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CaliforniACA August Newsletter

The California Health Benefit Exchange
August Board Meeting Makes Decisions on SHOP Structure, QHP Policies and Service Center Options
During the August meeting, the Exchange board announced it had been awarded $196M from the federal government, which will be mostly used for the Exchange’s IT system, CalHEERS. The board also discussed premium aggregation and agent payment options in the individual market, Small Business Health Options Program (SHOP) recommendations, QHP policies, and service center options and recommendations. The board unanimously adopted the recommendations made by staff for premium aggregation (i.e. do consumers pay the Exchange or plans directly), agent payment, and qualified health plan (QHP) policies. The service center recommendations, however, were adopted with one abstention, with a centralized service center to support Exchange eligibles and Medi-Cal eligibility being determined at the county level. All meeting materials are available online, and more information on this meeting can be found here. The next meeting will be held on September 18 in Sacramento.

Governor Brown Calls for Special Session
Governor Brown sent legislative leaders a letter detailing his plans to call a special legislative session in December to help implement ACA reforms. In the letter, the Governor wrote, “We will work with you to complete what we can in the current session, but many important issues and questions cannot be addressed or answered without further guidance from the federal government and additional analysis to understand the interrelationship of the decisions we must make.” This session will run concurrently with the regular legislative session in late 2012 and early 2013, and will focus on issues such as Medicaid expansion and the Basic Health Plan.

Governor and Lawmakers Reach Deal on Public Worker Pension Reform
The Governor announced that he has reached a deal with Democratic lawmakers on pension reform for public employees. AB 340, which was approved by the legislative Conference Committee on Pension Reform, would require all current and future public workers at every level of government to pay at least 50% of their pension costs; increase the retirement age by at least 2 years for future public workers, and cap the amount of future public workers’ salaries that can go toward their pensions. This bill, however, did not include Gov. Brown’s original plan to have a significant portion of the retirement money placed into 401(k)-style accounts.

Support Grows for Governor’s Tax Hike Initiative
According to a poll by PACE/University of Southern California Rossier School of Education, CA voters support the Governor’s compromise tax hike initiative (Proposition 30) 55% to 36%. This initiative would raise sales tax by a quarter of a percent, and income taxes on incomes in excess of $250,000. Molly Munger’s alternative tax hike plan (Proposition 38) has less support with 40% for and 49% against the plan. For more information on the propositions, read our report on Proposition 30.

ACA Implementation Bills Passed
As of Friday noon, several bills that would implement ACA reforms have been passed by the Legislature, including:

  • AB 1453 (Monning): sets the level of essential health benefits at that of the Kaiser Small Group plan and gives the Department of Managed Health Care (DMHC) oversight for relevant plans
  • SB 951 (Hernandez): sets the level of essential health benefits at that at of the Kaiser Small Group plan and gives the Department of Insurance oversight for relevant plans
  • AB 1461 (Monning): prohibits exclusions for preexisting conditions in the individual market
  • SB 961 (Hernandez): prohibits exclusions for preexisting conditions in the individual market
  • SB 1410 (Hernandez): sets standards for independent medical review
  • SB 336 (Lieu): requires acute care hospitals to monitor emergency department overcrowding
  • AB 1846 (Gordon): implements Consumer Operated and Oriented Plans (COOP)
  • AB 1526 (Monning): eliminates annual and lifetime caps in the Major Risk Medical Insurance Pool (MRMIP) program

The deadline is midnight on August 31. The Governor has until the end of September to approve or veto the bills that have passed the legislature.

Basic Health Plan
Basic Health Plan Shelved
The Legislature has shelved plans to implement a Basic Health Plan as SB 703 (Hernandez) was not reported out by the Assembly Appropriations committee. The BHP, which would offer low-cost health insurance for low-income Californians, would have been operated through DHCS, possibly as an extension of the Medi-Cal program. For more information, read our report on the BHP.

DHCS Holds Webinar on Rural Managed Care Expansion
The Department of Health Care Services hosted a webinar to inform stakeholders on their progress on expanding Medi-Cal managed care in rural counties. More information and meeting materials can be found online. Several counties in the rural north expressed an interest in creating a County Organized Health System operated by Partnership Health Plan. DHCS representatives stated that a request for applications on this topic will be released in September.

Healthy Families
Legislators Work to Keep Healthy Families
Legislators are making a final push to keep the Healthy Families program intact through two bills that would halt the transition: SB 301 (DeSaulnier) and AB 826 (Swanson). While both bills have yet to go through their respective health committees and beyond, they have the endorsement of the California Medical Association. The deadline to pass legislation is midnight August 31.

The Healthy Families program is slated for elimination, with half of the almost 900,000 children being transitioned into Medi-Cal managed care starting January 2013. More information on the transition plan can be found here.

Mental Health
Steinberg Requests Audit of Proposition 63 Funds
Following criticisms of misused Proposition 63 funds, Senate President Pro Tempore Darrell Steinberg formally requested a state audit of billions in mental health funds. The Mental Health Services Act raised $7.4 billion through a 1% tax on residents with incomes greater than $1M annually, and is intended to expand services and develop innovative programs for the mentally ill, with 20% of the funds to be used on programs “effective in preventing mental illnesses from becoming severe” and “reducing the duration of untreated severe mental illnesses.”

CDI Releases Rebate Data for CA Health Insurers
The California Department of Insurance released information on rebates that must be issued under the ACA’s medical loss ratio rule. Approximately 1.8 million Californians will receive a total of $73.9M in rebates, with an average rebate amount of $65 per CA family.

DMHC Awarded $4.6M for Consumer Assistance
The Department of Managed Health Care has received $4.6M from the federal government to assist consumers with questions about health insurance, as well as to improve data collection on health care trends and needs. The funds will also be used to expand partnerships with not-for-profit community groups to provide direct, local consumer assistance, and to develop recommendations to improve and standardize data collection and reporting on consumer issues and their resolution.

Poll Shows Increasing CA Support for ACA
A Field Poll funded by The California Wellness Foundation found that 54% of respondents supported the reform law, with 37% opposing. It also found that more respondents trusted President Obama (53%) than Mitt Romney (29%) to deal with the future of health reform. The poll surveyed registered CA voters in English, Spanish, Cantonese, Mandarin, Tagalog, Korean and Vietnamese, and found there was a great diversity of responses across geographic and demographic subgroups.

Minorities Most Affected by ED Overcrowding
A joint study by UCLA, UCSF and Stanford University found that emergency department overcrowding disproportionately affects minority populations in California; hospitals serving the largest percentage of minority patients diverted ambulances because of overcrowding up to four times as often as facilities that served the smallest percentage of minorities. Researchers noted that this could delay care and lead to poorer health outcomes.

Major CA Cities Unprepared for Retiree Health Benefits
A report by California Common Sense found that 11 of the 20 CA cities with the largest budgets have not set aside funds to cover future health care costs for government retirees. These cities, which include Fresno, Glendale, Oakland, Pasadena, Redding, Riverside, Sacramento, San Francisco, Santa Ana and Santa Monica, have a pay-as-you-go budget in their current operating budgets. The 11 cities combined have promised a total of $16 billion, $12 billion of which is unfunded.

Managed Care Transition for Medi-Cal SPDs Examined
The California HealthCare Foundation (CHCF) released a first look on the mandatory enrollment of almost 240,000 seniors and persons with disabilities (SPDs) into managed care. The report concluded that longer planning periods, more communication with beneficiaries, improved provider outreach, and establishment of quality improvement benchmarks should be encouraged for future managed care transitions. Read more here.

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