BILL ANALYSIS �
AB 714
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Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 714 (Atkins) - As Amended: May 3, 2011
Policy Committee: HealthVote:13-6
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill establishes notification requirements of individuals
who are enrolled or cease to be enrolled in state health care
programs, and begins "pre-enrollment" activities on behalf of
these individuals for health care coverage through the
California Health Benefits Exchange. Specifically, this bill:
1)Requires the Department of Public Health, the Managed Risk
Medical Insurance Board, and the Department of Health Care
Services to notify individuals who have ceased to be enrolled
in certain comprehensive health care coverage programs that
they can access health care coverage through the California
Health Benefit Exchange. The programs include:
a. Medi-Cal
b. Healthy Families (HFP)
c. Access for Infants and Mothers (AIM)
d. Major Risk Medical Insurance Program (MRMIP)
e. Preexisting Condition Insurance Program (PCIP)
The bill requires informational notices to be sent out until
June 30, 2013, and after that date requires the notices to
indicate that an application has been made to the California
Health Benefits Exchange on the individual's behalf.
2)Requires DPH and DHCS to issue a similar notification to
enrollees in certain disease-specific programs, including:
a. AIDS Drug Assistance Program (ADAP)
b. Ryan White HIV/AIDS Programs
c. Breast and Cervical Cancer Treatment Program (BCCTP)
d. Family PACT
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1) Requires departments administering health care coverage
programs, after January 1, 2013, to provide to the Exchange
the name, address, and other information on every individual
who has ceased to be enrolled (in the case of comprehensive
health care coverage programs) or who is enrolled (in the
case of disease-specific programs).
2) Requires the information provided to the Exchange to
initiate an application for enrollment in coverage. Permits
individuals to have the opportunity to decline coverage
pursuant to this bill by notifying the Exchange in writing.
3) Requires DHCS, DPH, and MRMIB to seek approval from the U.S.
Department of Health and Human Services (HHS) to transfer the
minimum information necessary to initiate an application for
enrollment in coverage through the Exchange.
4) Requires an existing statement regarding eligibility for
public insurance programs that hospitals provide as part of a
patient billing, to also include information about coverage
through the Exchange.
FISCAL EFFECT
1)Significant state costs to various departments to send
notifications, in the range of $2 million ($400,000 GF). Some
GF costs could likely be offset by federal funding for
outreach through HFP, Medi-Cal, or the PCIP program.
2)As currently drafted, the bill is unclear about whether
screening and enrollment functions are performed upon
provision of information about potential enrollees to the
Exchange, or whether additional steps are necessary. Further
specification of the enrollment process is necessary in order
to assess potential costs. If screening and enrollment is
conducted upon provision of information about potential
enrollees, there could be significant state screening and
enrollment costs to the Exchange and/or Medi-Cal that would
otherwise not occur, in the range of millions to tens of
millions of dollars.
3)Unknown, potentially significant state information technology
costs to transfer data from several different enrollment
systems to the Exchange. It is unknown whether federal grant
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funding available for exchange activities would be available
for this purpose.
4)Potentially significant state cost savings to the extent that
this bill speeds the transition of individuals from GF-funded
services to the Exchange or new eligibility categories of
Medi-Cal. Actual cost savings would depend on the dynamics
and speed of individuals shifting from one type of coverage to
another. Medi-Cal costs for newly eligible individuals are
100% federally funded through 2016.
5)Potentially significant state Medi-Cal costs (50% GF) if
individuals are found to be eligible for Medi-Cal under
existing eligibility rules, to the extent that this bill
causes more individuals to become enrolled in Medi-Cal more
quickly than would otherwise occur.
6)Federal funding is available for Exchange-related activities
through federal Exchange implementation grants. Subject to
federal approval, some of the activities mandated in this may
be eligible for funding through these grants.
7)Reduced cost pressure to counties to fund otherwise
uncompensated care, to the extent this bill results in more
individuals enrolled more quickly into comprehensive health
care coverage.
COMMENTS
1)Rationale . The author states that existing law is silent with
respect to notifying and pre-enrolling those who are likely to
be eligible for the Exchange or newly eligible for Medi-Cal
who are already enrolled in other public programs or who seek
charity care or discounted care from hospitals. Additionally,
the author states that initial enrollment in public programs
including HFP and the new high risk pool has been slow. The
author indicates that in order to accelerate enrollment of
those likely to be eligible for Exchange coverage or Medi-Cal
in 2014, this takes two steps: in 2012 and 2013, those likely
to be eligible are given notice of the availability of
low-cost or no-cost coverage through the Exchange or Medi-Cal
effective in 2014; and, second, in 2013, those already
enrolled in an existing public program with limited benefits,
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or covered by comprehensive coverage but about to lose
coverage, will be pre-screened and pre-enrolled in coverage
through the Exchange or Medi-Cal.
2)California Health Benefit Exchange . California was the first
state in the nation to enact legislation creating a health
benefit exchange under the Patient Protection Affordable Care
Act (PPACA.) AB 1602 (John A. P�rez), Chapter 655, Statutes
of 2010, and SB 900 (Alquist), Chapter 659, Statutes of 2010,
established the Exchange as an independent entity in state
government governed by a five-member executive board.
According to California's health care reform Website
(www.healthcare.ca.gov), the Exchange will enhance competition
and provide the same advantages available to large employer
groups by organizing the private insurance market, including a
more stable risk pool, greater purchasing power, more
competition among insurers and detailed information about the
price, quality, and service of health coverage. In addition,
federal subsidies for purchasing health insurance coverage for
individuals between 133% and 400% of poverty under will only
be available through the Exchange.
The federal government awarded California $1 million to fund
preliminary planning efforts related to the development of an
exchange. An additional federal implementation grant was
announced in January of this year. After 2014, the Exchange
must be self-supporting from fees paid by health plans and
insurers participating in the Exchange.
3)Medicaid Expansion . PPACA significantly expands the Medicaid
program. This is accomplished primarily by mandating coverage
of certain population groups not previously required, such as
childless adults. Until this mandate takes effect, Medicaid
beneficiaries generally have needed to have a low income and
to be in certain specific categories, such as being pregnant
or having a disability. Beginning January 1, 2014, federal
law will require coverage of all individuals under age 65
(children, parents, and childless adults) with incomes at or
below 133 percent of the FPL regardless of disability or other
categories. Furthermore, states will be eligible for 100%
federal reimbursement for these new eligibility categories
through 2016. For individuals who newly enroll in Medi-Cal
after 2014, but who would be eligible under existing law (for
example, a low-income pregnant woman), the federal matching
rate remains 50%.
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4)Potential Inefficiency in Process . The bill as currently
drafted requires notices to be made to a number of individuals
for which the notice may be irrelevant or confusing. For
example, the bill requires notices be sent to families in
which a child ceases to be enrolled in HFP. According to HFP
data, 16% requested termination of coverage. 28% of HFP
disenrollments are due to a child aging out of the program,
who may subsequently become enrolled as dependents on their
parent's plan in the Exchange. MRMIB would be required to send
these individuals a notification indicating that an
application had been made to the Exchange on their behalf, and
send the Exchange information about these individuals.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081