BILL ANALYSIS Ó
SB 28
Page 1
SENATE THIRD READING
SB 28 (Ed Hernandez and Steinberg)
As Amended August 7, 2013
Majority vote
SENATE VOTE :32-0
HEALTH 13-5 APPROPRIATIONS 12-5
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|Ayes:|Pan, Ammiano, Atkins, |Ayes:|Gatto, Bocanegra, |
| |Bonilla, Bonta, Chesbro, | |Bradford, |
| |Gomez, | |Ian Calderon, Campos, |
| |Roger Hernández, | |Eggman, Gomez, Hall, |
| |Lowenthal, Mitchell, | |Holden, Pan, Quirk, Weber |
| |Nazarian, V. Manuel | | |
| |Pérez, Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Maienschein, Mansoor, |Nays:|Harkey, Bigelow, |
| |Nestande, Wagner, Wilk | |Donnelly, Linder, Wagner |
| | | | |
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SUMMARY : Requires the Managed Risk Medical Insurance Board
(MRMIB) to provide the California Health Benefit Exchange
(Exchange), now known as Covered California, with the name,
contact information, and spoken language of Major Risk Medical
Insurance Program (MRMIP) 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.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Potential cost pressure in the hundreds of thousands of
dollars on Medi-Cal county administrative costs for training
approximately 15,000 county eligibility workers on AE. In
practical terms, this would likely not have a significant
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budgetary impact, as administrative funding is currently
provided as a lump sum to counties as part of the annual
Medi-Cal budget and this bill's requirements are not likely to
increase the sum provided. Additionally, workers will be
retrained and the administrative funding methodology will
likely be reassessed over the next two years in light of
considerable simplification and changes in eligibility
processing for Medi-Cal.
2)Potential minor Medi-Cal benefits costs associated with some
children gaining coverage through AE sooner than would
otherwise be the case. AE allows children to receive program
benefits pending final determination of their eligibility.
Costs are not expected to be significant, as most eligibility
determinations are expected to be completed in real-time. In
addition, Medi-Cal already grants retroactive coverage,
meaning the program pays claims incurred for 90 days prior to
granting of eligibility. The only potential benefit costs
would be associated with children who were granted AE then
lost to follow-up. For example, if a parent did not bring in
needed documentation to establish residency, the state would
incur costs for AE on behalf of that child that would
otherwise not have been occurred, and the child would not have
their application completed. This would likely occur only in
a very small minority of cases.
COMMENTS : This bill makes two separate changes to prepare for
implementation of the federal Patient Protection and Affordable
Care Act (ACA) 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. Specifically, this bill
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 (MOE) 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 its enactment.
The second change made by this bill would direct MRMIB to
transfer information about individuals enrolled in the MRMIP to
Covered California so that Covered California can conduct
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outreach to these individuals. Under federal privacy
regulations, a state law is needed to require MRMIB to transfer
this information. There are approximately 6,400 individuals
enrolled in MRMIP. The Governor's 2013-14 Budget Summary
proposed to phase out MRMIB, but the Legislature declined to
adopt this proposal. Regardless of whether MRMIP remains
operational, some subscribers could receive better coverage and
potentially pay lower premiums in Covered California. With the
exception of calendar years 2013 and 2014, individuals in MRMIP
pay premiums that are 25% above the rate for a comparable
product in the private market. (AB 1526 (Monning), Chapter 855,
Statutes of 2012, authorizes MRMIB to lower premiums to 100% and
MRMIB has exercised this option for 2013 and 2014.) 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 Covered California (where premium and
cost-sharing subsidies are available). This bill would require
Covered California to use the information from MRMIB to provide
a notice informing the individual that he or she may be eligible
for reduced-cost coverage through Covered California, or no-cost
coverage through Medi-Cal.
AB 1494 (Budget Committee), Chapter 28, Statutes of 2012, enacts
a transition of the approximately 860,000 Healthy Families
program (HFP) subscribers into the Medi-Cal program to begin no
sooner than January 1, 2013, in four Phases throughout 2013.
Children in HFP, previously administered by MRMIB 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 the federal poverty level (FPL). As of
January 1, 2013, all newly eligible children are being enrolled
in Medi-Cal. Although there are no longer two separate
programs, DHCS retained the single point of entry (SPE) as
required by the MOE and assumed the contract from MRMIB with the
vendor (MAXIMUS). Applications are received through the mail
and on-line (via Health-e-App). The vendor 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, and 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
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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. However if the
application comes in directly to the county human services
department without going through the SPE, the child is not
eligible for AE.
Beginning in 2014, the ACA give states the option to expand
Medicaid eligibility to a new "adult group". It also collapses
and simplifies most existing eligibility categories into three
broad groups: parents, pregnant women, and children under age
19. The "adult group" includes all non-pregnant individuals
ages 19 to 65 with household incomes at or below 133% FPL. (The
law includes a five percentage point of FPL disregard making the
effective limit 138% FPL). The income calculation for all these
categories is based on Modified Adjusted Gross Income (MAGI), as
defined in the Internal Revenue Code. Regarding the private
health insurance market, the ACA primarily restructures the
individual and small group markets, setting minimum standards
for health coverage, providing financial assistance to
individuals with income below 400% of FPL through advanceable
premium tax credits, tax credits for small employers, the
establishment Exchanges and an essential health benefits package
required to be offered by qualified health plans (QHPs).
Beginning in 2014, QHPs will be required to offer coverage at
one of four levels: bronze, silver, gold, or platinum.
Under the federal Health Insurance Portability and
Accountability Act of 1996 (HIPAA) privacy regulations, a HIPAA
covered entity is prohibited from using or disclosing protected
health information without valid authorization, 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
would place such a requirement on MRMIB to transfer information
about MRMIP subscribers and applicants to Covered California for
purposes of having Covered California conduct outreach to these
individuals.
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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,
PICO California, and United Ways of California support 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. The American Academy of Pediatrics
also supports this bill because it preserves a critical access
point for children entering Medi-Cal by broadening the entities
authorized to grant AE. The American Cancer Society Cancer
Action Network (ACS CAN) writes in support that under the ACA
health insurers and plans can no longer deny individuals
coverage because of preexisting conditions. This support
further states Covered California will provide protections
similar to the existing MRMIP, except that the new program has
no annual cap on benefits and lower subscriber premium, making
the new program more attractive in general. ACS CAN further
states in support that MRMIP has served a vital role in the
safety net for Californians with preexisting conditions,
including cancer. Covered California will allow these
individuals to join a larger pool of Californians by applying
for health insurance without fear of denial.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097 FN: 0002137