BILL ANALYSIS Ó
AB 175
Page 1
Date of Hearing: January 23, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 175 (V. Manuel Perez) - As Amended: January 6, 2013
Policy Committee: HealthVote:11-5
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill establishes a funding mechanism for providing primary
health care services to certain individuals not eligible for
other coverage. Specifically, this bill:
1)Establishes the Uncovered Health Trust Fund, and authorizes
voluntary contributions to the fund from contributing
employers, as defined, and other private sources.
2)Defines an uncovered worker as an individual who works for a
contributing employer and who is ineligible for state and
federal comprehensive health care programs.
3)Requires the Department of Health Care Services (DHCS) to
allocate monies from the trust fund to nonprofit community
clinics that provide health care services to uncovered
workers, based on several criteria. Allows DHCS to delay
implementation until the Trust Fund has a balance of one
million dollars.
4)Funds DHCS administrative costs through the Trust Fund, and
limits administrative costs to no more than 10% of program
costs. Establishes a continuous appropriation for Trust Fund
moneys.
FISCAL EFFECT
1)Minor one-time start-up costs to DHCS to define program
criteria and processes, not likely to exceed $50,000 GF.
Additional GF costs, not likely to exceed $50,000, may be
incurred if the department deems regulations are necessary.
It is possible that the Uncovered Health Trust Fund could
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reimburse the GF for start-up expenses incurred prior to the
administration of the program, although this is not explicitly
authorized.
2)Ongoing administrative costs could range from minor to
millions of dollars annually, depending on the level of
voluntary contributions to the trust. If the trust fund
allocated $10 million annually, for example, and assuming
administrative costs of at 5%, the department would incur
$500,000 annually in administrative costs (Uncovered Health
Trust Fund). If the program distributed $50 million annually,
administrative costs would be in the low millions.
COMMENTS
1)Purpose . According to the author, this bill is needed to
provide an option for employers and employees to secure some
degree of health care coverage for workers not covered by
recent expansions of coverage. The author believes this bill
provides a viable option for private employers to begin the
culture of contributing to the health care status of their
employees. This bill targets employees in small business,
agriculture, restaurants, sales, and service industries, whom
the author states are most likely to remain uninsured.
2)Access to Care for Low-Income People . The ACA greatly expands
health care coverage options and improves affordability for
low-income people who are in the country legally. Medi-Cal
coverage has been extended, at state option and with state
funding, to legal immigrants who meet income guidelines.
However, those who lack legal immigration status are not
eligible for Medi-Cal or subsidized coverage through Covered
California, the state's health insurance exchange. The UC
Berkeley-UCLA California Simulation of Insurance Markets
(CalSIM) project estimates that even after implementation of
ACA-related coverage expansions, about 800,000 people in
California will be ineligible for coverage due to their
immigration status. A large majority will be Latino and have
limited English proficiency.
Although low-income individuals who lack legal immigration
status are generally not eligible for comprehensive health
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care coverage through federal and state programs, these
individuals may be eligible for limited-scope services through
Medi-Cal, including emergency, pregnancy, dialysis, and some
cancer treatment services. These individuals can seek primary
health care services from most community clinics on a sliding
fee scale, and cannot be denied services based on inability to
pay. In addition, some counties provide comprehensive health
care services for low-income individuals regardless of
immigration status.
3)DHCS Program for Agricultural Workers. From 1983 through the
2008-09 fiscal year, DHCS administered the Seasonal,
Agricultural, and Migratory Worker Program, which provided
several million dollars annually in grant funding to eligible
primary care clinics. The program funded 30 clinics located
in federally designated shortage areas, clinics that served
a patient population of at least 25% seasonal, agricultural,
and migratory workers and their families. During the 2009-10
budget crisis, funding was eliminated from the program and has
not been restored. The Primary, Rural, and Indian Health
Division (PRIHD) within DHCS, which had administered the
program, continues to provide technical assistance and
training to clinics that serve seasonal, agricultural, and
migratory workers despite the lack of direct grant funding.
The program devised by this bill is somewhat similar to the
defunct grant program.
4)Comments . This bill attempts to address health care coverage
for individuals left out of recent coverage expansions as a
result of the federal ACA, a policy issue important to
numerous health and immigrant rights groups as well as health
care providers. Many have suggested the state address these
coverage gaps in a systematic way. However, even if a
systematic policy solution is preferred, the structure of the
program set up in this bill raises a number of fiscal, policy,
and practical issues, outlined below.
a) Direct Subsidy for Workers, or Contribution to a Pool?
It is unclear whether this bill intends for employers to
subsidize health care for their own workers, or to simply
contribute grant funding to a statewide pool. Both
approaches raise significant issues. If a certain
employer's funds are to be used specifically to benefit
their own workers, then a state role appears superfluous.
If the intention is instead to encourage employers to
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voluntarily contribute to a statewide fund without a
guarantee that their workers would benefit, it doesn't
appear employers would have any incentive to contribute
funds. In addition, the insufficient specification of how
funds will be distributed leaves this critical policy
question to be resolved through the administrative or
regulatory process, watering down the legislative role in
program design.
b) All the Bureaucracy of a State Program, Possibly None of
the Benefits . In reviewing the appropriate role of state
government, the Legislative Analyst's Office has long
indicated state operation of a program is appropriate when
uniformity is vital or where resources to be distributed
reflect the resources of the entire state, whereas local
control is appropriate when it is more important that the
program be flexible and responsive to local concerns.
Since the program does not establish uniform benefits for
individuals or clinics, and does not appear to transfer
resources from one segment of the state to another, a state
role does not appear to be optimal when viewed through this
lens. In fact, most employer-based coverage is provided
directly to employees with no state intervention, outside
normal regulation. It is unclear why state, indeed,
government intervention is necessary in this case to
transfer voluntary financial support from specific
employers to specific clinics for coverage of their
workers.
c) Funding May Be Limited By Perception of Admission to
Illegal Hiring Practices . Employers may perceive that
voluntary contributions to the Uncovered Health Trust Fund,
as envisioned by this bill, are a tacit admission that they
are employing individuals who lack legal immigration
status. Under the definition of uncovered worker as
someone ineligible for other state and federal programs in
this bill, it appears the only low-income individuals who
would qualify are those who lack legal status. This may
limit contributions to the fund and the effectiveness of
the grant program. In addition, it appears as if this
definition of uncovered worker would force the employer to
verify that the employee is ineligible for these programs.
Given the primary reason these employees would be
ineligible for other public coverage is their lack of legal
immigration status, this mechanism raises significant
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workability concerns and would likely further discourage
voluntary participation.
d) Effect on Improved Access to Care Unclear. This bill
does not contain provisions for funding inpatient or
specialty care-essentially the program is designed to
provide funding for primary care only. But primary care is
already accessible to uninsured low-income individuals who
can access community clinics. Most community clinics
already operate pursuant to federal guidelines that require
them to provide primary care to everyone, regardless of
ability to pay. For those who are not able to reach
community clinics, providing transportation or establishing
new clinic sites, including mobile sites, would arguably
improve access to primary care. This bill, however, does
not specifically require grant funds to be used in this
manner. Grant funds could instead be used to provide
support for uncompensated services clinics are already
delivering, which may have limited direct impact on the
targeted population. Finally, inpatient and specialty care
remains challenging to access for the uninsured, and this
bill does not address these services. Overall, it is
uncertain how efficient additional grant funding to
existing clinics would be in meeting the health care needs
of the targeted population.
e) Possible Impediment to Care . Generally, community
clinics do not seek or verify employment information. In
order to apply for funds, this bill implicitly requires
some mechanism for clinics to track how much care is
provided to uncovered workers, as well as where they work,
which may lead to clinics seeking employment information
from those who may be employed illegally. These workers
may be discouraged from seeking care if the provision of
health care at a clinic appears related to their
relationship with an employer.
f) Continuous Appropriation . Given this bill establishes a
new program and funding source, providing a continuous
appropriation, which reduces legislative oversight through
the budget process, seems inappropriate.
1)Opposition . A coalition of agricultural interests, including
the Western Growers Association, California Farm Bureau
Federation, California Grape and Tree Fruit League, Nisei
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Farmers League, California Citrus Mutual, and the California
Association of Nurseries and Garden Centers oppose this bill.
They believe the bill unintentionally places participating
employers in legal jeopardy in order to create a state-run
program that could just as easily be created without the
state's involvement, potentially subjecting them to federal
penalties and raising the risk of employment verification
audits.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081