BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 28
Author: Hernandez (D)
Amended: 9/6/13
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
SENATE FLOOR : 32-0, 5/16/13
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De León, DeSaulnier, Evans, Fuller, Gaines,
Galgiani, Hancock, Hernandez, Hill, Hueso, Jackson, Lara,
Leno, Lieu, Liu, Monning, Padilla, Pavley, Roth, Steinberg,
Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Emmerson, Huff, Knight, Nielsen, Price,
Walters, Vacancy, Vacancy
ASSEMBLY FLOOR : Not available
SUBJECT : California Health Benefit Exchange
SOURCE : Author
DIGEST : This bill implements various provisions of Affordable
Care Act (ACA) relating to determining eligibility for the
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Medi-Cal program. Authorizes the Department of Health Care
Services (DHCS) to implement some of those provisions by, among
other things, all-county letters, until the time any necessary
regulations are adopted. Requires DHCS to adopt regulations
implementing those provisions by July 1, 2017. Requires the
program implementing provisions authorizing individuals to
select Medi-Cal managed care plans via the California Healthcare
Eligibility, Enrollment, and Retention System (CalHEERS), as
specified, to include training of individuals, including county
human services staff, to carry out the program. Makes technical
and clarifying changes to provisions relating to a new budgeting
methodology for Medi-Cal county administrative costs and makes
other technical changes.
Assembly Amendments 1) delete the requirement that DHCS
designate Covered California and county human services
departments as qualified entities for determining eligibility
for accelerated enrollment under Medi-Cal for children; 2)
require the training of "individuals, including county human
services staff," (instead of "specialized county employees") in
carrying out a DHCS program, as specified; and 3) make other
clarifying changes to the recently enacted Medi-Cal-related
provisions implementing the ACA.
ANALYSIS :
Existing law:
1.Establishes the Medi-Cal program, which is administered by
DHCS, under which qualified low-income individuals receive
health care services.
2.Requires DHCS to develop and implement, in consultation with
county program and fiscal representatives, a new budgeting
methodology for Medi-Cal county administrative costs.
Requires the new budgeting methodology be used to reimburse
counties for eligibility determinations for applicants and
beneficiaries, including one-time eligibility processing and
ongoing case maintenance.
3.Requires DHCS to provide the new budgeting methodology to the
legislative fiscal committees by March 1, 2012, and permits
inclusion of the methodology in the May 2012 Medi-Cal Local
Assistance Estimate for the 2012-13 fiscal year and each
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fiscal year thereafter.
4.Requires a single, accessible, standardized paper, electronic,
and telephone application for insurance affordability programs
be developed by DHCS in consultation with the Managed Risk
Medical Insurance Board and the Covered California board.
Requires the application to be used by all entities authorized
to make an eligibility determination for any of the insurance
affordability programs and by their agents.
This bill:
1.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.
2.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.
3.Permits DHCS to implement provisions of AB 1 X1 (John A.
Pérez), Chapter 3, Statutes of 2013, First Extraordinary
Session, and SB 1 X1 (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.
4.Requires DHCS to adopt regulations by July 1, 2017, in
accordance with the requirements of the rulemaking
requirements of the Administrative Procedure Act.
5.Requires DHCS to provide a status report to the Legislature on
a semiannual basis until regulations have been adopted.
6.Makes technical and clarifying changes to provisions relating
to a new budgeting methodology for Medi-Cal county
administrative costs.
Background
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MRMIB . This bill directs 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
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.
ACA . Beginning in 2014, the ACA will 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 of American Health Benefit Exchanges and an
essential health benefits package required to be offered by
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qualified health plans (QHPs). Beginning in 2014, QHPs will be
required to offer coverage at one of four levels: bronze,
silver, gold, or platinum.
Health Insurance Portability and Accountability Act of 1996
(HIPAA). Under 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
places 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.
AB 1 X1 and SB 1 X1 . 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.
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.
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AB 792 (Bonilla, Chapter 851, Statutes of 2012) establishes
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
According to the Assembly Appropriations Committee, based on a
prior version:
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.
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.
SUPPORT : (Verified 9/10/13)
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100% Campaign
AARP
American Academy of Pediatrics - California
American Cancer Society Cancer Action Network
California Chiropractic Association
California Coverage and Health Initiatives
California Optometric Association
California Primary Care Association
Children Now
Children's Defense Fund-California
Children's Partnership
March of Dimes California Chapter
National Association of Social Workers
PICO California
United Ways of California
Western Center on Law & Poverty
ARGUMENTS IN SUPPORT : 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.
JL:nl:ej 9/10/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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