BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 28
AUTHOR: Hernandez and Steinberg
AMENDED: April 16, 2013
HEARING DATE: April 24, 2013
CONSULTANT: Bain
SUBJECT : California Health Benefit Exchange.
SUMMARY : Requires the Managed Risk Medical Insurance Board
(MRMIB) to provide the California Health Benefit Exchange (known
as Covered California) with the name, contact information and
spoken language of Major Risk Medical Insurance Program (MRMIP)
and Pre-Existing Condition Insurance Program (PCIP) subscribers
and applicants in order to assist Covered California in
conducting outreach. Requires Covered California to use the
information from MRMIB to provide a notice to these individuals
informing them of their potential eligibility for coverage
through Covered California or Medi-Cal. Requires the Department
of Health Care Services (DHCS) to designate Covered California
and county human services departments as qualified entities for
determining eligibility for accelerated enrollment (AE) under
Medi-Cal for children.
Existing law:
1.Requires the Department of Health Care Services (DHCS) to
exercise the federal Medicaid option to implement a program
for AE of children. Requires DHCS to designate a single point
of entry (SPE) as the qualified entity for determining
Medi-Cal eligibility. Defines "single point of entry" as the
centralized processing entity that accepts and screens
applications for benefits under the Medi-Cal Program for the
purpose of forwarding them to the appropriate counties.
2.Establishes the Major Risk Medical Insurance Program (MRMIP),
which is administered by the Managed Risk Medical Insurance
Board (MRMIB), to provide major risk medical coverage to
California residents who have been rejected for coverage by at
least one private health plan, or if the only private health
coverage that the applicant can secure would impose
substantial waivers or provide limited coverage or afford
coverage only at an excessive price.
3.Requires, under the Patient Protection and Affordable Care Act
Continued---
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(ACA), the federal Secretary of the Department of Health and
Human Services (DHHS) to establish a temporary high-risk
health insurance pool program to provide health insurance
coverage for eligible individuals until January 1, 2014 (known
as the Pre-Existing Condition Insurance Program or PCIP).
Existing state law requires PCIP to be managed by MRMIB.
4.Requires, under the ACA, the Secretary of DHHS to develop
procedures to provide for the transition of eligible
individuals enrolled in health insurance coverage offered
through a high-risk pool into qualified health plans offered
through Covered California.
5.Establishes, under regulations implementing the federal Health
Insurance Portability and Accountability Act of 1996 (HIPAA),
requirements relating to the protection of privacy of
protected health information. Permits a HIPAA covered entity
to use or disclose protected health information to the extent
that such use or disclosure is required by law and the use or
disclosure complies with and is limited to the relevant
requirements of such law.
6.Establishes Covered California in state government, and
specifies the duties and authority of Covered California.
Requires the Covered California board, in the course of
selectively contracting for health care coverage offered to
individuals and small employers through Covered California, to
seek to contract with health plans and insurers so as to
provide health care coverage choices that offer the optimal
combination of choice, value, quality, and service.
This bill:
1.Requires (MRMIB) to provide Covered California or its designee
with the name, addresses, email addresses, telephone numbers,
other contact information, and written and spoken language of
MRMIP and PCIP subscribers and applicants in order to assist
Covered California in conducting outreach to MRMIP and PCIP
subscribers and applicants.
2.Requires Covered California to use the information from MRMIB
to provide a notice to individuals informing the individual
that he or she may be eligible for reduced-cost coverage
through Covered California or no-cost coverage through
Medi-Cal. Requires the notice to include information on
obtaining coverage under those programs.
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3.Requires DHCS, commencing October 1, 2013, to designate
Covered California and its agents, and county human services
department as qualified entities for determining eligibility
for AE for children under Medi-Cal under the SPE. Requires a
qualified entity to grant AE if a complete eligibility
determination cannot be made for a child at the time of the
initial application.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. SB 28 makes two separate changes to
prepare for implementation of federal health care reform in
2014. The first change would update the state's AE in Medi-Cal
to conform to the new eligibility and enrollment systems being
established to implement federal health care reform.
Specifically, SB 28 would broaden the entities authorized to
grant AE to include counties and Covered California so that
children applying through either entity can receive AE. In
addition, continuing AE will ensure the state will meet the
federal ACA maintenance of effort requirement for children's
coverage that prevents states (until September 30, 2019) from
having eligibility standards, methodologies, or procedures
that are more restrictive than the eligibility standards,
methodologies, or procedures, in effect on the date of
enactment of the ACA.
The second change made by SB 28 would direct MRMIB to transfer
information about individuals enrolled in the MRMIP and PCIP
to Covered California so that Covered California can conduct
outreach to these individuals. Under federal privacy
regulations, a state law is needed to require MRMIB to
transfer this information. PCIP is scheduled to terminate at
the end of this year when Covered California opens, and the
nearly 16,000 individuals enrolled in PCIP will need a new
health coverage option. In addition, there are over 5,700
individuals enrolled in MRMIP. The Governor's 2013-14 Budget
Summary states that MRMIP will phase out with the
implementation of the ACA in 2014, although this phase-out is
not yet the subject of legislation. However, if MRMIP remains
operational, some MRMIP subscribers could receive better
coverage and potentially pay lower premiums in Covered
California. With the exception of calendar year 2013,
individuals in MRMIP pay premiums that are 25 percent above
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the rate for a comparable product in the private market.
Despite the high cost, MRMIP products all have a low annual
and lifetime limit. In addition, depending on income, many
MRMIP enrollees will likely be able to obtain more affordable
coverage with better benefits in the Covered California (where
premium and cost-sharing subsidies are available), and their
enrollment in Covered California coverage would reduce the
amount of state tobacco tax funding needed for MRMIP. SB 28
would require Covered California to use the information from
MRMIB to provide a notice to individuals informing the
individual that he or she may be eligible for reduced-cost
coverage through Covered California, or no-cost coverage
through Medi-Cal.
2.Accelerated enrollment and the single point of entry. AB 430
(Cardenas), Chapter 171, Statutes of 2001 and AB 442
(Committee on Budget), Chapter 1161, Statutes of 2002
established the single point of entry (SPE) and accelerated
enrollment (AE) for children in Medi-Cal. The SPE and AE were
established in part because the state provides two separate
children's health insurance programs (the Healthy Families
Program and Medi-Cal) with different entities making
eligibility determinations for each program.
Under the SPE, DHCS contracts with a vendor which receives
applications through the mail and on-line (via Health-e-App),
checks for current or prior Medi-Cal and public program
enrollment, reviews the application to see if it is complete,
screens the application for AE and forwards the application to
the counties for a full Medi-Cal eligibility determination.
The purpose of AE is to accelerate temporary, fee-for-service,
full-scope, Medi-Cal coverage for children under the age of 19
who are new to Medi-Cal, who applied for Medi-Cal through the
SPE and are likely eligible for Medi-Cal based on screening by
the SPE. AE is temporary coverage while the county human
services department makes a final determination of Medi-Cal
eligibility. Coverage under AE begins the first day of the
month of the date the SPE receives the application. Once the
county makes an eligibility determination, the county sends a
notice of action either approving or denying the application.
3.HIPAA and MRMIP and PCIP. Under federal HIPAA privacy
regulations, a HIPAA covered entity is prohibited from using
or disclosing protected health information without an
authorization that is valid, with specified exceptions. One
exception to this HIPAA prohibition against the disclosure of
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protected health information is if a HIPAA covered entity is
required to use or disclose protected health information by
law, and the use or disclosure complies with and is limited to
the relevant requirements of such law. SB 28 would place such
a requirement on MRMIB to transfer information about PCIP and
MRMIP subscribers and applicants to the Covered California for
purposes of having the Covered California conduct outreach to
these individuals.
4.Related legislation. SB X1 1 (Hernandez and Steinberg)
implements various provisions of the ACA regarding Medi-Cal
eligibility and program simplification including the use of
the MAGI and expansion of eligibility in the Medi-Cal program.
SB X1 1 is currently in the Assembly Health Committee. AB X1 1
(John A. Pérez) is identical to SB X1 1. AB X1 1 is currently
in the Senate Health Committee.
SB 249 (Leno) permits DPH to share health records involving the
diagnosis, care, and treatment of a beneficiary enrolled in
federal Ryan White Act-funded programs who may be eligible for
services under the ACA, with "qualified entities," as defined.
Permits qualified entities to share health records relating
to persons diagnosed with HIV/AIDS with DPH for the purpose of
enrollment without disruption in Medi-Cal, the bridge program,
Medicaid expansion programs, and any insurance plan certified
by Covered California. SB 249 is set to be heard in the Senate
Health Committee on April 24, 2013.
AB 50 (Pan) implements various provisions of the ACA related
to allowing hospitals to make a preliminary determination of
Medi-Cal eligibility, allows forms for renewal to be
prepopulated with existing available information and requires
the process for Medi-Cal enrollees to choose a plan to be
coordinated with the Covered California. AB 50 is currently
in the Assembly Health Committee.
5.Prior legislation. AB 714 (Atkins) of the 2011-12 session
would have required notices of health care eligibility be sent
to individuals who are enrolled in, or who cease to be
enrolled in, publicly-funded state health care programs. AB
714 was held on the Senate Appropriations Committee suspense
file.
AB 792 (Bonilla), Chapter 851, Statutes of 2012 establishes
notification requirements about the availability of
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reduced-cost coverage available in the Covered California 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, and for an individual who ceases
to be enrolled in health coverage through a health plan or
health insurer.
6.Support. California Children's Health Coverage Coalition -
comprised of the 100% Campaign (a collaborative effort of The
Children's Partnership, Children Now, and Children's Defense
Fund-California), California Coverage and Health Initiatives,
and United Ways of California - supports this bill to update
the state's AE program for children applying for coverage to
conform to the new eligibility and enrollment systems being
established to implement federal health care reform.
Supporters argue this bill preserves a critical access point
for children entering Medi-Cal by broadening the entities
authorized to grant AE and by requiring the state to make
necessary changes in order to offer more affordable coverage
through Covered California.
SUPPORT AND OPPOSITION :
Support: 100% Campaign
The Children's Partnership
Children Now
Children's Defense Fund-California
California Coverage and Health Initiatives
California Primary Care Association
United Ways of California
Western Center on Law & Poverty
Oppose: None received
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