BILL ANALYSIS Ó
SB 145
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Date of Hearing: September 11, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 145
(Pan) - As Amended September 10, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the Department of Health Care Services (DHCS)
to provide stop-loss coverage to a private multi-employer trust
providing health care benefits to farmworkers. Specifically,
this bill:
SB 145
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1)Requires DHCS to annually reimburse the Robert F. Kennedy
Farmworkers Medical Plan (RFK Medical Plan) for claim payments
that exceed $70,000.
2)Requires reimbursement made by the plan on behalf of an
eligible employee or dependent for a single episode of care on
or after September 1, 2016.
3)Limits total reimbursement to three million dollars
($3,000,000) per year.
4)Requires the RFK Medical Plan to submit to the department
completed data, verified by an independent certified public
accountant, for claims paid by the plan for services during
the preceding year from September 1 to August 31, inclusive.
FISCAL EFFECT:
GF costs of up to $3 million per year to DHCS to reimburse RFK
Medical Plan for episodes of high-cost care incurred by RFK
Medical Plan enrollees.
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COMMENTS:
1)Purpose. According to the author, this bill will provide state
funding critical to allow a particular health trust fund to
continue to provide health benefits to their enrollees.
Absent this funding, the author contends, the plan would cease
providing benefits and individuals would either enroll in
Medi-Cal or lose insurance coverage. Because Medi-Cal would
incur additional costs if low-income eligible individuals
enrolled in coverage, the author argues this bill actually
saves the state money.
2)Background. The RFK Medical Plan is a self-funded,
self-insured health plan that is subject to a collective
bargaining agreement between the United Farm Workers (UFW) and
multiple agricultural employers. According to the UFW, the
RFK Medical Plan provided health insurance to more than 13,000
people living in California farmworker families. UFW points
out that their plan had imposed a $70,000 limit on annual
benefits as a cost control measure, but the federal Patient
Protection and Affordable Care Act's (ACA's) prohibits such
benefit limits. This has resulted in significant cost
pressure that UFW states is unrealistic to expect employers
and employees to bear. UFW states there are approximately
16,000 California farmworkers covered by the plan and about
2,000 other individuals. Staff calculates the increased
contribution to cover $3 million in additional costs incurred
on behalf of 18,000 enrollees would be about $167 per
enrollee, per year, including dependents.
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3)Prior Budget Actions. The Legislature took two separate budget
actions in recent years to provide special fund dollars to the
RFK Medical Plan to purchase stop-loss coverage that covers
the costs of episodes of care over $70,000. This supplemental
funding has allowed the plan to maintain the annual benefit
limits and comply with the ACA requirement, without passing
these costs on to covered employees and employers.
Specifically, the 2014 Budget Act allocated $3.2 million in
one-time Proposition 99 funds, and the 2015 Budget Act
allocated $2.5 million in Proposition 99 funds. The allocated
funds were previously used to fund the Major Risk Medical
Insurance Program, which provided coverage to enrollees who
were denied coverage in the private market, prior to the
federal ACA. The budget actions were intended to provide
one-time funding in order to prevent insolvency and allow RFK
Medical Plan to modify its business model to adapt to the
federal ACA.
4)Comments.
a) Recent amendments impose a five-year sunset in order to
prevent the state from becoming the default payer of
high-cost claims for this plan on a permanent basis. The
Health Committee policy analysis indicates a sunset date
also offers the RFK Medical Plan a timeline under which it
can continue to strive toward self-sustainment, and report
back its progress to the Legislature. However, the bill
does not specify reporting or accountability measures, nor
clearly state intent language related to self-sufficiency.
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b) This bill has intent language stating the Legislature
has found it is efficient and cost-effective to provide
health care through the RFK Medical Plan, and indicating
the plan has saved the state significant sums of money.
However, there does not appear to be a legislative analysis
conclusively demonstrating savings.
c) According to UFW, some enrollees in the RFK Medical Plan
are not California farmworkers. Therefore, it appears that
this bill would authorize reimbursement for enrollees who
do not work in California.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081