BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                    AB 2077

                                                                    Page  1

          (Without Reference to File)


          2077 (Burke and Bonilla)

          As Amended  June 1, 2016

          Majority vote

          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |Health          |18-0 |Wood, Maienschein,    |                    |
          |                |     |Bonilla, Burke, Chiu, |                    |
          |                |     |Dababneh, Gomez,      |                    |
          |                |     |Roger HernŠndez,      |                    |
          |                |     |Lackey, Nazarian,     |                    |
          |                |     |Olsen, Patterson,     |                    |
          |                |     |Ridley-Thomas,        |                    |
          |                |     |Rodriguez, Santiago,  |                    |
          |                |     |Steinorth, Thurmond,  |                    |
          |                |     |Waldron               |                    |
          |                |     |                      |                    |
          |Appropriations  |14-0 |Gonzalez, Bloom,      |                    |
          |                |     |Bonilla, Bonta,       |                    |


                                                                    AB 2077

                                                                    Page  2

          |                |     |Calderon, Daly,       |                    |
          |                |     |Eggman, Eduardo       |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |HernŠndez, Holden,    |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Weber, Wood           |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |

          SUMMARY:  Establishes procedures to ensure eligible recipients  
          move from Medi-Cal and other insurance affordability programs,  
          like the California Health Benefit Exchange (Exchange) or  
          CoveredCA), without any breaks in coverage.  Prohibits, for  
          individuals eligible to enroll in a qualified health plan (QHP)  
          through the Exchange, Medi-Cal benefits from being terminated  
          until at least 20 days after the county sends the notice of  
          action terminating Medi-Cal eligibility (Medi-Cal to CoveredCA  
          transition) and is contingent to the extent that federal  
          financial participation is available.  Specifies procedures  
          counties must follow to enroll individuals in Medi-Cal who are  
          deemed ineligible for subsidized coverage through the Exchange  
          due to income that appears to make them Medi-Cal eligible  
          (CoveredCA to Medi-Cal transition). 

          FISCAL EFFECT:  According to the Assembly Appropriations  

          1)Uncertain Information Technology (IT) costs to the California  
            Healthcare Enrollment, Eligibility and Retention System  
            (CalHEERS) system (General Fund (GF)/federal/special), to the  
            county-administered Statewide Automated Welfare System (SAWS),  
            and to the Medicaid Eligibility Data System (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  


                                                                    AB 2077

                                                                    Page  3

            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.  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.  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 the millions of dollars or more  

          COMMENTS:  The sponsor, Western Center on Law and Poverty  
          (WCLP), states that under the existing presumptive eligibility  
          process, most people do not have a break in coverage during  
          which they are uninsured.  However, a change in policy at the  
          state level may result in individuals being required to stay in  
          CoveredCA until they have their Medi-Cal eligibility determined  
          while paying premiums for commercial coverage.  Furthermore, the  
          Department of Health Care Services (DHCS) selects the Medi-Cal  
          plan based on their QHP plan, even when networks are different.   
          Unlike Medi-Cal, CoveredCA coverage cannot begin until the  
          individual has chosen a QHP plan.  According to the sponsor,  
          individuals whose Medi-Cal coverage are ending are not told to  
          choose a CoveredCA plan before the end of the month to avoid a  
          break in coverage. 

          Federal Poverty Level (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. 


                                                                    AB 2077

                                                                    Page  4

          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 enroll 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. 

          CalHEERS is the computer system behind the Exchange and is  
          sponsored by CoveredCA and DHCS.  It 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.  It also determines preliminary eligibility  
          for Advanced Premium Tax Credits, Modified Adjusted Gross Income  
          (MAGI) Medi-Cal, and Non-MAGI Medi-Cal.

          Consumers who experience a qualifying life event can enroll in a  
          CoveredCA health insurance plan even outside of the  
          open-enrollment period.  This is called special enrollment and  
          includes income changes in which a consumer becomes newly  
          eligible or ineligible for help paying for their insurance.   
          Medi-Cal enrollment is year-round. 

          While existing law already requires transitions between  
          CoveredCA and Medi-Cal without a break in coverage, this bill  
          provides for specificity with respect to notice requirements for  
          newly eligible members.  Unlike Medi-Cal, CoveredCA coverage  
          cannot begin until the individual has chosen a QHP, however it  
          appears as if current notices are insufficient to advise  
          individuals that they need to choose a QHP before the end of the  
          month to avoid a break in health coverage.  This bill also  
          requires CalHEERS to send an individual's case file within a  
          specific time if CalHEERS receives information indicating that  
          an individual is newly eligible for Medi-Cal. 

          WCLP, the sponsor of this bill, states that while existing law  
          requires transitions between Medi-Cal and CoveredCA without a  
          break in coverage, there needs to be more specific processes to  


                                                                    AB 2077

                                                                    Page  5

          ensure that the transitions work.  WCLP writes that the state is  
          changing its current processes and even when someone loses their  
          job and reports it to CoveredCA, they would have to stay on and  
          keep paying for their current coverage, rather than moving over  
          to Medi-Cal.  WCLP and the Asian Law Alliance also contend that  
          this bill will put policies in place to ensure that when  
          someone's income fluctuates they could move into their new  
          program without becoming uninsured.

          Analysis Prepared by:                                             
                          Kristene Mapile / HEALTH / (916) 319-2097  FN: