BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 514 (Anderson) - California Health Benefit Exchange
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|Version: April 20, 2015 |Policy Vote: Health X - XX |
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|Urgency: Yes |Mandate: No |
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|Hearing Date: January 19, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 514 would require the California Health Benefit Exchange
(Covered California) to allow an applicant to indicate whether
he or she would like assistance in completing the application
from a certified insurance agent or enrollment counselor. If an
applicant opts not to receive assistance, the bill would
prohibit Covered California from sharing the applicant's
personal information with a certified insurance agent or
certified enrollment counselor.
Fiscal
Impact:
One-time costs of about $300,000 to modify information
technology systems by Covered California to allow applicants
to indicate whether they would like assistance (special fund).
Unknown costs to develop the systems and procedures to pass
along consumer information (upon consumer request) to
certified insurance agents or enrollment counsellors (special
fund). In addition to the system changes needed to allow a
consumer to consent to having contact information shared with
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insurance agents or enrollment counsellors, Covered California
will need to develop systems and procedures for taking the
appropriate information and sharing it with the appropriate
partners. Covered California does not yet have a plan for how
that process would work, so no cost estimates are available at
this time. It is likely that the costs to create those "back
end" systems would be in the low hundreds of thousands.
Potential minor costs to revise paper applications for health
care coverage by the Department of Health Care Services
(General Fund and federal funds). The state uses a single
paper application for the Medi-Cal program and coverage
through Covered California. In order to comply with the
requirements of this bill, the Department would likely need to
update the paper application to opt out of future contacts.
The costs to do so are not expected to be significant since
the Department regularly revises those forms.
Background: Under the federal Affordable Care Act, states are required to
establish American Health Benefit Exchanges. If a state does not
create an Exchange, the federal government will do so. Within
the Exchanges, individuals are able to purchase health care
coverage with standardized benefit packages and actuarial
values. In addition, individuals with incomes between 100
percent and 400 percent of the federal poverty level are
eligible for subsidies for coverage purchased in the Exchanges.
California has established its own California Health Benefit
Exchange (referred to as "Covered California"). In order to
establish eligibility for subsidies, Covered California operates
call centers, contracts with counties, and utilizes certified
insurance agents and certified enrollment counsellors to help
consumers navigate the eligibility and enrollment process.
Federal guidance requires state-run Exchanges to screen
employees, vendors, volunteers, and anyone who will have access
to sensitive medical or financial information for previous
criminal convictions or arrests.
In general, consumers can select health care coverage through
Covered California during open enrollment periods. (Open
enrollment periods apply to qualifying health plans sold through
Covered California and on the individual market. Individuals may
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apply for, and if eligible, gain coverage through the state's
Medi-Cal program year-round). The next open enrollment period in
Covered California begins on October 1, 2014.
During the 2013 open enrollment period, Covered California
shared applicant contact information (such as a name, phone
number, and email address) for about 40,000 applicants who had
not completed their application with certified insurance agents
or enrollment counsellors. Covered California implemented this
policy to utilize insurance brokers and enrollment counsellors
to contact potential enrollees to assist the enrollees with
completing the enrollment process. After receiving complaints
from consumers who were contacted by certified insurance agents,
Covered California put this information sharing program on hold
and has not used it in the following open enrollment periods.
Currently, Covered California is considering a change to its
information technology system (CalHEERS) to allow consumers to
consent to having their contact information shared with
certified insurance agents or enrollment counsellors. It is
important to note that this change is one of many system changes
that must be made to CalHEERS to facilitate application and
enrollment into Covered California and/or Medi-Cal coverage.
Proposed Law:
SB 514 would require the California Health Benefit Exchange
(Covered California) to allow an applicant to indicate whether
he or she would like assistance in completing the application
from a certified insurance agent or enrollment counselor.
Covered California would have to implement this change by
September 30, 2016. If an applicant opts not to receive
assistance, the bill would prohibit Covered California from
sharing the applicant's personal information with a certified
insurance agent or certified enrollment counselor.
This bill is an urgency measure.
Related
Legislation:
SB 974 (Anderson, 2014) was substantially similar to this
bill. That bill was held in the Assembly Appropriations
Committee.
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AB 1560 (Gorell, 2014) was substantially similar to this bill.
That bill failed passage in the Assembly Health Committee.
Staff
Comments: As noted above, there are a large number of system
changes that must be made to the CalHEERS system to allow for
the accurate assessment of eligibility for enrollment into
either coverage through Covered California or Medi-Cal. The
bill's requirement that this specific change be made by
September 30, 2016 may result in other system changes being
delayed. Covered California and the Department of Health Care
Services are planning to develop a priority list by April 2016
for system changes to be made in the Fall of 2016.
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