BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2077 (Burke) - Health Care Eligibility, Enrollment, and  
          Retention Act
          
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          |Version: June 27, 2016          |Policy Vote: HEALTH 9 - 0       |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: August 8, 2016    |Consultant: Brendan McCarthy    |
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          This bill meets the criteria for referral to the Suspense File.

          Bill  
          Summary:  AB 2077 would extend Medi-Cal eligibility in some  
          circumstances and impose deadlines for determining Medi-Cal  
          eligibility, in order to avoid gaps in coverage for  
          beneficiaries transitioning between Medi-Cal and Covered  
          California health care coverage.


          Fiscal  
          Impact:  
           One-time costs in the hundreds of thousands, for the  
            Department of Health Care Services to change internal  
            processes, revise regulations, and seek any necessary federal  
            approvals (General Fund and federal funds).

           One-time costs in the hundreds of thousands to make system  
            changes to several information technology systems used to  
            determine eligibility for Medi-Cal and Covered California  
            coverage and to manage Medi-Cal enrollment (General Fund and  
            federal funds). In order to facilitate the requirements of the  
            bill, system changes will be needed to CalHEERS (the system  







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            used to process applications for Medi-Cal and Covered  
            California coverage) and MEDS (the system used to managed  
            Medi-Cal enrollment). It is possible that those costs would be  
            eligible for enhanced federal matching rate of 90%.

           One-time costs of $2.5 million to make system changes to the  
            SAWS (the systems used by counties to determine eligibility  
            for Medi-Cal) (General Fund and federal funds).
          
           Ongoing costs of $3 million to $5 million per year from  
            extended Medi-Cal eligibility during transitions to Covered  
            California coverage (General Fund and federal funds). Under  
            current practice, when an individual loses eligibility for  
            Medi-Cal (generally because of an increase in income), the  
            individual is given 10 days' notice before coverage is  
            terminated. This bill would require individuals to be given 20  
            days' notice before coverage is terminated. Medi-Cal coverage  
            would be terminated before 20 days, if the individual enrolls  
            in coverage through Covered California. Because Medi-Cal  
            enrollment is granted monthly, extending the transition period  
            from 10 to 20 days will result in roughly a third of  
            transitioning individuals receiving an additional month of  
            coverage. According to data published by the Department, there  
            are 5,000-6,000 individuals per month who transition from  
            Covered California to Medi-Cal. Staff assumes that a roughly  
            similar number of individuals transition from Medi-Cal to  
            Covered California each month.

           Ongoing costs, potentially in the low millions due to  
            increased enrollment in Medi-Cal of individuals transitioning  
            from Covered California coverage to Medi-Cal (General Fund and  
            federal funds). The bill would impose new deadlines on  
            counties to determine Medi-Cal eligibility for individuals who  
            have lost their Covered California coverage. By imposing such  
            deadlines, the bill may result in earlier Medi-Cal enrollment.  
            If 10% of individuals in that situation become eligible for  
            Medi-Cal for one extra month under the bill, the annual cost  
            would be about $3 million.


          Background:  Under state and federal law, the Department of Health Care  
          Services operates the Medi-Cal program, which provides health  
          care coverage to low income individuals, families, and children.  
          Medi-Cal provides coverage to childless adults and parents with  








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          household incomes up to 138% of the federal poverty level and to  
          children with household incomes up to 266% of the federal  
          poverty level. The federal government provides matching funds  
          that vary from 50% to 90% of expenditures depending on the  
          category of beneficiary.
          Also under state and federal law, the state operates Covered  
          California, which is the state's health benefit exchange.  
          Individuals are able to purchase health care coverage through  
          Covered California, with federal subsidies for individuals with  
          household income up to 400% of the federal poverty level.


          Based on changes in household income, individuals and families  
          transition back and forth between Medi-Cal and subsidized  
          Covered California Coverage.


          Current law requires transitions between these programs to be  
          accomplished without a break in coverage. However, some of the  
          state's existing processes and procedures seem to be resulting  
          in coverage lapses (for example, an individual losing Medi-Cal  
          coverage before Covered California coverage begins) or instances  
          in which an individual who is no longer eligible for subsidized  
          Covered California coverage is not yet enrolled in Medi-Cal,  
          leading to additional premium or cost sharing requirements on  
          the individual.


          Under current practice, when an individual is no longer eligible  
          for Medi-Cal, a county will send a "notice of action" informing  
          the individual that he or she will shortly lose Medi-Cal  
          coverage. Under current practice, the individual's Medi-Cal  
          coverage will not be terminated for at least 10 days. Because  
          Medi-Cal coverage is provided monthly, the actual additional  
          coverage period will depend whether the 10 day period goes into  
          the following month (in which case the individual will have an  
          additional month of coverage).


          Under current law, counties are generally required to determine  
          eligibility for Medi-Cal within 45 days. For individuals or  
          families who are transitioning from Covered California coverage  
          to Medi-Cal (for example because of a reduction in household  
          income), current practice has been to grant presumptive  








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          eligibility, enroll the individual or household in Medi-Cal, and  
          then require counties to make a final eligibility determination.  
          Generally, this has prevented significant gaps in coverage for  
          individuals transitioning to Medi-Cal. (Medi-Cal coverage is  
          granted monthly and is usually retroactive to the first day of  
          the month.) The Department of Health Care Services has indicated  
          that it is going to change this policy and no longer grant  
          presumptive eligibility to this population. The sponsors of the  
          bill are concerned that this could result in coverage gaps,  
          depending on how long it will take counties to determine  
          Medi-Cal eligibility.




          Proposed Law:  
            AB 2077 make extend Medi-Cal eligibility in some circumstances  
          and impose deadlines for determining Medi-Cal eligibility, in  
          order to avoid gaps in coverage for beneficiaries transitioning  
          between Medi-Cal and Covered California health care coverage.
          Specific provisions of the bill would:
           If an individual is eligible for coverage through Covered  
            California, prohibit Medi-Cal coverage from being terminated  
            until at least 20 days after the county sends a notice of  
            action notifying the beneficiary that Medi-Cal benefits are  
            being terminated;
           Require the notice of action to inform the beneficiary of the  
            deadline to enroll in Covered California coverage to avoid a  
            gap in coverage;
           Require Medi-Cal coverage to be terminated on the date of  
            enrollment in Covered California coverage, if it is less than  
            20 days from the notice of action being sent;
           Make implementation contingent on federal financial  
            participation;
           When an beneficiary who had Covered California coverage is  
            determined to be newly eligible for Medi-Cal by CalHEERS,  
            require the state to send the beneficiary's case information  
            to the county of residence within three days;
           When an beneficiary who had Covered California coverage is  
            determined to be newly eligible for Medi-Cal by CalHEERS,  
            require the county of residence to make  a final Medi-Cal  
            eligibility  determination by the end of the month for cases  
            received before the 15th of the month, or the 15th day of the  
            following month for cases received after the 15th of the  








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            month.


          Staff  
          Comments:  As part of the state's implementation of the  
          Affordable Care Act, the state has created Covered California to  
          provide subsidized health care coverage, expanded Medi-Cal  
          eligibility to childless adults, and created a system designed  
          to provide "no wrong door" for accessing health care coverage.  
          Individuals and families can apply for both Medi-Cal and Covered  
          California coverage online through Covered California, by phone,  
          in person at county welfare offices, or through enrollment  
          counselors. To the consumer, it appears that determining program  
          eligibility and enrolling the applicant in the appropriate  
          health care coverage program is done by the same system. While  
          the CalHEERS computer system is used to determine which program  
          an individual is eligible for, final eligibility determinations  
          and enrollment into Medi-Cal is still primarily performed by  
          counties. (CalHEERS can determine Medi-Cal eligibility when the  
          information provided by the applicant and federal data sharing  
          partners is sufficient to determine eligibility. If information  
          is incomplete or needs further verification of clarification,  
          the resident county performs the eligibility determination.)
          Under current practice, when an individual who has Covered  
          California coverage experiences a reduction in income such that  
          they are likely to be eligible for Medi-Cal, the individual is  
          granted presumptive eligibility for Medi-Cal, while the county  
          of residence reviews the case file to make the final eligibility  
          determination. The Department of Health Care Services is about  
          to make a change to this process that would eliminate  
          presumptive eligibility for those individuals. There are  
          indications that most applicants in this situation have their  
          Medi-Cal eligibility determined before their Covered California  
          coverage is terminated. By placing specific timelines in statute  
          for counties to perform the required eligibility determinations,  
          the bill may increase Medi-Cal enrollment, by facilitating  
          earlier enrollments by eligible individuals. 




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