BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1438 (Alquist) - Long term care insurance.
Amended: May 1, 2012 Policy Vote: Ins 5-3
Urgency: No Mandate: No
Hearing Date: May 24, 2012 Consultant: Maureen Ortiz
SUSPENSE FILE.
Bill Summary: SB 1438 requires the Insurance Commissioner to
convene a task force to examine the components necessary to
design a statewide long-term care insurance program, and to
report to the Legislature by January 1, 2014.
Fiscal Impact: Total costs for the task force are unknown but
likely to exceed $150,000 for designing a long-term care
insurance program. (Special Fund)
The Department of Insurance has indicated the need for 4
limited term positions that will work for approximately one
month at a total cost of about $105,000. (Special)
Unknown, dependent upon meeting frequency and locations,
travel reimbursement expenses for approximately 8-10
stakeholders. (Special)
Additional, unknown expenses to the Department of Health
Care Services, and the Employment Development Department.
Although total costs for all departments are indeterminable, it
is very likely that the expenses associated with determining
program eligibility, enrollment procedures, varying level of
benefits, financing, state administration of the program, and
interaction with the Medi-Cal program may exceed $150,000.
Background: The Department of Health Care Services houses the
California Partnership for Long-Term Care Program which links
private long-term care insurance and health care service plan
contracts that cover long-term care with the In-Home Supportive
Services program and Medi-Cal.
The California Public Employees Retirement System (CalPERS)
administers a long-term care insurance program for state
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employees. All California public employees, retirees, their
spouses, parents, parents-in-law, and adult siblings are
eligible for the CalPERS Long-Term Care Program. Those eligible
to apply must be between the ages of 18 to 79. This includes
members of CalPERS, teachers, school employees, University of
California, and California State University employees and
retirees, county and city employees and retirees, judges,
legislators, and all other California public employees and
retirees. Members of the Program can receive benefits anywhere
in the nation. There are currently over 150,000 members of the
CalPERS long-term care program. The average premium is about
$180 per month.
Proposed Law: SB 1438 requires the Insurance Commissioner to
convene a task force to do the following:
a) Explore how a statewide long-term care insurance program
could be designed to expand the options for people who
become functionally or cognitively disabled and require
long-term care services and supports.
b) Explore options for the design of the program including
eligibility, enrollment, benefits, financing,
administration and interaction with the Medi-Cal program.
The options to consider would include the enrollment of
working adults who would make voluntary premium
contributions either directly or through payroll deduction,
requiring a mandatory enrollment with a voluntary opt-out
option, helping individuals with functional or cognitive
limitations to remain in their communities, and helping
offset the costs incurred by adults with chronic and
disabling conditions.
c) Evaluate how benefits under the program would be
coordinated with existing private health care coverage
benefits.
d) Take into account the premiums necessary for a solvent
program.
SB 1438 requires the task force to be composed of key senior
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health policy and long-term care insurance stakeholders, at
least one representative from the Department of Health Care
Services and one from the Employment Development Department.
The task force may also include representatives from other
relevant federal, state and local government agencies.
SB 1438 additionally provides that the Department of Insurance
will be required to operate within its existing budgetary
resources for support of the task force; and requires any other
governmental agency that participates in the task force to also
operate within existing budgetary resources.
SB 1438 requires the task force to recommend options for
establishing a statewide long-term care insurance program and to
comment on the respective degrees of flexibility of those
options in a report to the Commissioner, the Governor and the
Legislature no later than January 2014.
Additionally, SB 1438 authorizes the Insurance Commission to
seek private funds for administrative support of the task force.
Staff Comments: Staff notes the Legislature adopts the Budget
Act every year based on workload assumptions and legislative
priorities for spending. The Appropriations Committee cannot
assume that additional workload can be undertaken within
existing resources without displacing other activities the
Legislature has explicitly or implicitly recognized in adopting
the annual Budget Act. In addition, as most departments have
experienced budget reductions and staff furloughs in recent
years, it has become more difficult for state agencies to
undertake additional responsibilities within existing resources.
Thus, while this bill directs the Department of Insurance, the
Department of Health Care Services and the Employment
Development Department to participate in a task force that will
examine the components necessary to design a statewide long-term
care insurance program, these costs are not absorbable. Any
additional activities required by legislation will likely result
in the delay or elimination of other duties within those
departments.
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