BILL ANALYSIS Ó SB 10 Page 1 Date of Hearing: April 26, 2016 ASSEMBLY COMMITTEE ON HEALTH Jim Wood, Chair SB 10 (Lara) - As Amended April 13, 2016 SENATE VOTE: Not relevant. SUBJECT: Health care coverage: immigration status. SUMMARY: Requires the Secretary of California Health and Human Services Agency (CHHSA) to apply for a waiver under Section 1332 of the Patient Protection and Affordable Care Act (ACA) to allow persons otherwise not able to obtain coverage by reason of immigration status to obtain coverage through California's Health Benefit Exchange (Exchange, now known as Covered California or CoveredCa). Specifically, this bill: 1)Requires the CHHSA Secretary to apply to the United States (U.S.) Department of Health and Human Services (DHHS) for a waiver to allow persons otherwise not able to obtain coverage by reason of immigration status to obtain coverage through California's Exchange. 2)Requires the Exchange to offer qualified health plans (QHPs) to persons otherwise not able to obtain coverage by reason of immigration status, and subject to all of the requirements applicable to QHPs, as set forth in the Exchange's program SB 10 Page 2 requirements. 3)Requires eligible persons to pay the full cost of coverage without federal advanced premium tax credit (APTC), federal cost-sharing reduction, or any other federal assistance. 4)Defines, for the purposes of this bill, a California QHP as a product offered to persons not otherwise eligible to purchase coverage from the Exchange by reason of immigration status that complies with state law and the Exchange requirements for a QHP. 5)Makes provisions of this bill operative upon federal approval of the Section 1332 waiver. EXISTING LAW: 1)Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which qualified low-income persons receive health care benefits and, in part, governed and funded by federal Medicaid program provisions. Authorizes DHCS to extend continuous Medi-Cal eligibility to children 19 years of age and younger. 2)Extends eligibility for full-scope Medi-Cal benefits to individuals under 19 years of age who do not have, or are unable to establish, satisfactory immigration status, commencing after the DHCS Director determines that systems SB 10 Page 3 have been programmed for implementation of this extension, but in no case sooner than May 1, 2016. Requires these individuals to enroll in a Medi-Cal managed care health plan in those counties in which a Medi-Cal managed care health plan is available. 3)Prohibits Medicaid matching funds for medical assistance for an undocumented individual, except for care and services necessary for the treatment of an emergency medical condition, as defined, for an individual who otherwise meets the eligibility requirements for medical assistance under the state's Medicaid State Plan. 4)Establishes the ACA, which enacts various health care coverage market reforms. Requires, each state, by January 1, 2014, to establish an Exchange that makes QHPs available to qualified individuals and qualified employers. Requires, if a state does not establish an Exchange, the federal government to administer the Exchange. Establishes requirements for the Exchange and for QHPs participating in the Exchange, and defines who is eligible to purchase coverage in the Exchange. Limits enrollment in the Exchanges to citizens or U.S. nationals of the U.S., or an alien lawfully present in the U.S. 5)Allows, under the ACA and effective January 1, 2014, eligible individual taxpayers, whose household income is between 100% and 400% of the federal poverty level (FPL), an APTC based on the individual's income for coverage under a QHP offered in the Exchange. Requires a reduction in cost-sharing for individuals with incomes below 250% of FPL, and a lower maximum limit on out-of-pocket expenses for individuals whose incomes are between 100% and 400% of FPL. Provides that legal immigrants with household incomes less than 100% of FPL who are ineligible for Medi-Cal because of their immigration status are also eligible for the APTC and the cost-sharing SB 10 Page 4 reductions. 6)Establishes the CoveredCa within state government, as an independent public entity not affiliated with an agency or department, and requires the Exchange to compare and make available through selective contracting health insurance for individual and small business purchasers as authorized under the ACA. Specifies the powers and duties of the board governing the Exchange, and requires the board to facilitate the purchase of QHPs though the Exchange by qualified individuals and small employers. 7)Provides that an individual is not a qualified individual eligible for coverage under a QHP if that individual is not a citizen or national of the U.S. or an alien lawfully present in the U.S. FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee. COMMENTS: 1)PURPOSE OF THIS BILL. The author states that this bill directs the state to apply for a federal waiver to allow undocumented Californians to buy health insurance with their own money through Covered California. According to the author, this bill affirms California's commitment to embrace and integrate our immigrant community, to lead where the federal government has failed, and to acknowledge the hard work and sacrifice of a community that contributes billions of dollars to our gross domestic product. If successful, this bill will allow 390,000 immigrants who earn an income too high to qualify for Medi-Cal to purchase healthcare through the SB 10 Page 5 Exchange under the ACA. This bill will make California the first state in the nation to make this petition to the federal government. Additionally, the author states that prohibiting immigrants from buying insurance from the Exchange with their own money is irrational. Furthermore, the author contends that this is a discriminatory policy that does not reflect our California values. Through a waiver request to the federal government, the author states that we can fix that. 2)BACKGROUND. a) ACA. The ACA includes new health insurance subsidies for those with incomes up to 400% FPL and establishes an essential health benefits package that all plans in the Exchanges, or offered in the individual and small group markets outside the Exchanges, must provide at minimum. Qualified non-citizens will be eligible for subsidies, regardless of how long they have been in the U.S and access to the Exchange and available subsidies will be the same as for citizens, and will represent a substantial increase in the affordability of insurance for low and moderate income immigrants. Lawfully present immigrants with five years or less of U.S. residency, without access to employer sponsored insurance, will be able to receive both APTC and cost sharing reductions toward approved plans that meet the essential benefits package outlined in the ACA. This includes lawfully present immigrants whose incomes are below 133% FPL and, but for immigration status, would be eligible for Medicaid. Unauthorized immigrants are not allowed to purchase insurance from Exchanges, receive subsidies for Exchange coverage, or enroll in full-scope Medicaid and thus will likely remain uninsured under the ACA. Their access to SB 10 Page 6 primary and other forms of outpatient care will depend on the ability and willingness of local safety net providers, such as community health centers, to serve them, which will likely vary from area to area. The UC Berkeley Center for Labor Research and Education indicated that more than 2.7 million Californians are expected to remain uninsured under the ACA in 2019. b) Section 1332 State Innovation Waivers. Under Section 1332 of the ACA, the Secretaries of DHHS and the Treasury (Secretaries), as appropriate, may exercise their discretion to approve a request for a State Innovation Waiver (Section 1332 waiver) only if the Secretaries determine that the proposal meets the following four requirements: i) Provides coverage to at least a comparable number of the state's residents as would be provided absent the waiver; ii) Provides coverage and cost-sharing protections against excessive out-of-pocket spending that are at least as affordable for the state's residents as would be provided absent the waiver; iii) Provides coverage that is at least as comprehensive for the state's residents as would be provided absent the waiver; and, iv) Does not increase the Federal deficit. The Secretaries retain their discretionary authority under Section 1332 to deny waivers when appropriate given consideration of the application as whole, including the four requirements. SB 10 Page 7 As under similar waiver authorities, the Secretaries reserve the right to suspend or terminate a waiver, in whole or in part, any time before the date of expiration, if the Secretaries determine that the state materially failed to comply with the terms and conditions of the Waiver, including any of the requirements discussed in the guidance. Additionally, states are required to enact legislation to provide Waiver authority and must submit an application that includes economic, actuarial, and budget analysis, in addition to the analysis regarding how the Section 1332 Waiver is consistent with federal requirements. These Section 1332 Waivers can be effective as early January 1, 2017. c) CoveredCa and Section 1332 Waiver proposals. CoveredCa engaged stakeholders to discuss potential Section 1332 waiver proposals and compiled an Analysis and Report on California's 2016 Section 1332 State Innovation Waiver Proposals. According to CoveredCa, its focus is the continued effective implementation of the ACA in California. CoveredCa notes that a Section 1332 waiver would require considerable CoveredCa staff time and resources which will divert resources for improvements and advancements of proposals that are possible without a waiver. CoveredCa requests consideration of the following factors when pursuing a Section 1332 Waiver: i) Proposals should be directly related to CoveredCa's mission; ii) Proposals should achieve cost savings or administrative simplification for CoveredCa's enrollees and potential enrollees, for CoveredCa and for CoveredCa's contracted providers and health plans; SB 10 Page 8 iii) Due to CoveredCa's existing strategic priorities, the primary focus of a Section 1332 Waiver should be to improve processes rather than redesign processes; and, iv) Proposals that violate the U.S. Treasury's budget neutrality requirement or add liabilities to California's General Funds should not be considered. CoveredCa states that there was significant public comment in support of expanding coverage to additional populations such as undocumented Californians, specifically that all members of mixed immigration status families would be able to apply for coverage directly through CoveredCa. This proposal would simplify the family health insurance shopping and enrollment experience. CoveredCa also notes that there was not conclusive data presented regarding the demand for CoveredCa enrollment from undocumented Californians. Expert opinion indicated that there could be an increase in overall enrollment in CoveredCa due to mixed families being more likely to apply through one-stop shopping and because of reduced fears related to immigration status of undocumented family members. The estimated potential enrollment presented to CoveredCa during the stakeholder discussions was 50,000. Currently, undocumented Californians can enroll off the Exchange and similar to this bill, these products whether purchased on or off the Exchange, would not be subsidized with APTC or cost sharing reductions. d) December 2015 federal guidance. Federal guidance in December 2015 provided additional information about Section 1332 waiver requirements that must be met, the application review procedures, the amount of pass-through funding, certain analytical requirements, and operational considerations. SB 10 Page 9 e) Other states. For the 2015 legislative sessions, 11 states proposed bills affecting, examining, or authorizing Section 1332 Waivers, including Arkansas, California, Maine, Minnesota, New Mexico, Ohio, Rhode Island, South Carolina, Texas, and Vermont. Five states enacted measures related to Section 1332 Waivers, including Hawaii, Minnesota, Ohio, Rhode Island, and Texas. California appears to be the only state considering a Section 1332 Waiver with respect to on Exchange coverage for undocumented individuals. f) Current scope of Medi-Cal coverage. In order to be Medi-Cal eligible, an individual must be a state resident and generally must be low-income. Recent legal immigrants and undocumented immigrant adults who meet income and residency requirements are Medi-Cal-eligible, but the scope of that coverage depends on the immigration status of the immigrant. Under existing state and federal law, undocumented immigrants are not eligible for full scope services, and are instead eligible for "limited scope" Medi-Cal benefits. Limited-scope services are long-term care, pregnancy-related benefits, and emergency services. Medi-Cal also provides coverage for undocumented individuals needing breast and cervical cancer treatment, family planning services through the Family Planning, Access, Care, and Treatment program, and through temporary presumptive eligibility programs. Specifically, DHCS is currently implementing the Affordability and Benefit Program for Newly Qualified Immigrants. Individuals who participate in this program will enroll in a Covered California health plan and receive Medi-Cal coverage for any Medi-Cal-covered services not included in the CoveredCa plan. Enrollment opportunities for this program are planned for the Covered California 2016 open enrollment period beginning in November 2016, with QHP enrollment beginning on January 1, 2017. For individuals who SB 10 Page 10 participate in this program, all costs related to the CoveredCa plan will be paid by the state after federal APTC are applied. g) Current California law extended full-scope Medi-Cal benefits to children, specifically, SB 75 requires DHCS to provide full-scope Medi-Cal benefits to children, under age 19, who do not have satisfactory immigration status or are unable to establish satisfactory immigration status. DHCS identified May 16 as the projected implementation date. Full-scope eligibility will be retroactive to May 1. After DHCS' Director communicates to California's Department of Finance that the system is ready to enroll these children into full-scope coverage, actual enrollment will begin. DHCS has been working collaboratively with interested stakeholders on implementation efforts, and updates are provided at biweekly Immigration Workgroup meetings. 3)SUPPORT. The Western Center on Law and Poverty (WCLP) states that California needs to adopt inclusionary health coverage policies because immigrants without satisfactory immigration status were left out of federal health reform. WCLP contends that this bill would take another important step in allowing the whole family regardless of status to obtain coverage together on CoveredCa. WCLP notes that undocumented immigrants contribute substantially to the California economy and should benefit from our public program. Health Access California (Health Access) contends that California's health system, and Californians in general, are healthier and stronger when every Californian has the opportunity to have affordable, comprehensive health coverage. SB 10 Page 11 Existing law allows undocumented individuals to buy coverage as individuals in the market off the Exchange. If, however, an undocumented individual or a family with an undocumented family member shows up at CoveredCa, the undocumented individual is barred from purchasing covered through CoveredCa and must be turned away. Health Access states that while affordability will continue to be a barrier, this bill would provide a practical benefit to many families with mixed immigration status, so that CoveredCa could assist the entire family in signing up for coverage, even if some will be subsidized and others not. Health Access contends that over 70% of undocumented Californians are in families with legal residents. Consumer Watchdog states that improving health access and allowing more immigrant families to purchase health coverage through Covered Ca are important steps toward making the ACA more inclusive. The National Health Law Program states that California can be a model for this nation by removing an unjust exclusion to CoveredCa based on immigration status and immigrant families will be better serviced when CoveredCa is accessible to the entire family. The California Immigrant Policy Center (CIPC) states that the ACA explicitly excluded undocumented immigrants and immigrants approved for deferred action through the Deferred Action for Childhood Arrivals Program of 2012 from purchasing health insurance through CoveredCa due to immigration status. On June 15, 2012, the Secretary of Homeland Security announced that certain people who came to the U.S. as children and meet several key guidelines may request consideration of deferred action for a period of two years, subject to renewal, and would then be eligible for work authorization.The CIPC states that improving health access and allowing people to buy health coverage through CoveredCa are important steps toward making the ACA more inclusive. SB 10 Page 12 4)PREVIOUS LEGISLATION. a) SB 4 (Lara), Chapter 709, Statutes of 2015, requires children under the age of 19 enrolled in restricted scope Medi-Cal be enrolled in full-scope Medi-Cal. b) SB 75 (Committee on Budget and Fiscal Review), Chapter 18, Statutes of 2015, the Omnibus Health Trailer Bill for 2015-16, contains changes related to the Budget Act of 2015 and includes provisions expanding full-scope Medi-Cal coverage to children, regardless of immigration status, who currently would be eligible for Medi-Cal if not for immigration status. Requires children eligible in this category to enroll in Medi-Cal managed care. Requires DHCS to seek federal financial participation (FFP), but requires coverage to be provided regardless of FFP. Requires DHCS to provide a semiannual status report to the Legislature until regulations have been adopted. c) SB 1005 (Lara) of 2014 would have established the California Health Exchange Program for All Californians (CHEPFAC) within state government and would have required that CHEPFAC be governed by the Executive Board that governs CoveredCa. SB 1005 would have required CoveredCa, by January 1, 2016, to facilitate the enrollment of individuals who would have been eligible to purchase coverage through CoveredCa but for their immigration status and extend eligibility for full-scope Medi-Cal benefits to individuals who were otherwise eligible for those benefits but for their immigration status. SB 1005 was held on the Senate Appropriations suspense file. SB 10 Page 13 d) SB 900 (Alquist), Chapter 659, Statutes of 2010, establishes CoveredCa as an independent public entity within state government, and requires CoveredCa to be governed by a board composed of the CHSSA Secretary, or his or her designee, and four other members appointed by the Governor and the Legislature who meet specified criteria. e) AB 1602 (John A. Pérez), Chapter 655, Statutes of 2010, specifies the powers and duties of Covered California relative to determining eligibility for enrollment in the CoveredCa and arranging for coverage under qualified health plans. 5)PROPOSED AMENDMENTS. The author intends to include an urgency clause such that this bill will become effective immediately upon enactment. REGISTERED SUPPORT / OPPOSITION: Support Advancement Project Alameda Health Consortium Alliance for Boys and Men of Color American Academy of Pediatrics, California American Federation of State, County and Municipal Employees, AFL-CIO Asian Americans Advancing Justice Asian Law Alliance ASPIRE SB 10 Page 14 California Academy of Family Physicians California Alliance for Retired Americans California Asian Pacific Islander Budget Partnership California Black Health Network California Coverage & Health Initiatives California Family Resources Association California Immigrant Policy Center California Labor Federation California Latinas for Reproductive Justice California Lesbian, Gay, Bisexual, and Transgender Health and Human Services Network California National Organization for Women California Pan-Ethnic Health Network California Partnership California Primary Care Association California Rural Legal Assistance Foundation California School Employees Association California Teachers Association Campaign for a Healthy California Children Now Children's Defense Fund California Children's Health Coverage Coalition Children's Partnership Coalition for Humane Immigrant Rights of Los Angeles Coalition of California Welfare Rights Organizations, Inc. Coalition of Orange County Community Health Centers Community Clinic Association of Los Angeles County Community Clinic Consortium Community Health Councils, Inc. Community Health Initiative of Orange County Consumer Watchdog Fathers & Families of San Joaquin Having Our Say Health Access California Korean Community Center of the East Bay L.A. Care Health Plan Latino Health Access Long Beach Immigrant Rights Coalition Los Angeles LGBT Center SB 10 Page 15 Maternal and Child Health Access National Association of Social Workers, California Chapter National Health Law Program National Immigrant Law Center NICOS Chinese Health Coalition Older Women League People Demanding Action Physicians for a National Health Program PICO California Planned Parenthood Affiliates of California Planned Parenthood Mar Monte Providence Health & Services Public Law Center Reach Out San Francisco Community Clinic Consortium SEIU California Senior and Disability Action Single Payer Now South Asian Network Southeast Asian Resource Action Center Street Level Health Project United Steel Workers Local 675 United Way Fresno and Madera Counties United Way of Stanislaus County United Way of the Bay Area United Ways of California Visión y Compromiso Western Center on Law and Poverty Young Invincibles Opposition None in file. SB 10 Page 16 Analysis Prepared by:Kristene Mapile / HEALTH / (916) 319-2097