BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1005
AUTHOR: Lara
AMENDED: April 22, 2014
HEARING DATE: April 30, 2014
CONSULTANT: Bain
SUBJECT : Health care coverage: immigration status.
SUMMARY : Establishes the California Health Exchange Program For
All Californians (CHEPFAC) within state government and would
require that CHEPFAC be governed by the executive board that
governs Covered California. Specifies the duties of the board
relative to CHEPFAC, and would require the board, by January 1,
2016, to facilitate the enrollment of individuals who would have
been eligible to purchase coverage through Covered California
but for their immigration status. Requires the board to provide
premium subsidies and cost-sharing reductions to these eligible
individuals that are the same as the premium assistance and
cost-sharing reductions these individuals would have received
through Covered California. Extends eligibility for full-scope
Medi-Cal benefits to individuals who are otherwise eligible for
those benefits but for their immigration status.
Existing federal law:
1.Requires, under the Patient Protection and Affordable Care Act
(ACA, Public Law 111-148), as amended by the Health Care
Education and Reconciliation Act of 2010 (Public Law 111-152),
each state, by January 1, 2014, to establish an American
Health Benefit Exchange that makes qualified health plans
(QHPs) available to qualified individuals and qualified
employers. Requires, if a state does not establish an
Exchange, the federal government to administer the Exchange.
Establishes requirements for the Exchange and for QHPs
participating in the Exchange, and defines who is eligible to
purchase coverage in the Exchange. Limits enrollment in the
Exchanges to citizen or nationals of the United States, or an
alien lawfully present in the United States.
2.Allows, under the ACA and effective January 1, 2014, eligible
individual taxpayers, whose household income is between 100
and 400 percent of the Federal Poverty Limit (FPL), an
advanceable and refundable premium tax credit (APTC) based on
the individual's income for coverage under a QHP offered in
Continued---
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the Exchange. Requires a reduction in cost-sharing for
individuals with incomes below 250 percent of the FPL, and a
lower maximum limit on out-of-pocket expenses for individuals
whose incomes are between 100 and 400 percent of the FPL.
Legal immigrants with household incomes less than 100 percent
of the FPL who are ineligible for Medicaid because of their
immigration status are also eligible for the APTC and the
cost-sharing reductions.
3.Prohibits Medicaid matching funds for medical assistance for
an undocumented individual, except for care and services
necessary for the treatment of an emergency medical condition
(as defined) for an individual who otherwise meets the
eligibility requirements for medical assistance under the
state's Medicaid State Plan
Existing state law:
1.Establishes the California Health Benefit Exchange in state
government (known as Covered California), and specifies its
duties and authority. Requires Covered California to be
governed by a board that includes the Secretary of the
California Health and Human Services Agency (Agency) and four
members with specified expertise who are appointed by the
Governor and the Legislature.
2.Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), under which low
income individuals are eligible for medical coverage. Requires
DHCS to implement the ACA expansion of Medi-Cal coverage to
adults and parents up to 138 percent of the FPL who are under
age 65.
3.Makes undocumented individuals, who are otherwise eligible for
Medi-Cal services, eligible only for care and services that
are necessary for the treatment of an emergency medical
condition and medical care directly related to the emergency,
as defined in federal law. Makes low-income undocumented
individuals Medi-Cal eligible for pregnancy-only coverage,
breast and cervical cancer-related treatment services, and
long-term care services.
4.Defines, under state law, an "emergency medical condition" as
a medical condition (including emergency labor and delivery)
manifesting itself by acute symptoms of sufficient severity
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3
(including severe pain) such that the absence of immediate
medical attention could reasonably be expected to result in:
a. Placing the patient's health in serious
jeopardy;
b. Serious impairment to bodily functions; or,
c. Serious dysfunction of any bodily organ or
part.
This bill:
Medi-Cal Changes
1.Makes individuals who meet all of the eligibility requirements
for full-scope Medi-Cal benefits under existing law, except
for their immigration status, eligible for full-scope Medi-Cal
benefits.
2.Requires benefits for services to be provided with state-only
funds only if federal financial participation (FFP) is not
available for those services. Requires DHCS to maximize FFP in
implementing the Medi-Cal-related provisions to the extent
allowable.
3.Requires DHCS to implement, interpret, or make specific the
Medi-Cal provisions by means of all-county letters, plan
letters, plan or provider bulletins, or similar instructions
until the time regulations are adopted. Requires DHCS to adopt
regulations by July 1, 2018, in accordance with the
requirements of the Administrative Procedure Act. Requires,
beginning July 1, 2015, DHCS to provide a status report to the
Legislature on a semiannual basis until regulations have been
adopted.
California Health Exchange Program for All Californians
(CHEPFAC)
4. Establishes, in state government, CHEPFAC as an
independent public entity not affiliated with an agency or
department, and requires CHEPFAC to be governed by the
Covered California executive board established under
existing law, and requires the board to be subject to that
provision of the Covered California statute.
5. States legislative intent in enacting CHEPFAC to provide
affordable coverage for Californians who would be eligible
for coverage and premium subsidies under Covered California
but for their immigration status, and that Californians
SB 1005 | Page 4
eligible under this bill be offered the same premiums and
cost sharing that they would be offered through Covered
California but for their immigration status.
6. Defines an "eligible individual" for purposes of CHEPFAC
as an individual who would have been eligible to purchase
coverage through Covered California, but for his or her
immigration status and who is not eligible for full-scope
Medi-Cal coverage under state law.
7. Requires the board to take specified actions in
implementing CHEPFAC using the same requirements as
currently exist for Covered California. These include
certifying QHPs; providing a toll-free telephone hotline
and internet web site; establishing a navigator program;
determining the criteria and process for eligibility,
enrollment and disenrollment of enrollees and coordinating
with counties; determining the requirements for
participating insurance carriers; selectively contracting
with insurers; providing a choice of five levels of
coverage; requiring carriers to offer at least one product
in each of the five levels of coverage; requiring carriers
that offer products inside CHEPFAC to also offer the same
products outside of CHEPFAC; providing for application
processing; marketing and publicizing CHEPFAC; employing
necessary staff; assessing a charge on QHPs that is
reasonable and necessary to support the development,
operations and prudent cash management of CHEPFAC;
authorizing expenditures from the California Health Trust
Fund for All Californians to pay program expenses;
conducting an annual audit and preparing a written report
on CHEPFAC; maintaining enrollment and expenditures to
ensure that expenditures do not exceed the amount of
revenue in the fund; exercising all powers reasonably
necessary to carry out and comply with the duties,
responsibilities and requirements of the CHEPFAC statute;
and facilitating the purchase of QHPs by qualified
individuals by no later than January 1, 2016.
8. Authorizes the board to take specified actions in
implementing CHEPFAC using the same authority as currently
exists for Covered California. These include collecting
premiums and assisting in the administration of subsidies;
entering into contracts; adopting rules and regulations,
including emergency regulations until January 1, 2018;
collaborating with Covered California and DHCS, to the
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5
extent possible, to allow an individual the option to
remain enrolled with his or her carrier and provider
network in the event an individuals has to switch coverage;
sharing information with relevant state departments,
consistent with applicable laws governing confidentiality,
for CHEPFAC administration; requiring carriers to make
available to the CHEPFAC an electronic directory of
contracting health care providers; requiring applicants for
health care coverage or for a premium subsidy or
cost-sharing reduction to be required to provide only the
information strictly necessary to authenticate identity,
determine eligibility, and determine the amount of the
credit or reduction; making supplemental coverage available
to the extent permitted by available funding; and having
the authority to standardize products offered through
CHEPFAC.
9. Requires the board to establish an appeals process for
prospective and current enrollees of CHEPFAC.
10. Requires, consistent with current requirements for
Covered California, health plans and insurers to fairly and
affirmatively offer, market, and sell in CHEPFAC at least
one product within each of 5 levels of coverage (platinum,
gold, silver, bronze and catastrophic), requires plans and
insurers that sell any products outside the CHEPFAC to
fairly and affirmatively offer, market, and sell all
products made available to individuals in CHEPFAC to
individuals purchasing coverage outside the CHEPFAC, and
requires plans and insurers participating in CHEPFAC to
charge the same rate for the same product whether that
product is offered through CHEPFAC or in the outside market
11. Provides exemptions from the Public Records Act as
currently exist for Covered California related to contracts
and contract payment rates. Makes contracts open to
inspection by the Joint Legislative Audit Committee.
12. Requires any person who receives information provided by
a CHEPFAC applicant, whether directly or by another person
at the request of the applicant, or who otherwise obtains
information about the applicant through the CHEPFAC program
process, to do both of the following:
a. Use the information only for the purposes of, and to
the extent necessary in, ensuring the efficient operation
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of the program, including verifying the eligibility of an
individual to enroll through the program or to claim a
premium subsidy or cost-sharing reduction or the amount
of the credit or reduction; and,
b. Not disclose the information to any other person
except as provided in this bill.
13. Establishes the California Health Trust Fund for All
Californians (Fund), and continuously appropriates moneys
in the Fund for purposes of CHEPFAC.
14. Requires the board to ensure that the establishment,
operation and administrative functions of CHEPFAC do not
exceed the combination of state funds, private donations
and other non-General Fund moneys available for this
purpose. Makes implementation of CHEPFAC contingent on a
determination by the board that sufficient financial
resources exist or will exist in the Fund. Requires the
determination to be based on specified factors, and
requires reporting if funds are insufficient.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, implementation
of the ACA expands access to health care coverage to millions
of Californians. The health benefit exchange, Covered
California, provides a marketplace for consumers to choose a
health plan. The ACA also expanded Medi-Cal coverage, to
include individuals and families under 138 percent of the
federal poverty level. Over one million newly eligible
Californians are expected to enroll in Medi-Cal and many more
are expected to purchase coverage through Covered California
by 2015. But the ACA specifically excluded undocumented
immigrants from insurance coverage provided through full-scope
Medi-Cal and the health exchanges created by the ACA. An
estimated 1 million Californians will remain uninsured and not
eligible for coverage until Congress enacts comprehensive
immigration reform. People without insurance generally wait to
seek care until they are seriously ill, and in many cases
health problems that could have been avoided with preventive
care, or treated early for little cost, become significant and
costly health issues. The impacts of this include lost
productivity, increased demand on emergency services, and
increased costs in our healthcare system. It does not reflect
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7
our values, or serve the common good, to leave hundreds of
thousands of workers, students, and family members without
treatment for preventable ailments.
2.Scope of Medi-Cal Coverage for Immigrants. In order to be
Medi-Cal eligible, an individual must be a state resident
and generally must be low-income. Recent legal immigrants
and undocumented immigrants who meet income and residency
requirements are Medi-Cal eligible, but the scope of that
coverage depends on the immigration status of the immigrant.
Under existing law, undocumented immigrants are not eligible
for full scope services, and are instead eligible for
"limited scope" Medi-Cal benefits. Limited scope services
are long-term care, pregnancy-related benefits, and
emergency services. Medi-Cal also provides coverage for
undocumented individuals needing breast and cervical cancer
treatment, family planning services through Family PACT, and
through temporary presumptive eligibility programs.
3.Covered California and the individual market. Undocumented
immigrants are prohibited from purchasing coverage in
Covered California under federal law. Because APTCs and
cost-sharing subsidies are only available for individuals
purchasing coverage in Covered California, undocumented
individuals are also not eligible for these subsidies
intended to make health insurance and the cost of care more
affordable. In the individual market outside Covered
California, plans and insurers are required to fairly and
affirmatively offer, market and sell to all individuals and
dependents in each service area the plan or insurer provides
services. Plans and insurers are required to limit
enrollment in individual products to open enrollment periods
and special enrollment periods.
This bill will create a parallel Exchange for undocumented
individuals, with the same governing board, premium and
cost-sharing subsidies as in Covered California. The amount
of the premium subsidy in CHEPFAC will be based on the
premium for the second lowest cost silver plan in the area
where the person is eligible to purchase coverage. The
amount of the subsidy is such that the premium a person
would have to pay for the second lowest cost silver plan
would not exceed a specified percentage of the individual's
income (adjusted for family size), as follows:
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------------------------------------
|Income Level |Maximum Premium as a |
| |Percentage of Income |
| |for 2nd Lowest Cost |
| |Silver Plan |
| | |
|-------------+----------------------|
| 133-150% |3 - 4% of income |
| FPL* | |
|-------------+----------------------|
|150-200% FPL |4 - 6.3% of income |
|-------------+----------------------|
|200-250% FPL |6.3 - 8.05% of income |
|-------------+----------------------|
|250-300% FPL |8.05 - 9.5% of income |
|-------------+----------------------|
|300-400% FPL |9.5% of income |
------------------------------------
This bill would also provide the same cost-sharing subsidies
for lower-income people as in Covered California. The
cost-sharing subsidies would reduce an individual's
out-of-pocket costs (co-payments and deductibles) when
receiving health care services. Individuals with incomes up to
250 percent of the FPL purchasing coverage in the silver tier
through CHEPFAC would be eligible for reduced cost-sharing
(e.g., coverage with lower deductibles and co-payments).
Instead of having a silver product with a 70 percent actuarial
value (AV is the average percentage of health care costs paid
for by insurance, with the remainder paid for by the
individual), individuals would be eligible for a silver
product with a higher AV, depending on their income. This
means that the health plan on average pays a greater share of
covered benefits. The chart below shows the higher AV by
income group for individuals in CHEPFAC with incomes below 250
percent of the FPL:
---------------------------------------
| FPL | AV |
| | |
|-----------------------+---------------|
| 100-150%* | 94% |
|-----------------------+---------------|
| 150-200% | 87% |
|-----------------------+---------------|
| 200-250% |73% |
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9
| | |
---------------------------------------
*Subsidies for coverage in CHEPFAC would begin at 138
percent of the FPL
4.Prior legislation. SB 900 (Alquist), Chapter 659, Statutes of
2010, establishes Covered California as an independent public
entity within state government, and requires Covered
California to be governed by a board composed of the Secretary
of the Agency, or his or her designee, and four other members
appointed by the Governor and the Legislature who meet
specified criteria.
AB 1602 (John A. P�rez), Chapter 655, Statutes of 2010,
specifies the powers and duties of Covered California relative
to determining eligibility for enrollment in the Covered
California and arranging for coverage under QHPs.
AB X1 1 (Perez), Chapter 3, Statutes of 2013-14 First
Extraordinary Session, implemented specified Medicaid
provisions of the ACA, including the expansion of federal
Medicaid coverage to low-income adults with incomes between 0
and 138 percent of the FPL. AB X1 1 also implemented a number
of the Medicaid ACA provisions to simplify the eligibility,
enrollment and renewal processes for Medi-Cal.
SB X1 1 (Hernandez and Steinberg), Chapter 4, Statutes of
2013-14 First Extraordinary Session, established the existing
Medi-Cal benefit package as the benefit package for the
expansion population eligible under the ACA and expanded the
Medi-Cal benefit package for the existing population and newly
eligible under the ACA to include mental health services and
substance use disorder services required under the essential
health benefit legislation adopted in 2012 that were not
currently covered by Medi-Cal. SB X1 1 also implemented a
number of the Medicaid ACA-related provisions to simplify the
eligibility, enrollment and renewal processes for Medi-Cal.
SB X1 1 also makes recent immigrant childless adults, who
would be eligible for Medicaid funding under the ACA except
for the five-year bar who are enrolled in Covered California
with an APTC, also eligible for Medi-Cal benefits not covered
by their Covered California plan. For these individuals, DHCS
would be required to pay the individual's premium and
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cost-sharing (referred to as a "Medi-Cal wrap"). The Medi-Cal
wrap has not yet been implemented. Until this provision is
implemented, these recent legal immigrant adults are Medi-Cal
eligible.
5.Support. This bill is supported by individuals, low-income,
labor, consumer, immigrant, religious, and community groups,
and health care providers. Supporters argue an estimated 1
million Californians will remain uninsured who are not
eligible for coverage due to immigration status following the
implementation of the ACA, and these individuals cannot even
use their own money to buy health insurance in Covered
California. Supporters argue every Californian should have the
opportunity to have health insurance, regardless of
immigration status as undocumented immigrants need health care
as they are twice as likely to be uninsured as documented
immigrants, and have increased rates of injury, illness, and
death from hazardous occupations and housing, compounded with
vulnerability to deportation if they report dangerous
conditions or seek treatment. Supporters argue that
undocumented immigrants' health care will be worse in the
future as the ACA cuts future disproportionate share funding
to hospitals for the uninsured, which undocumented immigrants
will depend on. Supporters conclude that access to high
quality health care for each California resident regardless of
immigration status, is essential for the well-being of our
state. Supporters conclude that it does not reflect the
state's value or serve the common good to leave hundreds of
thousands of workers, students, and family members without
treatment for preventable ailments.
6.Opposition. Californians for Population Stabilization (CPS)
writes in opposition that it is opposed to providing state
health insurance for those who have entered the county
illegally, and that it is inappropriate for the state to
create a new health exchange specifically to require
California taxpayers to provide premium subsidies and
cost-sharing reductions to those who deliberately break
immigration and labor laws. CPS states California has many
pressing needs, such as a deteriorating infrastructure,
overcrowded schools, and a stressed environment, and this bill
will take scarce funds away from these problems. CPS concludes
that it would be unfair and fiscally irresponsible to ask
Californians to subsidize insurance for those who have entered
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11
the country illegally, and if California is to protect its
environment, develop a healthy economy, and provide a quality
educational system, it must work to discourage illegal
immigration and not encourage it.
7.Bill being modeled using CalSIM model. The coverage and cost
effects of this bill are being modeled by the UC Berkeley
Center for Labor Research and Education and the UCLA Center
for Health Policy Research using the California Simulation of
Insurance Markets (CalSIM) model. Data from CalSIM produced by
these two entities was used last year to estimate the growth
in Medi-Cal enrollment among both the newly and currently
eligible during the legislative and executive branch
deliberations regarding the Medi-Cal expansion last year. Data
from the CalSIM model on this bill are expected to be
available next month.
8.Suggested amendments. Undocumented beneficiaries currently
enrolled will be transitioned to full scope coverage under
this bill. The author may want to specify how these
individuals will be notified and transitioned from limited
scope to full scope coverage. In addition, this bill requires
the board to establish an appeals process for prospective and
current enrollees of CHEPFAC. Staff recommends that these due
process protections be further outlined in statute, rather
than solely be determined by the board administering CHEPFAC.
SUPPORT AND OPPOSITION :
Support: ACCESS Women's Health Justice
ACT for Women and Girls
Alameda County Board of Supervisors
AllCare Alliance
Alliance for Boys and Men of Color
Alliance of Californians for Community Empowerment
American Civil Liberties Union
American Federation of State, County and Municipal
Employees
Asian & Pacific Islander American Health Forum
Asian Americans Advancing Justice - Asian Law Caucus
Asian Health Services
Asian Law Alliance
Asian Pacific Policy & Planning Council (A3PCON)
Black Women for Wellness
Breathe California
Building Health Communities - South Kern
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California Academy of Family Physicians
California Alliance for Retired Americans
California Chapter of the American College of
Emergency Physicians
California Communities United Institute
California Conference Board of the Amalgamated Transit
Union
California Conference of Machinists
California Council on Youth Relations
California Coverage and Health Initiatives
California Family Health Council
California Immigrant Policy Center
California Immigrant Youth Justice Alliance
California Labor Federation
California Latinas for Reproductive Freedom
California Medical Association
California Nurses Association
California Pan-Ethnic Health Network
California Partnership
California Primary Care Association
California Rural Legal Assistance Foundation
California School Based Health Alliance
California School Employees Association
California Teachers Association
California Teamsters Public Affairs Council
Campaign for a Health California
Central American Resource Center
Central California Alliance for Health
Child Abuse Prevention Center
Children Now
Children's Defense Fund - California
Chinese for Affirmative Action
City and County of San Francisco Board of Supervisors
City of Los Angeles
Coalition for Humane Immigrant Rights of Los Angeles
Community Health Partnership
Congregations Building Community
Congress of California Seniors
Council of Mexican Federations
Dolores Huerta Foundation
East Valley Community Health Center
Engineers & Scientists of CA, IFPTE Local 20, AFL-CIO
Equality California
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13
Faith in Action Kern County
Family Health Care Network
Fresno Interdenominational Refugee Ministries
Greenlining Institute
Health Access California
Health Care for All
Hunger Action Los Angeles
Inland Empire Immigrant Youth Coalitions
Interfaith Coalition for Immigrant Rights
International Longshore and Warehouse Union
Justice for Immigrants Coalition
Korean Community Center of the East Bay
La Clinica de la Raza
Latino Coalition for a Healthy California
Liberia del Pueblo, Inc.
Los Angeles Community Action Network
Low Income Self-Help Center of San Jose
National Asian Pacific American Families Against
Substance Abuse
National Council of La Raza
National Health Law Program
National Immigration Law Center
Our Family Coalition
Pangea Legal Services
Pico California
Placer People of Faith Together
Planned Parenthood Advocacy Project Los Angeles County
Planned Parenthood Affiliates of California
Planned Parenthood of Orange and Santa Bernardino
Counties
Planned Parenthood of the Pacific Southwest
Planned Parenthood of Santa Barbara, Ventura & San
Luis Obispo Counties, Inc.
Planned Parenthood Pasadena and San Gabriel Valley
PolicyLink
Professional & Technical Engineers, IFPTE Local 21,
AFL-CIO
Sacramento Area Congregations Together
San Diego Dream Team
San Diego Organizing Project
San Francisco Labor Council
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San Ysidro Health Center
Santa Clara County Single Payer Healthcare Coalition
Service Employees International Union - California
State Council
Service Employees International Union - Local 1000
Service Employees International Union - United
Healthcare Workers West
Services Immigrant Rights and Education Network
South Asian Network
St. Anthony Foundation
Street Level Health Project
The Children's Partnership
Tiburcio Vasquez Health Center
United Ways of California
UNITE-HERE, AFL-CIO
Utility Workers Union of America, Local 132
Western Center on Law and Poverty
Young Invincibles
Several individuals
Oppose: Californians for Population Stabilization
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