BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 28| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 28 Author: Hernandez (D) Amended: 5/13/13 Vote: 21 SENATE HEALTH COMMITTEE : 9-0, 4/24/13 AYES: Hernandez, Anderson, Beall, De León, DeSaulnier, Monning, Nielsen, Pavley, Wolk SENATE APPROPRIATIONS COMMITTEE : 5-0, 5/6/13 AYES: De León, Hill, Lara, Padilla, Steinberg NO VOTE RECORDED: Walters, Gaines SUBJECT : California Health Benefit Exchange SOURCE : Author DIGEST : This bill requires the Managed Risk Medical Insurance Board (MRMIB) to provide the California Health Benefit Exchange (known as Covered California) with specified information of Major Risk Medical Insurance Program (MRMIP) and Pre-Existing Condition Insurance Program (PCIP) subscribers and applicants to assist Covered California in conducting outreach. Requires Covered California to provide a specified notice, informing these subscribers and applicants 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. CONTINUED SB 28 Page 2 ANALYSIS : Existing law: 1.Requires 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. 2.Establishes MRMIP, which is administered by 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 (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. 6.Establishes Covered California in state government and requires the Covered California board 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. CONTINUED SB 28 Page 3 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/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. 3.Requires DHCS, commencing October 1, 2013, to designate Covered California and its agents, and county human services departments 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. Clarifies that the qualified entity shall grant AE only to children who are eligible. Background This bill makes two separate changes to prepare for implementation of the ACA in 2014. The first change updates the state's AE in Medi-Cal to conform to the new enrollment systems being established under the ACA. Specifically, this bill broadens the entities authorized to grant AE to include counties and Covered California so that children applying through either entity can receive AE. The second change made by this bill directs MRMIB to transfer information about individuals enrolled in MRMIP and PCIP to Covered California to conduct outreach. Under HIPPA, a state law is needed to require MRMIB to transfer this information. PCIP is scheduled to terminate at the end of 2013 when Covered California opens, and the nearly 16,000 individuals enrolled in PCIP will need a new health coverage option. This bill requires Covered California to use the information from MRMIB to provide a notice to individuals informing the individual that he/she may be eligible for CONTINUED SB 28 Page 4 reduced-cost coverage through Covered California, or no-cost coverage through Medi-Cal. AE and the SPE. AB 430 (Cardenas, Chapter 171, Statutes of 2001), and AB 442 (Assembly Budget Committee, Chapter 1161, Statutes of 2002), established the SPE and 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. 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, a notice of action either approving or denying the application is sent. HIPAA and MRMIP and PCIP. 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 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. This bill places 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. Prior Legislation AB 714 (Atkins, 2011-12), 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 CONTINUED SB 28 Page 5 notification requirements about the availability of reduced-cost coverage available in the Covered California and no-cost coverage available in Medi-Cal to an individual, as specified. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes SUPPORT : (Verified 5/13/13) 100% Campaign California Coverage and Health Initiatives California Primary Care Association Children Now Children's Defense Fund-California The Children's Partnership United Ways of California Western Center on Law and Poverty ARGUMENTS IN 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 enrollment systems being established to implement the ACA. 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. (JL:nl):ej 5/14/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED