|Budget Issue:||Request for positions related to the federal Patient Protection and Affordable Care Act|
|Program:||Department of Managed Health Care|
|Finding or Recommendation:||Approve the administration's April finance letter request for eight permanent positions in the Help Center, Division of Financial Oversight, and Office of Technology and Innovation. Approve the request for six Division of Licensing positions as two-year limited term positions—instead of permanent positions—because the degree to which this workload will be ongoing is still unclear at this time.|
Governor’s Proposal. In 2011-12, the Legislature approved 13 two-year limited term positions in the Department of Managed Health Care (DMHC) to address workload associated with the federal Patient Protection and Affordable Care Act (ACA)—also known as federal health care reform. According to the administration, experience over the last year has proven that additional workload in DMHC associated with the ACA is continuous and permanent. In an April finance letter, the administration requests converting the 13 limited-term positions to permanent and adding one new permanent position, along with $1.8 million in 2013-14 and $1.9 million in 2014-15, to continue to address workload resulting from implementation of the ACA. These positions would be funded with revenue from fees assessed on licensed health plans.
The requested positions are to address additional ACA-related workload in the following areas:
Level of Ongoing Workload in DOL Is Unclear. We have reviewed DMHC’s requests for funding and positions related to the ACA. We find that the ACA will likely create ongoing workload that justifies the permanent positions in the Call Center, Division of Financial Oversight, and Office of Technology and Innovation. We also find that the ACA will likely result in additional DOL workload, such as reviewing additional applications for new licenses and modifications or amendments to existing licenses. The additional workload depends, in part, on how health plans behave under the new market environment created by the ACA. For example, health plans will likely modify their licenses to comply with new health insurance market reforms under the ACA, facilitate their participation in the Exchange, and compete for millions of additional purchasers of health coverage products. We believe it is reasonable to expect these changes to result in additional license applications and modifications in the next couple of years. However, in our view, the degree to which the additional workload will continue on an ongoing basis—even after health plans have had a couple of years to adjust to the new market environment under the ACA—is still subject to substantial uncertainty.
Recommend Modifying Requested DOL Positions From Permanent to Limited-Term. We recommend the Legislature approve the funding and permanent positions requested in the Help Center, Division of Financial Oversight, and Office of Technology and Innovation. We recommend the Legislature approve the DOL positions as two-year limited term positions—instead of permanent positions—because the degree to which this workload will be ongoing is still unclear at this time.