BILL ANALYSIS Ó
AB 1839
Page 1
Date of Hearing: April 5, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
AB 1839
(Patterson) - As Introduced February 9, 2016
SUBJECT: California Health Benefit Exchange: enrollment
options.
SUMMARY: Makes changes to the California Health Benefit
Exchange's (the Exchange) enrollment system. Specifically, this
bill:
1)Requires upgrades to the Exchange's enrollment system so that
an enrollee has the option to elect either of the following:
a) Enroll in a plan with subsidized coverage for himself or
herself and enroll the eligible child or children in
Medi-Cal; or,
b) Enroll in a single plan for a family that preserves the
enrollee's subsidized coverage and purchase unsubsidized
coverage under the same plan for the child or children
under 19 years of age.
1)Requires the upgrades to be operational no later than July 1,
2017, and provides that the chief information and technology
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officer or his or her designee to oversee the update process.
EXISTING LAW:
1)Establishes the federal Patient Protection and Affordable Care
Act (ACA), which enacts various health care coverage market
reforms.
2)Establishes the Exchange (also referred to as Covered
California) within state government, as an independent public
entity not affiliated with an agency or department, and
requires the Exchange to compare and make available through
selective contracting health insurance for individual and
small business purchasers as authorized under the ACA.
Specifies the powers and duties of the board governing the
Exchange, and requires the board to facilitate the purchase of
qualified health plans though the Exchange by qualified
individuals and small employers.
3)Requires the board to determine the criteria and process for
eligibility, enrollment, and disenrollment of enrollees and
potential enrollees in the Exchange and coordinate that
process with state and local government entities administering
other specified health care coverage programs, as specified.
4)Establishes the Medi-Cal program, which is administered by the
State Department of Health Care Services (DHCS), under which
qualified low-income persons receive health care benefits and,
in part, governed and funded by federal Medicaid program
provisions. Authorizes DHCS to extend continuous Medi-Cal
eligibility to children 19 years of age and younger.
FISCAL EFFECT: This bill has not yet been analyzed by a fiscal
committee.
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COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, children are
being automatically enrolled into Medi-Cal if their parents
enroll for health insurance through the Exchange and their
parents are of certain income eligibility- up to 266% of the
federal poverty limit (FPL). Although there is currently a
process to remove these children from Medi-Cal, the author
contends that this process is very bureaucratic and opens
families to higher financial liabilities. The author points
out that some families would like the option of paying an
additional amount through the Exchange to keep their children
on the same commercial plan because it may better suit their
families' individual needs. The author raises concerns
regarding access to care and finding providers accepting
Medi-Cal payments especially in rural communities throughout
the Central Valley. The author cites rate reductions to
Medi-Cal providers and projected enrollment increases in
Medi-Cal as reasons why individuals may choose Covered
California. The author states that while current law provides
an alternative to remove a child from the Medi-Cal system,
this process is slow and only allows for the purchase of a
separate plan for the child or children. Consequentially, the
family is then on two separate plans. The author contends
that the separate plans add another layer to the complexities
of navigating healthcare coverage and opens the parents to a
higher financial liability by having a family deductible and
out-of-pocket maximum on each plan instead of one. Under
current law, families who do not want Medi-Cal coverage for
their children and are in the income bracket of 138% to 266%
FPL cannot sign up through Covered California on a single
policy.
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2)BACKGROUND.
a) FPL. FPL is a measure of income level issued annually
by the Department of Health and Human Services to determine
eligibility for certain programs and benefits. Medi-Cal is
available to all individuals who qualify on the basis of
income up to 138% of the FPL and all children (up to age
19) whose family's income is at or under 266% of the FPL.
Families who enroll in the Exchange with income below 266%
of the FPL must enroll their children in Medi-Cal or enroll
their children into a separate commercial plan.
b) Covered California. The Exchange does not change how
existing state health care coverage programs are
administered. Medi-Cal continues to be administered by the
DHCS. Federal law requires state exchanges to perform the
function of screening for and enrolling individuals in
Medi-Cal. The Exchange coordinates with DHCS and
California counties to ensure that individuals are
seamlessly transitioned between coverage programs if their
eligibility changes.
Federal and state regulations provide that individuals who are
in the same household but would qualify for different levels of
cost-sharing reduction (CSR) if applying separately may,
collectively, only qualify for the CSR level that all members of
the household qualify for if they choose to enroll in the same
Covered California family health plan. Here, individuals who are
eligible for Medi-Cal are not eligible for advanced premium tax
credit (APTC) or CSR. Therefore, any parents who wish to enroll
their Medi-Cal-eligible children into their subsidized Covered
California health plan will lose their eligibility for CSR, if
applicable.
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The California Eligibility, Enrollment and Retention System
(CalHEERS) is the computer system behind the Exchange and
is sponsored by Covered California and DHCS. CalHEERS is a
computer program that allows prospective consumers to enter
their personal and income data and receive information
about plans they are eligible for and what they cost.
CalHEERS also determines preliminary eligibility for APTC,
Modified Adjusted Gross Income (MAGI) Medi-Cal, and
Non-MAGI Medi-Cal. Covered California indicates initial
estimates of this bill's implementation would cost
approximately $1.8 million. Covered California also notes
that this change request could take well over a year to
correctly implement.
In its February 2016 report, the California State Auditor
noted that CalHEERS, while functional, its rapid design,
development, and implementation have resulted in some risk
to system maintainability. It noted that without continued
oversight, identification or resolution of system issues,
there may be long-term cost and schedule implications for
the ongoing maintenance of CalHEERS.
3)SUPPORT. Lumen Insurance Solutions, Inc. states that this
bill would cost California nothing, give families a choice,
not increase the family's total out-of-pocket maximum, relieve
stress on the Medi-Cal system, and is simple to do.
4)OPPOSE UNLESS AMENDED. Health Access California (Health
Access) contends that the difference in costs for families who
opt for unsubsidized coverage is so extreme that this bill
should be amended to identify the cost differences for
families. Furthermore, Health Access states that this bill
should be further amended to direct families to the Department
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of Managed Health Care's call center and to the Medi-Cal
managed care ombudsman to complain about Medi-Cal's lack of
access to care. Finally, Health Access requests that this
bill amended to require insurance agents to provide the same
degree of assistance to a family with members on Medi-Cal as
they provide to a family with private, commercial coverage.
5)OPPOSITION. The Western Center on Law and Poverty (WCLP)
contends that the CalHEERS system already provides a choice
for families since it allows purchasers to select the
financial assistance path that would determine eligibility for
Medi-Cal or tax credits. This bill would mandate changes to
CalHEERS ahead of other problems like income determinations,
immigration status information, eligibility determinations for
former foster youth, and many other requests. Additionally,
WCLP states that advising families of eligibility for
unsubsidized coverage could also jeopardize the parents'
eligibility for Cost Sharing Reductions (CSRs) and would not
provide families with complete information about the major
cost implications of choosing unsubsidized coverage over
Medi-Cal. Specifically, WCLP cites Covered California
Regulations that cause parents to lose their eligibility for
CSRs like the enhanced silver plan, which has lower
cost-sharing. Finally, WCLP identifies the potential
financial options faced by children enrolled in unsubsidized
coverage, describing Medi-Cal monthly premiums and
unsubsidized platinum plan premiums and bronze plan cost
sharing.
6)RELATED LEGISLATION.
a) AB 2077 (Burke and Bonilla) establishes procedures to
ensure eligible recipients of insurance affordability
programs move between the Medi-Cal program and other
insurance affordability programs without any breaks in
coverage. AB 2077 would require an individual's case to be
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run through CalHEERS. AB 2077 is currently pending in the
Assembly Health Committee.
b) SB 10 (Lara) requires the Secretary of California Health
and Human Services to apply to the United States Department
of Health and Human Services for a waiver to allow
individuals who are not eligible to obtain health coverage
because of their immigration status to obtain coverage from
the Exchange.
7)PREVIOUS LEGISLATION. SB 75 (Committee on Budget and Fiscal
Review), Chapter 18, Statutes of 2015, the Omnibus Health
Trailer Bill for 2015-16, contains changes related to the
Budget Act of 2015 and includes provisions expanding
full-scope Medi-Cal coverage to children, regardless of
immigration status, who currently would be eligible for
Medi-Cal if not for immigration status. Requires children
eligible in this category to enroll in Medi-Cal managed care.
Requires DHCS to seek federal financial participation (FFP),
but requires coverage to be provided regardless of FFP.
Requires DHCS to provide a semiannual status report to the
Legislature until regulations have been adopted.
8)POLICY COMMENTS. This bill would require changes to the
CalHEERS system to enable families the option to enroll in a
single plan by July 1, 2017. First, this bill will have cost
implications and may also require CalHEERS to implement
changes in advance of other priorities. Based upon the
California State Auditor report, this bill has a potential to
exacerbate CalHEERS maintenance issues. Second, it also
appears as if there may be some unintended consequences on
adult coverage with respect to enrollment in the subsidized on
Exchange plan if children (who are also eligible for Medi-Cal)
are allowed the option to enroll in the parent's subsidized
commercial plan.
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REGISTERED SUPPORT / OPPOSITION:
Support
California Association of Health Underwriters
Lumen Insurance Solutions, Inc.
Opposition
Western Center for Law and Poverty
Analysis Prepared by:Kristene Mapile / HEALTH / (916) 319-2097