BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      SB 10


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          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  








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            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  








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            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  








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            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  








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            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  








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               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.  









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               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;









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               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.  








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             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  








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               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.  








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             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.  









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          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.












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             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








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          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








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          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.










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          Analysis Prepared by:Kristene Mapile / HEALTH / (916)  
          319-2097