BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    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.
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           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.


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          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  

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          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  

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          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

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