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AB-174 Health care coverage: financial assistance.(2019-2020)

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Date Published: 06/26/2019 09:00 PM
AB174:v96#DOCUMENT

Amended  IN  Senate  June 26, 2019
Amended  IN  Assembly  May 16, 2019
Amended  IN  Assembly  March 27, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 174


Introduced by Assembly Member Wood

January 08, 2019


An act to add Sections 100504.1 and 100504.2 to and repeal Section 100509 of the Government Code, relating to health care coverage.


LEGISLATIVE COUNSEL'S DIGEST


AB 174, as amended, Wood. Health care coverage: financial assistance.
Existing federal law, the Patient Protection and Affordable Care Act (PPACA), requires each state to establish an American Health Benefit Exchange to facilitate the purchase of qualified health benefit plans by qualified individuals and qualified small employers. PPACA defines a “qualified health plan” as a plan that, among other requirements, provides an essential health benefits package. Existing state law creates the California Health Benefit Exchange, also known as Covered California, to facilitate the enrollment of qualified individuals and qualified small employers in qualified health plans as required under PPACA. Existing law specifies the powers of the Exchange’s executive board, including the power to assist in the administration of subsidies for individuals with coverage made available through the Exchange.

This bill would require the board, contingent on an appropriation in the 2019–20 Budget Act, to administer enhanced premium assistance to individuals with household incomes below 400% of the federal poverty level, reduce premiums to zero for individuals with household incomes at or below 138% of the federal poverty level, reduce premiums for individuals with household incomes at or between 401% and 800% of the federal poverty level and who are ineligible for federal advanced premium tax credits so their premiums do not exceed a specified percentage of their household incomes, and administer specified additional cost-sharing financial assistance for individuals with household incomes below 400% of the federal poverty level and who are eligible for premium tax credits. The bill would authorize the board to proportionally reduce enhanced premium assistance if the projected cost for a fiscal year exceeds the amount appropriated in the Budget Act for that fiscal year. If the federal government reduces or eliminates funding for the advanced premium tax credit, the bill would end the administration of enhanced premium assistance 6 months after that change in federal funding.

SB 78 of the 2019–20 Regular Session would, until January 1, 2023, create an individual market assistance program to provide health care coverage financial assistance to California residents with household incomes at or below 600% of the federal poverty level.
This bill would, until January 1, 2023, require the board of the Exchange to develop and prepare one or more reports to be issued at least quarterly and to be made publicly available within 30 days following the end of each quarter for the purpose of informing the California Health and Human Services Agency, the Legislature, and the public about the enrollment process for the individual market assistance program. The bill would require the reports to contain specified information, including, among other things, the number of applications received for the program, the disposition of those applications, and the total number of grievances and appeals filed by applicants and enrollees.
This bill would become operative only if SB 78 is also chaptered and becomes operative.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 100509 is added to the Government Code, to read:

100509.
 (a) The board shall develop and prepare one or more reports that shall be issued at least quarterly and be made publicly available within 30 days following the end of each quarter for the purpose of informing the California Health and Human Services Agency, the Legislature, and the public about the enrollment process for the individual market assistance program pursuant to Title 25 (commencing with Section 10800). The reports shall include, but not be limited to, the following information:
(1) The number of applications received for the individual market assistance program.
(2) The number of applicants included on those applications.
(3) Aggregate applicant demographics, including, but not limited to, gender, age, race, ethnicity, and primary language.
(4) The disposition of applications, including all of the following:
(A) The number of eligibility determinations that resulted in approval for financial assistance.
(B) The program or programs for which the applicants were determined eligible.
(C) The number of applicants that were denied financial assistance and the reason or reasons for the denials.
(5) The number of program participants in the following categories:
(A) Between 401 percent to 600 percent, inclusive, of the federal poverty level.
(B) Between 139 percent to 400 percent, inclusive, of the federal poverty level.
(C) At or below 138 percent of the federal poverty level.
(6) The amount of the financial assistance provided to program participants in each of the federal poverty levels described in paragraph (5).
(7) The number of program participants subject to reconciliation in each of the federal poverty levels described in paragraph (5).
(8) The health plans selected by applicants as reported by the program.
(9) The total number of grievances and appeals filed by applicants and enrollees, the basis for the grievance, and the outcomes of the appeals.
(10) Any other information the board determines to be relevant to the individual market assistance program design.
(b) The report required to be submitted to the Legislature pursuant to subdivision (a) shall be submitted in compliance with Section 9795.
(c) This section shall remain in effect only until January 1, 2023, and as of that date is repealed.

SEC. 2.

 This act shall become operative only if Senate Bill 78 of the 2019–20 Regular Session is chaptered and becomes operative.
SECTION 1.Section 100504.1 is added to the Government Code, to read:
100504.1.

(a)The Legislature finds and declares all of the following:

(1)Although Covered California provides financial assistance for premiums, financial help to reduce copays and deductibles, and other cost sharing, many low- and moderate-income Californians who receive that financial help still have difficulty paying their premiums, obtaining access to care, or affording the necessities of life, such as food and housing.

(2)Under existing federal law, most Californians are assured that their health insurance premiums will cost no more than 10 percent of their incomes, but some Californians who buy coverage as individuals may still face health insurance premiums that cost far more than 10 percent of their incomes.

(3)There are still over 1,000,000 Californians in the individual market who remain uninsured because they cannot afford health care coverage due to high health care costs and the high cost of living in this state.

(b)It is the intent of the Legislature that a California taxpayer who buys coverage as an individual shall not spend more than 15 percent of the taxpayer’s income on health care coverage premiums that meet minimum standards of affordability.

(c)It is further the intent of the Legislature that the total uninsured population in the individual market shall be reduced by one-half because more Californians will have more affordable coverage.

SEC. 2.Section 100504.2 is added to the Government Code, to read:
100504.2.

(a)(1)The board shall administer enhanced premium assistance to an individual who enrolls in health care coverage through the Exchange. The enhanced premium assistance shall be based on the adjusted monthly premium for the applicable second lowest cost silver level health care coverage with respect to the individual.

(2)For an individual with a household income at or below 138 percent of the federal poverty level, the enhanced premium assistance shall reduce the individual’s premiums to zero.

(3)For an individual with a household income at or between 139 percent and 400 percent of the federal poverty level, the enhanced premium assistance shall be scaled to reduce the individual’s premiums to 1 percent of the individual’s household income for an individual with a household income of 139 percent of the federal poverty level to 8 percent of the individual’s household income for an individual with a household income of 400 percent of the federal poverty level.

(4)For an individual with a household income of 401 percent or more of the federal poverty level who is not otherwise eligible for federal advanced premium tax credit, the enhanced premium assistance shall reduce the individual’s premiums to 8 percent of the individual’s household income for coverage with an actuarial value of 70 percent with respect to essential benefits for an individual with a household income of 401 percent of the federal poverty level, scaled to reduce the individual’s premiums to 12 percent of the individual’s household income for an individual with a household income of 600 percent of the federal poverty level, and scaled to reduce the individual’s premiums to 15 percent of the individual’s household income for an individual with a household income of 800 percent of the federal poverty level.

(5)The enhanced premium assistance shall be in addition to applicable federal tax premium subsidies and shall not replace those subsidies.

(6)The board may proportionally reduce the amount of enhanced premium assistance administered in a fiscal year if the amount appropriated in that fiscal year is less than the projected cost of full implementation so that the enhanced premium assistance costs do not exceed the appropriation amount adopted in the Budget Act for that fiscal year.

(b)The board shall administer additional cost-sharing financial assistance to those who are otherwise eligible for premium tax credits and who have incomes determined to be below 400 percent of the federal poverty level as follows:

(1)An individual with a household income at or below 138 percent of the federal poverty level shall be offered products with an actuarial value of 100 percent with respect to essential benefits.

(2)An individual with a household income at or between 200 percent and 400 percent of the federal poverty level shall be offered products with an actuarial value of 80 percent with respect to essential benefits. The benefit design for these products shall be consistent with the benefit design for a gold level of coverage.

(c)For purposes of this section, “cost-sharing financial assistance” includes direct assistance with copays and deductibles.

(d)For the purposes of this section, the term “silver level” has the same meaning as set forth in Section 1367.009 of the Health and Safety Code, and Section 10112.295 of the Insurance Code.

(e)If the federal government reduces or eliminates funding for the applicable federal advanced premium tax credit, the administration of enhanced premium assistance under this section shall cease six months after the effective date of the federal law or other action reducing or eliminating the federal advanced premium tax credit.

(f)The board shall implement this section contingent on the appropriation of funds in the 2019–20 Budget Act.