BILL ANALYSIS Ó AB 2077 Page 1 GOVERNOR'S VETO AB 2077 (Burke and Bonilla) As Enrolled September 9, 2016 2/3 vote -------------------------------------------------------------------- |ASSEMBLY: |80-0 |(June 2, 2016) |SENATE: |39-0 |(August 25, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- -------------------------------------------------------------------- |ASSEMBLY: |79-0 |(August 31, | | | | | | |2016) | | | | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: HEALTH SUMMARY: Prohibits Medi-Cal benefits from being terminated until at least 20 days after the county sends the notice of action (NOA) terminating Medi-Cal eligibility if the individual is eligible to enroll in a qualified health plan (QHP) through Covered California, to the extent federal financial participation is available. Establishes application processing AB 2077 Page 2 timelines for counties for individuals who were enrolled in California's Health Benefit Exchange (also known as 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). The Senate amendments: 1)Delete language specifying that individuals who effectuated enrollment in a QHP prior to the termination date specified in the NOA, then Medi-Cal eligibility will be terminated as of the QHP enrollment date. 2)Delete language specifying that for individuals enrolled in a QHP and newly eligible for Medi-Cal, cases received by the county prior to the 15th day of the month be processed for final Medi-Cal eligibility by the end of the month and cases received by the county after the 15th of the month be processed for final Medi-Cal eligibility by the 15th day of the following month. 3)Add language specifying that for referrals of a Modified Adjusted Gross Income Medi-Cal eligible individual, the county is required 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 to prioritize the referral for processing to ensure the individual's Medi-Cal eligibility is effective on the first day of the following month if the referral is received with at least five business days remaining in the month; and, AB 2077 Page 3 b) Requires the county to prioritize the referral for processing to ensure the individual's eligibility is effective no later than the first day of the second month following receipt of the referral if the referral is received with less than five business days remaining in the month. 4)Add language requiring the county 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 if the referral requires follow-up to establish Medi-Cal eligibility. 5)Delete the Medi-Cal enrollment procedure requirements for newly eligible Medi-Cal individuals, specifically: a) For individuals previously enrolled through Covered California and the QHP is available as a Medi-Cal managed care plan in the same county and the health plan has the same or substantially similar provider network; b) For individuals assigned to a health plan using the usual Medi-Cal managed care default algorithm; and, c) For individuals enrolled into the county organized health system plan. FISCAL EFFECT: According to the Senate Appropriations Committee: 1)One-time costs in the hundreds of thousands, for the AB 2077 Page 4 Department of Health Care Services (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 this 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 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 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 AB 2077 Page 5 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). This 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, this 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 this bill, the annual cost would be about $3 million. COMMENTS: 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 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. DHCS concerns. The problems with transitions between Covered California and Medi-Cal has been discussed with DHCS and Covered California, and the improved notices regarding the need to promptly pick a plan for new Covered California enrollees are currently scheduled to take effect in the CalHEERS release in September 2016. With regard to the 20 day NOA (instead of the current 10 day NOA), DHCS indicates this change would treat individuals in a transition differently than new applicants for Medi-Cal coverage. This change would require changes to DHCS' existing infrastructure for a subset of individuals, and is counter to DHCS' desire to treat individuals the same. If the NOA timeframe were changed to 20 days for all Medi-Cal AB 2077 Page 6 beneficiaries, DHCS indicates this would have an impact on Medi-Cal costs as more individuals would remain on the program an additional month. GOVERNOR'S VETO MESSAGE: I am returning Assembly Bill 2077 without my signature. This bill allows people to stay on Medi-Cal longer in order to sign up for Covered California. The bill also requires counties to prioritize applications from new enrollees into Medi-Cal from Covered California. The ability to maintain coverage while transitioning between Medi-Cal and Covered California may indeed be a daunting task. I am not comfortable, however, with the approach this bill proposes by giving more time on Medi-Cal to some, and preferential enrollment to others. The Department of Health Care Services and Covered California are currently working on improvements to the eligibility and enrollment systems to give people the timely information they need to ease the transition from one program to the other. Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0005077 AB 2077 Page 7