BILL ANALYSIS                                                                                                                                                                                                    

                                                                       SB 4  

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          Date of Hearing:  August 19, 2015


                                 Jimmy Gomez, Chair

          SB 4  
          (Lara) - As Amended July 16, 2015

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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          This bill contains two provisions related to expanding health  
          care coverage to undocumented immigrants.  Specifically, this  


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          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  

          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  


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            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.


          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  


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            limited scope Medi-Cal are quickly transitioned to full-scope  

          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  

            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  


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            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  


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            preserving relationships with a child's existing providers, or  
            expanding coverage in phases to better manage the transition  

          Analysis Prepared by:Lisa Murawski / APPR. / (916)