BILL ANALYSIS                                                                                                                                                                                                    




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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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