BILL ANALYSIS
SB 580
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Date of Hearing: September 6, 2005
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Lloyd E. Levine, Chair
SB 580 (Escutia) - As Amended: September 1, 2005
SENATE VOTE : 31-8
SUBJECT : Public Utilities Commission: Low-Income Oversight
Board
SUMMARY : Requires the State Office of Health Insurance
Portability and Accountability Act Implementation (OHI) within
the Health and Human Services Agency (HHS) to facilitate
automatic enrollment of participants of the Medi-Cal or Healthy
Families programs into the California Alternative Rates for
Energy (CARE) program. Specifically, this bill :
1)Requires the OHI to obtain any waivers of the Health Insurance
Portability and Accountability Act (HIPAA) needed to implement
automatic enrollment of persons enrolled in the Medi-Cal
program or Healthy Families program, in the California Public
Utilities Commission (PUC) CARE program.
2)Requires the PUC to cooperate with HHS and the Secretary of
HHS to ensure that all gas and electric customers who are
eligible for low-income assistance programs are enrolled in
the CARE program.
3)Expands the PUC Low-Income Oversight Board (LIOB) purview to
include water utility customer issues in addition to the
existing electric and gas customer issues.
EXISTING LAW :
1)Federal law establishes HIPAA of 1996 (Public Law 104-191) to
improve portability and continuity of health insurance
coverage, simplify the administration of health insurance, and
encourage the development of a health information system.
2)HIPAA Privacy Regulations section 160.204 provides for a state
exception if the state law is necessary:
a) To prevent fraud and abuse related to providing or
payment of health care.
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b) To ensure state regulation of insurance and health
plans.
c) For state reporting on health care delivery or costs.
d) For purposes of serving a compelling need related to
public health, safety, or welfare, or if the Secretary
determines that the intrusion into privacy is warranted
when balanced against the need to be served.
e) For the regulation of controlled substances.
3)Establishes LIOB to advise PUC on low-income electric and gas
customer issues and serve as a liaison for PUC to low-income
ratepayers and representatives.
4)Requires the PUC to examine methods to improve CARE enrollment
and participation, including automatic enrollment of Universal
Lifeline Telephone Service (ULTS) customers who are eligible
for the CARE program.
FISCAL EFFECT : Unknown for the OHI or HHS to comply with the
provisions of this bill. According to Assembly Appropriations
Committee analysis, minor absorbable costs to PUC for additional
staff support associated with the LIOB's expanded purview.
COMMENTS : The purpose of this bill is to provide rate relief
for ratepayers who qualify for CARE but have not enrolled in the
program. In addition, the bill is intended to assist low-income
ratepayers during the upcoming winter months when utility bills
are usually high.
1) Procedural History : Previous versions of this bill added
water utilities to the purview of the LIOB, passed out of this
committee on a 6-4 vote, and passed out of the Assembly
Appropriations Committee on a 13-5 vote. The bill was recently
amended on the Assembly floor to include the provisions of
automatic enrollment in the CARE program, and to direct the OHI
to obtain any waivers needed from HIPAA.
2) What is CARE : The CARE program provides rate reductions for
those who earn up to 175% of the federal poverty guidelines, or
up to $34,000 per year for a family of four. According to the
PUC, the penetration rate for the Southern California Edison
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territory was 91% in 2002. PUC benchmarks for some of the other
IOUs include 63% for PG&E and 75% for San Diego Gas and
Electric. This bill would try to capture the remaining eligible
customers by using the enrollment records of the Medi-Cal and
Healthy Families recipients, identifying those customers who are
not enrolled in CARE, and automatically enrolling them in CARE.
3) The OHI may not be able to get a waiver in time for the
upcoming winter months . According to the OHI, it may take a few
months to get the preemption exception request from PUC; review,
approve, and submit to the Governor; and have the Governor
submit the request for exemption to the federal HHS. After
submittal, OHI is unable to accurately estimate the duration of
time the federal HHS needs to review and render a decision on
the state's request for an exemption because it has never
requested an exception.
In addition, it's unlikely that a waiver will be granted.
According to Department of Health Services (DHS), it is not
HIPAA but federal and state Medicaid law that prohibits the DHS
from releasing names of Medi-Cal beneficiaries to utility
companies for purposes of the CARE program. Welfare and
Institutions code Section 14100.2 makes it a misdemeanor to
disclose Medi-Cal information for any purpose other than for
specified purposes directly connected with the administration of
the federal Medicaid program. DHS previously requested
authorization from the Centers for Medicaid and Medi-Care
services to share the Medi-Cal eligibility file with the PUC for
the purpose of enrolling beneficiaries into the CARE program.
According to DHS, the answer was a definite "no" because this
was not directly connected with administration of the Medicaid
program.
4) There might be an easier or more effective way to increase
CARE participation rates : According to OHI, a waiver seems to
be the most difficult approach to improve CARE participation and
is not the only option. There are other avenues that should be
explored to determine the most effective method of increasing
CARE participation rates that are currently in compliance with
state and federal laws, including HIPAA Privacy Regulations.
Many State programs use income-based eligibility criteria and
may provide an example of effective penetration rates. The PUC
also administers the ULTS program that provides low-income
customers with discounts of up to $10 from the monthly cost of
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telephone service for a single land-based telephone line in
their principal residence. Other State departments, such as the
DHS, the Managed Risk Medical Insurance Board (MRMIB),
Department of Social Services (DSS), and the Department of
Community Services and Development (DCSD), administer programs
designed to provide assistance to low-income residences. Most
are governed by program-specific federal laws designed to
protect the privacy of program participants.
Acting under the provisions of SB X2 2 (Alarcon) (Chapter 11,
Statutes of 2001) to improve CARE enrollment, the PUC outlined
the process for implementation of automatic enrollment
(D02-07-033). The PUC anticipates administering the automatic
enrollment process for the CARE program in-house and using 2000
Census data to estimate the eligible customer base, which
gradually becomes less accurate over time. The PUC staff would
serve as a clearinghouse to identify electronic matches between
agency and utility customer records by comparing non-CARE data
provided by the utilities with client information from DHS,
MRMIB, DSS, and DCSD programs. Once a match is made, the PUC
would forward the customers' names and addresses to the utility
for automatic enrollment. Because five (or more) state entities
target a similar eligibility base, the committee may wish to
amend the bill to require the Secretary of HHS to determine how
to streamline the State's low-income assistance programs in
order to reduce administrative redundancies, optimize the use of
established state and federal databases, and provide automatic
enrollment for as many of the State income-based assistance
programs as possible while complying with state and federal
privacy laws . The Secretary should be prepared to present his
or her findings to the Legislature after the evaluation is
complete. The intent would be to ensure all eligible candidates
benefit by all of the state's programs.
5) This bill puts the cart before the horse : This bill directs
the various departments to cooperate to improve the CARE
application process, then dictates the solutions this team shall
propose. For example, it first requires the departments to
cooperate in developing solutions to improve the CARE
application process. Without knowing the conclusions and
recommendations drawn from this cooperative effort, the bill
then requires the agency to place specific information on public
assistance application forms, requires this team to assist OHI
with applying for any waivers of federal authorities, and
directs OHI to obtain waivers. The committee may wish to strike
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the proposed solutions in order to permit the team of experts
within the departments to develop a comprehensive and effective
solution.
6) Why add water to the LIOB purview: Current law requires the
LIOB to advise the PUC on low-income electric and gas customer
issues. Of those issues, the LIOB advises the commission about
the CARE program. Current law also requires the PUC to consider
programs to assist low-income water ratepayers; however, it
permits the PUC to determine the feasibility of rate relief and
provides the PUC the prerogative to implement a program. This
bill would add water issues to the LIOB's purview; however, it
would not change current law to require the PUC to implement
programs.
7) Cost implications: According to DHS, there are over 6
million Medi-Cal recipients and over 2 million recipients of the
Cal Works program. Current law permits the PUC to authorize all
administrative costs associated with the CARE program, including
outreach, marketing, regulatory compliance, certification and
verification, billing, measurement and evaluation, and capital
improvements and upgrades to communications and processing
equipment. It is assumed that an increase of participation in
the CARE program as a result of automatic enrollment of Medi-Cal
and Cal Works programs would likely increase administration
costs and reimbursement costs for the utilities to provide
reduced rates. In addition, CARE customers are exempt from
additional surcharges attributable to the energy crisis. These
costs would likely be redirected toward the fewer remaining
non-CARE eligible customers' in their rates.
REGISTERED SUPPORT / OPPOSITION :
Support
Office of Ratepayer Advocates (ORA)
Pacific Gas & Electric (PG&E)
Sempra Energy
Opposition
None on file
Analysis Prepared by : Gina Mandy / U. & C. / (916) 319-2083
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