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 ****