BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 617 (Nazarian) - California Health Benefit Exchange: appeals.
Amended: August 4, 2014 Policy Vote: Health 9-0
Urgency: No Mandate: No
Hearing Date: August 11, 2014
Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 617 would establish in law the process for
appealing eligibility determinations for health subsidy programs
such as health care coverage through the California Health
Benefits Exchange.
Fiscal Impact:
Annual costs of $630,000 for additional staff to perform
expedited appeal hearings (General Fund and federal funds).
The bill authorizes applicants to request an expedited
appeal, which requires a decision to be issued within five
days. By accelerating the appeals timeline, the bill will
increase administrative workload to the Department of Social
Services.
Unknown information technology costs to allow the issuance
of combined eligibility notices (General Fund, federal
funds, or special funds). The bill requires that applicants
be sent a combined eligibility notice, which provides
information to the individual applicant (and members of the
applicant's household) regarding eligibility for each of the
various health care coverage programs that the applicant may
be eligible for. Covered California, the Department of
Health Care Services, and the counties are working on
information technology upgrades that will be necessary to
allow combined eligibility notices to be sent. Because the
bill mandates that such notices be sent, information
technology upgrades will be accelerated, likely increasing
costs. The cost to accelerate this function is not known at
this time.
One-time administrative costs in the low hundreds of
thousands to develop and adopt regulations to implement the
AB 617 (Nazarian)
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requirements of the bill (General Fund and federal funds).
Background: Under state and federal law, the Department of
Health Care Services operates the Medi-Cal program, which
provides health care coverage to pregnant women, children and
their parents with incomes below 100 percent of the federal
poverty level, as well as blind, disabled, and certain other
populations. Generally, the federal government provides a 50
percent federal match for state Medi-Cal expenditures.
The federal Affordable Care Act allows states to expand Medicaid
(Medi-Cal in California) eligibility to persons under 65 years
of age, who are not pregnant, not entitled to Medicare Part A or
enrolled in Medicare Part B, and whose income does not exceed
133 percent of the federal poverty level (effectively 138
percent of the federal poverty level as calculated under the
Affordable Care Act). The state has opted to expand Medi-Cal
coverage.
In addition, the Affordable Care Act authorizes states to
establish Health Benefit Exchanges, which will function as
electronic market places wherein consumers can compare and
select health plans. Consumers with incomes between 138 percent
and 400 percent of the federal poverty level will be entitled to
subsidies that will offset some of the costs of purchasing
coverage through the Exchanges. California's Health Benefit
Exchange is referred to as Covered California.
Federal law and regulations, as well as state law governing the
California Health Benefit Exchange, require the health benefit
exchanges to create a process for applicants for health subsidy
programs to appeal eligibility determinations. The California
Health Benefit Exchange has adopted regulations to implement
such an appeals process.
Proposed Law: AB 617 would establish in law the process for
appealing eligibility determinations for health subsidy
programs, such as health care coverage through the California
Health Benefit Exchange.
Major provisions of the bill would:
Require the appeals process to allow for appeals of
eligibility determinations for Medi-Cal, the Medi-Cal Access
Program (the successor to the Healthy Families Program), and
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subsidized coverage purchased through the California Health
Benefit Exchange;
Designate the Department of Social Services as the appeals
entity;
Specify the process and timelines for notification to
applicants;
Require the appeals process to use the existing procedures
in law for appealing Medi-Cal eligibility determinations;
Authorize an informal resolution process that an applicant
may request.
Provisions of the bill that significantly differ from the
adopted regulations would:
Require the appeals entity to accept applications in
person;
Authorize an applicant to request an expedited appeals
hearing when there is an immediate need for health care
services;
Require a decision in an expedited appeal to be issued
within five days, unless the applicant agrees to a delay;
Require the eligibility determining entity to issue a
combined eligibility notice (For an application that covers
multiple people in a household, the bill would require a
single notice to be sent with information on the eligibility
determinations for each person, even if individuals would be
eligible for different health subsidy programs.)
The bill would require the Department of Health Care Services to
adopt implementing regulations by July 1, 2017.
Staff Comments: Pursuant to the adopted regulations, Covered
California has entered into a contract with the Department of
Social Services to administer the appeals process. The annual
cost of that contract is about $5 million. Because the Covered
California is already required to administer an appeals process
under federal and state law, the overall cost to administer an
appeals process should not be attributed to this bill. However
because this bill imposes new requirements that go beyond
federal and state regulations, those additional costs are
attributable to this bill.
The federal Health and Human Services Agency has considered
requiring state Exchanges to send combined eligibility notices.
When the federal Health and Human Services Agency was developing
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proposed regulations for the process for appealing eligibility
determinations made by the states, it considered requiring state
Exchanges to provide a combined eligibility notification by
January 1, 2015. However, the final adopted regulations did not
include this requirement. The federal Health and Human Services
Agency indicated that it will return to this issue in a future
rulemaking.