BILL ANALYSIS �
AB 1877
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Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1877 (Cooley) - As Amended: April 2, 2014
Policy Committee: HealthVote:19-0
Urgency: Yes State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill creates the California Vision Care Access Council
(Council), modeled after the California Health Benefit Exchange
(Exchange), to create a marketplace for the purchase of vision
plans by individuals and employers. Specifically, this bill:
1)Creates the California Vision Care Access Trust Fund, and
continuously appropriates the fund for purposes of the
Council.
2)Requires the Council to:
a) Construct, manage, and maintain a marketplace for the
purchase of vision plans.
b) Selectively contract with plans that offer the optimal
combination of choice, value, quality, and service.
c) Manage a website with secure purchase functionality.
d) Make the marketplace available to individuals without
Internet access.
e) Operate a toll-free telephone hotline for consumer
assistance to facilitate enrollment.
f) Provide referrals for individuals with grievances and
complaints.
g) Assess a charge on the vision plans offered through the
marketplace that is reasonable and necessary to support
Council activities.
1)Authorizes expenditures to pay program expenses to administer
the Council.
2)Allows the Council to receive gifts, grants, donations from
individuals, private entities, and public agencies.
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3)Makes implementation contingent on the existence of $250,000
in the fund.
4)Contains an urgency clause.
FISCAL EFFECT
1)One-time costs as follows:
a) Significant GF costs, likely millions of dollars at a
minimum, for information technology (IT) systems with
required functionality.
b) Indeterminate GF costs, likely in the range of hundreds
of thousands to low millions of dollars, for initial policy
and procedure development, hiring, training, equipment, and
other start-up activities.
c) The bill makes implementation contingent upon $250,000
in the fund, but does not provide a mechanism for funding
start-up costs. In the absence of such a mechanism, the GF
will bear any start-up costs.
1)Ongoing costs in the range of $5 million dollars annually
(GF/fee revenue), for state staff and IT support of numerous
activities including enrollment, provision of information via
a public facing website, financial management, public outreach
and communication, and plan contracting and oversight.
The bill requires the Council to assess a charge on the vision
plans offered through the marketplace that is reasonable and
necessary to support Council activities, but does not require
the Council to be fully fee-supported. It also does not
prohibit GF from being used to support Council activities. If
fee revenue was inadequate to support Council activities, the
remainder of the costs would be GF-supported.
COMMENTS
1)Purpose . The author indicates this bill will provide consumers
the opportunity to purchase a standalone vision plan, given
the exclusion of vision care from California's new health
insurance Exchange, Covered California.
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2)Background . Federal law requires state Exchanges, including
Covered California, to facilitate enrollment in qualified
health plans that provide a set of 10 "essential health
benefits" (EHBs) including inpatient and outpatient care,
pharmacy, maternity services, and behavioral health care,
among others. In addition, pediatric oral and vision care is
included as an EHB.
In 2012, the Covered California board intended to pursue the
offering of supplemental insurance plans, including standalone
vision and dental plans for adults and families. However, on
March 29, 2013, the federal Center for Consumer Information
and Insurance Oversight (CCIIO), released guidance stating an
Exchange could not offer certain supplemental products,
including vision plans. However, Covered California would be
able to partner and share infrastructure with a separate
non-Exchange state program in order to offer supplemental
products such as vision plans, provided several conditions
were met. For example, the non-Exchange state program must be
supported by a separate funding stream and have a separate
legal status. The federal guidance allows such an entity to
share infrastructure with the Exchange, provided that if an
Exchange resource is used for non-Exchange purposes, the cost
of using the resource must be paid by the other, non-Exchange
state program.
This bill establishes the Council as a separate legal entity
and does not authorize the use of Exchange resources for
Council purposes. Instead, it establishes a connection
between the Exchange and the Council via a web link.
3)This bill mirrors provisions governing the Exchange , with
minor differences. Like the Exchange, the Council would be
governed by a five-member board appointed by the governor and
legislative leadership, comply with conflict of interest
provisions, and have the ability to hire exempt executive
positions. Board members would not be compensated, but would
be reimbursed for travel expenses. Also like the Exchange,
the Council would standardize products, be an active
purchaser, conduct public outreach, and charge fees to support
its activities.
4)Prior Legislation .
a) AB 1602 (John A. P�rez), Chapter 655, Statutes of 2010,
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and SB 900 (Alquist), Chapter 659, Statutes of 2010,
establish the Exchange and its powers and duties.
b) AB 1453 (Ed Hernandez), Chapter 866, Statutes of 2012,
and SB 951 (Monning), Chapter 854, Statutes of 2012,
establish California's EHBs.
1)Staff Comments . California's Exchange was established with
significant one-time startup grant funding from the federal
government. No such funding exists for purposes described in
this bill.
In addition, there does not appear to be evidence indicating
vision benefits are difficult to access or that a
state-administered marketplace is necessary to facilitate the
purchase of vision coverage.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081