BILL ANALYSIS Ó
SB 28
Page 1
SENATE THIRD READING
SB 28 (Ed Hernandez and Steinberg)
As Amended September 6, 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, 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. Permits the
Department of Health Care Services (DHCS) to implement
provisions of AB 1 X1 (John A. Pérez), Chapter 3, Statutes of
2013 First Extraordinary Session, and SB 1 X1 (Ed Hernandez and
Steinberg), Chapter 4, Statutes of 2013 First Extraordinary
Session, by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions until the time any
necessary regulations are adopted. Requires DHCS to adopt
regulations by July 1, 2017, in accordance with the requirements
of the rulemaking requirements of the Administrative Procedure
Act. Requires DHCS to provide a status report to the
Legislature on a semiannual basis until regulations have been
adopted. Makes technical and clarifying changes to provisions
relating to a new budgeting methodology for Medi-Cal county
SB 28
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administrative costs.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, based on a prior version:
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 accelerated
enrollment (AE). In practical terms, this would likely not
have a significant 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 would direct MRMIB to transfer information
about individuals enrolled in the MRMIP 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. 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
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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.
Beginning in 2014, the Patient Protection and Affordable Care
Act (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% of the federal poverty level
(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, 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 American Health Benefit 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
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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.
This bill also includes technical and clarifying amendments to
AB 1 X1 and SB 1 X1 that were in AB 50 (Pan) of the current
legislative session and are being deleted from that bill, such
as adding authorization for DHCS to implement specified
provisions by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions until the time any
necessary regulations are adopted and requires DHCS to adopt
regulations by July 1, 2017. These provisions had been
inadvertently omitted from the Special Session bills. A second
provision permits, rather than requires under existing law, the
budgeting methodology for county Medi-Cal eligibility
determination to include specified costs. Requires the new
budgeting methodology to be implemented no sooner than the
2015-16 fiscal year, to reflect the impact of ACA implementation
on county administrative work, and to be provided to the
legislative fiscal committees by March 1 of the fiscal year
immediately preceding the first fiscal year of implementation.
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: 0002451
SB 28
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