BILL ANALYSIS Ó
AB 2077
Page 1
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2077 (Burke) - As Amended March 18, 2016
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill establishes specific procedures to ensure eligible
recipients move from Medi-Cal and other insurance affordability
programs such as the California Health Benefit Exchange
(CoveredCA), without any breaks in coverage as required by
current law. Specifically, this bill:
1)Establishes a grace period for persons no longer eligible for
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Medi-Cal, during which Medi-Cal benefits are not terminated
unless an individual enrolls in another health plan before the
specified termination date (Medi-Cal to CoveredCA transition).
2)Specifies procedures counties must follow to enroll
individuals in Medi-Cal who are deemed ineligible for
subsidized coverage through Covered California due to income
that appears to make them Medi-Cal eligible (CoveredCA to
Medi-Cal transition).
3)Specifies other requirements related to the content of notices
and related administrative procedures.
FISCAL EFFECT:
1)Uncertain Information Technology (IT) costs to the CalHEERS
system (GF/federal/special), to the county-administered
Statewide Automated Welfare System (SAWS), and to the Medicaid
Eligibility Data System (MEDS) (GF/federal) to effectuate the
policy changes. There is already a "change request" to these
IT systems planned that will modify eligibility, enrollment
and notifications. This change request could potentially be
modified to accomplish the bill's requirements at little
additional cost. To the extent this bill would require IT
changes beyond the scope of the current request, there could
be additional costs.
2)This bill's requirements could result in unknown but large
additional state cost pressure in Medi-Cal. Although current
law requires the state to provide for a seamless transition,
to the extent the specific procedures required by this bill
preclude the state from pursuing other, most cost-efficient
ways to ensure individuals seamlessly move between programs,
costs would increase beyond the status quo, even when
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considering currently planned changes.
The largest fiscal impact is associated with the creation of a
grace period to move from Medi-Cal and enroll in a CoveredCA
plan, where the state would pay for Medi-Cal coverage for a
longer period of time in order to extend the window most
consumers have to pick a CoveredCA plan. This bill would
prohibit Medi-Cal eligibility from being terminated until at
least 30 days after the county sends a "notice of action"
about the termination, allowing individuals to stay on
Medi-Cal longer than they otherwise would. Based on the fact
that eligibility is provided on a monthly basis, it appears
this bill would provide additional time to about 2/3 of the
individuals enrolling in CoveredCA from Medi-Cal. Under
current rules, these individuals would have been terminated
from enrollment at the end of the month in which they were
determined ineligible, whereas under this bill they would gain
another month of eligibility.
The UC Berkeley Labor Center estimated around 16%, or 2
million beneficiaries, would be income-eligible to transition
out of Medi-Cal to CoveredCA every year. This is likely an
overestimate, but the "churn" between programs is nevertheless
significant. If even a portion of this projected 2 million
stayed on Medi-Cal for an extra month while transitioning from
Medi-Cal to CoveredCA, the state could experience cost in tens
of millions. It is unknown precisely what the overall cost of
this grace period would be. It would depend on the number of
such transitions, which is not currently reported, and how
long they would stay on the program under the new rules versus
the status quo. Over a large base of beneficiaries, small
changes can have an enormous fiscal effect.
Finally, it is unclear whether federal rules allow for federal
financial participation (FFP) during this proposed coverage
grace period as currently envisioned by this bill. If federal
rules do not allow FFP, any costs would be state-only GF
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costs.
COMMENTS:
1)Purpose. Current law requires the state to ensure individuals
can transition between insurance affordability programs
without a gap in coverage. This bill intends to establish
specific administrative procedures that effectuate this broad
requirement. Western Center on Law and Poverty (WCLP), this
bill's sponsor, believes such specific guidance is necessary
in order to ensure individuals are enrolled into Medi-Cal in a
timely way, and to meet other goals such as encouraging
individuals to select a Medi-Cal plan and ensuring they
receive timely and accurate information about eligibility. It
attempts to make the process consumer-friendly without being
overly burdensome on the state administration of the programs.
2)Background. CalHEERS is the computer system that operates as a
single online portal to apply for state health care
affordability programs, including Medi-Cal and premium
subsidies through CoveredCA. The transition between these
programs- when individuals lose eligibility for one program
and gain eligibility for another due to changes in income or
family size- is the subject of this bill. Adults are generally
eligible for Medi-Cal if they make under 138% of the poverty
level, while higher levels apply to children and different
rules apply to seniors. An individual receiving Medi-Cal or
CoveredCA subsidies is supposed to report a change in income
to CalHEERS in order to re-determine the benefits for which
one is eligible. Many transitions also occur during required
annual redeterminations.
Transitioning from Medi-Cal to subsidized coverage is
different than transitioning in the other direction. The
differences include:
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Currently, applications for persons who appear
Medi-Cal eligible due to income are forwarded to county
eligibility offices to make a final determination for
Medi-Cal eligibility, while CalHEERS makes a final
determination for CoveredCA subsidies.
Medi-Cal plan selection can be done through a
default algorithm, while individuals must actively select
a plan and pay premiums in order to enroll in a CoveredCA
plan.
Although Medi-Cal enrollment is year-round,
individuals can only choose plans and receive subsidized
coverage through CoveredCA during open enrollment periods
or if they experience a qualifying life event, such as a
change in income.
This bill attempts to address some of these nuances by
specifying certain processes that apply in each case, such as
timelines and notice requirements for Medi-Cal plan
selections. Currently, CoveredCA and DHCS are conducting
stakeholder workgroups to address concerns with such
transitions.
1)Prior Legislation. AB 1296 (Bonilla), Chapter 641, Statutes of
2011, enacts the Health Care Reform Eligibility, Enrollment,
and Retention Planning Act (Act), which requires the
California Health and Human Services Agency (CHHSA), in
consultation with specified entities, to establish
standardized single, accessible application forms and related
renewal procedures for state health subsidy programs, as
defined, in accordance with specified requirements. It also
addressed coverage transitions, requiring "during the
processing of an application, renewal, or a transition due to
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a change in circumstances, an entity making eligibility
determinations for a public health coverage program shall
ensure that an eligible applicant and recipient of state
health subsidy programs that meets all program eligibility
requirements and complies with all necessary requests for
information moves between programs without any breaks in
coverage and without being required to provide any forms,
documents, or other information or undergo verification that
is duplicative or otherwise unnecessary."
2)Staff Comments. This bill offers a specific solution to
implement a current-law requirement for seamless coverage
transitions that the author contends has not yet been
realized. Staff notes there may be other workable solutions
available that are consumer-friendly but at a lower state
cost. At the very least, implementing a process contingent on
whether federal matching funds are available seems reasonable.
It does not appear that information about the number and
seamlessness of transitions is meaningfully tracked at this
time, raising questions about whether the state is able to
monitor its own compliance with current state law, which
specifies individuals should move between programs with any
breaks in coverage. It is difficult to demonstrate the extent
of a problem or measure progress without this data. According
to DHCS, this data will soon be reported and monitored as part
of a report required pursuant to AB X1 1 (J. Perez), Chapter
3, Statutes of 2013
Finally, there is an inherent tension between maintaining
seamless coverage and providing consumers adequate time to
make informed decisions about plan choice, if appropriate.
There is also a tension between the state's interest in
maintaining seamless coverage and minimizing its growing
burden of health care costs. There is not likely to be a
solution that optimizes all of the variables at once-
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instead, the question is how the state should balance these
trade-offs.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081