BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    SB 4      
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          |AUTHOR:        |Lara                                           |
          |---------------+-----------------------------------------------|
          |VERSION:       |April 6, 2015                                  |
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          |HEARING DATE:  |April 15, 2015 |               |               |
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          |CONSULTANT:    |Scott Bain                                     |
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           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  







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            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.  








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          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  








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            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  








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            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,








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                  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  








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            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;










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             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  








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            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,  








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            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  








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            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  








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            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  








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          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



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