BILL ANALYSIS �
AB 1296
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Date of Hearing: May 27, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1296 (Bonilla) - As Amended: May 10, 2011
Policy Committee: HealthVote:13-6
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill enacts the Health Care Eligibility, Enrollment and
Retention Act, requiring state entities who administer health
care coverage programs to undertake a variety of activities
related to streamlining eligibility, enrollment, and renewal of
health care coverage through these programs. This bill
operationalizes in state law a number of new federal
requirements associated with the federal Patient Protections and
Affordable Care Act (PPACA). Specifically, this bill:
1)Requires, by January 1, 2012, the California Health and Human
Services Agency (CHHSA), in consultation with the Department
of Health Care Services (DHCS), Managed Risk Medical Insurance
Board (MRMIB), the California Health Benefit Exchange
(Exchange), and other stakeholders to begin a planning process
to develop plans and procedures to implement the PPACA related
to eligibility, enrollment, and retention with regard to
public health coverage programs. Requires CHHSA to submit the
plan to the Legislature by April 1, 2012.
2)Requires DHCS to develop, in consultation with MRMIB and the
Exchange, a single standardized paper, electronic, and
telephone application form to be used by all entities
authorized to make eligibility determinations.
3)Requires DHCS, in coordination with MRMIB and the Exchange to
streamline and coordinate eligibility rules and requirements
among the Medi-Cal, HFP, and Exchange premium tax credit and
reduced cost-sharing programs using the least restrictive
rules and requirements to ensure that applicants with family
income under 400% FPL obtain coverage.
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4)Requires an entity receiving an application to treat it as an
application for all public coverage programs and enroll the
applicant in the most beneficial program the applicant is
eligible for.
5)Requires existing process designed to enroll eligible infants
at birth, as well as other patients identified by health care
providers, to be modified consistent with federal law and in a
way that does not require the patient to submit an
application.
6)Requires renewal processes to be streamlined and simplified.
7)Requires entities processing applications to assist
individuals with decisions about health care coverage,
including providing counseling on hardship exemptions,
individual mandate, premium tax credit, and other federal
provisions governing an individual's choice about coverage.
8)Requires seamless transition between programs at application,
renewal, and transition without breaks in coverage. Requires
DHCS to develop procedures to ensure continuity at specified
changes in circumstances.
9)Establishes transparency and accountability provisions,
including forums for public feedback, an independent review of
information technology programming, and independent
post-implementation evaluation.
10) Specifies that enrollment entities must monitor and oversee
both private and public entities that are screening for
eligibility.
11) Establishes privacy and confidentiality protections,
including privacy notices, informed consent to decline
electronic screening and verification, and breach notification
requirements.
FISCAL EFFECT
1)One-time costs to DHCS to conduct a stakeholder planning
process and develop a report may range from $50,000 to the
hundreds of thousands of dollars (50% GF), depending upon the
scope and complexity of the stakeholder process. Ongoing
costs related to specific transparency and accountability
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measures, including a monthly public forum for entities
operating health programs to receive in-person feedback,
estimated at $100,000 annually (50% GF). Federal grants
related to the exchange may be available to offset the costs a
portion of this work.
2)Significant costs for development of information technology
(IT) and business processes that meet the requirements of this
bill, potentially ranging from the tens to hundreds of
millions of dollars. The bill specifies the requirements of
an eligibility system, but does not specify a technological
design. There are a number of ways to design a system to meet
the bill's requirements. Most of the significant systems
changes required by this bill are required by the federal
Patient Protection and Affordable Care Act (PPACA) and
existing state law governing the operation of the state's
Exchange, so a significant systems development cost in the
range specified would be incurred regardless of the passage of
this bill.
Significant federal funding is available for the development
of systems required to implement the eligibility and
enrollment systems required by PPACA. A grant opportunity was
released in January 2011 that provides 100% federal funding
for activities related to the establishment of a
state-operated exchange, including the development of exchange
IT systems. In addition, a proposed federal rule would make
90% federal matching funding available for the development and
upgrade of Medicaid eligibility systems. Previously, 90%
federal matching funds were available only for Medicaid claims
processing systems.
At this time, the 100% federal funding opportunities for
exchange-related activities is available for activities
conducted through 2014, and the enhanced 90% Medicaid funding
is proposed to be available through 2015.
3)Unknown, potentially significant costs associated with a
number of provisions in the bill that go beyond strict
conformity with requirements of state and federal law. These
provisions are consistent with the intent of the federal law,
but prescribe specific actions with respect to the operation
of the enrollment and eligibility system that go beyond
existing requirements in state and federal law. These
include:
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a. The inclusion of county health programs in the
definition of "public health care coverage programs," and
associated requirements that the system screen and enroll
individuals in county health programs, in addition to
state health programs. As local programs will likely
differ in eligibility rules, making eligibility
determinations for counties would require county-specific
IT logic built into the eligibility system.
b. The provision that applicants for public health care
coverage programs be enrolled in "the most beneficial"
program for which the applicant is eligible.
c. The provision of presumptive eligibility for public
health care coverage programs for all individuals.
d. The requirement that the eligibility system offer
specified consumer assistance with respect to hardship
exemptions, premium tax credits, penalties for
overpayment, and other issues related to federal law and
federal subsidies for health insurance.
e. The requirement that recipients move seamlessly
between programs without any breaks in coverage.
f. The requirement that the department develop specific
procedures to ensure continuity of coverage.
COMMENTS
1)Rationale . According to the author, the Patient Protection and
Affordable Care Act (PPACA) requires a seamless "no wrong
door" application system so that wherever a consumer applies
he/she is enrolled into the program for which he/she is
eligible. The author explains that by enacting the Health
Care Eligibility, Enrollment and Retention Act, this bill
implements the PPACA requirement to create a single statewide
application to be used by all entities accepting and
processing applications for enrolling consumers in health
coverage. The author argues that the system must be available
by phone, in-person, by mail, or online for enrolling into
Medi-Cal, HFP, the Exchange, and county health programs.
2)Current Practice . Under current law, there are a number of
separate public health care programs, each with their own
eligibility criteria and application requirements. For
example, a low-income pregnant woman in California might be
eligible for the Medi-Cal program-automatically, if she is
also disabled; temporarily through a provider-based
presumptive eligibility program; through data-sharing with the
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CalFresh (food stamp) or CalWORKS (cash assistance) program;
or through a traditional application.
If her income is too high to be eligible for Medi-Cal, she
might be eligible for Access for Infants and Mothers, or one
or both of the state's high risk pool programs. Determining
eligibility would require three separate applications.
Currently, there is a joint application to Medi-Cal and
Healthy Families for children's coverage, but there is limited
coordination among other health programs in terms of
data-sharing for eligibility determination.
3)New Federal Requirements . Under the PPACA, new federal health
reform law, most U.S. citizens and legal residents will be
required to have health insurance beginning in 2014. The new
law expands Medicaid to make coverage readily available to
millions of uninsured people, and establishes a state-based
system of health insurance exchanges through which families
with incomes under 400% of poverty will be eligible for
subsidized coverage.
The PPACA also includes provisions aimed at simplifying
eligibility and enrollment procedures for Medicaid and CHIP,
and ensuring coordination with coverage available through the
newly created state exchanges. Required enrollment
simplification and coordination procedures include:
a) Utilizing a single, streamlined application form for
Medi-Cal, HFP, subsidies for coverage through the Exchange,
and the Basic Health Program (state optional program to
cover individuals from 133-200% FPL).
b) Establishing a website that permits individuals to apply
to, enroll in, and renew enrollment in Medi-Cal, and to
consent to enrollment or reenrollment in such coverage
through electronic signature.
c) Ensuring that individuals who seek coverage through
Medi-Cal, HFP, or the Exchange are screened for eligibility
for all three options (including Exchange coverage
subsidies and the Basic Health Program) and referred to the
appropriate program for enrollment, without having to
submit additional or separate applications for each
program.
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d) Requiring development of secure electronic interfaces to
exchange available data to the maximum extent practicable
to establish, verify, and update eligibility.
e) Establishing procedures for conducting outreach to and
enrolling vulnerable populations.
Forthcoming federal guidance will define the requirements of
the eligibility and enrollment system with more specificity,
and development of resources at the federal level may inform
the design of state-level systems. For example, PPACA
requires the federal Health and Human Services Agency (HHSA)
to design a single, streamlined form for use by the exchange,
Medicaid, and CHIP programs. Another example is the PPACA's
specific mention of possible data-sharing between the
Department of the Treasury and state exchanges for purposes of
income verification.
4)Related Legislation . AB 43 (Monning) of 2011 requires DHCS
to expand Medi-Cal eligibility to individuals with family
income up to 133% of FPL by January 1, 2014.
AB 1602 (John A. P�rez), Chapter 655, Statutes of 2010,
establishes the Exchange as an independent public entity to
purchase health insurance on behalf of Californians with
incomes of between 100% and 400% FPL and employees of small
businesses. It also clarifies the powers and duties of the
board governing the Exchange relative to the administration of
the Exchange, determining eligibility and enrollment in the
Exchange, and arranging for coverage under qualified carriers
SB 900 (Alquist), Chapter 659, Statutes of 2010, establishes
the Exchange and requires the Exchange to be governed by a
five-member board, as specified.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081