BILL ANALYSIS AB 772 Page 1 Date of Hearing: April 26, 2005 ASSEMBLY COMMITTEE ON HEALTH Wilma Chan, Chair AB 772 (Chan and Frommer) - As Amended: April 18, 2005 SUBJECT : California Healthy Kids Program. SUMMARY : Creates the California Healthy Kids Insurance Program (CHKIP) as the unified public interface for Medi-Cal for Children and Healthy Families (HFP). Requires the Managed Risk Medical Insurance Board (MRMIB) and the Department of Health Services (DHS) to operate CHKIP in a coordinated and seamless manner with respect to children who are enrolled in, or potential enrollees of, HFP and Medi-Cal. Expands HFP eligibility for children to families with incomes up to 300% of the federal poverty level (FPL). Creates HFP buy-in programs for children in families with incomes above 300% FPL. Limits documentation required for CHKIP enrollees to that required under federal law. Specifically, this bill : 1)Creates CHKIP, which consists of Medi-Cal for children and HFP, to be administered jointly by MRMIB and DHS. Requires the Medi-Cal and HFP to provide health insurance to children who qualify for CHKIP. 2)Requires MRMIB and DHS to operate CHKIP in a coordinated and seamless manner with respect to the persons intended to be covered. Requires MRMIB and DHS to coordinate enrollment, renewal, eligibility, and outreach. 3)Deems a child enrolled in either HFP or Medi-Cal to be enrolled in CHKIP. States legislative intent that from the child's perspective there is only a single program, even if the details are handled by two programs, agencies, and funding sources. 4)Establishes the California Healthy Kids Expert Panel (CHK Expert Panel) to guide MRMIB and DHS in the design and implementation of the CHKIP. Requires the panel to have broad representation as specified and to have its members appointed by the Governor and Legislature. Requires the panel, MRMIB, and DHS to hold twice yearly joint public meetings. Requires that a member of the panel serve on MRMIB. AB 772 Page 2 5)Requires MRMIB and DHS, in determining eligibility for CHKIP, to require documentation only to the extent required by federal law. 6)Requires MRMIB and DHS to award local grants for developing strategies to maximize CHKIP enrollment, retention, and appropriate utilization of health care. Specifies potential grant recipients and requirements for grant applications and evaluations. 7)Requires CHKIP to enable local children's health initiatives to create premium hardship funds or sponsorship programs to help children in their region pay required premiums for enrollment in CHKIP. 8)Requires CHKIP to enable counties to have the option to buy or partially subsidize HFP coverage for children with family incomes above 300% of the FPL and to seek federal financial participation, to the extent available. 9)Requires CHKIP to modify existing HFP and Medi-Cal forms and processes in order to seek family consent to transfer information among the Medi-Cal and Healthy Families programs. 10) Requires CHKIP to develop simplified annual renewal forms including forms repopulated with the child's eligibility information and a simple check off list for families to identify whether each eligibility information item remains correct. 11) Requires CHKIP to use seamless bridge coverage programs to transfer children to a different category of coverage where indicated. 12) Requires CHKIP to offer an online Medi-Cal health plan/health care arrangement selection system coordinated with the HFP health plan selection system. 13) States that all children who reside in this state and who meet the age, income, and other categorical eligibility requirements of either HFP or Medi-Cal are eligible for coverage under the CHKIP, including those children for whom federal financial participation is not available, as specified. AB 772 Page 3 14) Specifies transitional processes for county health initiatives before full implementation of statewide CHKIP begins. 15) Provides for accelerated enrollment into the CHKIP for children who are eligible for reduced price meals under the National School Lunch Program. Requires DHS and the Department of Social Services to implement a process to expedite the enrollment of food stamp participants into Medi-Cal and HFP. 16) Directs HFP to use the income determinations made in the federal school lunch program, supplemental food program for Women Infants and Children (WIC) and food stamp program. Allows the CHK Expert Panel and other stakeholders to recommend other programs that may provide a useable income determination. Requires MRMIB to seek federal approval to implement the use of other programs' income determinations. 17) Requires MRMIB and DHS to implement an electronic application system that utilizes real-time electronic connections to the state eligibility database for California health and Disability Prevention Program (CHDP). Requires DHS to develop an electronic application for accelerated determinations for CHKIP. 18) Makes children at or below 300% FPL eligible for HFP. Authorizes MRMIB to determine the premium for children between 250% and 300% of FPL. 19) Allows children to be enrolled in HFP prior to payment of their monthly premium. Allows prepayment of the HFP premium. Grants a discount for an annual prepayment. 20) Increases the income eligibility for Medi-Cal to 133% FPL for all ages of children. 21) States legislative intent to do all of the following: a) Develop strategies to promote and support voluntary employer participation in covering the children of employees; b) Implement the CHKIP over several years to provide adequate time to develop the statewide policies and AB 772 Page 4 infrastructure, to transition effectively from local children's health insurance efforts to a statewide program, and to phase in implementation consistent with available resources; and, c) Authorize the CHKIP to develop health care coverage options for children ages 19 and 20 who are currently ineligible for HFP or Medi-Cal. 22) States legislative intent to implement CHKIP as follows, subject to available resources: a) Establish the CHK Expert Panel to develop and implement program policies and systems, and begin pilot programs, in the first two years of implementation; and, b) Make all enrollment innovations and changes operational and open CHKIP enrollment for newly eligible children in the third year of implementation. 23) States legislative intent that financing for CHKIP be derived from any of the following sources: a) Federal matching funds; b) Family contributions toward premiums; c) Contributions from employers who chose to participate in CHKIP; and, d) During the transition period while CHKIP is being developed and implemented, funds from local children's health initiatives with pilot projects to operate local children's health insurance programs or to buy into the Medi-Cal or Healthy Families programs. 24) Permits the provisions of this bill to be implemented only to the extent that funds are appropriated in the annual Budget Act or in another statute. EXISTING LAW : 1)Establishes the Medi-Cal program, administered by the DHS, which provides comprehensive health benefits to low-income children, their parents or caretaker relatives, pregnant women, elderly, blind or disabled persons, nursing home residents and refugees who meet specified eligibility criteria. Sets income eligibility for children in Medi-Cal at 200% FPL for infants to age 1, 133% FPL for children ages 1 AB 772 Page 5 through 5, and 100% FPL for children ages 6 through 18. 2)Establishes HFP, administered by MRMIB, to provide low-cost, subsidized health, vision and dental insurance to uninsured children, with family incomes up to 250% FPL, who are not eligible for no-cost Medi-Cal. Establishes premium payment rates for HFP. 3)Authorizes the County Health Initiative Matching Fund, administered by MRMIB, to fund children's health coverage for those children between 250% and 300% FPL by using local funds as the state match to draw down federal funds. 4)Directs MRMIB and DHS to consult and coordinate in implementing accelerated enrollment into HFP or Medi-Cal through CHDP. 5)Establishes the Medi-Cal/Healthy Families Bridge Benefits program which provides children with benefits while transitioning from one program to the other. 6)Establishes a statewide program to expedite Medi-Cal enrollment for children receiving free lunches through the National School Lunch Program (Express Enrollment) and deems children who are eligible for free meals under the National School Lunch Program to be eligible for full scope Medi-Cal without a share-of-cost. FISCAL EFFECT : Unknown. COMMENTS : 1)PURPOSE OF THIS BILL . According to the author, this bill will ensure that every child in California has access to affordable health insurance. Despite all we have done in California to expand Medi-Cal, implement HPF, and create county health initiatives, there are approximately one million California children that are without health care coverage. The author states that the good news is that over half of these uninsured children are currently eligible for existing public programs. These children can be insured by improving outreach, streamlining enrollment, and simplifying retention and reenrollment. For those children who are not currently eligible for public programs, this bill expands eligibility, builds on the successful local efforts to offer a "no wrong AB 772 Page 6 door" opportunity for parents to cover their kids, allows buying in to HPF, and promotes greater participation by employers in providing health coverage for workers' children. The author believes we are in reach of covering 100% of California's children and that this bill, utilizing the strategies noted above, will make it happen. 2)BACKGROUND . According to the most recent California Health Interview Survey (CHIS), 782,000 California children had no health insurance at the time the survey was conducted in 2003. The survey also found that more than 1.1 million California children under age 19 (more than the combined populations of nine states) were uninsured for all or part of the year in 2003. This was a decline from the 1.5 million children who were uninsured for all or part of 2001. This decline resulted from increased enrollments in Medi-Cal, HFP, and county health initiatives. These public programs enrolled 600,000 more children over the two-year period, and more than overcame the drop in employment-based coverage of children. According to the UCLA Center for Health Policy Research, county-based health insurance programs for children have been important in providing coverage to over 55,000 California children. These programs cover only children who are not eligible for employment-based insurance or for Medi-Cal or Healthy Families, and whose family incomes do not exceed 300% of the FPL (except for one county with a higher income limit and one with a lower limit). However, while local public and private resources were key to initiating these innovative programs, they cannot be sustained without strong support from federal and state funds. Most already have reached their enrollment caps. The disappointing trend in the coverage of California children is the decline of employment based coverage. Two hundred thousand fewer children were covered in 2003 through their parents' employment than were covered in 2001. According to UCLA, this drop in employment-based coverage reflects a weak labor market and rapidly rising health insurance costs, including a 79% increase in employee share of premiums for family coverage. The following chart summarizes the health insurance status of California children in 2003: ------------------------------------------------- |INSURANCE STATUS OF |2003 |PERCENTAGE | AB 772 Page 7 |CHILDREN | |POINT CHANGE | |Less than 19 years | |FROM 2001 | |old | | | |--------------------+--------------+-------------| |Uninsured All Year |5.1% |-2.4% | | |(508,000) | | |--------------------+--------------+-------------| |Uninsured Part Year |6.2% |-1.1% | | |(626,000) | | |--------------------+--------------+-------------| |Employment-based |50.8% |-4.3% | |Insurance All Year |(5,102,000) | | |--------------------+--------------+-------------| |Medi-Cal or Healthy |29.3% |+5.2% | |Families All Year |(2,942,000) | | |--------------------+--------------+-------------| |Other Insurance All |8.7% |+2.7% | |Year |(873,000) | | |--------------------+--------------+-------------| |Population in 2003 |100% | --- | | |(10,050,000) | | ------------------------------------------------- Source: CHIS, UCLA Center for Health Policy Research, December 2004 Based on insurance status at the time of the CHIS interview, 55% of all uninsured children were eligible for enrollment in either Medi-Cal or Healthy Families (227,000 for Medi-Cal; 224,000 for Healthy Families). Another 6% (44,000) children were eligible for insurance through county-based insurance programs. Although children eligible for county-based programs had grown to over 100,000 by December 2004, limited funding resulted in enrollment caps in many county programs. Thirty-nine percent of uninsured children were not eligible for public programs because of family income level (159,000 children) or immigration status (148,000 children). According to UCLA, expanding state programs to match the eligibility levels that prevail in county programs would provide coverage to an estimated 230,000 uninsured children. In addition, UCLA suggests coordinating public programs with employment-based insurance coverage to assure that all children have affordable coverage. According to the author, this bill accomplishes both of those goals. 3)SUPPORT . Supporters, including the 100% Campaign and the AB 772 Page 8 California Catholic Conference, argue that this bill offers California the historic opportunity to be a leader in the nation by ensuring that every child can get health insurance to grow up healthy and strong. Supporters note that research shows that children with health insurance are more likely to get the care they need, especially essential preventive care, and that they are healthier and perform better in school. The American Academy of Pediatrics, District IX views access to quality care as a fundamental right of all children, essential to a good start in life and being ready and able to learn. Health Access argues that Healthy Families, Medi-Cal and county health initiatives have demonstrated that the number of uninsured children can be dramatically reduced and that this bill would expand and protect health insurance coverage for all California children. The Local Health Plans of California argue that, by providing a "no wrong door" approach," as has been used in many county health initiatives, this bill will prevent children from unnecessarily being denied coverage due to a failure of health care programs to coordinate and communicate effectively. Small Business California supports this bill because it is committed to having all children in California covered by health insurance. 4)OPPOSITION . The California Right to Life Committee, in opposition, argues that teenage girls will be brought into government-funded programs promoting birth control and abortion services without parental consent. 5)PREVIOUS LEGISLATION . a) SB 1631 (Figueroa) of 2004 would have created the Cal-Health program which sought to expand access to health insurance by reforming and consolidating administrative procedures of Medi-Cal and HFP. SB 1631 was held in the Senate Appropriations Committee. b) SB 493 (Sher), Chapter 897, Statutes of 2001, implements a simplified eligibility process as part of the Food Stamp Program to expedite the enrollment of individuals and families in Medi-Cal and HFP. c) AB 495 (Diaz), Chapter 648, Statutes of 200, establishes the Children's Health Initiative Matching Fund to allow federal funds to be matched by local funds to cover children between 250 and 300% of the FPL. AB 772 Page 9 d) AB 59 (Cedillo), Chapter 894, Statutes of 2001, establishes a statewide pilot project to expedite Medi-Cal enrollment for children receiving free lunches through the National School Lunch Program. e) AB 32 (Richman) of 2001 would have created the California Health Care Program to provide comprehensive health care services to residents of this state, including coordinating Medi-Cal and HFP and requiring children and their parents to be eligible to participate in Cal-Health if their family income is at or below 250% FPL. AB 32 was held in the Senate Appropriations Committee. 6)RELATED LEGISLATION . a) AB 624 (Montanez) requires DHS and MRMIB to deem any child who meets the income requirements for the CHDP program to have met the income requirements for HFP and Medi-Cal. AB 624 passed the Assembly Health Committee and is now before the Assembly Appropriations Committee. b) AB 1670 (Richman and Nation) imposes an individual mandate on all California residents to have minimum health care coverage for themselves and their dependents, requires regional purchasing pools, and establishes a subsidy program for qualified employers who offer health care coverage for specified employees. AB 1670 will be heard by the Assembly Health Committee on April 26, 2005. c) SB 38 (Alquist) raises the income eligibility limit for HFP from 250% to 300% FPL. SB 38 passed the Senate Banking, Finance, and Insurance Committee and is currently before the Senate Appropriations Committee. d) SB 437 (Escutia) is the Senate version of this bill. SB 437 passed the Senate Health Committee and the Senate Banking, Finance, and Insurance Committee and is now before the Senate Appropriations Committee. e) SB 377 (Ortiz) would raise the income eligibility limit for the HFP from 250% to 275% of the FPL. SB 377 passed the Senate Health Committee and is now before the Senate Banking, Finance, and Insurance Committee. AB 772 Page 10 7)AUTHOR'S AMENDMENTS. The author proposes to amend this bill in committee as follows: a) On page 17, line 12, clarify that CHKIP is not a new program but an umbrella structure to present to the public a single interface for children's health insurance programs. b) On page 19, strike lines 20 through 39; on page 20 strike lines 1 through 14, to delete certain legislative intent language. c) On page 19, strike lines 2 and 3, and insert language specifying that the CHK Expert Panel be compose of 15 members, five of whom are appointed by the Governor, five by the Speaker of the Assembly, and five by the Senate Rules Committee. d) On page 19, lines 4 through 6, clarify that the representative from the CHK Expert Panel to MRMIB is a new additional member of MRMIB and does not replace any current membership slot. e) Consolidate existing legislative intent language into one legislative intent section of the bill. REGISTERED SUPPORT / OPPOSITION : Support 100% Campaign, (sponsor) (Children Now, Children's Defense Fund and the Children's Partnership) PICO California (sponsor) Lt. Governor Cruz Bustamante Alameda Alliance for Health AB 772 Page 11 Alliance of Catholic Health Care American Academy of Pediatrics - California District IX California Catholic Conference California Children's Hospital Association California Church Impact California Health Collaborative California Health Initiative of Greater Los Angeles California Immigrant Welfare Collaborative California Physicians Alliance California School Employees Association California School Health Centers Association California School Nurses Association California Teachers Association California WIC Association Catholic Charities of California Catholic Health Care West Child Care Law Center Children's Advocacy Institute Children's Health Initiative of Greater Los Angeles City of West Hollywood Coalition for Community Health Community Health Councils, Inc. AB 772 Page 12 Consumers Union Contra Costa Interfaith Supporting Community Organization Covering Kids and Families Dental Health Foundation First 5 Colusa First 5 Tulare County First 5 Yolo Fresno Healthy Communities Access Program Greater Long Beach Interfaith Community Organization Greenlining Institute Health Access California Healthy Kids of Santa Cruz County Institute for Health Policy Solutions Insure the Uninsured Project Jericho Lao Khmu Association, Inc. Latino Coalition for a Healthy California Latino Issues Forum Local Health Plans of California Los Angeles Free Clinic Los Angeles Unified School District Marin County Mercy General Hospital AB 772 Page 13 North Coast Clinics Network Oakland Community Organizations Peninsula Interfaith Action People and Congregations Together Relational Cultural Institute Sacramento Area Congregations Together San Diego Organizing Project San Francisco Organizing Project San Gabriel Valley Medical Center Service Employees International Union Small Business California St. Helena Catholic Church St. Johns Pleasant Valley Hospital St. Johns Regional Medical Center Unitarian Universalist Legislative Ministry Venice Family Clinic Worksite Wellness LA Yolo County Children's Coalition 2 individuals Opposition AB 772 Page 14 California Right to Life Committee Analysis Prepared by : John Gilman / HEALTH / (916) 319-2097