BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    AB 2077             
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          |AUTHOR:        |Burke                                          |
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          |VERSION:       |June 1, 2016                                   |
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          |HEARING DATE:  |June 22, 2016  |               |               |
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          |CONSULTANT:    |Scott Bain                                     |
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           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  








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            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  :  
          
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          |Assembly Floor:                     |80 - 0                      |
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          |Assembly Appropriations Committee:  |14 - 0                      |
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          |Assembly Health Committee:          |18 - 0                      |
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          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  








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            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. 








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          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 --
          










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