BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                       SB 4

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          Date of Hearing:  July 14, 2015

                            ASSEMBLY COMMITTEE ON HEALTH

                                  Rob Bonta, Chair

          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  


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            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  

          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  


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          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.


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          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  

          3)Prohibits Medicaid matching funds for medical assistance for  
            an undocumented individual, except for care and services  


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            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.


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          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.


             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.  


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          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  

               If a state is granted a Section 1332 waiver, the state can  
               fund its reforms through the aggregate amount of federal  


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               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  


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               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  


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               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  

            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  


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            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.


             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  


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               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  


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               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.


          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 


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          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


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          Asian Americans Advancing Justice


          Asian Law Alliance

          ASPIRE Los Angeles

          California Alliance of Retired Americans

          California Asian Pacific Islander Budget


          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


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          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


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          Campaign for a Healthy California

          Central California Alliance for Health

          Center for Empowering Refugees and


          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


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          Friends Committee on Legislation of California

          Health Care for All - Contra Costa County

          HOPE (Hispanas Organized for Political


          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


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          Planned Parenthood Action Fund of Santa

            Barbara, Ventura and San Luis Obispo


          Planned Parenthood Action Fund of the Pacific


          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


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          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


          United Domestic Workers/AFSCME

            Local 3930

          Young Invincibles


          Opposition (previous version)

          We The People Rising


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          Analysis Prepared by:Lara Flynn / HEALTH / (916)