BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 2077 --------------------------------------------------------------- |AUTHOR: |Burke | |---------------+-----------------------------------------------| |VERSION: |June 1, 2016 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |June 22, 2016 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Scott Bain | --------------------------------------------------------------- SUBJECT : Health Care Eligibility, Enrollment, and Retention Act SUMMARY : Prohibits Medi-Cal benefits from being terminated until at least 20 days after the county sends the notice of action terminating Medi-Cal eligibility if the individual is eligible to enroll in a qualified health plan through Covered California, to the extent federal financial participation is available. Establishes application processing timelines for counties for individuals who were enrolled in Covered California and who are determined newly eligible for Medi-Cal through the application processing system known as the California Healthcare Eligibility, Enrollment and Retention System. 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 to establish an American Health Benefit Exchange that makes qualified health plans (QHP) available to qualified individuals and qualified employers. Requires, if a state does not establish an Exchange, the federal government to administer the Exchange. 2)Allows through the ACA, eligible individual taxpayers whose household income equals or exceeds 100%, but does not exceed 400% of the federal poverty level (FPL), an advanceable and refundable tax credit (APTC) for a percentage of the cost of premiums for coverage under a QHP offered in the Exchange. The ACA requires a reduction in cost-sharing for individuals with incomes below 250% of the FPL, and a lower maximum limit on out-of-pocket expenses for individuals whose incomes are between 100% and 400% of the FPL. AB 2077 (Burke) Page 2 of ? Existing state law: 1)Establishes the California Health Benefit Exchange (known as Covered California) in state government, and specifies its duties and authority. Requires Covered California to be governed by a board that includes the Secretary of the California Health and Human Services Agency and four members with specified expertise who are appointed by the Governor and the Legislature. 2)Establishes the Medi-Cal Program, administered by the Department of Health Care Services (DHCS), which provides comprehensive health benefits to low-income children up to 266% of the FPL, parents and adults under age 65 up to 138% of the FPL, pregnant women, and elderly, blind or disabled persons, who meet specified eligibility criteria. 3)Requires, during the processing of an application, renewal, or a transition due to a change in circumstances, an entity making eligibility determinations for an insurance affordability program (such as Medi-Cal or Covered California) to ensure that an eligible applicant and recipient of insurance affordability programs that meets all program eligibility requirements and complies with all necessary requests for information moves between programs without any breaks in coverage. 4)Requires counties, for individuals determined ineligible for Medi-Cal by a county following the redetermination procedures, eligibility to be determined for other insurance affordability programs. Requires the county, if the individual is found to be eligible, to transfer the individual's electronic account to other insurance affordability programs via a secure electronic interface. 5)Requires county social service departments to notify beneficiaries in writing of their Medi-Cal-only eligibility or ineligibility, and of any changes made in their eligibility status or share of cost. These notifications are called a "Notice of Action (NOA)." NOAs inform Medi-Cal beneficiaries of: a) Any approval, denial or discontinuance of eligibility; b) A change in the beneficiary's share of cost; c) The reason an action is being taken and the law or AB 2077 (Burke) Page 3 of ? regulation that requires the action (if the action is a denial, discontinuance or increase in share of cost); and, d) The right to request a state hearing. This bill: 1)Prohibits Medi-Cal benefits from being terminated until at least 20 days after the county sends the NOA terminating Medi-Cal eligibility if the individual is eligible to enroll in a QHP through Covered California. 2)Requires the NOA to inform the individual of the date by which he or she must select and enroll in a QHP through the Exchange to avoid being uninsured. 3)Requires Medi-Cal eligibility to be terminated as of the date of enrollment in the QHP if the individual has effectuated his or her enrollment in a QHP through Covered California before the termination date specified in the notice. 4)Implements paragraphs 1) through 3) above only to the extent that federal financial participation is available. 5)Requires, if an individual who has been enrolled in a QHP through Covered California is determined newly eligible for Medi-Cal through the California Healthcare Eligibility, Enrollment and Retention System (CalHEERS), the individual's case information and eligibility determination to be sent to his or her county of residence within three business days. (CalHEERS is the on-line application system administered by Covered California and DHCS.) 6)Requires cases received by the county prior to the 15th day of the month to be processed for final Medi-Cal eligibility by the county by the end of that month. 7)Requires cases received by the county after the 15th day of the month to be processed for final Medi-Cal eligibility by the 15th day of the following month. 8)Requires, for an individual who is newly eligible for Medi-Cal, in a county that provides Medi-Cal services under the two-plan model or the geographic managed care plan model, the individual to be enrolled in a Medi-Cal managed care plan according to either of the following: AB 2077 (Burke) Page 4 of ? a) Requires, if the QHP the individual was enrolled in through the Covered California is an available Medi-Cal managed care plan in his or her county and that plan has the same or substantially similar provider network, the individual to be assigned to that plan; or, b) Requires the individual to be assigned to a plan using the usual Medi-Cal managed care default algorithm. 1)Requires, for an individual who is newly eligible for Medi-Cal, in a county that provides Medi-Cal services under a county organized health system (COHS), the individual to be enrolled into the COHS plan on the first date of Medi-Cal coverage and to be sent the provider directory for the managed care plan. -States legislative intent to establish procedures to ensure that individuals move between Medi-Cal and Covered California without any breaks in coverage as required under a specified provision of existing law. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1)Uncertain Information Technology (IT) costs to 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 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 Covered California 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 Covered California plan. If even a portion of AB 2077 (Burke) Page 5 of ? this projected 2 million stayed on Medi-Cal for an extra month while transitioning from Medi-Cal to Covered California, the state could experience cost in the millions of dollars or more (GF/federal). PRIOR VOTES : ----------------------------------------------------------------- |Assembly Floor: |80 - 0 | |------------------------------------+----------------------------| |Assembly Appropriations Committee: |14 - 0 | |------------------------------------+----------------------------| |Assembly Health Committee: |18 - 0 | | | | ----------------------------------------------------------------- COMMENTS : 1)Author's statement. According to the author, this bill eases the transition between plans for those moving from Covered California plans to Medi-Cal and vice versa. For individuals moving from Medi-Cal to Covered California, they will have 20 days before their Medi-Cal benefits expire. Those moving from Covered California to Medi-Cal will also have additional time to select a plan, and receive guidance on how to select a plan. By providing a coverage bridge for Californians transitioning between plans, we can make sure that no one falls through a coverage gap. 2)Transitions between coverage programs. Eligibility for Medi-Cal and Covered California APTC and cost-sharing subsidies are based in part on income. Most adults can qualify for Medi-Cal with incomes up to 138% of the FPL ($33,534 a year for a family of four in 2016) and children can qualify with incomes up to 266% FPL ($64,638 for a family of four in 2016). People whose incomes are higher than these thresholds can get health coverage through Covered California and can qualify for subsidies with incomes up to 400% FPL ($97,200 for a family of four in 2016). When an individual experiences a change in income, they may move between the two programs. These transitions can occur during the course of the year as a result of a change in income, due to a change in the FPL, when an individual has a change in family size, or at annual eligibility redetermination. When an individual's income AB 2077 (Burke) Page 6 of ? increases or decreases, they can move from Medi-Cal to Covered California or vice versa. DHCS indicates (based on prior years' data), approximately 80,000 to 100,000 cases transitioned from Covered California to Medi-Cal in the January timeframe, due to Covered California's annual renewal period (which ends December 31st of each year). An additional 5,000 to 10,000 cases transition from Covered California to Medi-Cal on a monthly basis throughout the remainder of the year, due to reported changes in circumstances. Based on DHCS' data, on average 2,800 - 5,000 Medi-Cal cases transition each month to Covered California. Existing law already requires transitions between the programs without a break in coverage. This bill establishes more specific provisions on how transitions from Medi-Cal to Covered California (and vice versa) will work, as follows: a) Covered California to Medi-Cal. When an individual moves from coverage in Covered California to Medi-Cal through CalHEERS, this bill requires that case information to be sent to their county of residence within three business days (Covered California indicates this information is transmitted immediately under current practice). Under existing law, counties receiving these cases have 45 days to make a Medi-Cal eligibility determination for most cases. Under this bill, shorter timeframes would apply for these individuals. Cases received by the county prior to the 15th day of the month would have to be processed for final Medi-Cal eligibility by the county by the end of that month. Cases received after the 15th day of the month would have to be processed for final Medi-Cal eligibility by the 15th day of the following month. The purpose of these shorter timeframes is so that individuals are not required to incur premiums and cost-sharing for Covered California coverage when they are Medi-Cal eligible. b) Medi-Cal to Covered California. When an individual moves from Covered California to Medi-Cal, this bill would prohibit Medi-Cal benefits from being terminated until at least 20 days after the county sends a NOA AB 2077 (Burke) Page 7 of ? terminating Medi-Cal eligibility. Under current law, NOAs are sent 10 days prior to Medi-Cal eligibility being discontinued. In addition, this bill would require Medi-Cal eligibility to be terminated as of the date of enrollment in the QHP in Covered California if the individual has effectuated his or her enrollment in a QHP through Covered California before the termination date contained in the notice. There are several reasons for this longer timeframe. Because Medi-Cal coverage is a monthly basis, a notice mailed mid-month would not meet the 20 day notice, so Medi-Cal coverage would continue through the following month. For example, if Medi-Cal coverage was discovered to be discontinued on March 12, the 20 day notice requirement would mean the coverage discontinuance would not take effect until May 1st,(because the 20 day notice would fall after the end of March). Under a 10 day NOA requirement, the individual's coverage would terminate April 1st. In addition, the 20 day notice provides an individual a longer time period to select a QHP in Covered California. To address DHCS' concern that this would result in a state-only Medi-Cal cost for an additional month of Medi-Cal coverage, this bill contains language making this provision contingent upon FFP being available. In addition, this bill requires the NOA to inform the individual of the date by which he or she must select and enroll in a QHP through the Exchange to avoid being uninsured. This provision addresses an issue with the existing notices, which do not notify individuals of the need for prompt action if they do not pick a QHP so as to avoid a gap between when their Medi-Cal coverage ends and their Covered California coverage begins. The notice fixes are currently scheduled for implementation in September 2016. 1)Prior legislation. AB 1296 (Bonilla, Chapter 641, Statutes of 2011) enacted the Health Care Eligibility, Enrollment and Retention Act, requiring state entities who administer health care coverage programs to undertake a variety of activities related to eligibility, enrollment and renewal of health care coverage through Medi-Cal. AB 2077 (Burke) Page 8 of ? 2)Support. This bill is sponsored by Western Center on Law and Poverty (WCLP) to put in place policies and procedures to allow people moving between Medi-Cal and Covered California to do so without being uninsured. WCLP writes that many people moving between programs are ending up without health coverage for one to several months despite an existing law provision that requires that individuals be able to move between programs without any breaks in coverage. During gaps in coverage, individuals cannot get the care they need, or they have to pay for care out-of-pocket, which many cannot afford. WCLP argues that when people move from Covered California to Medi-Cal, the state is planning to change its policy of "presumptive eligibility" which enrolls them in Medi-Cal quickly. WCLP states the effect of this change which will be that people will have to say on Covered California while the county makes a final Medi-Cal eligibility determination. WCLP states this forces the person to pay premiums and cost-sharing as if they had higher income when Medi-Cal coverage is free. For individuals moving from Covered Coverage to Medi-Cal, WCLP writes this bill would ensure their case is sent to the county right away and is promptly determined. Finally, WCLP writes that this bill would also ensure that individuals moving from Medi-Cal to Covered California are being told they most choose a Covered California plan to avoid a break in coverage, and will allow consumers more time to choose and enroll in a Covered California plan. The Legal Aid Society of Orange County, Legal Services of Northern California and the Legal Aid Society of San Mateo County writes in support of this measure and cites cases they have dealt with where individuals transitioning between Medi-Cal and Covered California have had gaps in coverage, and have suffered adverse health and financial consequences as a result. 3)DHCS concerns. The problems with transitions between Covered and Medi-Cal has been discussed with DHCS and Covered California, and the improved notices regarding the need to promptly pick a plan for new Covered California enrollees are currently scheduled to take effect in the CalHEERS release in September 2016. With regard to the 20 day NOA (instead of the current 10 day NOA), DHCS indicates this change would treat individuals in a transition differently than new applicants for Medi-Cal coverage. This change would require changes to AB 2077 (Burke) Page 9 of ? DHCS' existing infrastructure for a subset of individuals, and is counter to DHCS' desire to treat individuals the same. If the NOA timeframe were changed to 20 days for all Medi-Cal beneficiaries, DHCS indicates this would have an impact on Medi-Cal costs as more individuals would remain on the program an additional month. 4)Author's amendment. The author is proposing to delete the provisions in this bill that assign people moving from Covered California to a Medi-Cal into a Medi-Cal managed care plan. SUPPORT AND OPPOSITION : Support: Western Center on Law and Poverty (sponsor) American Cancer Society Cancer Action Network Asian Americans Advancing Justice Asian Law Alliance California Black Health Network California Pan-Ethnic Health Network California Coverage and Health Initiatives California Immigrant Policy Center California Rural Legal Assistance, Inc. California School Employees Association Central California Legal Services, Inc. Children Now Children's Defense Fund Children's Partnership Coalition of Welfare Rights Organizations, Inc. Congress of California Seniors Consumers Union Health Access California Justice in Aging Legal Aid Society of Orange County Legal Aid Society of San Mateo County Legal Services of Northern California National Association of Social Workers, California Chapter National Health Law Program Project Inform Oppose: None received -- END -- AB 2077 (Burke) Page 10 of ?