BILL ANALYSIS Ó
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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