BILL ANALYSIS                                                                                                                                                                                                    Ó






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          | SENATE RULES COMMITTEE           |                       AB 2077|
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                                   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).










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          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; 








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             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  







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            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  







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            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: 








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             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  







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          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  







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            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







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          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  







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          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


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