BILL ANALYSIS Ó SB 4 Page 1 Date of Hearing: July 14, 2015 ASSEMBLY COMMITTEE ON HEALTH Rob Bonta, Chair SB 4 (Lara) - As Amended July 7, 2015 SENATE VOTE: 28-11 SUBJECT: Health care coverage: immigration status. SUMMARY: Requires the Secretary of the California Health and Human Services Agency (CHHSA) to apply for a federal waiver in order to allow persons who are unable to obtain health insurance coverage through California's Health Benefit Exchange (Covered California) because of their immigration status, to do so. Requires, when 2015 Budget bill language making undocumented children under the age of 19 eligible for full scope Medi-Cal benefits is implemented, that individuals enrolled in restricted scope Medi-Cal at that time be transitioned to full scope Medi-Cal within 30 days. Specifically, this bill: 1)Requires CHHSA to apply to the federal Department of Health and Human Services for a 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 qualified health plans (QHPs). 2)Requires the Exchange to offer California QHPs, which are SB 4 Page 2 required to be subject to the requirements of the existing Covered California statute, including all of those requirements applicable to QHPs. 3)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. 4)Makes enactment of these provisions contingent upon federal approval of the waiver. 5)Defines a California QHP as a product offered to those not otherwise eligible to purchase coverage from the Exchange by reason of immigration status and that comply with the requirements of current law for a QHP. 6)Requires, when 2015 Budget bill language is implemented to make undocumented children under the age of 19 eligible for full scope Medi-Cal benefits, that individuals enrolled in restricted scope Medi-Cal at that time to be transitioned to full scope Medi-Cal within 30 days. 7)Requires an individual made eligible for Medi-Cal under these provisions to enroll in a Medi-Cal managed care plan if the individual would otherwise have been required to enroll in the plan. SB 4 Page 3 EXISTING STATE LAW: 1)Establishes 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 CHHSA 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. 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)Expands, through the 2015-16 Health Budget trailer bill, full-scope Medi-Cal coverage to children, regardless of immigration status, who currently would be eligible for Medi-Cal if not for immigration status, beginning when DHCS declares that systems are ready for implementation, but no sooner than May 1, 2016. Requires children eligible in this category to enroll in Medi-Cal managed care in those counties in which a managed care plan is available. Requires DHCS to seek federal financial participation (FFP), but requires coverage to be provided regardless of FFP. Requires DHCS to provide a semiannual status report to the Legislature until regulations have been adopted. SB 4 Page 4 EXISTING FEDERAL LAW: 1)Requires, under the Patient Protection and Affordable Care Act (ACA), as amended by the Health Care Education and Reconciliation Act of 2010, each state, by January 1, 2014, to establish an American Health Benefit Exchange that makes 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 individual taxpayers, whose household income is between 100% and 400% 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% of the FPL, and a lower maximum limit on out-of-pocket expenses for individuals whose incomes are between 100% and 400% of the FPL. Legal immigrants with household incomes less than 100% 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 SB 4 Page 5 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. FISCAL EFFECT: The July 7, 2015 version of this bill has not been analyzed by a fiscal committee; however, the Senate Appropriations Committee notes that the rates at which undocumented immigrants are likely to apply for 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. Senate Appropriations Committee also assumes that, on the low end, about 50% of eligible undocumented immigrants under age 19 would enroll in Medi-Cal under this 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, Senate Appropriations assumes that about 60% of eligible individuals under age 19 enroll in Medi-Cal - which is equal to the pre-ACA enrollment rate for Medi-Cal eligible individuals in the state. COMMENTS: SB 4 Page 6 1)PURPOSE OF THIS BILL. According to the author, 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. The author states that 60% of Californians who have individual coverage have it through Covered California, and there is no reason why undocumented immigrants should not be able to purchase it through the Exchange as well. The author also notes that the Legislature and the Governor, through the enactment of the Budget Act of 2015 (SB 97 (Committee on Budget and Fiscal Review), Chapter 11, Statutes of 2015) expanded Medi-Cal eligibility for children under the age of 19, regardless of immigration status, to ensure that no child in California who is income eligible will be denied access to health care coverage. These provisions are slated to go into effect some time on or after May 1, 2016. This bill will make certain that children currently eligible for limited scope Medi-Cal are quickly transitioned to full-scope Medi-Cal. The author concludes, 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)BACKGROUND. a) Covered California and the individual market. As an active purchaser, Covered California chooses which plans and products to offer and negotiates rates in order to offer the best value for consumers. In contrast, most other state exchanges and the federal health care exchange accept all products that health insurance companies wish to offer, at the rates they want to charge, provided that they meet basic standards and have passed regulatory review. SB 4 Page 7 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 in which 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. 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. b) Section 1332 Waivers. This bill requires CHHSA 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 SB 4 Page 8 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: i) Will provide coverage that is least as comprehensive as ACA coverage; ii) Will provide coverage and cost sharing protections against excessive out-of-pocket spending that are at least as affordable as the as ACA coverage; iii) Will provide coverage to at least a comparable number of its residents as the ACA would provide; and, iv) Will not increase the federal deficit. c) 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 immigrant adults 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 state and federal 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 SB 4 Page 9 services. Medi-Cal also provides coverage for undocumented individuals needing breast and cervical cancer treatment, family planning services through Family Planning, Access, Care, and Treatment program, and through temporary presumptive eligibility programs. d) 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. President Obama also announced an expansion of the Deferred Action for Childhood Arrivals 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. e) 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 SB 4 Page 10 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. 3)SUPPORT. Health Access California supports this bill stating, some of the 350,000-400,000 Californians with incomes above the Medi-Cal income threshold who are unauthorized and uninsured can afford to pay for their own coverage. Health Access notes, since the cost of coverage varies by age and geographic region, the ability to afford coverage varies as well, but for a family that makes less than 250% FPL, there is coverage at a very modest price for the adults who are citizens or lawful residents and the children, regardless of immigration status. To give an example of affordable coverage for a family, Health Access explains that, if the kids are on Medi-Cal and the mother who is lawful is in Covered California with a subsidy, the family that lives on $3,000-$4,000 a month may be able to afford to pay the $200-$300 a month for health insurance for the undocumented father who is the primary earner. Health Access concludes those who are unauthorized and uninsured should have the same opportunity as the rest of us. The National Immigration Law Center (NILC) states, individuals and communities suffer when people are uninsured. NILC notes, the uninsured are more likely to be diagnosed with cancer at an advanced state, to die after a heart attack or accident, and to suffer poor outcomes from a stroke. NILC concludes, we are all better off when everyone has access to health insurance. The Western Center on Law and Poverty supports this bill, noting as California leads the way in implementing the ACA, providing comprehensive health coverage for undocumented children is just the humane thing to do. 4)OPPOSITION. We the People Rising states in opposition to a SB 4 Page 11 previous version of this bill, that US Veterans and their children, children in foster care, homeless families, and the unemployed should be the focus of legislation in Sacramento - not individuals residing unlawfully in California. 5)RELATED LEGISLATION. SB 10 (Lara) was recently amended to make 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. SB 10 is currently pending a hearing in the Assembly Judiciary Committee; however the bill will most likely be re-referred to Assembly Health Committee. 6)PREVIOUS LEGISLATION. a) SB 1005 (Lara) of 2014 would have established the California Health Exchange Program for All Californians (CHEPFAC) within state government and would have required that CHEPFAC be governed by the executive board that governs Covered California. SB 1005 would have required Covered California, by January 1, 2016, to facilitate the enrollment of individuals who would have been eligible to purchase coverage through Covered California but for their immigration status and extend eligibility for full-scope Medi-Cal benefits to individuals who were otherwise eligible for those benefits but for their immigration status. SB 1005 was held on the Senate Appropriations suspense file. b) 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 CHHSA, or his or her designee, and four other members appointed by the Governor and the Legislature who SB 4 Page 12 meet specified criteria. c) 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. d) AB X1 1 (John A.Pérez), 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% 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. e) SB X1 1 (Ed 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 and also made 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, eligible for Medi-Cal benefits not covered by their Covered SB 4 Page 13 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 it is, these recent legal immigrant adults are Medi-Cal eligible. 7)SUGGESTED TECHNICAL AMENDMENT. As currently drafted this bill requires, when 2015 Budget bill language making undocumented children under the age of 19 eligible for full scope Medi-Cal benefits is implemented, that individuals currently enrolled in restricted scope Medi-Cal be transitioned to full scope Medi-Cal within 30 days. The bill should be amended to clarify the authors' intent that the individuals required to be transitioned from restricted to full scope Medi-Cal are under the age of 19. REGISTERED SUPPORT / OPPOSITION: Support Advancement Project AIDS Project Los Angeles Alliance of Catholic Healthcare California Coverage and Health Initiatives California Immigrant Policy Center California Pan-Ethnic Health Network California Rural Legal Assistance Foundation California State Council of the Service Employees International Union California Teachers Association Children Now SB 4 Page 14 Children's Defense Fund California Children's Partnership Equality California Health Access Lutheran Office of Public Policy, California March of Dimes California National Immigrant Law Center United Ways of California Western Center on Law and Poverty Support (previous version) Alliance for Boys and Men of Color American Civil Liberties Union of California American Federation of State, County and Municipal Employees Anti-Defamation League SB 4 Page 15 Asian Americans Advancing Justice Sacramento Asian Law Alliance 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 of the American College of Emergency Physicians California Communities United Institute SB 4 Page 16 California Faculty Association California Family Health Council California Family Resource Association California Healthy Nail Collaborative California Labor Federation California Latinas for Reproductive Justice California Nurses Association California Partnership California Primary Care Association California Program of All-Inclusive Care for the Elderly California School Employees Association California School-Based Health Alliance SB 4 Page 17 Campaign for a Healthy California Central California Alliance for Health Center for Empowering Refugees and Immigrants Coalition for Humane Immigrant Rights of Los Angeles Community Action Fund of Planned Parenthood of Orange and San Bernardino Counties Community Clinic Association of Los Angeles County Community Health Partnership Consumers Union SB 4 Page 18 Friends Committee on Legislation of California Health Care for All - Contra Costa County HOPE (Hispanas Organized for Political Equality) Instituto Familiar de la Raza, Inc. Korean Resource Center Mexican American Legal Defense and Educational Fund National Association of Social Workers, California Chapter National Health Law Program Pacific Asian Counseling Service PICO California SB 4 Page 19 Planned Parenthood Action Fund of Santa Barbara, Ventura and San Luis Obispo Counties Planned Parenthood Action Fund of the Pacific Southwest Planned Parenthood Advocacy Project Los Angeles County Planned Parenthood Affiliates of California Planned Parenthood Pasadena and San Gabriel Valley Planned Parenthood Northern California Action Fund Planned Parenthood Mar Monte SB 4 Page 20 San Francisco Community Clinic Consortium Santa Cruz Women's Health Center St. Anthony Foundation St. John's Well Child & Family Center San Francisco Bay Area Physicians for Social Responsibility UC Berkeley Center for Labor Research and Education United Domestic Workers/AFSCME Local 3930 Young Invincibles Opposition (previous version) SB 4 Page 21 We The People Rising Analysis Prepared by:Lara Flynn / HEALTH / (916) 319-2097