BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                          SB 4|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |

                                   THIRD READING 

          Bill No:  SB 4
          Author:   Lara (D), et al.
          Amended:  6/1/15  
          Vote:     21  

           SENATE HEALTH COMMITTEE:  7-0, 4/15/15
           AYES:  Hernandez, Hall, Mitchell, Monning, Pan, Roth, Wolk
           NO VOTE RECORDED:  Nguyen, Nielsen

           AYES: Lara, Beall, Hill, Leyva, Mendoza
           NOES: Bates, Nielsen
           SUBJECT:   Health care coverage:  immigration status

          SOURCE:    Author
          DIGEST:   This bill extends eligibility for full-scope Medi-Cal  
          benefits to individuals under age 19 who are otherwise eligible  
          for those benefits but for their immigration status. Extends  
          Medi -Cal eligibility for full-scope Medi-Cal benefits to  
          individuals age 19 and older if sufficient funding is available,  
          and grants the Department of Health Care Services the authority  
          to determine the number of individuals who may be enrolled.  
          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 (QHPs). 


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          Existing 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  

          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.  

          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:
            1)  Makes individuals under age 19 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. 


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            2)  Requires counties, for individuals age 19 and older who  
              meet Medi-Cal eligibility requirements except for their  
              immigration status, to transmit this information to DHCS to  
              determine if sufficient funding is available for the  
              individual to receive full-scope Medi-Cal benefits.  
              Requires, if sufficient funding is available, the individual  
              to be eligible for full-scope benefits, and if sufficient  
              funding is not available, the individual to be eligible for  
              limited scope Medi-Cal benefits. 

            3)  Prohibits eligibility for full scope Medi-Cal benefits for  
              individuals age 19 and older who meet Medi-Cal eligibility  
              requirements except for their immigration status from being  
              an entitlement. Grants DHCS the authority to determine  
              eligibility, determine the number of individuals who may be  
              enrolled, establish limits on the number of individuals who  
              may be enrolled, and establish processes for waiting lists  
              needed to maintain program expenditures within available  

            4)  Requires individuals eligible for full scope Medi-Cal  
              benefits under this bill to enroll in 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.

            5)  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.

            6)  Requires that individuals under age 19 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 individuals  
              under age 19 who are 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  
              these individuals may choose any available Medi-Cal managed  


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              care plan and primary care provider.

            7)  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.

            8)  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. 

            9)  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.

            10) Makes the above-described Section 1332 waiver-related  
              provisions operative upon federal approval of the waiver. 

           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 children that qualify for Medi-Cal based on  
            income level, this bill would allow children to enroll in  
            Medi-Cal, and would create a capped enrollment program to  
            extend coverage to undocumented adults with sufficient funding  
            is available. Expanding access to health care will make a real  
            difference in the lives of thousands of hard working  


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            Californian families. The author states the state has 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  
            undocumented individuals at a total funds cost of $1.4 billion  
            ($690 million General Fund).

          3)Covered California and the individual market. Undocumented  
            immigrants are prohibited from purchasing coverage in Covered  
            California under federal law. Because federal advance premium  
            tax credits 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. 


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          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;

             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  


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            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  
            initial grant of DACA or renewal of DACA under the original  

            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.


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          FISCAL EFFECT:                Appropriation:      Yes  Fiscal  
          Com.:          Yes            Local:         Yes

          According to the Senate Appropriations Committee, the fiscal  
          estimates below are subject to a great deal of uncertainty. The  
          rates at which undocumented immigrants are likely to apply for  
          either Medi-Cal or unsubsidized coverage are unknown at this  
          time and are likely to be heavily influenced by concerns over  
          coming to the attention of immigration authorities and language  
          barriers. In addition, the age and health status of those who  
          ultimately would enroll in Medi-Cal will have a significant  
          impact on the costs to provide coverage. At this time, there is  
          limited information available to accurately project the cost to  
          provide coverage to this population. Finally, a pending  
          executive action by the President Obama would shield about half  
          of California's undocumented immigrant population from  
          deportation. If that executive action stands, those individuals  
          would be eligible for full-scope Medi-Cal coverage under current  

          The costs for the Medi-Cal expansion below reflect two  
          scenarios. The first scenario does not assume that the courts  
          uphold the President's Executive Action and therefore the  
          state's current undocumented population remains the same. The  
          second scenario assumes that the courts uphold the President's  
          Executive Action, which would make a significant number of  
          undocumented immigrants eligible for full scope Medi-Cal under  
          current law. This would significantly reduce the undocumented  
          population who would be made eligible for full scope Medi-Cal  
          under this bill. 

           Increased Medi-Cal costs for children without the President's  
            Executive Action. Likely annual increase in Medi-Cal spending  
            between $7 million and $135 million per year (General Fund). 

            Under current law, undocumented immigrants are eligible for  
            limited scope Medi-Cal benefits such as Emergency Medi-Cal and  
            Pregnancy-Only Medi-Cal. Under current practice, the federal  
            government provides funding for those services both in the  
            fee-for-service system and for undocumented immigrants who are  
            enrolled in managed care. Based on current practice, about 60  
            percent of Medi-Cal managed care costs for individuals covered  
            by this bill would be eligible for federal matching funds  


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            (i.e. about 60 percent of Medi-Cal managed care costs for  
            immigrants are for services such as emergency services and  
            pregnancy-related services). This analysis assumes that on the  
            low end about 50 percent of eligible undocumented immigrants  
            under age 19 would enroll in Medi-Cal under the bill - which  
            is roughly the number of undocumented immigrants under age 19,  
            on average, who access emergency- or pregnancy-related  
            Medi-Cal services each year. On the high end, this analysis  
            assumes that about 60 percent of eligible individuals under  
            age 19 enroll in Medi-Cal - which is equal to the  
            pre-Affordable Care Act enrollment rate for Medi-Cal eligible  
            individuals in the state.

            The costs above reflect the annual cost to provide full-scope  
            Medi-Cal coverage to the enrolling individuals, accounting for  
            available federal matching funds, less the current state  
            spending to provide limited scope Medi-Cal services, as the  
            state is already incurring those costs. The analysis assumes  
            that the per member per month cost to provide coverage to  
            children will be similar to such costs for the existing  
            Medi-Cal population. 

            The analysis also assumes that there will be reductions in  
            state spending on certain state-only health care programs  
            (such as FamilyPACT and the Every Woman Counts programs) due  
            to undocumented immigrants currently receiving services from  
            those programs shifting to full-scope Medi-Cal coverage.  
            Finally, by shifting individuals from fee-for-service Medi-Cal  
            into Medi-Cal managed care and enrolling additional  
            individuals in managed care, the state will receive additional  
            tax revenue under the Managed Care Organization Tax.

           Increased Medi-Cal costs for children under the President's  
            Executive Action. Likely increase in Medi-Cal spending between  
            $4 million and $83 million per year (General Fund). Based on  
            estimates by the Pew Research Center, the pending Executive  
            Action would protect about 900,000 of the state's 2.5 million  
            undocumented immigrants from deportation. Under current law,  
            those individuals would be eligible for full-scope Medi-Cal.  
            Thus, the cost to provide coverage to those individuals would  
            not be attributable to this bill. The costs above reflect the  
            projected cost to provide full-scope Medi-Cal to the remaining  
            income-eligible undocumented population under 19 years of age  
            who would not be protected from deportation (assuming similar  


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            enrollment rates as discussed above).

           Unknown costs to provide full-scope Medi-Cal benefits to  
            undocumented adults (General Fund). Under the amendments, DHCS  
            would be authorized to enroll adults who would otherwise be  
            eligible for Medi-Cal, but for their immigration status, if  
            sufficient funding is available. In practice, DHCS would be  
            authorized to enroll adults into full scope Medi-Cal based on  
            the funding that is provided in the annual Budget Act, similar  
            to previous state health care programs such as MRMIP and PCIP.
           Unknown, but potentially significant savings to the state  
            under realignment (General Fund). Under current law, the state  
            has set up a system to direct funds from the counties to the  
            state, under the premise that expansion of Medi-Cal will  
            reduce county expenditures for health care services to the  
            uninsured. This process is generally governed by formulas that  
            take into account historic and actual expenses by the  
            counties. Under the system, there is a maximum amount of  
            funding that can be redirected to the state. By expanding  
            Medi-Cal coverage, this bill will further reduce county health  
            care expenditures (in counties that are currently providing  
            health care services to the undocumented) and should increase  
            redirected funding to the state. The size of this impact is  
            unknown and would depend on enrollment in Medi-Cal, actual  
            reductions in county spending, and the amount of additional  
            redirections that would be allowed under the current system.

           Annual, fee-supported costs in the tens of millions per year  
                                                                                to provide coverage through Covered California (special fund).  
            The bill authorizes undocumented immigrants to purchase health  
            care coverage, without subsidy, through Covered California or  
            a parallel exchange. Individuals who purchase such coverage  
            would pay for the administrative costs of the Exchange, via a  
            participation fee that Covered California assesses on  
            qualified health plans. Because coverage through Covered  
            California would be unsubsidized and because undocumented  
            immigrants tend to be low-income, enrollment rates through  
            Covered California are not likely to be high. If 20% of  
            undocumented immigrants who are not income eligible for  
            Medi-Cal enroll through Covered California, the administrative  
            costs and the fees collected to pay those costs would be about  
            $25 million per year.


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          SUPPORT:   Verified (5/27/15)

          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 Association of Public Hospitals and Health Systems
          California Black Health Network
          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 Employees Association
          California School-Based Health Alliance
          California State Council of the Service Employees International  
          California Teachers Association
          Cal-Islanders Humanitarian Association
          Campaign for a Healthy California
          Children's Defense Fund California
          Clínica Monseñor Oscar A. Romero
          Community Clinic Consortium


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          Congregations Building Community
          Consumers Union
          Council of Mexican Federations
          Educators for Fair Consideration
          Equality California 
          Friends Committee on Legislation of California
          Gray Panthers of San Francisco
          Greenlining Institute
          Having Our Say Coalition
          Health Access 
          HOPE (Hispanas Organized for Political Equality)
          Insurance Commissioner Dave Jones
          Korean Resource Center 
          La Familia Family Counseling Center, Inc.
          Latino Coalition for a Healthy California
          Mexican American Legal Defense and Educational Fund
          March of Dimes Foundation
          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 
          San Francisco Bay Area Physicians for Social Responsibility
          SEIU California
          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

          OPPOSITION: Verified (5/27/15)

          None received

          Prepared by:Scott Bain / HEALTH / 
          6/1/15 19:05:03


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