BILL ANALYSIS Ó SB 4 Page 1 Date of Hearing: August 19, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 4 (Lara) - As Amended July 16, 2015 ----------------------------------------------------------------- |Policy |Health |Vote:|12 - 6 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill contains two provisions related to expanding health care coverage to undocumented immigrants. Specifically, this bill: SB 4 Page 2 1)Requires the state to apply for a waiver of federal law that bars undocumented immigrants from purchasing coverage through a state health insurance exchange, in order to allow such persons to purchase coverage through California's exchange (also known as Covered California) using their own financial resources. 2)Specifies a 30-day timeline for the Department of Health Care Services (DHCS) to transition a group of undocumented immigrant children who recently became eligible for full-scope Medi-Cal coverage to such coverage, based on a determination by DHCS that systems have been programmed such that implementation may proceed. FISCAL EFFECT: 1)Minor, absorbable costs to the California Health and Human Services Agency (CHHSA), and costs in the range of $100,000 to Covered California (California Health Trust Fund) to pursue a narrow federal waiver that allows undocumented immigrants to purchase health care coverage through Covered California. 2)Minor, absorbable ongoing administrative costs to Covered California (California Health Trust Fund) to designate California qualified health plans (QHPs). As this bill specifies the California QHPs are subject to the same standards as federal QHPs, the designation appears to be mostly "in name only" for purposes of compliance with federal law and does not appear to require additional workload. 3)Significant Information Technology (IT) costs to Covered California. Potentially in the millions one-time costs, for planning, development, and testing of functionality to allow SB 4 Page 3 for designation of undocumented status (California Health Trust Fund). Potentially significant, unknown ongoing costs from the same fund. 4)Negligible increased costs associated with a 30-day timeline to transition children to full-scope Medi-Cal. The 2015-16 budget assumed transition by June 1, 2016. COMMENTS: 1)Purpose. This bill intends to improve coverage for undocumented immigrants in California by addressing two separate issues. First, the author notes current federal law excludes undocumented immigrants from being able to purchase coverage through Covered California, even with their own resources. He notes, for example, mixed-status families cannot purchase coverage through Covered California as a family unit. The author believes this policy does not reflect our common values nor serve the common good, and proposes seeking a federal waiver of this exclusionary federal law. Secondly, the author also notes 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 SB 4 Page 4 limited scope Medi-Cal are quickly transitioned to full-scope Medi-Cal. 2)Background. Under existing state and federal law, undocumented adults who are otherwise income-qualified for Medi-Cal 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. Undocumented immigrants are also prohibited from purchasing coverage in Covered California under federal law, and are ineligible for federal subsidies intended to make health insurance and the cost of care more affordable. However, California law requires health plans and insurers to make the same plans available inside and outside the exchange, meaning the plans available for purchase through Covered California are also offered outside on the non-Exchange market. The federal Patient Protection and Affordable Care Act (ACA) included a provision (Section 1332) that allows many ACA requirements to be waived in order to pursue innovation. Federal guidance related to Section 1332 waivers was recently released. Section 1332 allows states to pursue broad alternative approaches to expand coverage, or targeted changes like the one proposed in this bill. This bill has been significantly scaled down from an earlier version, which extended full-scope Medi-Cal eligibility to all undocumented immigrants who would have been eligible except for their immigration status. 3)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 was SB 4 Page 5 referred to Rules Committee July 13, 2015 and is pending in that committee. 4)Prior Legislation. SB 1005 (Lara) of 2014, established the California Health Exchange Program for All Californians to facilitate the enrollment of individuals who would have been eligible to purchase coverage through Covered California but for their immigration status, and also extended 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. 5)Staff Comments. Because undocumented individuals would remain ineligible for federal subsidies that offset the significant cost of care, and because they can purchase the same coverage from outside the exchange, the practical impact of allowing individuals to purchase coverage through Covered California may be somewhat limited. Coverage will still be unaffordable for many people, and those who can afford it can already purchase it outside the exchange. However, Covered California has numerous beneficial features, including shop-and-compare functions and the ability to purchase family coverage. Allowing undocumented individuals to purchase coverage through the Exchange directly would allow individuals to make use of these functions, could encourage greater enrollment, and could benefit families of mixed immigration status. With respect to the 30-day transition timeline for children, it seems reasonable that children in restricted-scope Medi-Cal aid codes should be transitioned to full-scope coverage as quickly as possible after systems are programmed to allow children without satisfactory immigration status to enroll in Medi-Cal. However, staff notes administrative resources are finite and there may be policy goals that conflict with the goal of a 30-day transition, such as identifying and SB 4 Page 6 preserving relationships with a child's existing providers, or expanding coverage in phases to better manage the transition workload. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081