BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 800 (Lara) - California Health Benefit Exchange: outreach services. Amended: April 24, 2013 Policy Vote: Health 9-0 Urgency: No Mandate: No Hearing Date: May 13, 2013 Consultant: Brendan McCarthy This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 800 would require the Department of Health Care Services to provide contact information to the California Health Benefit Exchange for parents and caretakers of children enrolled in the Healthy Families Program (or have been transitioned from Health Families to Medi-Cal). Fiscal Impact: Minor administrative costs to the Department of Health Care Services and/or the Major Risk Medical Insurance Board to provide contact information (General Fund). Likely costs in the low hundreds of thousands for the California Health Benefit Exchange to contact parents and caretakers (federal funds). Potential increased costs in the Medi-Cal program in the millions to low tens of millions (federal funds) for one year. See below. Background: Under state and federal law, the Department of Health Care Services operates the Medi-Cal program, which provides health care coverage to pregnant women, children and their parents with incomes below 100 percent of the federal poverty level, as well as blind, disabled, and certain other populations. In addition, the state Health Families Program provides health care coverage for children from families with incomes too high to qualify for traditional Medi-Cal benefits. Children from households with incomes between 100% and 250% of the federal poverty level are eligible for Health Families, with a cost-sharing requirement based on household income. Beginning SB 800 (Lara) Page 1 last year, the state has been transitioning children from Health Families to Medi-Cal. The federal Affordable Care Act allows states to expand Medicaid (Medi-Cal in California) eligibility to persons under 65 years of age, who are not pregnant, not entitled to Medicare Part A or enrolled in Medicare Part B, and whose income does not exceed 133 percent of the federal poverty level (effectively 138 percent of the federal poverty level as calculated under the Affordable Care Act). The Affordable Care Act provides a significantly enhanced federal match for the Medicaid expansion. Under the law, the federal government will pay for 100 percent of the cost of the Medicaid expansion in 2013-14 declining to a 90 percent federal match in the 2020 federal fiscal year and thereafter. Proposed Law: SB 800 would require the Department of Health Care Services to provide contact information to the California Health Benefit Exchange for parents and caretakers of children enrolled in the Healthy Families Program (or have been transitioned from Health Families to Medi-Cal). Related Legislation: SB 28 (Hernandez) would require notification of subscribers of two state-run health plans about coverage options that will be available through the state's Health Benefit Exchange. That bill is on the Senate Floor. SB 249 (Leno) would permit the Department of Public Health to share records relating to the diagnosis or care of beneficiaries enrolled in certain health care programs with specified entities. That bill will be heard in this committee. SB X1 1 (Hernandez) and AB X1 1 (J. Perez) would extend Medi-Cal eligibility to all non-pregnant, non-Medicare eligible, childless adults with income below 138 percent of the federal poverty level, as authorized by the federal Affordable Care Act. Staff Comments: The intention of the bill is to provide the parents and caretakers of Healthy Families children with information about coverage options that will be available to SB 800 (Lara) Page 2 them after January 1, 2014. Under current law, individuals up to 400% of the federal poverty level will be eligible for subsidized coverage through the Exchange. In addition, the state is considering expanding the eligibility for Medi-Cal to 138% of the federal poverty level. Should the state decide to expand Medi-Cal eligibility, a significant number of the parents of Healthy Families children are likely to qualify for enrollment. To the extent that this bill results in those individuals learning of their eligibility for expanded Medi-Cal, enrollment could increase, increasing costs. If even a modest share of Healthy Families parents enroll in Medi-Cal earlier than they would have because of the notifications provided in this bill, the costs could be in the low tens of millions. Those costs would be born entirely by the federal government, since the Medi-Cal expansion will be funded entirely with federal funds initially. Any increase in Medi-Cal enrollment due to this bill would only be temporary, as annual redeterminations of eligibility for Healthy Families going forward are likely to lead eligible parents to enroll in Medi-Cal. Proposed Author Amendments: Would add an urgency clause to the measure.