BILL ANALYSIS Ó ----------------------------------------------------------------- | SENATE RULES COMMITTEE | AB 2077| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2077 Author: Burke (D) and Bonilla (D) Amended: 8/19/16 in Senate Vote: 21 SENATE HEALTH COMMITTEE: 9-0, 6/22/16 AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Roth, Wolk SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen ASSEMBLY FLOOR: 80-0, 6/2/16 - See last page for vote SUBJECT: Health Care Eligibility, Enrollment, and Retention Act SOURCE: Western Center on Law and Poverty DIGEST: This bill 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. This bill requires counties to prioritize processing applications 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 (CalHEERS). AB 2077 Page 2 Senate Floor Amendments of 8/19/16 provide different county application processing timeframes when people move from Covered California to Medi-Cal who have applied through CalHEERS, and remove a requirement for counties to terminate Medi-Cal coverage early if the individual is already enrolled in a Covered California plan. ANALYSIS: Existing law: 1)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. 2)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. 3)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; AB 2077 Page 3 b) A change in the beneficiary's share of cost; c) The reason an action is being taken and the law or 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 quality health plan (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 Covered California to avoid being uninsured. 3)Implements 1) and 2) above only to the extent that federal financial participation is available. 4)Requires, if an individual who has been enrolled in a QHP through Covered California is determined newly eligible for Medi-Cal through the 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 Department of Health Care Services (DHCS).) 5)Requires counties, for an individual who was previously enrolled in coverage through Covered California, who enrolled through CalHEERS, and is determined newly eligible for Medi-Cal, if a referral from indicates that an individual is eligible or conditionally eligible for MAGI Medi-Cal based on AB 2077 Page 4 Modified Adjusted Gross Income (MAGI), to prioritize the referral for processing to ensure the individual's Medi-Cal eligibility is effective according to either of the following timelines, as applicable: a) Requires the county, if the referral is received with at least five business days remaining in the month, the county to prioritize the referral for processing to ensure the individual's Medi-Cal eligibility is effective on the first day of the following month. b) Requires the county, if the referral is received with less than five business days remaining in the month, to prioritize the referral for processing to ensure the individual's Medi-Cal eligibility is effective no later than the first day of the second month following receipt of the referral. 1)Requires counties, if the referral requires follow-up to establish Medi-Cal eligibility, to prioritize the referral for processing to ensure the individual's Medi-Cal eligibility is effective no later than the first day of the second month following receipt of the referral. 2)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. 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 AB 2077 Page 5 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 Advanced Premium Tax Credit and cost-sharing subsidies are based in part on income. Most adults can qualify for Medi-Cal with incomes up to 138% of the Federal Poverty Level (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 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: AB 2077 Page 6 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 if the referral is received with at least five business days remaining in the month. For these individuals, the county is required to prioritize the referral for processing to ensure the individual's Medi-Cal eligibility is effective on the first day of the following month. The purpose of this expedited timeframe 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 terminating Medi-Cal eligibility. Under current law, NOAs are sent 10 days prior to Medi-Cal eligibility being discontinued. 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 1, (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 1. 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 AB 2077 Page 7 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. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee: 1)One-time costs in the hundreds of thousands, for DHCS to change internal processes, revise regulations, and seek any necessary federal approvals (General Fund and federal funds). 2)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 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%. 3)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). 4)Ongoing costs of $3 million to $5 million per year from extended Medi-Cal eligibility during transitions to Covered AB 2077 Page 8 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-day notice before coverage is terminated. This bill requires 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 DHCS, 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. 5)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 imposes 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. SUPPORT: (Verified8/18/16) Western Center on Law and Poverty (source) American Cancer Society Cancer Action Network Asian Americans Advancing Justice Asian Law Alliance California Black Health Network California Pan-Ethnic Health Network California School Employees Association AFL-CIO Central California Legal Services, Inc. Children Now AB 2077 Page 9 Coalition of California Welfare Rights Organizations, Inc. Congress of California Seniors Consumers Union Health Access California Justice in Aging Legal Aid Society of San Mateo County Legal Services of Northern California National Health Law Program Private Essential Access Community Hospitals Project Inform The Children's Defense Fund The Children's Partnership OPPOSITION: (Verified8/18/16) Department of Finance ARGUMENTS IN 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 ensures their case is sent to the county right away and is promptly determined. Finally, WCLP writes that this bill also ensures 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 AB 2077 Page 10 plan. ARGUMENTS IN OPPOSITION: The Department of Finance (DOF) writes because it creates additional General Fund costs for DHCS and the Department of Social Services. In addition, DOF states this bill is unnecessary and premature as DHCS and Covered California are already taking steps to address the concerns raised in this bill by planning for the implementation of CalHEERS functionality to address this issue. DOF states that DHCS and the Covered California are already undertaking efforts to improve the transition of beneficiaries between Medi-Cal and QHP coverage, and CalHEERS functionality is scheduled to be implemented in October of 2016 to enhance automation processes for insurance affordability programs transitions. ASSEMBLY FLOOR: 80-0, 6/2/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon Prepared by:Scott Bain/ HEALTH / (916) 651-4111 8/22/16 23:01:08 **** END ****