BILL ANALYSIS Ó SB 10 Page 1 Date of Hearing: May 18, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 10 (Lara) - As Amended April 28, 2016 ----------------------------------------------------------------- |Policy |Health |Vote:|12 - 3 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- 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. SB 10 Page 2 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. SB 10 Page 3 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 SB 10 Page 4 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. SB 10 Page 5 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