BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 772
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          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.









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          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.









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          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  








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               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  








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            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  








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            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   |








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                  |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  








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            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.








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             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.









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           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








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          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.









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          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








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          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 

           









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          California Right to Life Committee

           

          Analysis Prepared by  :    John Gilman / HEALTH / (916) 319-2097