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 SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15 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). SB 4 Page 2 ANALYSIS: 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 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. 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. SB 4 Page 3 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 funds. 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 SB 4 Page 4 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. 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 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 SB 4 Page 5 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. SB 4 Page 6 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 SB 4 Page 7 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 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. SB 4 Page 8 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 law. 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 SB 4 Page 9 (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 SB 4 Page 10 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. SB 4 Page 11 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 Union 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 SB 4 Page 12 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 SB 4 Page 13 **** END ****