BILL ANALYSIS
SB 56
Page 1
SENATE THIRD READING
SB 56 (Alquist)
As Amended August 17, 2010
Majority vote
SENATE VOTE :21-12
HEALTH 12-4 APPROPRIATIONS 12-5
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|Ayes:|Monning, Ammiano, Carter, |Ayes:|Fuentes, Bradford, |
| | De La Torre, De | |Huffman, Coto, Davis, De |
| |Leon, Eng, Hayashi, | |Leon, Gatto, Hall, |
| |Hernandez, Jones, Bonnie | |Skinner, Solorio, |
| |Lowenthal, V. Manuel | |Torlakson, Torrico |
| |Perez, Salas | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Conway, Gaines, Smyth, |Nays:|Conway, Harkey, Miller, |
| | Audra Strickland | |Nielsen, Norby |
| | | | |
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SUMMARY : Permits a health plan that is governed, owned, or
operated by a county board of supervisors, a county special
commission, a county-organized health system (COHS), or a county
health authority, or the County Medical Services Program (CMSP),
to form joint ventures for the joint or coordinated offering of
health plans to individuals and groups. Specifically, this
bill :
1)Gives a CMSP governing board the power to participate in such
a joint venture, provided that it is funded separately from
the program and does not impair its financial stability.
Permits a CMSP governing board, if it elects to participate in
such a joint venture, to contract with a third-party
administrator to provide coverage under the joint venture.
2)Permits the joint ventures to consist of either:
a) Contractual relationships entered into in order to pool
risk or share networks, or both; or,
b) Contractual relationships entered into in order to
provide for the joint offering or marketing of health plans
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to individuals and groups.
3)Requires participating health plans, in forming joint
ventures, to seek to contract with designated public
hospitals, county health clinics, primary care clinics, and
other traditional safety net providers.
4)Requires joint ventures to meet all the requirements of the
Knox-Keene Health Care Service Plan Act of 1975.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, one-time fee-supported special fund costs to the
Department of Managed Health Care in the range of $200,000 to
$500,000 (health plan fees) to license two to five joint
ventures established pursuant to authority created in this bill.
COMMENTS : According to the author, due to the economic
downturn, hundreds of thousands of Californians are joining the
ranks of the uninsured or are looking to publicly financed
programs for their health coverage. Compared to persons with
health coverage, the uninsured are less likely to have a regular
source of care, are likely to delay seeing a doctor, and are
less likely to receive preventive health care services. Based
on recent data collected by the Kaiser Family Foundation and
other entities, health care costs continue to rise at a faster
rate than general inflation and than average wage growth. The
author states that there is a lack of affordable health coverage
options particularly for low-income uninsured populations.
Because of the cost-effective provider networks these plans use,
and their very low levels of overhead, the local health plans
have the potential to be a viable coverage alternative for the
uninsured, a population they don't currently serve. By
clarifying their ability to form joint ventures to serve the
uninsured, the author asserts that this bill will tap into the
potential these plans offer for providing cost-effective
coverage.
According to the Department of Health Care Services (DHCS), as
of December 2009, managed care served about 3.8 million Medi-Cal
beneficiaries in 25 counties (representing 52% of the total
Medi-Cal population). In California, there are three models of
managed care:
1)In the COHS model counties, DHCS contracts with a health plan
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created by the County Board of Supervisors. Local government,
health care providers, community groups and Medi-Cal
beneficiaries all can give input in creating the health plan.
In a COHS county, everyone is in the same managed care plan.
COHS serve about 811,500 beneficiaries through five health
plans in 11 counties: Merced, Monterey, Napa, Orange, San
Mateo, San Luis Obispo, Santa Barbara, Santa Cruz, Solano,
Sonoma, and Yolo. Ventura's program is in formation, and is
expected to be implemented between October 2010 and January
2011.
2)In most Two-Plan model counties, there is a "Local Initiative"
(LI) and a "commercial plan" (CP). DHCS contracts with both
plans. Local government, community groups and health care
providers all can give input in creating the LI. The LI is
designed to meet the needs and concerns of the community. The
CP is a private insurance plan that also provides care for
Medi-Cal beneficiaries. Two-Plan serves about 2.6 million
beneficiaries in 12 counties: Alameda, Contra Costa, Fresno,
Kern, Los Angeles, Riverside, San Bernardino, San Francisco,
San Joaquin, Santa Clara, Stanislaus, and Tulare.
3)In GMC counties, DHCS contracts with several commercial plans.
This provides several choices for beneficiaries, so the health
plans may want to try different ways to deliver care to
members. GMC serves about 387,000 beneficiaries in two
counties: Sacramento and San Diego.
CMSP provides medical care services in 34 primarily rural
counties to indigent adults 21-64 years of age with incomes at
or below 200% of the federal poverty level who are not eligible
for Medi-Cal and who are U.S. citizens or legal residents.
Analysis Prepared by : Melanie Moreno / HEALTH / (916)
319-2097
FN: 0006097