BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  May 18, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 10  
          (Lara) - As Amended April 28, 2016


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          Urgency:  Yes State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill requires the Secretary of the California Health and  
          Human Services Agency (Agency) to apply for a federal waiver to  
          allow undocumented Californians to enroll in a form of  
          unsubsidized health care coverage through Covered California.


          Upon approval of the waiver, Covered California would designate  
          "California qualified health plans (QHPs)," which are identical  
          to other qualified health plans offered, but able to be offered  
          to persons not otherwise eligible to purchase coverage from the  
          Exchange by reason of immigration status.









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          This bill also contains an urgency clause, indicating it is  
          necessary in order to request federal approval of the waiver to  
          expand access to health care coverage in California as quickly  
          as possible.


          FISCAL EFFECT:


          1)Minor and absorbable administrative costs to Covered  
            California to apply for the waiver.  The Agency indicates  
            Covered California is the appropriate entity to submit the  
            waiver application (California Health Trust Fund). 


          2)Significant Information Technology (IT) costs to Covered  
            California, potentially in the millions. Costs include  
            planning, development, and testing of functionality to allow  
            for designation of undocumented status, and facilitate  
            enrollment into "California QHPs" (California Health Trust  
            Fund). 


          3)Potentially significant, unknown ongoing costs to Covered  
            California associated with additional enrollment and  
            maintenance of IT systems.  Covered California also notes  
            implementation would need to include revisions to their  
            marketing campaign, to explain potentially confusing  
            differences in subsidies for families of mixed immigration  
            status.


          COMMENTS:


          1)Purpose.  The author notes current federal law excludes  
            undocumented immigrants from being able to purchase coverage  
            through Covered California, even with their own resources.   








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            This bill seeks to allow undocumented immigrants in California  
            to privately purchase, with no federal or state financial  
            assistance, health plans through Covered California, the  
            state's health insurance exchange.  This bill is supported by  
            numerous health care, immigration, labor, and other advocacy  
            organizations and has no opposition. 



          2)Background. Under existing state and federal law, undocumented  
            adults who are otherwise income-qualified for Medi-Cal 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. 



            Undocumented immigrants are also prohibited from purchasing  
            coverage in Covered California under federal law, and are  
            ineligible for federal subsidies intended to make health  
            insurance and the cost of care more affordable.  However,  
            California law requires health plans and insurers to make the  
            same plans and policies available inside and outside the  
            exchange, meaning the plans available for purchase through  
            Covered California are also offered outside on the  
            non-Exchange market.  





          3)Section 1332 Waivers and Recent State Work. The federal  
            Affordable Care Act (ACA) included a provision (Section 1332)  
            that allows certain ACA requirements to be waived in order to  
            pursue innovation. Section 1332 allows states to pursue broad  
            alternative approaches to expand coverage, or targeted changes  
            like the one proposed in this bill.   Waivers must meet  
            several federal requirements related to affordability and  








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            coverage and must not increase the federal deficit over 10  
            years.  Federal guidance related to Section 1332 waivers was  
            released last year, and waivers can be effective as early as  
            January 1, 2017.   



            Earlier this year, CoveredCA engaged stakeholders to discuss  
            potential Section 1332 waiver proposals.  This idea is one of  
            several 1332 waiver ideas proposed and evaluated by Covered  
            California.  Of the ideas proposed, this appears to be among  
            the simplest operationally and does not raise significant  
            concerns about ongoing state or federal fiscal liability.    





          4)Implementation. Under this bill, Covered California would  
            request permission to waive the ACA requirements that an  
            exchange only offer QHPs, since these plans cannot be offered  
            to undocumented immigrants. If the waiver is approved, Covered  
            California will be permitted to create and offer California  
            QHPs that are not subject to immigration verification  
            requirements.



            This bill requires such California QHPs be completely  
            identical to the plans offered in the subsidized and  
            unsubsidized market. However, Covered California will be  
            required to create a legally and technically distinct product  
            line, which would feature its own enrollment path and  
            eligibility requirements.













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          5)Staff Comments. Staff notes even with the ability to purchase  
            coverage through Covered California, coverage will still be  
            unaffordable for many. Furthermore, those who can afford it  
            can already purchase the same products outside the exchange.   
            However, Covered California has numerous beneficial features,  
            including shop-and-compare functions and the ability to  
            purchase family coverage.  Allowing undocumented individuals  
            to purchase coverage through Covered California directly would  
            allow individuals to make use of these functions, could  
            encourage greater enrollment, and could benefit families of  
            mixed immigration status. 
           


          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081