BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 714 (Atkins)
Hearing Date: 8/15/2011 Amended: 6/30/2011
Consultant: Katie Johnson Policy Vote: Health 5-3
_________________________________________________________________
____
BILL SUMMARY: AB 714 would require notices of health care
eligibility be sent to individuals who are enrolled in, or who
cease to be enrolled in, publicly-funded state health care
programs.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
DHCS notices, IT, unknown, likely significant
General/*
and ongoing costs Federal
MRMIB notices, IT, unknown, likely significant
General/**
and ongoing costs Federal
CDPH notices, IT, unknown, likely significant General/
and ongoing costs Federal/
Other
FPACT notices, IT, unknown, likely significant cost
pressureGeneral/***
and ongoing costs Federal
Potential state potentially significant, depending
onGeneral/
cost avoidance actual transfers of coverage Federal
*Costs shared 50 percent General Fund, 50 percent federal funds
**Costs shared 35 percent General Fund, 65 percent federal funds
***Costs shared 10 percent General Fund, 90 percent federal
funds
****See Staff Comments
_________________________________________________________________
____
AB 714 (Atkins)
Page 1
STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
This bill would require the Department of Health Care Services
(DHCS), the Managed Risk Medical Insurance Board (MRMIB), and
the California Department of Public Health (CDPH), and Family
Planning, Access, Care, and Treatment (FPACT) providers to
provide two specified notices of health care eligibility to
individuals who are enrolled in, or who cease to be enrolled in,
the following publicly funded state health care programs in
materials otherwise provided to those individuals:
1) Breast and Cervical Cancer Treatment Program (BCCTP),
Breast Cancer Control Program (BCCP), and the Every Woman
Counts (EWC) program-both notices would be sent to all
enrollees. At least 12,500 EWC enrollees. BCCTP and BCCP
enrollment were unavailable at the writing of this
analysis.
2) AIDS Drug Assistance Program (ADAP)-both notices would
be sent to all enrollees-about 42,500 clients total.
3) Ryan White HIV/AIDS Treatment Extension Act of 2009
(Public Law 111-187)-both notices would be sent to all
enrollees. The number of Ryan White enrollees was unknown
at the writing of this analysis.
4) FPACT-both notices would be sent to all enrollees by
FPACT providers-about 2.7 million total enrollees.
5) Healthy Families Program (Healthy Families)-the first
notice and the notice specifically addressing parents would
be sent to all enrollees and the second notice would be
sent to individuals who cease to be enrolled-about 850,000
subscribers total, 320,943 disenrollments annually.
6) Access for Infants and Mothers-the first notice would be
sent to all enrollees and the second notice would be sent
to women who cease to be enrolled-approximately 7,000 total
enrollees and 7,000 disenrollments annually.
7) Major Risk Medical Insurance Program-the first notice
would be sent to all enrollees and the second notice would
be sent to individuals who cease to be enrolled-6,632 total
subscribers, approximately 2,500 disenrollments annually.
8) Pre-existing Condition Insurance Program-the first
notice would be sent to all enrollees and the second notice
would be sent to individuals who cease to be enrolled-3,608
total subscribers, approximately 1,000 disenrollments
annually.
9) Full-scope Medi-Cal for which there is federal financial
AB 714 (Atkins)
Page 2
participation-both notices would be sent to individuals who
cease to be enrolled-about 2.2 million disenrollments
annually.
Notices
The notices required in this bill would be required to be
included in materials otherwise provided to individuals who
would be receiving the notices pursuant to these provisions and
would be sent to program enrollees as described above.
A) The first notice requirement would be effective from
January 1, 2012, to June 30, 2013. It would state that
effective January 1, 2014, an individual may be eligible
for reduced-cost comprehensive health care coverage through
the California Health Benefit Exchange (Exchange) and that
if the individual's income is low, he or she could be
eligible for no-cost coverage through Medi-Cal. For
additional information, it would direct individuals to
www.healthcare.ca.gov or 1-888-Healthhelp.
B) The second notice requirement would be in effect
commencing July 1, 2013, and ongoing. It would state that
because an individual is enrolled in one of the above
programs, there would be an application for health care
coverage through the Exchange submitted on their behalf,
that coverage would be effective beginning January 1, 2014,
that the individual would not be required to accept the
coverage from the Exchange, that the individual's premium
for health care coverage would be based on his or her last
year's income and that if there was a significant change in
income from that year, he or she would be able to amend the
income and the premiums would be based on the updated
income. The notice would state, as the first one did, that
if an individual's income is low, he or she may qualify for
no-cost coverage through Medi-Cal. It would again direct
individuals to www.healthcare.ca.gov or 1-888-Healthhelp.
Effective January 1, 2012, an additional Healthy Families notice
would be sent out targeting parents of children enrolled in
Healthy Families effective January 1, 2012, and ongoing. It
would state that, effective Janaury 1, 2014, if a child's
parents or other family members do not have health care coverage
that costs less than 10 percent of the child's income, the
parents or family members may be eligible for reduced-cost
health care coverage through the Exchange and that if their
AB 714 (Atkins)
Page 3
income is low, they may be eligible for no-cost Medi-Cal. It
would again direct individuals to www.healthcare.ca.gov or
1-888-Healthhelp.
Finally, effective January 1, 2013, hospitals would be required
to include a notice about the availability of health care
coverage through the Exchange in the notice informing an
uninsured patient that it bills of publicly available health
care coverage. Also effective January 1, 2013, a hospital would
be required to provide applications for coverage through the
Exchange in addition to its requirement to provide Medi-Cal and
Healthy Families applications.
Staff notes that the 1-888-Healthhelp hotline does not yet exist
and that this bill would not establish it.
Enrollment in the Exchange
For all of the programs listed above, this bill would require
their respective departments and MRMIB to seek federal approval
to transfer the minimum information necessary to initiate an
application for enrollment in the Exchange. Effective January 1,
2013, the departments would be required to confidentially
provide enrollee-specific information to the Exchange, including
their name, recent address, clinical information, and a list of
providers for the last 12 months in order to determine
eligibility, complete enrollment, and maximize continuity of
care. With that information, the Exchange would initiate
enrollment for an individual. The individual, in turn, would be
provided an opportunity to give informed consent for the use of
the transferred information to commence eligibility
determination and complete enrollment as well as an opportunity
to correct incorrect information via a process yet to be
defined. If the individual fails to consent or to respond, that
failure would be construed to mean that the individual declines
coverage. Therefore, an individual would not be "automatically
enrolled" in the Exchange.
Regulation Authority
This bill would provide that the State Public Health officer,
MRMIB, and the Director of DHCS would be permitted to modify the
wording of the notice for the purposes of clarity, readability,
and accuracy, but may not change the substantive meaning of the
notice. Each notice would be required to be provided in the
threshold languages. This section of the bill is uncodified.
AB 714 (Atkins)
Page 4
Fiscal Effect of Notices and Providing Data to the Exchange
Since the notices would be included in materials otherwise sent
to program enrollees or enrollees who cease to be enrolled,
costs to CDPH, DHCS, MRMIB, and FPACT providers would be
relatively minor, but not necessarily absorbable, depending on
the number of notices to be sent out; for a relative number of
notices per program see the estimated program
enrollment/disenrollment figures above.
There would likely be administrative costs to CDPH, DHCS, and
MRMIB potentially in the low hundreds of thousands of dollars
associated with seeking federal approval to transfer data to the
Exchange. It is unclear what type of approval would be necessary
and how long approval would take.
Additionally, there would likely be significant one-time costs
in the millions of dollars to CDPH, DHCS, and MRMIB to create
information technology systems or programs that would gather
required data and transfer it to the Exchange and system costs
to the Exchange to create a system to accept CDPH, DHCS, and
MRMIB enrollee data and to make it compatible with its yet to be
developed enrollment system. Ongoing maintenance costs of such a
system and data transfer would be unknown.
Administrative costs would normally be shared as follows,
however, it is unclear whether or not the normal sharing ratios
would be permitted to be used for these purposes; if that is the
case, then costs may be up to 100 percent General Fund: CDPH
administrative costs would be shared amongst a variety of state
and federal funds; DHCS administrative costs would be shared 50
percent General Fund and 50 percent federal funds; MRMIB
administrative costs would be shared 35 percent General Fund and
65 percent federal funds for Healthy Families, 35 percent state
Proposition 99 funds and 65 percent federal funds for AIM, state
Proposition 99 funds for MRMIP, 100 percent federal funds for
PCIP, and shares of enrollee premiums; there would be cost
pressure on FPACT providers to send out notices and costs would
be shared 10 percent General Fund and 90 percent federal funds.
Fiscal Effect of Coverage Shifts Commencing January 1, 2014
To the extent that this bill would speed the process of
transitioning individuals off of state-funded programs and into
the Exchange or newly available 100 percent federally funded
Medi-Cal aid codes, there could be potentially significant state
AB 714 (Atkins)
Page 5
cost avoidance. Actual cost avoidance would depend on the number
of individuals that actually transfer their coverage from one
program to another or enroll in the Exchange. Newly eligible
Medi-Cal individuals' coverage would be paid by 100 percent
federal funds until 2016. Exchange costs would consist of
enrollee premiums and federal subsidies.