BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 800
AUTHOR: Lara
AMENDED: September 3, 2013
HEARING DATE: September 11, 2013
CONSULTANT: Bain
PURSUANT TO SENATE RULE 29.10.
SUBJECT : Health care coverage programs: transition.
SUMMARY : Requires the Department of Health Care Services (DHCS)
to provide the California Health Benefits Exchange (known as
Covered California) with contact information of parents of
children enrolled in the Healthy Families Program or Medi-Cal,
as specified, in order to assist the Exchange in conducting
outreach. Requires, if any statute dissolves or terminates the
Managed Risk Medical Insurance Board (MRMIB), employees at MRMIB
to transfer either to Covered California (in the case of
employees assigned to the Pre-existing Condition Insurance
Program) or to DHCS (in the case of employees assigned to other
programs).
Existing federal law:
1.Requires, under the Patient Protection and Affordable Care Act
(ACA, Public Law 111-148), as amended by the Health Care
Education and Reconciliation Act of 2010 (Public Law 111-152),
each state, by January 1, 2014, to establish an American
Health Benefit Exchange that makes qualified health plans
(QHPs) available to qualified individuals and qualified
employers. If a state does not establish an Exchange, the
federal government is required to administer the Exchange. The
ACA establishes requirements for the Exchange and for QHPs
participating in the Exchange, and defines who is eligible to
purchase coverage in the Exchange.
2.Allows, under the ACA and effective January 1, 2014, eligible
individual taxpayers, whose household income is between 100
and 400 percent of the federal poverty level (FPL) inclusive,
an advanceable and refundable premium tax credit based on the
individual's income for coverage under a QHP offered in the
Exchange. The ACA also requires a reduction in cost-sharing
for individuals with incomes below 250 percent of the FPL, and
a lower maximum limit on out-of-pocket expenses for
Continued---
SB 800 | Page 2
individuals whose incomes are between 100 and 400 percent of
the FPL. Legal immigrants with household incomes less than 100
percent of the FPL who are ineligible for Medicaid because of
their immigration status are also eligible for the premium tax
credit and the cost-sharing reductions.
Existing state law:
3.Establishes, under federal law, the Medicaid Program (Medi-Cal
in California), administered by DHCS, to provide comprehensive
health care services and long-term care to low income
populations such as pregnant women, children, and seniors, and
people with disabilities.
4.Establishes Healthy Families Program (HFP), administered by
MRMIB, to provide low-cost health, dental, and vision coverage
to children who do not have health insurance, who do not
qualify for free Medi-Cal and are in families with incomes at
or below 250 percent of the FPL, and establishes monthly
premium amounts that families must pay for HFP coverage.
Transitions children in the HFP to Medi-Cal, by expanding
Medi-Cal to include targeted low-income children in four
phases, beginning no sooner than January 1, 2013.
5.Establishes, under regulations implementing the federal Health
Insurance Portability and Accountability Act of 1996 (HIPAA),
requirements relating to the protection of privacy of
protected health information. Permits a HIPAA covered entity
to use or disclose protected health information to the extent
that such use or disclosure is required by law and the use or
disclosure complies with and is limited to the relevant
requirements of such law.
6.Establishes Covered California in state government, and
specifies the duties and authority of Covered California,
which include selectively contracting for health care coverage
offered to individuals and small employers.
7.Requires, whenever a function or the administration of a law
is transferred from one state agency to another state agency,
all persons serving in the state civil service and engaged in
the performance of the function or the administration of the
law to be transferred to that agency.
This bill:
1.Requires DHCS, in order to assist Covered California to
conduct outreach to individuals potentially eligible for an
SB 800 | Page
3
insurance affordability program, to provide to Covered
California or its designee, the names, addresses, email
addresses, telephone numbers, or other contact information,
and written and spoken languages of individuals who are not
enrolled in Medi-Cal but who are the parents or caretakers of
children enrolled in the HFP or the Medi-Cal program.
2.Requires, if any statute dissolves or terminates MRMIB, any
employee of MRMIB who, immediately prior to the effective date
of the dissolution or termination of MRMIB, was assigned to
the HFP, the Access for Infants and Mothers (AIM) Program, the
County Health Initiative Matching Fund or the Major Risk
Medical Insurance Program (MRMIP) to be transferred to the
DHCS.
3.Requires any employee of MRMIB to retain his or her status,
position, and rights pursuant to the State Civil Service Act
and under the existing law provisions requiring whenever a
function or the administration of a law is transferred from
one state agency to another state agency, all persons serving
in the state civil service and engaged in the performance of
the function or the administration of the law to be
transferred to that agency.
4.Requires DHCS, if employees are transferred to DHCS under this
bill, to prepare a report on the transfer of employees, and,
if applicable, any functions transferred to DHCS upon
dissolution or termination of MRMIB. Requires the report, at a
minimum, to describe any assignment of new activities to
transferred employees and provide workload justification for
the position authority transferred.
5.Requires DHCS to submit the report to the fiscal and relevant
policy committees of the Legislature by February 1st of the
year following the year in which employees are transferred,
and to update the report, if necessary, by February 1st of
each of the two years following submission of the report.
Permits the report to be included with any budget information
submitted by DHCS to those committees.
6.Requires, if any statute dissolves or terminates MRMIB, any
employee of MRMIB who, immediately prior to the effective date
of the dissolution or termination of MRMIB, was assigned to
Pre-existing Condition Insurance Program (PCIP) to be
transferred to Covered California, and to retain his or her
SB 800 | Page 4
status, position, and rights pursuant to the State Civil
Service Act and under the existing law provisions requiring
whenever a function or the administration of a law is
transferred from one state agency to another state agency, all
persons serving in the state civil service and engaged in the
performance of the function or the administration of the law
to be transferred to that agency. Exempts from this provision
any employee who has transferred to Covered California.
7.Requires, if any statute dissolves or terminates MRMIB, an
employee's applicable reinstatement rights that would have
applied to MRMIB to instead apply to DHCS.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the overall cost impact of the transfer of employees
should be minor. Employees may be reassigned to other duties
after the transfer if their functions cease. It is not clear
whether workload justifies the transfer of up to 76 employees to
DHCS. Potentially significant state Medi-Cal costs, if more
individuals enroll in Medi-Cal more quickly than would otherwise
occur, as a result of outreach provided with information
required to be transferred by this bill. If individuals are
found to be eligible for Medi-Cal under existing eligibility
rules, the cost associated with these individuals will be funded
50 percent through the General Fund. Medi-Cal costs for newly
eligible individuals are 100 percent federally funded through
2016.
COMMENTS :
1.Author's statement. According to the author, this is a
two-part bill that seeks to ensure access to affordable care
for all families, especially for low and moderate income
families. To make coverage obtainable for families that
otherwise could not afford it and to encourage broad
participation in health insurance, the ACA includes provisions
to lower premiums and cost-sharing obligations for people with
low and modest incomes. Families with incomes up to 250
percent of the federal poverty level are eligible for reduced
cost sharing (e.g., coverage with lower deductibles and
copayments). Currently, California serves a similar population
through the HFP or the Medi-Cal HFP transition. To be eligible
for HFP, families' incomes must be greater than 100 percent
and up to 250 percent of the FPL. The first part of this bill
ensures families receive information about obtaining health
care coverage and subsidies available through Covered
California by directing DHCS to transfer information about
SB 800 | Page
5
parents of the children enrolled in the HFP, or being
transitioned into Medi-Cal, to Covered California so that
Covered California can conduct outreach to these individuals.
Outreach for this population is essential because, by
definition of their children's participation in HFP, they are
extremely likely to be able to access federal subsidies making
health care coverage possible.
The second part of this measure contains provisions
transferring staff of MRMIB if MRMIB is eliminated so that
MRMIB can continue to administer its existing programs, to
ensure knowledgeable and experienced staff from MRMIB are
transferred to other agencies that can make use of their
skills in health program administration, and to provide the
staff with certainty as to their employment status if MRMIB is
eliminated. The Administration has proposed to eliminate MRMIB
in past budgets, the HFP was eliminated and PCIP was returned
to the federal government. MRMIB continues to administer AIM
and MRMIP, has a small number of HFP subscribers as well as
HFP close-out activities, and will be engaged in substantial
close-out and reconciliation activities for PCIP through the
end of 2014. MRMIB management indicate its staff are seeking
opportunities elsewhere because of uncertainty regarding
MRMIB's future. When staff leave, it is difficult to maintain
program administration and attract new employees given the
uncertain future of MRMIB. This provision would provide
clarity and certainty and, as such, would permit MRMIB to
retain the necessary continuity of staffing and expertise to
fulfill its substantial remaining responsibilities.
2.Shift of HFP children to Medi-Cal. AB 1494 (Committee on
Budget), Chapter 28, Statutes of 2012, a health budget trailer
bill, required the transition of children in HFP to Medi-Cal.
HFP provides low-cost health, dental and vision coverage to
uninsured children, until age 19, in working families. HFP
covers children who meet all of the following criteria:
a. Children under the age of 19;
b. Uninsured children with no employer-sponsored
health insurance in the last three months;
c. California resident;
SB 800 | Page 6
d. Not eligible for or are enrolled in no-cost
Medi-Cal;
e. Children must meet citizenship or immigration
rules; and,
f. A families' income must be greater than 100
percent and below 250 percent, inclusive, of the
Federal Income Guideline which, varies depending on the
age of the child.
The state is transitioning children enrolled in HFP into
Medi-Cal in four phases. The first phase of the transition
began January 1, 2013, and included children in a HFP health
plan that matches a Medi-Cal managed care (MCMC) health plan.
The final phase transitions children in HFP residing in a
county that is not MCMC into the Medi-Cal fee-for-service
delivery system. Depending upon their income, the parents of
children enrolled in Medi-Cal will be eligible for either
Medi-Cal or premium and cost-sharing subsidies in Covered
California.
1.HIPAA and HFP. Under federal HIPAA privacy regulations, a
HIPAA covered entity is prohibited from using or disclosing
protected health information without an authorization that is
valid, 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. SB 800 would place such a
requirement on MRMIB to transfer information about the parents
and caretaker relatives of HFP subscribers and applicants to
Covered California for purposes of having Covered California
conduct outreach to these individuals.
2.Related legislation. SB X1 1 (Hernandez and Steinberg),
Chapter 4, Statutes of 2013 and AB X1 1 (John Perez), Chapter
3, Statutes of 2013 implement various provisions of the ACA
regarding Medi-Cal eligibility and program simplification
SB 800 | Page
7
including the use of a new method for counting income, the
expansion of eligibility in the Medi-Cal program, the
establishment of the benefit package for the expansion
population and additional benefits for the current Medi-Cal
benefit package.
SB 249 (Leno) permits the Department of Public Health (DPH) to
share health records involving the diagnosis, care, and
treatment of a beneficiary enrolled in federal Ryan White
Act-funded programs who may be eligible for services under the
ACA, with "qualified entities," as defined. Permits qualified
entities to share health records relating to persons diagnosed
with HIV/AIDS with DPH for the purpose of enrollment without
disruption in Medi-Cal, the bridge program, Medicaid expansion
programs, and any insurance plan certified by Covered
California.
SB 28 (Hernandez), among other provisions, requires MRMIB to
provide Covered California with the name, contact information
and spoken language of MRMIP and PCIP subscribers and
applicants in order to assist Covered California in conducting
outreach. SB 28 also 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.Prior legislation. AB 714 (Atkins) of the 2011-12 session
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.
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 filing
a dissolution or nullity of marriage, divorce or separation,
or petitioning for adoption, and for an individual who ceases
to be enrolled in health coverage through a health plan or
health insurer.
4.Support. Health Access, a statewide health care consumer
advocacy coalition, and Western Center on Law and Poverty
write in support of this bill. Proponents argue this bill
SB 800 | Page 8
would require DHCS Services to provide information about
parents of Health Family eligible-children to Covered
California, and Covered California would then facilitate
outreach to them about new coverage options. SEIU Local 1000
writes that ensuring the transfer of data as well as the
employees who have the skills and experience to manage both
the data and the program responsibilities will be cost
effective for the State, Covered California and DHCS.
SUPPORT AND OPPOSITION :
Support: American Federation of State, County and Municipal
Employees, AFL-CIO
California Pan-Ethnic Health Network
California School Employees Association
Children Now
Children's Defense Fund-California
Children's Partnership
County Welfare Directors Association of California
Health Access California
PICO California
SEIU Local 1000
SEIU-California
Western Center on Law and Poverty
100% Campaign
Oppose: None received
-- END --