BILL ANALYSIS �
AB 50
Page 1
ASSEMBLY THIRD READING
AB 50 (Pan)
As Amended May 13, 2013
2/3 vote. Urgency
HEALTH 13-5 APPROPRIATIONS 12-5
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|Ayes:|Pan, Ammiano, Atkins, |Ayes:|Gatto, Bocanegra, |
| |Bonilla, Bonta, Chesbro, | |Bradford, |
| |Gomez, | |Ian Calderon, Campos, |
| |Roger Hern�ndez, | |Eggman, Gomez, Hall, |
| |Lowenthal, Mitchell, | |Ammiano, Pan, Quirk, |
| |Nazarian, V. Manuel | |Weber |
| |P�rez, Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Maienschein, Mansoor, |Nays:|Harkey, Bigelow, |
| |Nestande, Wagner, Wilk | |Donnelly, Linder, Wagner |
| | | | |
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SUMMARY : Enacts provisions relating to the federal Patient
Protection and Affordable Care Act (ACA) regarding presumptive
eligibility (PE) by hospitals, enrollment in Medi-Cal managed
care plans, and the collection of demographic data on the
standardized application for state health subsidy programs.
Contains an urgency clause to ensure that the provisions of this
bill go into immediate effect upon enactment.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor and absorbable costs, potentially offset by
savings from federal matching funds being made available
earlier.
COMMENTS : According to the author, this bill is necessary for
enactment of provisions needed to implement the ACA, but that
may need to be considered outside of the Special Session in
order to allow adequate time for implementation or may need a
delayed implementation date so as not to delay the provisions
and systems requirements that must be operative as early as
October 2013. The author points out in that former category is
the ACA provision that authorizes states to allow hospitals to
make a determination of PE and is not currently included in AB 1
X1 (John A. P�rez) and SB 1 X1 (Ed Hernandez and Steinberg).
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The author explains that the Centers for Medicare and Medicaid
Services (CMS) issued draft preliminary regulations in January
2013 to implement this section of the ACA, but they are not yet
final. In the latter category, the author points to the repeal
of existing law applicable to a time when families were required
to apply for Medi-Cal in-person at the county social services
office. These provisions require the applicant to attend an
in-person presentation regarding enrollment into managed care
and will be obsolete when new Medi-Cal and plan choice
mechanisms are available. Finally, the author states this bill
requires certain demographic data be included as optional
questions in the new simplified application process that will be
used to implement the ACA, but not until January 1, 2015. The
author states that in order to meet the requirements of the ACA
and for the new system to be operational by October 1, 2013, a
decision was made to omit these items from the initial system
design. However, the author argues, this demographic
information will be crucial and therefore should begin to be
collected in the future. The author points out that it will be
needed to assess whether outreach and enrollment strategies to
target certain populations are needed. This data will also be
crucial in identifying and reducing health disparities.
The ACA establishes a number of requirements regarding the
eligibility and enrollment process with the goal of creating a
consumer-friendly, streamlined, and coordinated application
process. CMS regulations require state Medicaid and Children's
Health Insurance Program agencies to develop online single
streamlined applications, and build or modernize their
eligibility systems to implement Modified Adjusted Gross Income
eligibility rules and facilitate coordination among insurance
affordability programs, all of which need to incorporate
electronic data sources and verification procedures. Federal
regulations require that individuals must not be required to
provide additional information or documentation unless
information cannot be obtained electronically or the information
obtained electronically is not reasonably compatible with
self-attested information. Federal law does allow states the
option of asking voluntary demographic questions.
The California Health Benefit Exchange (Exchange), now known as
Covered California, was established in 2010 by AB 1602 (John A.
P�rez), Chapter 655, Statutes of 2010, and SB 900 (Alquist),
Chapter 659, Statutes of 2010. Through the Exchange people with
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incomes up to 400% of the federal poverty level (FPL) are
eligible for advanced payment of premium tax credits, subsidies,
and cost sharing reductions, depending on their income. The ACA
requires states to have a single streamlined application for
Exchange subsidies, their Medicaid programs, and their
Children's Health Insurance Program. Covered California and the
Department of Health Care Services (DHCS) are joint program
sponsors of the California Health and California Healthcare
Eligibility, Enrollment, and Retention System (CalHEERS), which
is the Information Technology system running both the online
application for the Exchange, Medi-Cal, and Access for Infants
and Mothers program and also the phone service center functions.
Following extensive review and stakeholder comment and input,
Accenture was hired through a solicitation process for the
design, development, and deployment of CalHEERS. The portal
will offer eligibility determinations for both Medi-Cal and
federally subsidized coverage through the Exchange. It will
allow enrollment through multiple access points including mail,
phone, and in-person applications. It is guided by a "no wrong
door" policy that is intended to ensure the maximum number of
Californians obtain coverage appropriate to their needs.
Eligibility and enrollment functions will be released in
September of 2013 in order to begin enrollment by October 2013,
effective January 1, 2014. The CalHEERS business functions
include interfacing with the Medi-Cal eligibility data system.
It will also have the capacity to be a secure interface with
federal and state databases in order to obtain and verify
information necessary to determine eligibility. With regard to
individuals who are eligible for Covered California, it will
allow those eligible for subsidies to compare and select a
qualified health plan. According to an April 8, 2013, CalHEERS
Project and Usability Update, the project has prioritized
features to maximize enrollment, with administrative and
late-breaking capabilities scheduled for later. Among those
capabilities deferred is the ability of a person who is deemed
eligible for Medi-Cal to make a plan choice. This bill repeals
the existing Medi-Cal health care options program in 2015, by
which time the capability will be operative.
Currently, Medi-Cal enrollees are sent a form to choose a plan
after they become eligible or if they have been converted from a
fee-for-service (FFS) category to a mandatory enrollment
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category. If a Medi-Cal eligible person is required to enroll
in Medi-Cal Managed Care and does not choose a plan, they are
assigned by default according to a formula developed by DHCS.
If the enrollee is converting from FFS, before applying the
formula, DHCS attempts to link the enrollee with the plan that
includes the existing primary care provider in its network.
Traditionally between 30% and 40% make a plan choice.
CMS issued one of multiple sets of proposed regulations
governing Exchanges and the Medicaid program on January 22,
2013, and requested comments be submitted by February 13, 2013.
These proposed regulations cover, among other provisions, PE
determined by hospitals. The regulations provide that the
states must provide Medicaid during a PE period to individuals
determined to be eligible by a qualified hospital, on the basis
of preliminary information. The regulations further provide
that states may place other limitations on the services and time
period applicable to PE for children, pregnant women, parents
and caretaker relatives, and other eligible adult services, such
as breast and cervical cancer services. The regulations also
allow states to establish standards for qualifying hospitals and
require states to take action to disqualify hospitals if the
hospital is not meeting the standards or is not capable of
making PE determinations in accordance with applicable state
policies and procedures.
The Western Center on Law & Poverty (WCLP) supports this bill
because it helps bring California's Medi-Cal eligibility system
into the 21st Century in many important ways. WCLP states that
the provisions allowing hospitals to conduct PE makes sense
because hospitals will be able to help uninsured consumers
enroll in coverage when they receive services in the hospital
but do not have health coverage, and that this will help provide
a payer source for the hospital and get enrollees the coverage
for which they are eligible. WCLP also supports the provisions
that repeal the existing outdated method for plan choice in
Medi-Cal because CalHEERS will provide an online portal for
Medi-Cal, and the Exchange. Finally, WCLP supports the
provisions of this bill which include voluntary demographic
questions on the health care coverage application because
collecting race, ethnicity, sexual orientation, language, and
gender identity data is important for tracking health
disparities.
On August 16, 2012, Governor Brown submitted a letter to the
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President Pro Tempore of the Senate and the Speaker of the
Assembly informing them of his plan to call a Special Session in
the beginning of the next legislative session to continue the
work of implementing the ACA. On January 24, 2013, Governor
Brown issued a proclamation to convene the Legislature in
Extraordinary Session (also known as Special Session) to
consider and act upon legislation necessary to implement the ACA
in the areas of California's private health insurance market,
rules and regulations governing the individual and small group
market, California's Medi-Cal program, changes necessary to
implement federal law, and options that allow low-cost health
coverage through Covered California to be provided to
individuals who have income up to 200% of the FPL. AB 1 X1 and
SB 1 X1 address the second of the three areas identified in the
Governor's proclamation. AB 2 X1 (Pan) and SB 2 X1 (Ed
Hernandez) address the insurance market reforms, and SB 3 X1 (Ed
Hernandez) addresses the option of low-cost health coverage.
These bills will become effective 60 days after the adjournment
of the Special Session.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
FN: 0000747