Update: California Coverage and Access Legislation

April 27, 2018

The California Legislature this week completed the first round of policy committee hearings for 2018. This year, legislators are considering multiple bills to expand coverage, improve affordability of coverage and ensure access in underserved communities. The bills outlined below passed the first policy committee and will now move to the fiscal committees for review of the costs and budget implications of each bill.

Coverage Expansion  

Legislators are focusing on extending Medi-Cal coverage to key subgroups of the remaining uninsured. (For an updated profile of the remaining uninsured, see this revised ITUP Fact Sheet.)

  • Coverage for undocumented adults. The majority of the remaining three million uninsured Californians are undocumented adults (1.8 million or 58 percent). The Legislature is considering legislation that extends Medi-Cal eligibility to all income-eligible adults regardless of immigration status. (AB 2965 [Arambula] and SB 974 [Lara]). The expansion proposal is also before the budget subcommittees. On March 22, 2018 a Senate Budget Subcommittee #3 analysis estimated state General Fund costs of the expansion to be in the low billions of dollars.
  • Low-income seniors and persons with disabilities over age 65. Under the Affordable Care Act (ACA), California expanded Medi-Cal to citizen and lawfully present adults ages 19-64 up to 138 percent of the federal poverty level (FPL). However, seniors and persons with disabilities age 65 and over are only eligible for no-cost Medi-Cal up to 124 percent FPL. AB 2430 (Arambula) expands Medi-Cal eligibility for persons 65 and over to 138 percent FPL through the Medi-Cal Aged and Disabled Program. When a similar bill was heard in 2015, (AB 763 [Burke]) the Assembly Appropriations Committee estimated the cost of this expansion at $60 million ($30 million state General Fund).

Affordability

An estimated 550,000 citizens and lawfully present immigrants above 400 percent FPL in California are not eligible for Medi-Cal, or for federal premium assistance to purchase individual coverage through the state ACA marketplace, Covered California.[1] Many of these families report that the premiums remain unaffordable. For individuals and families below 400 percent FPL, who receive partial subsidies and pay a portion of the monthly premiums in Covered California based on income, the costs can still be a barrier to securing coverage.

The Legislature is considering legislation to address the affordability challenges Californians are facing.  The following bills establish state-funded assistance programs, beyond the federal assistance provided, for individual coverage through Covered California.

  • AB 2459 (Friedman) – Establishes a state tax credit for individuals whose premiums for themselves or their dependents exceed 8 percent of the taxpayer’s income. Eligible individuals could claim a tax credit equal to the premium costs for themselves or their dependents in a bronze level coverage plan. (Bronze level plans cover 60 percent of the costs of covered benefits and the consumer pays the remaining 40 percent in out-of-pocket costs such as deductibles and copayments.)
  • AB 2565 (Chiu) – Requires Covered California to offer enhanced premium assistance to consumers between 138 and 400 percent FPL on a sliding scale based on income, ranging from zero premium at 139 percent FPL to a maximum of 8.16 percent for those with incomes between 299 and 400 percent FPL.
  • AB 3148 (Arambula) – Requires Covered California to offer additional cost sharing assistance to individuals below 400 percent FPL who are eligible for federal premium tax credits. This bill requires Covered California to increase the actuarial value (AV) (percentage of covered benefits paid for by the health plan) through reducing consumer cost-sharing at the point of service (deductibles and copayments). This bill requires Covered California to provide cost-sharing subsidies so that individuals between 200-299 percent FPL have coverage with 87 percent AV, and individuals between 300-400 percent FPL have coverage with an AV of 80 percent.
  • SB 1255 (Hernandez) – Requires Covered California to administer state financial assistance (premium tax credits or reductions in cost-sharing) for consumers whose share of premiums is 8 percent of income or more, or for consumers at 200 percent FPL or above who are subject to significant cost-sharing responsibilities.

Health Plan Choice

Legislators are also considering legislation to address communities where individuals have limited health plan choice. In 2018, Covered California enrollees are limited to one health plan in Inyo, Mono, Monterey, San Benito, San Luis Obispo, and Santa Barbara counties, and over half of Kings county. El Dorado, Fresno, Madera and Placer counties have only one Covered California health plan operating in many of the zip codes and partial zip codes in these counties – between 14 and 33 percent of the zip codes in these counties.

  • AB 2416 (Wood) – Requires health plans participating in Medi-Cal in counties with two or fewer plan offerings to negotiate with Covered California regarding development of a coverage option for the exchange.
  • AB 2472 (Wood) – Requires Covered California to analyze the feasibility of a public health plan option to increase competition and choice for health care consumers. Learn more about the public option concept in California in this ITUP Issue Brief.

Enrollment and Eligibility Improvements

  • AB 2579 (Burke) – Implements an automatic enrollment gateway system establishing express lane eligibility for children and presumptive eligibility for pregnant women at the point of application for Special Supplemental Nutrition Program for Women, Infants, and Children.
  • SB 1108 (Hernandez) – Prevents the state Department of Health Care Services (DHCS) from participating in any federal demonstration project or waiver requiring coverage waiting periods, time limits, coverage lockouts, work requirements for Medi-Cal recipients, or any other eligibility condition not required by other law.

System Transformation/Universal Coverage

  • AB 2517 (Wood) – Establishes the Advisory Panel on Health Care Delivery Systems and Universal Coverage in the California Health and Human Services Agency. Requires the Panel to develop a plan with a timeline of the benchmarks and steps necessary to implement universal coverage and a unified, publicly financed health care system. This bill includes a detailed outline of the issues and analyses for the Panel to address and requires the Panel to develop a concrete plan addressing state and federal challenges to implementing universal coverage in the state.
  • SB 562 (Lara) – Introduced in 2017, this bill establishes a comprehensive, universal single-payer health care coverage system for all California residents with no premiums or cost-sharing for covered benefits. SB 562 has been held in the Assembly and not referred to a policy committee. The Senate Appropriations Committee estimated total annual costs of about $400 billion per year. According to the Committee, existing federal, state, and local funding of about $200 billion could be available to offset a portion of the total costs.

Fiscal committees must meet and pass bills with a fiscal impact by May 25 and all bills must pass out of the house of introduction by June 1, 2018.


Notes

[1] Miranda Dietz, Dave Graham-Squire, Tara Becker, Xiao Chen, Laurel Lucia, and Ken Jacobs, “Preliminary CalSIM v 2.0 Regional Remaining Uninsured Projections,” UCLA Center for Health Policy Research and UC Berkeley Labor Center, August 2016.