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Special session bills continue to work through Legislature



June 11, 2013

Given the high level of activity generated by Covered California over the past few weeks, some observers may have forgotten that members of the Legislature are currently engaged in a special session intended to iron out the remaining details of health reform in California.


To date, only two of the six bills – three mirror image proposals in both the Assembly and Senate –introduced during the special session have been signed by the governor, while the remaining four continue to generate a high level of debate among lawmakers in both houses. Still yet to be addressed is the issue of how California plans to expand Medi-Cal coverage to more than 1 million residents beginning in 2014, as well as whether or not the state will launch a so-called “bridge plan” to potentially minimize patient churn between Medi-Cal and plans offered through Covered California.


The debate surrounding the Medi-Cal expansion, set to be addressed by ABX1-1 and SBX1-1, has largely been focused on whether to adopt a state- or county-based model for expansion of coverage. Under the Affordable Care Act, the federal government will be picking up the tab for expanding coverage for the first three years following the 2014 rollout, and, until recently, the debate in California was centered on whether the state or individual counties would be responsible for receiving the funds and expanding coverage to all individuals under 138 percent of the federal poverty level.


In early May, the governor’s budget announcement made clear that California would be adopting a state-based approach, yet also indicated that the state planned to redirect as much as $300 million from county Low Income Health Programs (LIHPs) in the first year to help cover the cost of the expansion. While state officials noted that California pays counties $1.5 billion annually to cover health care obligations that will now fall under the state as a result of the ACA, county officials have claimed that the proposed redirect included in the May revise was too aggressive and should be scaled back.


These funding debates continue to be the hold-up for ABX1-1 and SBX1-1, both of which have cleared their house of origin and have been referred to the Committee on Health of the second house.


Meanwhile, ABX1-3 and SBX1-3 act upon California’s desire to implement a “bridge plan” that would allow Covered California to negotiate qualified health plan (QHP) contracts with Medi-Cal managed care plans to serve as a “bridge” for those patients needing to transition between Medi-Cal coverage and Covered California. As proposed, these managed care bridge plans are believed to be able to offer very low out-of-pocket premiums for enrollees transitioning into or those enrollees at-risk of transitioning out of Covered California, specifically those between 138 and 200 percent of the federal poverty level.


As with the Medi-Cal expansion bill, a version of the bridge plan legislation has cleared its house of origin, though the central hang up looks to be the extent to which federal regulators will sign off on California’s proposal.


Of the bills introduced during the special session, the only two that have been signed into law deal with individual and small group market reforms called for under the ACA. These bills, ABX1-2 and SBX1-2, ban pre-existing conditions as a means of denial for health coverage, establish community rating and require guaranteed issue and renewal of health insurance in the individual and small group market. The bills were approved by the Legislature in late April and signed by the governor shortly after.

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