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: Yes                    Mandate: No
          Hearing Date: May 23, 2013      Consultant: Brendan McCarthy
          
          SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
          
          
          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  








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          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  








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          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.