BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 997 (Lara) - Health care coverage: immigration status ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 20, 2016 |Policy Vote: HEALTH 7 - 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 9, 2016 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 997 requires undocumented children who are eligible for full-scope Medi-Cal coverage and who are enrolled in low-cost coverage provided by Kaiser Permanente or another Medi-Cal managed care plan to be enrolled in full-scope Medi-Cal with the same health plan. Fiscal Impact: Likely one-time administrative costs of about $1 million for the Department of Health Care Services to coordinate with health plans and determine Medi-Cal eligibility for current low-cost coverage enrollees (General Fund). The Department will need to collect information from health plans about their current low-cost coverage enrollees who are likely to gain full-scope Medi-Cal eligibility, determine eligibility for those individuals, and set up a special process for those individuals to be directly enrolled with the same health plan under full scope Medi-Cal. Because this is not the normal process for determining Medi-Cal eligibility and assigning enrollees to a Medi-Cal managed health plan, there will be SB 997 (Lara) Page 1 of ? additional workload for the Department. (Because undocumented immigrants are generally not eligible for federal financial participation, all costs will be General Fund costs.) Likely increased Medi-Cal costs in the millions per year due to increased enrollment in Medi-Cal under the bill (General Fund). Under current law, undocumented immigrants under 19 years of age will be eligible for full-scope Medi-Cal on or after May 1, 2016. The undocumented children who are the subject of this bill will soon become eligible for full scope Medi-Cal. However, without the bill, those children's' parents will need to enroll them in Medi-Cal through the normal application process. Given that these children are already enrolled in health care coverage (often with a modest monthly fee per child), it is likely that a high percentage of these children's' parents will enroll them in Medi-Cal. However, there is likely to be a small share of the current population that will not enroll in Medi-Cal through the normal enrollment process. Under the bill, the streamlined enrollment into Medi-Cal is likely to reduce the number of individuals who would lose coverage during the transition. For example, if 10% of current program participants would not have transitioned to Medi-Cal coverage without the bill and the bill reduces that share to 5% losing coverage, the state cost for that additional Medi-Cal coverage would be about $7 million per year. Background: Under state and federal law, the Department of Health Care Services operates the Medi-Cal program, which provides health care coverage to low income individuals, families, and children. Medi-Cal provides coverage to childless adults and parents with household income up to 138% of the federal poverty level and to children with household income up to 266% of the federal poverty level. The federal government provides matching funds that vary from 50% to 90% of expenditures depending on the category of beneficiary. Under current law (SB 75, Committee on Budget and Fiscal Review, Statutes of 2015) the state will expand eligibility for full-scope Medi-Cal to undocumented immigrants under 19 years of age on or after May 1, 2016. The Department of Health Care Services indicates that coverage should begin about May 16, 2016. The cost of providing full-scope Medi-Cal benefits to undocumented immigrants is not eligible for federal financial SB 997 (Lara) Page 2 of ? participation (although federal financial participation is available for emergency and pregnancy-related services for undocumented immigrants). Currently, Kaiser Permanente and eight other Medi-Cal managed care plans (including both local initiatives and county organized health plans) offer low- or no-cost coverage to low-income undocumented children. Kaiser covers about 64,000 children and the other plans cover a combined 13,000 children. Most of those children are income-eligible for Medi-Cal. Under current practice in Medi-Cal, when an applicant is determined to be eligible, he or she is enrolled into fee-for-service Medi-Cal and given information to select a Medi-Cal managed care plan (in counties where there is more than one plan). This system is referred to as the Health Care Options process. If an enrollee does not select a plan, there is a process for assigning enrollees to a Medi-Cal managed care plan. Medi-Cal managed care enrollees are allowed to change health plans monthly (when there is a coverage option). Current regulation limits the ability of Medi-Cal managed care plans to contact their enrollees with information that could be interpreted as marketing material. Proposed Law: SB 997 requires undocumented children who are eligible for full-scope Medi-Cal coverage and who are enrolled in low-cost coverage provided by Kaiser Permanente or other Medi-Cal managed care plans to be enrolled in full-scope Medi-Cal with the same health plan. Specific provisions of the bill would: Require that children who are eligible for full-scope Medi-Cal and were enrolled in low-cost coverage with Kaiser Permanente or a Medi-Cal managed care plan shall be enrolled in full-scope Medi-Cal with the same managed care plan; Require disclosure of specified information on Medi-Cal eligibility and managed care plan options to the child's representative; SB 997 (Lara) Page 3 of ? Require the Department of Health Care Services, using information that is provided by health plans through an existing process, to determine the Medi-Cal eligibility of children enrolled in low-cost coverage; Require the Department to provide specified information to the child's representative; Include a sunset date of January 1, 2019. Related Legislation: SB 10 (Lara) would extend full-scope Medi-Cal eligibility to adults who would be eligible, except for their immigration status. That bill is pending in the Assembly Health Committee. Staff comments: Once undocumented children are able to enroll in Medi-Cal, it is likely that some of the children currently provided coverage through Kaiser Permanente and other Medi-Cal managed care plans will apply for and enroll in Medi-Cal. Since enrolling these children to Medi-Cal will shift the cost of providing their care from the managed care plans to the state, it is likely that the managed care plans will take steps to facilitate enrollment. However, current prohibitions on marketing to members by Medi-Cal managed care plans will limit the ability of plans that are currently providing coverage to assist currently enrolled undocumented children with selecting the same plan (when there is a choice). Therefore, there are likely to be children who will not ultimately enroll with the same health plan when they are enrolled in Medi-Cal managed care. This is particularly true for the children currently covered by Kaiser Permanente. That health plan not a primary Medi-Cal managed care plan in most counties, although it is a subcontracting Medi-Cal managed care plan in many more counties. Applicants who would like to remain with Kaiser Permanente may have difficulty navigating the Health Care Options process to enroll back with Kaiser. It is important to note that this bill is not an urgency measure and so would not go into effect until January 1, 2016. It is not known to what extent the health plans that are currently providing free or low cost coverage to undocumented children will still be offering such coverage by that date. SB 997 (Lara) Page 4 of ? -- END --