BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
56 (Alquist)
Hearing Date: 5/28/2009 Amended: 5/5/2009
Consultant: Katie Johnson Policy Vote: Health 7-4
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BILL SUMMARY: SB 56 would establish the California Health
Benefits Service (CHBS) program within the Department of Health
Care Services (DHCS) to authorize and facilitate the creation of
joint ventures among public health coverage programs to provide
health care coverage to uninsured individuals and purchasers of
health insurance.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
DHCS administration $50 - $150 $100 - $300 $100 - $300
Private
DMHC licensing up to $200 ongoing costs unknown,
Special**
but potentially in the
hundreds of thousands of
dollars
DMHC licensing fee (up to $50)ongoing revenues unknown,
Special**
revenue but not sufficient to cover
DMHC licensing costs
*Managed Care Fund
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Existing law creates various public health benefits programs
administered by the DHCS, the Managed Risk Medical Insurance
Board (MRMIB), and various local entities.
Existing law provides for the licensing and regulation of health
care coverage plans by the Department of Managed Health Care
(DMHC).
This bill would require the DHCS to establish the CHBS for
purposes of facilitating joint ventures among public health
programs, including existing local initiatives, publicly
operated Medi-Cal managed care plans known as county organized
health systems (COHS), and the County Medical Services Program
(CMSP), to expand cost-effective public health coverage options
to the uninsured and purchasers of health insurance. It is
estimated that DHCS staffing costs would total up to
approximately $450,000 in FY 2009-2010 and $900,000 annually
thereafter, to support 8 PYs.
This bill would require the CHBS to identify statutory,
regulatory, or financial barriers or incentives that should be
addressed to facilitate the establishment and maintenance of one
or more joint ventures between health plans that are related to
a county board of
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SB 56 (Alquist)
supervisors, a county special commission, a COHS, or a county
health authority and with the CMSP, to report these initial
findings to the Legislature on or before November 1, 2010, to
provide technical assistance to local health care delivery
entities that would participate in these joint ventures, and to
permit the DHCS to enter into contracts with joint ventures
authorized pursuant to this bill to provide medical services to
the joint ventures' target populations.
This bill would permit health plans that contract with or are
governed, owned, or operated by a county entity to form joint
ventures to create networks of public health plans that pool
risks and share networks. This bill would require participating
health plans to seek contracts with designated public hospitals
and other local safety net providers.
This bill would provide that no more than two joint ventures
would be established until the CHBS program submitted its
findings to the Legislature in November 2010. It is unknown how
many joint ventures or health care networks would be established
after the report is submitted.
This bill would require any joint venture or health care network
established pursuant to the provisions in this bill to seek
licensure by the DMHC. It is estimated that the DMHC would need
approximately $100,000 to license each joint venture or network.
It is possible that up to $25,000 of the cost per license would
be offset by licensing fees.
This bill would also create the California Health Benefits
Service Program Stakeholder Committee, as specified, and would
provide that the committee meet quarterly.
This bill would require the DHCS on or before November 1, 2010,
and annually thereafter, to update the relevant committees of
the Legislature on the implementation of this section. This bill
would provide that the update would include progress on the
purpose of these provisions and recommendations on necessary
resources, policy, and legislative changes.
This bill would provide that no public funds would be used to
support the CHBS program and that the DHCS would create and
administer the CHBS program only when the Department of Finance
determines that private donations in an amount sufficient to
fully support these duties have been deposited with the state.
Staff notes that the bill does not specify into which account or
fund private funds would be deposited for this purpose. If
private donations were unavailable, there would be considerable
General Fund pressure in the amount of $900,000 annually to fund
this program.
This bill would state Legislative intent to enact and implement
comprehensive reforms in the state's health care delivery system
by 2012, as specified, and to enact specific reforms by 2010
that would provide a foundation for California health care
reform, as specified.
As proposed to be amended, the author's amendments would remove
the requirement that the DHCS establish the California Health
Benefits Service Program
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SB 56 (Alquist)
and would instead establish the California Health Benefits
Service Advisory Committee (committee), as specified, within the
DHCS for the purpose of facilitating the creation of
cost-effective public health coverage options to the uninsured
and purchasers of health insurance. This bill would require the
committee to provide a forum for collaboration and sharing of
information regarding the formation of cost-effective public
health coverage options and to report on the actions of the
committee to the DHCS and to relevant Senate and Assembly
committees on or before December 1, 2010. This bill would
require that staffing necessary to support the functions of the
committee be provided by the DHCS. The DHCS would likely need 1
- 2 staff persons to support the work of the committee at a cost
of approximately $100,000 - 300,000 annually. This bill would
establish the California Health Benefits Service Account to
receive private donations for the administration of this
committee.