BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 145|
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UNFINISHED BUSINESS
Bill No: SB 145
Author: Pan (D)
Amended: 9/10/15
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR: Not available
SUBJECT: Robert F. Kennedy Farm Workers Medical Plan
SOURCE: United Farm Workers
DIGEST: This bill requires the Department of Health Care
Services (DHCS) to annually reimburse the Robert F. Kennedy Farm
Workers Medical Plan (RFK Plan) for claim payments that exceed
$70,000 made by the RFK Plan on behalf of an eligible employee
or dependent for a single episode of care on or after September
1, 2016, and caps the total reimbursement amount at $3 million
per year. Sunsets this bill's provisions on January 1, 2021.
Assembly Amendments delete the previous version of this bill
related to health facilities and patient transport and replace
it with the current provisions related to the RFK Plan.
ANALYSIS:
Existing law:
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1)Provides $2.5 million in one-time funding to the RFK Plan to
purchase stop-loss insurance.
2)Establishes under federal law, the Affordable Care Act (ACA),
which among other provisions, expands eligibility for Medicaid
(Medi-Cal in California), sets up health benefit exchanges,
and establishes reforms on private health insurance.
This bill:
1)Requires DHCS to annually reimburse the RFK Plan for claim
payments that exceed $70,000 made by the plan on behalf of an
eligible employee or dependent for a single episode of care on
or after September 1, 2016. Caps the reimbursement at $3
million per year.
2)Requires the plan to submit to DHCS 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, to seek reimbursement
commencing after September 1, 2017, and annually thereafter.
3)Requires DHCS to analyze claims data if received from the
plan, to determine the aggregate amount of claims that exceed
$70,000 paid by the plan on behalf of an eligible employee or
dependent for any separate episode of care.
4)Requires no later than 60 days after DHCS receives claims data
submitted by the plan, DHCS to reimburse the plan the amount
determined pursuant to 3) above up to the amount of $3 million
per year.
5)Includes as legislative intent the following:
a) The plan has saved the state significant sums of money
that would have otherwise been expended to provide health
care.
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b) The Legislature has determined that the plan is an
efficient and cost-effective means to deliver health care
services to farm workers and their families within the
plan's coverage areas. Thus, it is in the state's interest
to maintain the range of health care services provided by
the plan without threatening the plan's financial
viability.
6)Sunsets this bill on January 1, 2021.
Comments
1)Author's statement. According to the author, this bill
provides a longer-term strategy that will allow the state to
keep agricultural employer and farm worker contributions
flowing into health care, thereby allowing 16,000 farmworkers
and their families to preserve privately funded insurance. SB
145 will save the state money in avoided Medi-Cal costs and
provides good public and fiscal policy for both farm workers
and taxpayers.
2)RFK Plan. The RFK Plan was founded in 1969. It is a
self-funded, self-administered plan with an employer
contribution that depends on collective-bargaining agreements.
According to information provided by this bill's sponsor, the
United Farm Workers (UFW), the RFK Plan covers everything from
basic office visits, out-patient diagnostic lab and x-ray to
inpatient hospitalizations, including physical therapy,
chiropractic and in some plans, home health care, skilled
nursing and durable medical equipment. Cost sharing varies by
plan design. Plan participants can have small monthly
premiums based on hours worked, co-pays, and deductibles for
hospitalization. Deductibles vary from $5 to $170 in the
grandfathered plans. Most plans have a 20% co-insurance and
cover 80% of all benefits in the particular plan.
According to UFW, in the past year, the RFK Plan provided health
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insurance to more than 13,000 people living in farm worker
families in California. Of those covered, about 6,100 are
adults and about 7,500 are children. An estimated 9,132
members are eligible for full scope Medi-Cal, 1,560 are
eligible for limited scope Medi-Cal, 3,000 have income too
high to qualify for Medi-Cal. The Plan has one year (Sep
2014-Aug 2015) of claim experience above $70,000.
Approximately 17 cases are claims over $70,000, which total
approximately $1.4 million. The $70,000 limit is based on the
previous annual benefit limit the Plan had in place prior to
its compliance with the ACA in 2014.
In 2014, the Plan secured a $3.2 million appropriation from
California to purchase stop-loss insurance. In the 2015-16
Budget, UFW requested a lower amount of support from the state
($2.5 million) because of an enrollment increase by more than
2,300 lives in California. In the budget process, the
sponsors indicated the request was a one-time funding solution
for the purchase of stop-loss insurance for an additional
year.
3)Stop-loss insurance. Stop-loss insurance is sold to
purchasers (typically employers and labor trusts) that
self-insure their employee's health care coverage to limit the
purchaser's financial exposure. Stop-loss insurance is
available in two forms: a) specific stop loss, where coverage
is initiated when a claim for an individual employee or
dependent reaches the threshold selected by the employer.
After the threshold is reached, the stop-loss policy would pay
claims up to the lifetime limit per employee; and, b)
aggregate stop loss, where coverage is initiated when the
employer's self-insurance total group health claims reach a
stipulated threshold selected by the employer. This bill will
have the State of California, through DHCS, act as a stop loss
insurer. Under this bill, the state would pay claims for a
single episode of care that exceeds $70,000 up to a total cap
across all claims over $70,000 of $3 million per year until
this bill sunsets in 2021. The RFK Plan total premium for
stop-loss insurance for 2014-2015, was $3.43 million. The
total premium for 2015-2016 is estimated to be $3.1 million.
FISCAL EFFECT: Appropriation: No Fiscal
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Com.:YesLocal: No
According to the Assembly Appropriations Committee, General Fund
costs of up to $3 million per year to DHCS to reimburse the RFK
Plan for episodes of high-cost care incurred by the RFK Plan
enrollees.
SUPPORT: (Verified9/11/15)
United Farm Workers (source)
OPPOSITION: (Verified9/11/15)
None received
ARGUMENTS IN SUPPORT: This bill is sponsored by the UFW,
which writes that this bill ensures farm workers and their
families can continue to obtain medical health benefits. UFW
states that even with President Obama's ACA, it is estimated
that one million Californians will remain uninsured and not
eligible for coverage due to immigration status. UFW indicates
that the estimated Medi-Cal costs for this population for 2015
are estimated at 6.6 million if this population were enrolled in
Medi-Cal. With regard to stop-loss insurance, UFW indicates
that this bill reduces the potential state liability and
eliminates the need for on-going reliance on an uncertain
insurance market.
Prepared by:Teri Boughton / HEALTH /
9/11/15 20:15:45
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