BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: SB 4 --------------------------------------------------------------- |AUTHOR: |Lara | |---------------+-----------------------------------------------| |VERSION: |April 6, 2015 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |April 15, 2015 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Scott Bain | --------------------------------------------------------------- SUBJECT : Health care coverage: immigration status SUMMARY : Extends eligibility for full-scope Medi-Cal benefits to individuals who are otherwise eligible for those benefits but for their immigration status. Requires the Secretary of California Health and Human Services Agency to apply to the federal Department of Health and Human Services for a Section 1332 innovation waiver in order to allow persons otherwise not able to obtain coverage through Covered California because of their immigration status to obtain coverage without premium or cost-sharing subsidies by waiving the requirement that Covered California offer only qualified health plans. Establishes the California Health Exchange Program for All Californians as a state exchange for individuals ineligible for Covered California because of their immigration status in the event federal approval of the Section 1332 waiver is not granted. Existing federal law: 1.Requires, under the Patient Protection and Affordable Care Act (ACA, Public Law 111-148), as amended by the Health Care Education and Reconciliation Act of 2010 (Public Law 111-152), each state, by January 1, 2014, to establish an American Health Benefit Exchange that makes qualified health plans (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 citizen or nationals of the United States, or an alien lawfully present in the United States. 2.Allows, under the ACA and effective January 1, 2014, eligible SB 4 (Lara) Page 2 of ? individual taxpayers, whose household income is between 100 and 400 percent of the Federal Poverty Level (FPL), an advanceable and refundable premium tax credit (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 percent of the FPL, and a lower maximum limit on out-of-pocket expenses for individuals whose incomes are between 100 and 400 percent of the FPL. Legal immigrants with household incomes less than 100 percent of the FPL who are ineligible for Medicaid because of their immigration status are also eligible for the APTC and the cost-sharing reductions. 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.Authorizes, under Section 1332 of the ACA, waivers for state innovation under which states can seek federal approval to waive major provisions of the ACA, including the requirement for Exchanges, QHPs, premium tax credits and cost-sharing reductions, the individual mandate and the employer responsibility requirement, provided federal requirements are met for comprehensive benefits, affordability, and comparable coverage are met and the state proposal does not increase the federal deficit. Existing state law: 1.Establishes the California Health Benefit Exchange (Covered California) in state government, and specifies its duties and authority. Requires Covered California to be governed by a board that includes the Secretary of the California Health and Human Services Agency (Agency) and four members with specified expertise who are appointed by the Governor and the Legislature. 2.Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which low income individuals are eligible for medical coverage. Medi-Cal provides coverage to adults to adults and parents with incomes up to 138 percent of the FPL who are under age 65, and to children with incomes up to 266 percent of the FPL. SB 4 (Lara) Page 3 of ? 3.Makes undocumented individuals, who are otherwise eligible for Medi-Cal services, eligible only for care and services that are necessary for the treatment of an emergency medical condition and medical care directly related to the emergency, as defined in federal law. Makes low-income undocumented individuals Medi-Cal eligible for pregnancy-only coverage, breast and cervical cancer-related treatment services, and long-term care services. 4.Defines, under state law, an "emergency medical condition" as a medical condition (including emergency labor and delivery) manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in: a. Placing the patient's health in serious jeopardy; b. Serious impairment to bodily functions; or, c. Serious dysfunction of any bodily organ or part. This bill: Full-Scope Medi-Cal Benefits 1.Makes individuals who meet all of the eligibility requirements for full-scope Medi-Cal benefits, except for their immigration status, eligible for full-scope Medi-Cal benefits. Requires these individuals to enroll into Medi-Cal managed care health plans, and to pay copayments and premium contributions to the extent required of otherwise eligible Medi-Cal recipients who are similarly situated. 2.Requires Medi-Cal benefits for services to be provided with state-only funds only if federal financial participation (FFP) is not available for those services. Requires DHCS to maximize FFP in implementing this provision to the extent allowable. 3.Requires that individuals who are enrolled in restricted scope Medi-Cal as of December 31, 2015, who are eligible under this bill to be transitioned directly to full-scope coverage under the Medi-Cal program. Requires DHCS to develop a transition plan for those currently enrolled in restricted scope Medi-Cal that provides notice, assigns them to a Medi-Cal managed care plan that contains their emergency care provider (defined as a hospital in the county of residence there the individual received emergency care), and that the individuals may choose any available Medi-Cal managed care plan and primary care SB 4 (Lara) Page 4 of ? provider. Section 1332 State Innovation Waiver provisions 4.Requires the Secretary of Agency to apply to the federal Department of Health and Human Services for a Section 1332 waiver in order to allow persons otherwise not able to obtain coverage by reason of immigration status through Covered California to obtain coverage from Covered California by waiving the requirement that Covered California offer only QHPs. 5.Requires Covered California to offer QHPs, which are required to be subject to the requirements of the existing Covered California statute, including all of those requirements applicable to qualified health plans. 6.Requires persons eligible to purchase California QHPs to pay the cost of coverage without federal advanced premium tax credit, federal cost sharing reduction, or any other federal assistance. 7.Makes the above-described Section 1332 waiver-related provisions operative upon federal approval of the waiver. Requires, if these provisions do not become operative on or before January 1, 2017, the California Health Exchange Program for All Californians (the Program) provisions of this bill to become operative. Sunsets the Section 1332 waiver-related provisions if the Program is implemented. California Health Exchange Program for All Californians 8.Establishes in state government the California Health Exchange Program for All Californians as an independent public entity not affiliated with an agency or department and requires the Program to be covered by the Executive Board of Covered California. 9.Defines, for purposes of the Program, "eligible individuals" as individuals who would have been eligible to purchase coverage through Covered California but for his or her immigration status and who is not eligible for full-scope Medi-Cal coverage under state law. 10.Establishes the mandatory duties and discretionary duties of the Program board, which is generally modeled on the existing statute of Covered California. These include enrolling SB 4 (Lara) Page 5 of ? eligible individuals, certifying and contracting with health plans, facilitating enrollment, providing a choice of health plan coverage, employing staff, and assessing a charge on health plans to support the development and operations of the Program. 11.Authorizes the Program to make available premium subsidies and cost-sharing reductions to the extent funding is available. 12.Creates the California Health Trust Fund for All Californians as a continuously appropriated fund. Requirements on Health Plans and Insurers in the Program 13.Places the same requirements on health plans and insurers (plans) participating in the Program as exists under existing law for Covered California-participating plans, including requirements to fairly and affirmatively offer, market and sell in the Program at least one product within each of the five levels of coverage, to sell products in the Program to individuals purchasing coverage outside the Program, and to require plans participating in the Program to charge the same rate for the same product whether that product is offered through the Program or in the outside market. Findings and Declarations and Legislative Intent 14.Makes legislative findings and declarations that longstanding California law provides full-scope Medi-Cal to United States citizens, lawful permanent residents, and individuals permanently residing in the United States under color of law, including those granted deferred action. 15.States legislative intent in enacting this bill: a. To extend full-scope Medi-Cal eligibility to California residents who are currently ineligible for Medi-Cal due to their immigration status, as long as they meet the other requirements of Medi-Cal; b. That all Californians, regardless of immigration status, have access to health coverage and care; c. That all Californians who are otherwise eligible for Medi-Cal, a QHP offered through Covered California, or affordable employer-based health coverage, enroll in that coverage and obtain the care that they need; and, SB 4 (Lara) Page 6 of ? d. To ensure that all Californians be included in eligibility for coverage without regard to immigration status. FISCAL EFFECT : This bill has not been analyzed by a fiscal committee. COMMENTS : 1.Author's statement. According to the author, implementation of the ACA provided health care coverage to millions of Californians through Medi-Cal expansion and the Covered California health care exchange. But those reforms excluded undocumented immigrants from coverage provided through Medi-Cal, and even prohibited individuals from purchasing their own insurance through the health care exchange. Without access to affordable, quality health insurance, people are forced to rely on emergency care, which means they delay treatment until they are sicker and treatment is more expensive. This bill will allow undocumented Californians who are denied access to the Covered California exchange, to buy insurance with their own money through a federal waiver process. For individuals that qualify for Medi-Cal, based on income level, this bill would allow them to enroll in Medi-Cal. Expanding access to health care will make a real difference in the lives of thousands of hard working Californian families. The author states we've made enormous strides to reduce California's uninsured population with the implementation of the ACA, but only when we include everyone can we have a truly healthy California. 2.Current scope of Medi-Cal coverage for immigrants. 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 immigrants 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 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 Family PACT, and through temporary presumptive eligibility programs. In 2015-16, DHCS estimates providing Medi-Cal funded health care services to 786,600 SB 4 (Lara) Page 7 of ? undocumented individuals at a total funds cost of $1.4 billion ($690 million GF). 3.Covered California and the individual market. Undocumented immigrants are prohibited from purchasing coverage in Covered California under federal law. Because APTCs and cost-sharing subsidies are only available for individuals purchasing coverage in Covered California, undocumented individuals are also not eligible for these subsidies intended to make health insurance and the cost of care more affordable. In the individual market outside Covered California, plans and insurers are required to fairly and affirmatively offer, market and sell to all individuals and dependents in each service area the plan or insurer provides services. Plans and insurers are required to limit enrollment in individual products to open enrollment periods and special enrollment periods. 4.Section 1332 Waivers. This bill requires the Secretary of Agency to apply for a Section 1332 waiver in order to allow persons who cannot obtain coverage through Covered California because of their immigration status to obtain such coverage. Section 1332 of the ACA permits states to apply to the federal government for a waiver of major provisions of the ACA beginning in 2017. Known as "innovation waivers," the provisions of the ACA that can be waived under Section 1332 include any or all parts of the provisions relating to QHPs (including the essential health benefits package requirement), the Exchanges, premium tax credits and cost-sharing reductions, the minimum coverage requirement (individual mandate), and the employer responsibility requirements. If a state is granted a Section 1332 waiver, the state can fund its reforms through the aggregate amount of federal funding that otherwise would have been paid out within the state for premium tax credits, cost-sharing reduction payments, and small business tax credits. However, to qualify for an innovation waiver, the state must establish that its reform plan would provide coverage that: a. Will provide coverage that is least as comprehensive as ACA coverage; SB 4 (Lara) Page 8 of ? b. Will provide coverage and cost sharing protections against excessive out-of-pocket spending that are at least as affordable as the as ACA coverage; c. Will provide coverage to at least a comparable number of its residents as the ACA would provide; and, d. Will not increase the federal deficit. 1.Presidential action on immigration. In November 2014, President Obama announced that the federal Department of Homeland Security (DHS) would not deport certain undocumented parents of U.S. citizens and parents of lawful permanent residents (LPRs). President Obama also announced an expansion of the Deferred Action for Childhood Arrivals (DACA) program for youth who came to the United States as children. Under a directive from the secretary of DHS, these parents and youth may be granted a type of temporary permission to stay in the U.S. called "deferred action." Deferred action is a form of administrative relief from deportation whereby DHS authorizes a noncitizen to remain in the U.S. temporarily. These individuals may also apply for an employment authorization document (a work permit) during the deferred action period. A grant of deferred action is temporary and does not grant citizenship or permanent lawful status. However, a person granted deferred action is considered by the federal government to be lawfully present for as long as the grant of deferred action status. These actions are expected to affect up to 4.4 million people, according to DHS. The United States Citizenship and Immigration Services (USCIS) announced that, due to a federal court order, it would not begin accepting requests for the expansion of DACA on February 18, 2015 as originally planned and has suspended implementation of Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA). The court's temporary injunction, issued February 16, 2015, does not affect the existing DACA and individuals can continue to request an SB 4 (Lara) Page 9 of ? initial grant of DACA or renewal of DACA under the original guidelines. If the President's deferred action proposal is implemented, it would reduce the state costs associated with this bill as individuals eligible for deferred action are eligible for full-scope Medi-Cal. 2.The ACA and the remaining uninsured. A January 2015 report from the UC Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research estimated the ACA is expected to reduce California's uninsured rate by at least half by 2019, at which time the ACA will be fully implemented, as they estimate 6.5 million Californians would have remained uninsured by 2019 without the ACA. The report indicates that between 2.7 and 3.4 million Californians will remain uninsured by 2019. Overall, between 1.4 and 1.5 million undocumented immigrants in California are projected to remain uninsured in 2019, comprising up to half of all Californians remaining uninsured. The model used to provide these estimates had not yet incorporated Medi-Cal eligibility and enrollment among immigrants with deferred action. A March 2015 Policy Brief from the UC Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research estimated that 1.25 million of the estimated 2.45 million undocumented residents in California would be eligible for DAPA or DACA. More than two-thirds (68 percent) of Californians eligible for DACA and 65 percent of those eligible for DAPA were low-income by Medi-Cal income eligibility standards in 2013. Up to 60 percent of Californians eligible for DACA and up to 56 percent of those eligible for DAPA were low-income, lacked health insurance, and are predicted to be eligible for Medi-Cal under state policy if granted relief (as previously indicated, individuals granted deferred action are eligible for full-scope Medi-Cal). The Policy Brief indicates that between 360,000 and 500,000 Californians in need of health insurance could be eligible for comprehensive Medi-Cal if between 50 and 70 percent of Californians eligible for DACA or DAPA are granted deferred action. 3.Prior legislation. SB 1005 (Lara), was similar to this bill, SB 4 (Lara) Page 10 of ? except SB 1005 would have provided the same amount of premium and cost-sharing subsidies as individuals receive in Covered California, using state funds instead of federal funds. In addition, SB 1005 did not require the state to seek a Section 1332 waiver. SB 1005 was held on the Senate Appropriations suspense file. SB 900 (Alquist), Chapter 659, Statutes of 2010, establishes Covered California as an independent public entity within state government, and requires Covered California to be governed by a board composed of the Secretary of the Agency, or his or her designee, and four other members appointed by the Governor and the Legislature who meet specified criteria. 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 Covered California and arranging for coverage under QHPs. AB X1 1 (Perez), Chapter 3, Statutes of 2013-14 First Extraordinary Session, implemented specified Medicaid provisions of the ACA, including the expansion of federal Medicaid coverage to low-income adults with incomes between 0 and 138 percent of the FPL. AB X1 1 also implemented a number of the Medicaid ACA provisions to simplify the eligibility, enrollment and renewal processes for Medi-Cal. SB X1 1 (Hernandez and Steinberg), Chapter 4, Statutes of 2013-14 First Extraordinary Session, established the existing Medi-Cal benefit package as the benefit package for the expansion population eligible under the ACA and expanded the Medi-Cal benefit package for the existing population and newly eligible under the ACA to include mental health services and substance use disorder services required under the essential health benefit legislation adopted in 2012 that were not currently covered by Medi-Cal. SB X1 1 also implemented a number of the Medicaid ACA-related provisions to simplify the eligibility, enrollment and renewal processes for Medi-Cal. SB X1 1 also makes recent immigrant childless adults, who would be eligible for Medicaid funding under the ACA except for the five-year bar who are enrolled in Covered California with an APTC, also eligible for Medi-Cal benefits not covered SB 4 (Lara) Page 11 of ? by their Covered California plan. For these individuals, DHCS would be required to pay the individual's premium and cost-sharing (referred to as a "Medi-Cal wrap"). The Medi-Cal wrap has not yet been implemented. Until this provision is implemented, these recent legal immigrant adults are Medi-Cal eligible. 4.Support. This bill is supported by individuals, low-income, labor, consumer, health care providers, immigrant, religious, and community groups who write the "Health For All Act" will address a critical need facing the state's large immigrant communities by expanding access to health care coverage for all Californians, regardless of immigration status. Supporters argue an estimated 1.5 million Californians will remain uninsured who are not eligible for coverage due to immigration status following the implementation of the ACA, and these individuals cannot even use their own money to buy health insurance in Covered California. Supporters argue the prolonged and continued exclusion of undocumented immigrants, who contribute greatly to the state's economy, from federal and state health programs is contrary to the long held American value of fairness and equal opportunity for integration, as well as promoting the health and well-being of everyone in society. Supporters argue it does not reflect the state's values or serve the common good to leave hundreds of thousands of workers, students, and family members without treatment for preventable ailments. Proponents state that, in many cases, health problems that could have been avoided with preventive care or treated early for little cost become significant and costly health issues, resulting in lost productivity, increased demand on emergency services, and increased costs in the health care system. Supporters argue denying immigrants access to health care simply because of their immigration status is counter intuitive in ensuring the state has healthy residents and a healthy workforce, and this bill will ensure that everyone in the state has access to quality, affordable health care. 5.Amendments. This bill permits the change from limited scope to full scope Medi-Cal benefits to be implemented initially via policy letters or similar instructions and subsequently requires regulations to be adopted by July 1, 2018. Similar authority may need to be provided to DHCS to implement the SB 4 (Lara) Page 12 of ? Medi-Cal transition plan provisions of this bill. This bill is intended to establish a "California QHP" that would meet the same requirements as a QHP and which would be offered to people in the Program. Amendments are needed to distinguish between the two different types of QHP. In addition, the Program established by this bill is generally modeled on the Covered California statute, but differs in several instances related to recently enacted legislation affecting Covered California that need clarifying. SUPPORT AND OPPOSITION : Support: ACCESS Women's Health Justice ACT for Women and Girls Advancement Project Advancing Justice - Asian Law Caucus AltaMed Health Services Corporation American Academy of Pediatrics American Civil Liberties Union of California Asian Americans Advancing Justice Sacramento Asian Health Services ASPIRE Los Angeles California Alliance of Retired Americans California Asian Pacific Islander Budget Partnership California Chapter National Association of Social Workers California Chapter National Council of Jewish Women California Communities United Institute California Coverage and Health Initiatives California Immigrant Policy Center California Family Health Council California Family Resource Association California Labor Federation California Latinas for Reproductive Justice California Lesbian, Gay, Bisexual, and Transgender Health and Human Services Network California Nurse-Midwife Association California Nurses Association California Pan-Ethnic Health Network California Partnership California Primary Care Association California Program of All-Inclusive Care for the Elderly California Rural Legal Assistance Foundation California School-Based Health Alliance California State Council of the Service Employees International SB 4 (Lara) Page 13 of ? Union Cal-Islanders Humanitarian Association Campaign for a Healthy California Children's Defense Fund California Clínica Monseñor Oscar A. Romero Community Clinic Consortium Congregations Building Community Consumers Union Council of Mexican Federations Educators for Fair Consideration Friends Committee on Legislation of California Gray Panthers of San Francisco Having Our Say Coalition Health Access Korean Resource Center La Familia Family Counseling Center, Inc. Latino Coalition for a Healthy California Mexican American Legal Defense and Educational Fund National Council of La Raza National Health Law Program National Immigration Law Center Orange County Immigrant Youth United Planned Parenthood Affiliates of California Planned Parenthood Mar Monte Sacramento Covered St. Anthony Foundation St. John's Well Child & Family Center The Children's Partnership United Christian Centers of the Greater Sacramento Area, Inc. United Domestic Workers/AFSCME Local 3930 United Way Silicon Valley United Ways of California Western Center on Law & Poverty Young Invincibles Oppose: None received -- END -- SB 4 (Lara) Page 14 of ?