BILL ANALYSIS Ó
SB 703
Page 1
Date of Hearing: July 5, 2011
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 703 (Ed Hernandez) - As Amended: June 28, 2011
SENATE VOTE : 25-14
SUBJECT : Health care coverage: Basic Health Program.
SUMMARY : Creates the Basic Health Plan (BHP), administered by
the Managed Risk Medical Insurance Board (MRMIB), which will
serve individuals with income up to 200% of the federal poverty
level (FPL) who would otherwise be eligible for subsidies in the
California Health Benefit Exchange (Exchange). Specifically,
this bill :
1)States legislative intent to establish a BHP to implement the
option contained in the federal Patient Protection and
Affordable Care Act (PPACA). Finds and declares that the BHP:
a) Requires eligible individuals and their dependents
enrolled in the BHP to be provided a health plan containing
essential health benefits (EHBs) at a monthly premium price
that does not exceed the amount of the premium that the
eligible individual would have been required to pay if the
individual had enrolled in the applicable second lowest
cost silver plan offered to the individual through the
Exchange.
b) Prohibits the cost sharing an eligible individual is
required to pay under the BHP from exceeding the cost
sharing required under a platinum plan for individuals with
a household income at or below 150% FPL for the size of the
family involved.
c) Prohibits the cost sharing an eligible individual is
required to pay under the BHP from exceeding the cost
sharing required under a gold plan for an individual with a
household income above 150% FPL but at or below 200% FPL
for the size of the family involved.
d) Requires the medical loss ratio for coverage products in
the BHP to be 85%, instead of 80% as required for products
in the individual and small group market.
2)Defines "health plan" as a private health insurer holding a
valid outstanding certificate of authority from the California
Department of Insurance (CDI) or a health care service plan
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licensed by the Department of Managed Health Care (DMHC).
3)Requires MRMIB to enter into a contract with the United States
Secretary of the Department of Health and Human Services
(DHHS) to implement the BHP to provide coverage to eligible
individuals and permits enrollment on January 1, 2014.
4)Requires MRMIB to administer BHP in conjunction with the
Healthy Families Program (HFP), and to provide an eligibility
and enrollment process that allows an individual, or his or
her natural or adoptive parent, legal guardian, caretaker
relative, foster parent, or stepparent with whom the child
resides, to enroll in the BHP at the same time an individual,
or his or her natural or adoptive parent, legal guardian,
caretaker relative, foster parent, or stepparent with whom the
child resides, applies for enrollment in HFP for the child.
Permits an individual to enroll in the same health plan, or a
different health plan, than his or her child or children who
are enrolled in HFP.
5)Provides MRMIB authority to take actions in conjunction with
administering the BHP, including the following:
a) Determine eligibility criteria, requirements for
coverage and health plan participation, premiums, and
cost-sharing amounts;
b) Collect premiums and provide or make available
subsidized coverage through participating health plans;
c) Provide for the processing of applications and
enrollment of eligible individuals;
d) Determine and approve the benefit designs and cost
sharing required by health plans;
e) Maintain enrollment and expenditures to ensure that
expenditures do not exceed amounts available in the fund,
and, if sufficient funds are not available to cover the
estimated cost of program expenditures, requires MRMIB to
institute appropriate measures to reduce costs;
f) Issue rules and regulations, and until January 1, 2016,
provide emergency regulation authority; and,
g) Make application assistance payments to individuals who
have successfully completed the requirements of a Certified
Application Assistant in HFP and who successfully enroll
eligible individuals in BHP.
6)Authorizes MRMIB to determine benefits, if any, to offer BHP
participants that are in addition to the EHB packages required
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by PPACA, including benefits provided through specialized
health care service plans and specialized health insurance
policies, to the extent PPACA authorizes the inclusion of such
plans or policies in the BHP.
7)Requires MRMIB, in conjunction with state Department of Health
Care Services (DHCS), to conduct a community outreach and
education campaign to assist in notifying eligible individuals
of the availability of coverage through BHP.
8)Requires DHCS and the Exchange to include information on the
availability of coverage through the BHP in all eligibility
outreach efforts, and MRMIB to also include information on the
availability of coverage in the Medi-Cal Program and Exchange.
9)Requires MRMIB to ensure that written enrollment information
issued or provided, and telephone services provided, by the
BHP are available to program subscribers and applicants in
each of the Medi-Cal threshold languages.
10)Requires MRMIB to ensure that subscribers are provided
information within provider network directories of available
linguistically diverse providers, and participating health
plans, specialized health plans and specialized insurance
policies, provided documentation on how linguistically and
culturally appropriate services are provided, including
marketing materials, to subscribers.
11)Requires MRMIB to contract with a broad range of health plans
in an area, if available, to ensure that subscribers have a
choice of health plans from among a reasonable number and
different types of competing health plans.
12)Requires MRMIB to take all reasonable steps to ensure that
the range of choices of health plans available to each
applicant includes health plans that include in their provider
networks, and have signed contracts with, traditional and
public and private safety net providers.
13)Requires a participating health plan to annually submit to
MRMIB a report summarizing its provider network, including
information on geographic access for subscribers, linguistic
services, the ethnic composition of providers, the number of
subscribers who selected traditional and public and private
safety net providers.
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14)Prohibits MRMIB from relying solely on a determination by
DMHC and the CDI of a health plan network's adequacy or
geographic access to providers in the awarding of contracts
under this bill.
15)Requires MRMIB to collect and review demographic census, and
other data to provide to prospective local initiatives, health
plans, or specialized health plans, and identify specific
provider contracting target areas with significant numbers of
uninsured individuals with incomes that would make them
eligible for the BHP.
16)Requires MRMIB to give priority to those health plans, on a
county-by-county basis, that demonstrate that they have
included in their prospective plan networks significant
numbers of providers in these geographic target areas.
17)Requires MRMIB to designate a community provider plan (CPP)
in each geographic area that is the participating health plan
that has the highest percentage of traditional and public and
private safety net providers in its network. Requires that
subscribers selecting such a health plan be given a premium
discount in an amount determined by MRMIB. Includes
specialized health plans and insurance policies in this
provision and provisions 11) through 16) above.
18)Continues enrollment for an eligible individual enrolled in
the BHP for a period of 12 months from the month eligibility
is established, to the extent permitted by federal law.
19)Authorizes MRMIB to disenroll an eligible individual enrolled
in BHP after two consecutive months of nonpayment of premiums,
and a reasonable written notice period of not less than 30
days. Authorizes MRMIB to conduct or contract for collection
actions.
20)Requires MRMIB to make sure of a simple and easy to
understand mail-in and Internet application process, provide
for the operation of a toll-free telephone hotline to respond
to requests for assistance, maintain an Internet Website,
utilize a standardized format for presenting health benefits
plan options, as specified, and establish a process to inform
individuals who lose eligibility for the BHP of the
availability of coverage through Medi-Cal, and the Exchange
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and to transmit their eligibility-related information to those
programs electronically to facilitate enrollment.
21)Requires MRMIB in the event that MRMIB reasonably expects
that the cost of BHP will exceed the available funds, to
transfer individuals at their annual redetermination to
coverage in the Exchange.
EXISTING FEDERAL LAW :
1)Establishes federal PPACA, which among other private market
insurance reforms, authorizes states to establish an American
Health Benefit Exchange by January 1, 2014, that makes
qualified health plans available to qualified individuals and
employers.
2)Provides states an option to establish BHP to enter into
contracts to offer one or more health plans providing at least
EHBs, as specified, to eligible individuals in lieu of
offering such coverage in the Exchange.
3)Requires, as part of the BHP, the state to establish to the
satisfaction of DHHS, that the amount of the monthly premium
an eligible individual is required to pay for coverage under a
standard health plan (in BHP) for the individual and the
individual's dependents does not exceed the amount of the
monthly premium that the eligible individual would have been
required to pay if the individual had enrolled in the
applicable second lowest cost silver plan, as specified,
offered to the individual through an Exchange; that the
cost-sharing an eligible individual is required to pay under
the standard health plan does not exceed the cost-sharing
required under a platinum plan in the case of an eligible
individual with household income not in excess of 150% FPL;
and, the cost-sharing required under a "gold plan" in the case
of an eligible individual with household income between 150%
FPL and 200% FPL and the benefits provided under the standard
health plans offered through the program covers at least the
essential health benefits (EHBs).
4)Defines EHBs to include: ambulatory patient services,
emergency services, hospitalization, maternity and newborn
care, mental health and substance use disorder services,
including behavioral health treatment, prescription drugs,
rehabilitative and habilitative services and devices,
laboratory services, preventive and wellness services, chronic
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disease management, and pediatric services, including oral and
vision care, and requires the Secretary of DHHS to further
define EHBs, and ensure that the scope of EHBs is equal to
those provided under a typical employer plan.
5)Provides for premium assistance credits for the purchase of
health insurance in the Exchange. Credits are calculated on a
sliding scale capped at 2% of income for those at or above
133% FPL and phasing out at 9.8% for those at 400% FPL. The
premium credit is based on the second lowest-cost silver plan.
6)Provides assistance based on standard out-of-pocket (OOP)
limits of $5,950 for individuals and $11,900 for families.
Limit is reduced to one-third for those with income between
100% and 200% FPL, to one-half for those with income between
200 and 300% FPL and two-thirds for those with income between
300 and 400% FPL.
EXISTING STATE LAW :
1)Establishes HFP, administered by MRMIB, to provide health
coverage through health plans to eligible children in families
with income up to 250% FPL.
2)Establishes the CPP in HFP, whereby in each geographic area,
MRMIB designates a CPP that is the participating health plan
which has the highest percentage of traditional and safety net
providers in its network. Requires subscribers selecting such
a plan to be given a family contribution discount. Pursuant
to regulation, traditional and safety net providers are
determined by MRMIB for each county based on providers
participating in the Child Health and Disability Prevention
Program, outpatient hospital based clinics, Federally
Qualified Health Centers (FQHCs), rural, community and free
clinics participating in the Medi-Cal Program, and specified
public and private hospitals participating in the Medi-Cal
Program such as county hospitals, non-profit community
hospitals, hospitals operated by the University of California,
and designated children's hospitals.
3)Authorizes MRMIB to pay designated individuals or
organizations an application assistance fee, if the individual
or organization assists an applicant to complete the HFP
application, and the applicant is enrolled in HFP as a result
of the application.
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4)Provides for the licensure of health plans, through the DMHC,
under the Knox-Keene Health Care Service Plan Act of 1975, and
for the licensure of health insurers, through the CDI, under
the Insurance Code.
5)Provides for the DHCS, which administers the Medi-Cal Program,
a health care services and coverage program for low-income
families, pregnant women, children, individuals with
disabilities, the elderly, and individuals in long-term care.
6)Establishes the Exchange in state government, and specifies
the duty and authority of the Exchange. Requires the Exchange
to determine the minimum requirements health plans must meet
for participation in the Exchange, the standards and criteria
for selecting health plans to be offered in the Exchange, to
provide, in each region of the state, a choice of qualified
plans, at each of the five levels of coverage contained in
federal law (platinum, gold, silver, bronze, and
catastrophic).
FISCAL EFFECT : According to the Senate Appropriations
Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Start-up funding: unknown, likely in the millions of dollars
annually General*
Ongoing cost to operate BHP: likely in the billions of
dollars annually Federal/**
Private
*Permits a General Fund (GF) loan to be repaid by July 1, 2016,
with interest.
**BHP funded by federal funds and subscriber premiums.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill will
create affordable health care coverage for hundreds of
thousands of people without asking for a single dime more from
California's taxpayers. The BHP will provide low-income
Californians with equal or better benefit levels, less
expensive health plan premiums, and lower cost-sharing than
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would be available to them in the Exchange using exclusively
federal dollars, according to a Mercer Government Human
Services Consulting (Mercer) financial feasibility analysis.
Adopting the BHP option will lead to more individuals
receiving health care coverage as a result of lower premiums,
greater ability to access health care because of the lower
cost-sharing, increased compliance with the federal individual
mandate, and a reduction in uncompensated care for health care
providers. Because federal BHP financing is based on the
amount spent on premium tax credit and cost-sharing subsidies
for commercial Exchange products, the BHP also provides an
opportunity to increase funding to certain health plans and
providers to amounts that would exceed rates paid to health
plans and health care providers through Medi-Cal. The Mercer
feasibility analysis estimates rates paid to providers in the
BHP would be 20% to 25% higher than Medi-Cal rates, which will
improve the financial viability of safety net providers who
will continue to serve the remaining uninsured after full
implementation of federal health care reform. The BHP option
also provides participants with a product with a higher
medical loss ratio (85% instead of 80%) than in the Exchange,
which allows consumers to get more value out of their premium
dollar. Finally, establishing a BHP could also reduce state
GF Medi-Cal costs by making it more likely that individuals
who qualify for share-of-cost Medi-Cal, because they incur
medical costs significant enough to enable them to "spend
down" to Medi-Cal eligibility, will shift to the
federally-funded BHP.
2)FEDERAL HEALTH CARE REFORM . On March 23, 2010, President
Obama signed the PPACA (Public Law ÝPL] 111-148), which was
amended on March 30, 2010 by the Health Care and Education
Reconciliation Act of 2010 (PL 111-152), together these laws
are referred to as PPACA. The law includes many provisions
including a restructuring of the small and individual group
insurance market, setting minimum standards for health care
coverage, providing financial assistance to certain
individuals and small employers, and enabling and supporting
states to establish Health Benefit Exchanges where individuals
and small business can shop for insurance and premium credits
and cost sharing subsidies will be determined.
3)BENEFIT CATEGORIES . PPACA establishes five benefit
categories-bronze, silver, gold, platinum, and catastrophic -
all of which will have the EHB package. Policies cannot be
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sold in the small-group and individual market or Exchanges
that do not meet the actuarial standards (percentage of
medical expense paid by insurer) for the benefit categories
established by PPACA. All carriers selling in the individual
and small-group markets are at least required to offer silver
and gold plans.
a) The bronze package will represent minimum creditable
coverage with an actuarial value of 60% (i.e., covering 60%
of enrollees' medical costs) with out-of-pocket spending
limited to that which is defined for health savings
accounts (HSAs), or $5,950 for individual policies and
$11,900 for family policies.
b) The silver benefit package will have an actuarial value
of 70% and the same out-of-pocket limits.
c) The gold package will have an actuarial value of 80% and
the same out-of-pocket limits.
d) The platinum package will cover 90% of costs with the
same out-of-pocket limits.
e) A catastrophic benefit package can be made available for
adults younger than age 30, similar to HSA-eligible,
high-deductible plans, with the EHB package, the cost of
preventive services will be excluded from the deductible as
under current HSA law, three primary care visits, and
cost-sharing to HSA out-of-pocket limits.
1)PREMIUM TAX CREDITS AND SUBSIDIES . Depending upon income,
PPACA provides premium tax credits, lower cost-sharing and
lower maximum out-of-pocket (OOP) limits. Beginning 2014,
advanceable, refundable tax credits will be available in the
Exchange. Tax credits are based on the premium for the second
lowest cost silver plan in an Exchange in the area where the
person is eligible for coverage. Premiums are capped on a
sliding scale depending upon income: a person with income up
to 133% FPL has a cap of 2% of their income; a person with
income up to 200% FPL has a cap of 6.3%; and, a person with
income up to 400% FPL has a cap of 9.5%. As an example, a
person with income at 200% FPL ($21,780 in 2011) would have a
premium cap of $1,372 (6.3% of income), so if the second
lowest cost silver plan premium was $4,000, there would be a
premium credit of $2,628 (the difference between the $4,000
premium and the $1,372 cap). Credits are based on annual
income. A year-end reconciliation through the Internal
Revenue Service could result in a refund to the enrollee or
repayment up to a maximum safe harbor of $300 for an
individual and $600 for a family at or below 200% FPL, and a
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scaled repayment for those with incomes up to 500% FPL.
People who qualify for premium credits and are enrolled in an
Exchange silver level plan will also be eligible for
assistance with cost-sharing requirements. In addition to the
maximum OOP caps ($5,950 per individual and $11,900 per
family), cost-sharing subsidies will further reduce OOP
maximums by two-thirds for income between 100 and 200% FPL; by
one-half for income between 200 and 300% FPL; and, by
one-third for income between 300 and 400% FPL.
2)BHP . PPACA allows states to establish a BHP to support
coverage of low-income individuals not eligible for Medicaid
(Medi-Cal in California). BHP eligible individuals are people
with income under 200% FPL who would otherwise be eligible for
premium credits in the Exchange. Under the BHP, DHHS will
transfer to the state for each fiscal year for which one or
more standard health plans are operating within the state the
amount equal to 95% of the premium tax credits, and
cost-sharing reductions, that will be provided for the fiscal
year to eligible individuals enrolled in the Exchange. States
must assure that cost sharing requirements do not exceed those
of a platinum Exchange plan (90% actuarial value) for
individuals with income under 150% FPL and those of a gold
plan (80% actuarial value) for other BHP enrollees. To
qualify, enrollees must be U.S citizens or lawfully present
immigrants under age 65, have income that does not exceed 200%
FPL, not qualified for Medicare, Medicaid, or Children's
Health Insurance Program (CHIP), and not offered employer
sponsored insurance that meets PPACA standards for
affordability and comprehensiveness. The University
California Los Angeles (UCLA) Center for Health Policy
Research estimates there are approximately 829,000 individuals
in California who would be eligible for BHP, including 46,000
legal immigrants.
3)BHP FEASIBILITY . At the request of the California HealthCare
Foundation, Mercer assessed the financial feasibility of the
BHP option in terms of whether the BHP could potentially be
implemented in California at existing Medi-Cal managed care
payment rates. The results indicate that California may be
able to implement BHP at no cost to the state GF. Mercer
estimates that the average 2014 federal BHP monthly subsidy
would be between $441 and $497 per member per month (PMPM).
Using conservative estimates, Mercer estimates the average
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monthly BHP premium cost to be between $294 and $353 PMPM.
Mercer acknowledges that these estimates are speculative and
that there are many provisions and details of PPACA that are
still unknown. Another report by the Institute for Health
Policy Solutions (IHPS) points out that the federal subsidy
amounts are highly sensitive to the benchmark plan in the
Exchange and that IHPS and the Congressional Budget Office
have estimated a lower premium amount ($392 PMPM), which means
federal funding available for BHP could be hundreds of
millions of dollars less than is assumed by estimates to date
(i.e., Mercer).
4)IMPACT ON CONSUMERS . If the BHP uses Medi-Cal providers and
plans, it could provide continuity for populations switching
between Medi-Cal and the BHP. It could also provide coverage
at a lower cost than Exchange coverage, assuming Medi-Cal
provider rates. Savings would be passed on to BHP enrollees
in the form of lower premiums, cost-sharing, or additional
benefits. BHP enrollees would not be subject to year-end
reconciliation. To the extent that HFP plans participate,
parents and their children could enroll in the same plan. On
the other hand, BHP enrollees would not be able to enroll in
the Exchange, may be limited in their choice of mainstream
health plans, and would not be eligible for tax credits. In
addition, there may still be disruption in coverage as income
fluctuates (at slightly higher income levels) and people move
between BHP and the Exchange.
5)IMPACT ON SAFETY NET . Traditional and safety net providers
are those providers who typically serve Medi-Cal, low-income,
and uninsured patients. They include public hospitals and
primary care clinics, including FQHCs. California, through
its Medi-Cal Managed Care Program has three models of managed
care delivery; two of those models, Local Initiatives and
County Organized Health Systems have networks that include and
in some cases are required to include traditional and safety
net providers. The BHP, as contemplated in this bill,
creates discount premiums for a plan designated a CPP, which
obtains that designation based on the percentage of
traditional and safety net providers in its network. To the
extent the BHP preserves a patient base and revenue stream for
traditional and safety net providers, those providers will
benefit. FQHCs, however, are not guaranteed higher
Prospective Payment System (PPS) rates as they are in Medi-Cal
and the Exchange, and may be disadvantaged. Because of
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historically low reimbursement rates, provider access and
financial solvency is a concern in Medi-Cal and may be a
factor in the ability of Medi-Cal plans and providers to
compete in the Exchange, but may not be an issue in BHP.
6)IMPACT ON EXCHANGE . Mercer estimates approximately 1.8
million would enroll in the Exchange (even with a BHP).
Mercer suggests that the BHP population could represent a less
healthy (and more costly) risk profile than the remaining
Exchange population above 200% FPL because people with lower
incomes tend to have more health issues. The level of
premiums and cost-sharing in BHP and in the Exchange will have
a direct impact on the risk of the population that enrolls in
either place. Higher premium and cost-sharing levels increase
the level of adverse risk and lead to higher enrolled
population risk, because only those people who really need
coverage will be willing to pay for it, especially at higher
premium and cost-sharing levels. Lower premiums and
cost-sharing levels, as would be offered in the BHP as
compared to what the same population would get in the
Exchange, could result in better risk in BHP because lower
income people with more health issues would not be in the
Exchange risk pool. Mercer indicates that plan participation,
consumer choice, and risk dynamics for the Exchange population
are complicated and beyond the scope of their analysis.
The IHPS report indicates that the BHP would substantially
reduce the size of the Exchange's core tax credit population
by more than half. IHPS uses estimates developed by the Urban
Institute that indicate that there are over 2.3 million
Californians with income up to 400% FPL, and a half of them
have income under 200% FPL and would be eligible for BHP.
IHPS states that this reduction in the Exchange population
would greatly diminish the Exchange's ability to attract and
offer high-value health plans that would compete for three out
of four individual market purchasers.
Based on the 2009 California Health Interview Survey, a chart
prepared by the UCLA Center for Health Policy Research
indicates in the potential BHP eligible population 67%
self-report their health status as good or better, and 33%
indicate they have a chronic condition (any physical or mental
condition that limits daily activities). This compare to the
87% of the potential Exchange eligible population who
self-report their health status as good or better, and 20%
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indicate they have a chronic condition.
7)SUPPORT . The California Association of Health Insuring
Organizations (CAHIO) believes BHP is a better option compared
to the Exchange because it can offer a more affordable benefit
than the Exchange. CAHIO identifies many advantages to
establishing BHP as an extension of HFP, such as, MRMIB
already has a competitive health plan selection process,
appropriate plan oversight, it would reduce administrative
start-up expenses, and could maintain the family unit as
existing HFP plans are more likely to participate in BHP. The
Local Health Plans of California (LHPC) supports the BHP
because LHPC believes it will offer a better benefit at lower
cost to low-income working families, the BHP will provide
continuity and convenience of unified care for parents and
children who are in HFP, it will allow safety net providers
and their health plan networks to preserve their patient base
and revenue streams, and the BHP has the potential to raise
the level of compensation for those providers participating in
HFP and provide a more sustainable funding base.
8)SUPPORT IF AMENDED . The California Primary Care Association
requests amendments to ensure that FQHCs receive PPS
reimbursement in the BHP. The Western Center on Law and
Poverty (Western Center) supports this bill because they
believe, based on the Mercer study, that premiums and cost
sharing for this low-income group will be much lower than it
would be in the Exchange. However, Western Center believes
the BHP should be administered by DHCS or the Exchange in
order to provide seamless transitions for this population with
volatile income. The Service Employee International Union
requests amendments to house the BHP in the Exchange and
address adverse selection scenarios that could make the
Exchange or BHP pool unsustainable.
9)SEEKS AMENDMENTS . Health Access California has a strong
policy preference that BHP be operated by the Exchange.
Maternal and Child Health Access (MCH) requests an amendment
that this bill "shall not diminish the right of a woman to
pregnancy-related care under the Medi-Cal Program under
Welfare and Institutions Code sections 14132(u) and 14134.5."
MCH wants to preserve pregnancy related benefits and
protections on cost-sharing and due process for women with
income up to 200% FPL who qualify for Medi-Cal pregnancy
services. MCH raises questions about whether these women
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would be eligible for BHP for non-pregnancy services and if
so, questions, how the programs would coordinate. The
American Federation of State, County and Municipal Employees,
AFL-CIO (AFSCME) seeks amendments to put BHP in the Exchange.
AFSCME believes the Exchange will be undermined and have less
bargaining power without the BHP population, covering some,
but not all parents of HFP children further complicates
things, and that MRMIB has privatized (enrollment) providing
poor customer service.
10)OPPOSITION . The California Right to Life Committee opposes
any health care program that includes abortion and family
planning services with tax payer dollars, and any health care
programs that would include minors who could obtain these
services without parental notification or consent. The Orange
County Board of Supervisors thinks that as many individuals
and groups as possible should be served in a competitive,
private sector market and that government programs should
focus on serving our lowest income individuals who would
otherwise be unable to secure coverage.
11)POLICY QUESTIONS .
a) Should the impacts of pulling a significant federal
subsidy population out of the Exchange to create a separate
health coverage program be measured and monitored over
time? Mercer, Urban Institute, IHPS and others have
anticipated some of the potential impacts of creating a BHP
on the Exchange but there is no certainty in any of those
studies. Should California create a BHP it may be useful
to conduct an evaluation over a period of time after the
program has experience with enrollment, plan participation,
federal subsidies, etc., to determine the long-term
viability of the program and impact on the Exchange. A
sunset of the program could accompany the evaluation to
give policymakers an opportunity to revisit the utility of
the BHP.
b) Is MRMIB the best entity to administer the BHP? While
MRMIB has demonstrated many accomplishments establishing
and operating health coverage programs, there are
potentially greater advantages to locating the BHP at
either DHCS or the Exchange. At present, there is
uncertainty about the future of the HFP. A recent proposal
by the Governor would have transferred HFP to Medi-Cal to
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be operated as a Medi-Cal expansion. In addition federal
authorization of CHIP is time limited. There may be
advantages in leveraging purchasing power of the Medi-Cal
program or selective contracting of the Exchange that
should be taken into consideration.
c) Is there urgency to making a policy decision about the
BHP at this time? Federal rules are expected on the BHP
this fall which may help California evaluate with more
confidence the tradeoffs associated with implementing a
BHP.
REGISTERED SUPPORT / OPPOSITION :
Support
Local Health Plans of California (sponsor)
California Association of Health Insuring Organizations
California Association of Public Hospitals and Health Systems
California Chiropractic Association
Congress of California Seniors
Disability Rights Legal Center
Molina Healthcare of California
Planned Parenthood Affiliates of California
Santa Clara County
Opposition
American Federation of State, County and Municipal Employees,
AFL-CIO
California Right to Life Committee, Inc.
Orange County Board of Supervisors
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097