BILL ANALYSIS Ó
AB 422
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Date of Hearing: May 7, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 422 (Nazarian) - As Introduced: February 15, 2013
SUBJECT : Health care applications.
SUMMARY : Adds information regarding health care coverage
available through the California Health Benefit Exchange
(Exchange), to notifications on applications for the School
Lunch Program, effective January 1, 2014. Information from the
application may also be used to determine eligibility for the
Healthy Families Program (HFP), county or local-sponsored
programs, as defined and as applicable, if the parent has
granted consent when a child does not meet eligibility
requirements for Medi-Cal.
EXISTING LAW :
1)Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), which provides
comprehensive health benefits to low-income children, their
parents or caretaker relatives, pregnant women, elderly, blind
or disabled persons, nursing home residents, and refugees who
meet specified eligibility criteria.
2)Requires the Department of Education to administer the
National School Lunch program, which provides free meals to
children with family incomes at or below 130% of the federal
poverty level (FPL) and reduced price meals to children with
family incomes at or below 185% of FPL.
3)Establishes the Children's Health Insurance Program (CHIP)
that provides health coverage to children in families that are
low income, but with incomes too high to qualify for Medicaid.
After January 1, 2013, begins a transition of California's
CHIP from the HFP, administered by the Managed Risk Medical
Insurance Board (MRMIB) to Medi-Cal.
4)Permits information from an application for the School Lunch
Program to be used to determine eligibility for HFP and any
other county- or local-sponsored programs, as defined and as
applicable, if the parent has granted consent when a child
does not meet eligibility requirements for Medi-Cal.
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5)Requires, effective January 1, 2014, under the federal Patient
Protection and Affordable Care Act (ACA), an individual to
have the option to apply for state subsidy programs, which
include the state Medicaid program, the state's CHIP,
enrollment in a qualified health plan (QHP) through a state
exchange, and a Basic Health Plan (BHP), if there is one,
either in person, mail, online, telephone, or other commonly
available electronic means.
6)Under the ACA, effective in 2014, requires individuals to
maintain health insurance or pay a penalty, with exceptions
for financial hardship (if health insurance premiums exceed 8%
of a household's adjusted gross income), religion,
incarceration, and immigration status.
7)Creates the Exchange, known as Covered California, as an
independent state entity governed by a five-member board, to
be a marketplace for Californians to purchase affordable,
quality health care coverage, for those qualified to claim
advance payment of premium tax credits and obtain cost-sharing
subsidies and as a way to meet the personal responsibility
requirements of the ACA.
8)Under the ACA, effective January 1, 2014, requires development
of a single, accessible standardized application for the
Exchange subsidies, the state Medicaid program, and the CHIP
program to be used by all eligibility entities and establishes
a process for developing and testing the application
9)Under the ACA, effective January 1, 2014, requires states to
expand and simplify Medicaid eligibility (Medi-Cal in
California) by expanding coverage to former foster youth up to
age 26, eliminating the asset test for families, children, and
non-disabled persons under age 65, establishing a new
methodology for counting income in Medi-Cal, known Modified
Adjusted Gross Income (MAGI).
FISCAL EFFECT : None
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, current law
authorizes school districts to provide families with
notifications about the availability of school lunch programs.
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These notifications also inform parents about the
availability of low-cost health care coverage for children.
The ACA offers individuals and families with additional health
care coverage options, including expanded Medi-Cal coverage
and tax subsidies through the Exchange. The author states
that this bill will update current information provided to
parents about the availability of low-cost health care
coverage to include information about the new Exchange. The
author points out that multiple health problems may occur in
the absence of health insurance, consequently affecting a
child's ability to learn and parents' ability to work. In
addition, children who have access to medical, dental, and
vision care often experience a greater sense of well-being.
According to the Los Angeles Unified School District (LAUSD),
this translates into improved school attendance and higher
academic achievement.
The author cites the California Simulation of Insurance Markets
(CalSIM) Study, conducted by the UCLA Center for Health Policy
Research and the UC Berkeley Labor Center, which estimates
that 1.42 million adults will be eligible for coverage under
the new Medi-Cal expansion. An additional 2.6 million adults
will be eligible for tax credits to purchase health insurance
through California's new insurance marketplace, Covered
California. Although children and families may be eligible
for these new coverage options, many parents are unaware of
health coverage options. The CalSIM model includes two
scenarios to estimate take-up rates in Medi-Cal and Covered
California, a base model which assumes current individual and
market behaviors, and an enhanced model which assumes
additional outreach, enrollment, and simplification measures
are in place. For example, under the base scenario 900,000
adults under 65 are predicted to enroll into Medi-Cal whereas
under the enhanced scenario with a more aggressive enrollment
and outreach strategy enrollment would reach 1.4 million by
2014. The author argues that by updating information about
these new coverage options parents would be better informed in
order to take advantage of the health care coverage.
2)BACKGROUND . AB 59 (Cedillo), Chapter 894, Statutes of 2001,
established a statewide pilot project to expedite enrollment
into Medi-Cal for children receiving free lunches through the
National School Lunch Program, referred to as "EE." Five
school districts implemented EE in 73 schools for the 2003-04
school year. The current EE process is structured to expedite
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Medi-Cal enrollment for children who qualify for free school
lunches. Under the program, if a child is determined
ineligible for Medi-Cal due to income but is potentially
eligible for HFP the county sends an HFP application to the
child's parents, who must complete the application process for
that program separately. The school's EE coordinator reviews
School Lunch Program applications and determines whether a
child appears eligible for Medi-Cal. If a child is determined
to be eligible for EE, the application is forwarded to the
county for final determination when there is written consent
from the parents. The child is deemed temporarily eligible
for full-scope, no-cost Medi-Cal and the county has five
working days to send the family a card for temporary
enrollment. The county then sends a follow-up form asking the
parent for additional information required for a full
application review. If the child is subsequently determined
ineligible for Medi-Cal, the temporary enrollment is
terminated and the county sends the parents an application for
the HFP.
SB 1196 ( Cedillo), Chapter 729, Statutes of 2004, revised the
process to permit the information from the School Lunch
Program to also be used to actually determine eligibility for
HFP and any other county- or local-sponsored programs, if the
parent has granted consent. SB 1196 also requires a county to
forward a School Lunch Program application and any specified
supplemental forms to the HFP or a county or local-sponsored
health insurance program, if an applicant is determined to be
ineligible for the full-scope, no-cost Medi-Cal. When a child
is not eligible for full-scope, no-cost Medi-Cal, SB 1196
further requires the county to notify the parent or guardian
that their child is ineligible for Medi-Cal and that the
application has been forwarded to the HFP or a county- or
local-sponsored health insurance program. An example of how
this has been implemented is the LAUSD Parent Handbook that
includes information about student health insurance, entitled
the LAUSD Children's Health Access and Medi-Cal Program
(CHAMP), and informs parents that it can assist them with
enrolling their children into no-fee or low-cost health
insurance programs, provides a toll-free CHAMP HELPLINE for
enrollment assistance, a Website, and other referrals to
information.
3)ACA . The ACA increases access to health insurance beginning
in 2014 through a coordinated system of "insurance
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affordability programs," including Medicaid, CHIP, subsidies
through advanced payment of premium tax credits for coverage
provided through new Exchanges, and optional state-established
BHPs. The ACA, implementing guidelines, and proposed rules
issued by the Centers for Medicare and Medicaid Services (CMS)
to date, advance the federal vision of a simplified,
integrated enrollment system for all insurance affordability
programs. It is based on a system that is technology-driven
and relies on electronic data matching to the greatest extent
possible. The rules effectuate the ACA's transformative
change to Medicaid eligibility rules, enrollment, and renewal
processes, which will have significant impacts on applicants,
enrollees, and state Medicaid agencies. This is equally true
on the Exchange side.
a) Covered California . The California Exchange was
established in 2010 by AB 1602 (John A. Pérez), Chapter
655, Statutes of 2010, and SB 900 (Alquist), Chapter 659,
Statutes of 2010. Through the Exchange, now called Covered
California, people with incomes between the Medi-Cal
threshold and up to 400% FPL are eligible for subsidies and
cost-sharing reductions. Exchanges will not be insurers
but will provide eligible individuals and small businesses
with access to QHPs in a comparable way.
b) The California Healthcare Eligibility, Enrollment and
Retention System (CalHEERS) . CalHEERS is a procurement
conducted jointly by the Exchange, DHCS, and MRMIB to build
the Information Technology (IT) system to support the
consumer application and enrollment process at the
Exchange. The portal will offer eligibility determinations
for both Medi-Cal and federally subsidized Covered
California 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. Enrollment will begin by October 2013, effective
January 1, 2014. The CalHEERS business functions include
interfacing with the Medi-Cal eligibility data system.
Covered California is in the process of establishing an
Assister's Program that will include assister enrollment
entities (AEEs) and individual entities. AEEs are entities
and organizations eligible to be trained and registered to
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provide in-person assistance to consumers to help them
apply for Covered California programs, particularly
entities that have access to Covered California's targeted
population. Individual assisters are individuals who are
employed, trained, certified, and linked to AEEs to provide
in-person assistance to consumers and help them apply for
Covered California programs and are individuals who can
provide assistance in a culturally and linguistically
appropriate manner to consumers. According to a recent
stakeholder webinar conducted by Covered California on the
assisters program (March 14, 2013 Stakeholder Webinar), the
proposed compensation for AEEs is $58 per new enrollment
into Covered California, including a person who was a
MAGI-eligible Medi-Cal enrollee but upon redetermination
qualifies for Covered California and when a currently
enrolled person adds a new dependent. Compensation for
annual renewal is $25. The funding source for the initial
application is the federal funding from the Level II
Establishment Federal Grant and renewals will be funded as
operating costs from self-sustainability funds. A list of
eligible entities will be established and Covered
California is looking to all opportunities to build a
robust network of In-Person Assisters, particularly those
who have prior experience with healthcare and providing
application assistance. School districts are listed among
the recommended proposed entities.
c) Public Awareness. An April 2013 Health Tracking Poll
from the Kaiser Family Foundation (KFF), found that much of
the public remains confused about the ACA. Four in 10
Americans (42% were unaware that the ACA is still the law
of the land, including 12% who believe the law has been
repealed by Congress, 7% who believe it has been overturned
by the Supreme Court and 23% who don't know whether or not
the ACA remains law. The poll further found that about
half of the public said they do not enough information
about the health reform law to understand how it will
impact their own family, share that rises among the
uninsured and low-income households. Covered California
has a budget of about $290 million to reach 5.3 million
Californians. Slightly less than half the money is going
into television ads and other traditional media buys. Most
of the remaining funds are going into social media, data
mining and on-the ground outreach.
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4)HFP . The federal CHIP provides health coverage to children in
families that are low-income, but with incomes too high to
qualify for Medicaid. Until January 1, 2013, California's
CHIP was the HFP, administered by the MRMIB and provided
health insurance for about 863,000 children up to age 19, in
families with incomes above the thresholds needed to qualify
for Medi-Cal but below 250% of the FPL. (The FPL for 2013 is
$23,550 in annual income for a family of four). Under CHIP,
states have the option to create a stand-alone program such as
HFP or expand its Medicaid program to include these children
in families with higher income. In both options, the federal
matching ratio is 65% federal funds to 35% State Funds. As
originally implemented in California, Medi-Cal was expanded to
cover infants under age one in families with income under 200%
of FPL, children aged one to five in families with income up
to 133% FPL, and children age six to 18 in families with
income up to 100% FPL. A child of any age in a family with
income over the threshold but up to 250% FPL was covered by
HFP.
As part of the eligibility simplification, the ACA, effective
calendar year 2014, replaces many of the complex categorical
groupings and limitations in the Medicaid program. The ACA
requires, by January 1, 2014, the state's Medicaid program to
cover all children in families with income up to 133% FPL,
thereby eliminating discontinuity based on the age of the
child. In effect, this required California to transition
children in families with income between 100% FPL and 133% FPL
between age six and 19 to Medi-Cal from HFP by 2014. The ACA
also gives the states authority to integrate CHIP into the
exchanges or retain as a stand-alone program.
The Legislature adopted a modified version of this proposed
transition. AB 1494 (Committee on Budget), Chapter 28,
Statutes of 2012, enacted a transition of approximately
860,000 HFP subscribers to the Medi-Cal Program beginning no
sooner than January 1, 2013, in four Phases throughout 2013.
Children in HFP will transition into Medi-Cal's new optional
Targeted Low Income Children's Program covering children whose
family income is up to and including 250% of FPL. Phase 1
began January 1, 2013, and is continuing through May 1, 2013
and includes approximately 100,000 children. Phase 2 began
April 1, 2013, and includes approximately 240,000 children.
Phase 3 is scheduled to begin August 1, 2013, and will
transition approximately 111,000 children and Phase 4 is
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scheduled for September 2013 and covers approximately 38,000
children. Each phase is dependent on federal approval which
has been received for Phases 1 and 2 only.
5)Auto-Enrollment . The genesis of the Cedillo bills (AB 59 and
SB 1196) was: a) the relatively high numbers of success of
auto-enrollment strategies with other public and private
programs; and, b) the high numbers of children that remained
eligible but unenrolled in CHIP/HFP. According to a
Commonwealth Fund, June 2006 report, "Automatically Enrolling
Eligible Children and Families into Medicaid and SCHIP:
Opportunities, Obstacles, and Options for Federal
Policymakers," 62% of uninsured children and two-thirds of
uninsured low-income parents qualified for publicly funded
health coverage but were not enrolled. According to the
Commonwealth Fund 2006 report, building on the remarkable
success of auto-enrollment strategies in other programs, many
children's advocates and state policy makers have made efforts
to place children into Medicaid and CHIP based on their
families' receipt of other means tested benefits, such as
assistance provided under the National School Lunch Program,
the Special Supplemental Program for Women, Infants, and
Children, or the Food Stamp Program. A significant hurdle,
highlighted in the report, were the limitations and
incompatibility of the computer systems used by different
public benefit programs often necessitating manually
processing paper applications and verifications. The report
points to this as being a particular hurdle in California with
information divided among various systems and among the 58
counties. One recommendation called for enhanced IT systems
and infrastructure to allow automated queries, interfaces
between programs and systems, and facilitating
auto-enrollment.
6)SUPPORT . The California Pan-Ethnic Health Network (CPEHN),
sponsor of this bill, worked with researchers last year from
the California Program on Access at UC Berkeley on a series of
group interviews with low-income, racial, and ethnic
populations, including adults with Limited English
Proficiency, to learn how information about health coverage is
obtained, shared, and acted upon. The focus groups that CPEHN
helped to conduct provided insight into how communities of
color understand the benefits of the ACA and the barriers they
face enrolling in current programs. The group interviews
found that some racial and ethnic groups are more aware of the
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benefits under the ACA than others. For example, participants
from Latino and African-American communities had heard of
certain aspects of the ACA, such as the mandates on
individuals to purchase insurance and employers to offer
coverage. Some also knew of the coverage expansion for
low-income adults. However, Native American and Asian
respondents were less informed and felt less comfortable about
their knowledge of the ACA. Focus group participants
suggested that multiple mediums should be utilized to reach
their communities with accurate, accessible, and
linguistically appropriate messages. Participants noted that
community organizations, schools, and trusted community
institutions such as churches, child care centers, libraries,
and community health centers also need to play a role in
educating and enrolling communities of color. CPEHN concludes
that this bill provides parents with critical, updated
information about new health care options.
The California Chiropractic Association (CCA) states in support,
that the notification provided by this bill is essential to
the implementation of the ACA. According to this supporter,
many Californians are still uncertain about the steps they
need to take in order to comply with the new requirements
contained within the ACA. CCA further states in support that
it believes that affordable access to health insurance will
help reduce overall costs within the health care delivery
system by encouraging early treatment interventions and by
potentially reducing chronic illnesses that could have been
prevented with better access to care. The California Teachers
Association (CTA) also in support, states that it believes
that healthy kids learn better. On the other hand, CTA
argues, health problems are likely to escalate due to lack of
health insurance, affecting a child's ability to learn and the
parent's ability to work. CTA further states that although
children and families may be eligible for this new coverage
option, many parents are unaware. Health Access California
states in support that reaching out to individuals and
families who are likely to qualify for free or subsidized
coverage is critical to its goal of achieving massive
enrollment on day one. Children who qualify for free or
reduced lunch are extremely likely to qualify for health
coverage.
7)RELATED LEGISLATION . AB 1233 (Chesbro), pending in the
Assembly Appropriations Committee, authorizes
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federally-recognized American Indian tribes and tribal
organizations to use CalHEERS to facilitate Medi-Cal
eligibility determinations using CalHEERS as a Medi-Cal
Administrative Activities-specific activity.
8)PREVIOUS LEGISLATION .
a) AB 970 (De León) of 2012 would have authorized, upon
consent of the applicant, information provided for the
single state application for health subsidy programs to be
used to initiate a simultaneous application for the
California Work Opportunity and Responsibility to Kids
(CalWORKs) or the CalFresh programs and would have required
the California Health and Human Services Agency to convene
a work group of stakeholders, as specified, to consider the
feasibility, costs, and benefits of integrating application
and renewal processes for additional human services and
work support programs with the single state application for
health subsidy programs. SB 970 was vetoed by Governor
Brown stating this bill is well-intentioned but overly
prescriptive in its requirements. Codifying another
workgroup and requiring another report are not necessary.
The Governor continued that his Administration has worked
and will continue to work with the Legislature and
stakeholders in transparent and cooperative ways to
implement the requirements of the ACA.
b) AB 792 (Bonilla), Chapter 851, Statutes of 2012,
establishes notification requirements about the
availability of reduced-cost coverage available in the
Exchange and no-cost coverage available in Medi-Cal to an
individual filing a dissolution or nullity of marriage,
divorce or separation, or petitioning for adoption or for
an individual who ceases to be enrolled in health coverage
through a health plan or health insurer.
c) AB 714 (Atkins) of 2011 would have established
notification requirements to individuals who are enrolled
in, or who cease to be enrolled in, publicly funded state
health care programs, would require an application for
coverage to be made on their behalf through the Exchange,
and would allow individuals to decline health care coverage
in a manner to be prescribed by the Exchange. AB 714 was
held on suspense in the Senate Appropriations Committee.
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d) AB 1062 and SB 900 establish the structures and duties
of the Exchange to comply with the mandate on the states.
e) SB 1196 permits information from an application for the
School Lunch Program to be used to determine eligibility
for HFP and any other county- or local-sponsored programs,
as defined and as applicable, if the parent has granted
consent when a child does not meet eligibility requirements
for Medi-Cal.
f) AB 59 provides expedited Medi-Cal eligibility to
children participating in the free meals School Lunch
Program and their parents, if they chose to participate in
the Medi-Cal program and authorized the release of
information on their school lunch application.
g) SB 493 (Sher), Chapter 897, Statutes of 2001, implement
a simplified eligibility process as part of the Food Stamp
Program to expedite the enrollment of individuals and
families in the Medi-Cal and HFP.
9)POLICY COMMENT .
a) Horizontal Integration . It is apparent that the
experiences and recommendations reflected in the
Commonwealth Report from 2006 about the challenges of auto
enrollment in CHIP influenced the drafting and
implementation of the ACA. The coverage expansion is built
around a simplified, streamlined single application process
with automated enrollment and verification systems. The
ACA provides substantial funding to states to upgrade their
Medicaid IT systems for this purpose is establishing a
national database hub and will allow states to use Internal
Revenue Service data for income verification for the first
time. However, the massive IT undertaking needed to
establish the state based Exchanges (or the federal
exchange for states that chose not to develop a state-based
exchange) has put the idea of auto-enrollment from one
program to another on hold for the present. At the state
level, Covered California is planning to include a question
on the application asking if someone in the household would
like a referral to a local agency for more information
about CalWorks or CalFresh. Ideally once the IT systems
are in place and enrollment has begun, the next step will
be to coordinate with other income-based public programs.
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This bill is a small step towards this goal by requiring
information about the new coverage opportunities to be
included in the School Lunch Program application.
b) HFP . This bill adds provisions to a notification that
includes information regarding enrollment in HFP. This
language could become obsolete once all children have
transitioned to Medi-Cal. However, as the transition will
not be concluded until after September 2013, and is
dependent on additional federal approval, it is premature
to make changes in the HFP provisions.
REGISTERED SUPPORT / OPPOSITION :
Support
California Pan-Ethnic Health Network (sponsor)
100% Campaign
American Federation of State, County and Municipal Employees,
AFL-CIO
California Chiropractic Association
California Coverage and Health Initiatives
California Optometric Association
California Primary Care Association
California School Employees Association
California Teachers Association
Children Now
Children's Defense Fund-California
Children's Partnership
Health Access California
National Association of Social Workers - California Chapter
PICO California
United Ways of California
Western Center on Law and Poverty
Numerous individuals
Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097