BILL ANALYSIS �
AB 617
Page 1
Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 617 (Nazarian) - As Amended: April 15, 2013
Policy Committee: HealthVote:13-6
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill establishes, as required by federal law, appeal rights
and procedures for an applicant or enrollee who receives an
adverse action, decision, or inaction by the California Health
Benefit Exchange (known as Covered California). Specifically,
this bill:
1)Applies to enrollment, eligibility, or ineligibility for a
state health subsidy program, advance payment of the premium
tax credits (APTC), and cost-sharing reductions, and the
amount of the APTC or cost-sharing or eligibility for
affordable plan options.
2)Includes the right to appeal the determination of an exemption
from penalties for failing to meet minimum standards for
obtaining health care coverage and failure to provide timely
notices as specified.
3)Requires Covered California to contract with the Department of
Social Services (DSS) for this purpose.
FISCAL EFFECT
1)Major costs, in the tens of millions of dollars, for the DSS
State Hearings Division to modify current appeals system and
increase staff. Actual costs are dependent on caseload with
an assumption of a 2.5% appeal rate. Potentially significant
costs for the Department of Health Care Services (DHCS),
(Managed Risk Medical Insurance Board (MRMIB) and Covered
California to coordinate with DSS.
2)Potential GF offsets from federal grant funding for Covered
AB 617
Page 2
California (through the end of 2014), health plan fees, and
federal matching funds for Medi-Cal and Access for Infants and
Mothers (AIM) programs.
COMMENTS
1)Rationale . This bill seeks to establish an equitable notice
and "no wrong door" appeals procedure for both Medi-Cal and
Covered California determinations, which includes
determinations based on new Modified Adjusted Gross Income
(MAGI) rules. The existing DSS fair hearing process serves as
the appeals entity in this bill. Based on changes in state
and federal law, eligibility and access to public programs
should be more streamlined. By using the existing appeals
procedure through DSS, this bill implements a statewide
approach for seamless enrollment so that no matter where a
consumer applies, there is a defined process in place for next
steps if an appeal is needed.
2)Efficiency, Fairness, Cost-effectiveness . The Western Center
on Law and Poverty, this bill's sponsor, argues costs would be
allocated between programs (Medi-Cal, AIM, and Covered
California) and Covered California costs are paid by a federal
grant through the end of 2014. This bill leverages existing
systems in order to provide cost-effective and efficient
compliance with federal law. Further, Western Center notes
appeal rights should be in statute rather than regulation.
Although Covered California has rulemaking authority, Western
Center asserts due process rights are properly placed in
statute, consistent with existing appeals provisions for
Healthy Families, AIM, and Medi-Cal. Additional details could
be placed in regulation.
3)Related legislation . AB 2 X1 (Pan) and SB 2 X1 (Ed Hernandez)
enact substantially similar provisions to implement the
Affordable Care Act (ACA) insurance provisions related to
health insurance regulated under the Insurance Code and the
Health and Safety Code, respectively. Both bills have passed
both houses of the legislature and will soon be on the
Governor's desk.
AB 1 X1 (John A. P�rez) and SB 1 X1 (Ed Hernandez and
Steinberg) implement various provisions of the ACA
regarding Medi-Cal eligibility and program simplification
including the use of MAGI and Medi-Cal eligibility
AB 617
Page 3
expansion. AB 1 X1 is pending in the Senate; SB 1 X1 is
pending in the Assembly.
SB 3 X1 (Ed Hernandez) requires Covered California to
establish a "bridge" plan product by contracting with
Medi-Cal managed care plans for individuals losing Medi-Cal
coverage (for example, because of an increase in income),
the parents of Medi-Cal children, and individuals with
incomes below 200% of the federal poverty level (FPL). SB 3
X1 is pending referral in the Assembly.
SB 28 (Ed Hernandez and Steinberg) implements various ACA
provisions regarding Medi-Cal eligibility and program
simplification. SB 28 is pending in Senate Appropriations
Committee.
AB 50 (Pan) requires DHCS to establish a process to allow
hospitals to make a preliminary determination of a person's
eligibility for Medi-Cal. AB 50 is pending in Assembly
Health Committee.
Analysis Prepared by : Debra Roth / APPR. / (916) 319-2081