BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 1296|
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                                 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, 
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          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 







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             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 







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             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 







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             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 







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             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 







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          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 







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          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.  








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          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







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          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; 







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          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.  








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          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

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