lara, Bonnie Lowenthal, Ma, Mendoza, Mitchell, Monning, Pan, Perea, V. Manuel Pérez, Portantino, Skinner, Solorio, Swanson, Torres, Wieckowski, Williams, Yamada, John A. Pérez NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly, Fletcher, Beth Gaines, Garrick, Grove, Hagman, Halderman, Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell, Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Valadao, Wagner NO VOTE RECORDED: Gorell, Hall CTW:kc 8/29/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****