Healthy Families cuts rejected in subcommittee…

HEALTH ACCESS UPDATE
Tuesday, April 19, 2010

FEDERAL HEALTH REFORM TO RESHAPE GOVERNOR’S BUDGET PROPOSAL
* Assembly Budget Subcommittee Hears Testimony Against Cuts to Healthy Families
* Several Testify Against Schwarzenegger’s Harshest Scenarios for Children’s Health
* New Federal Health Reform Renders Governor’s “Trigger” Proposals Illegal

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On Monday, the Assembly Budget Subcommittee on Health and Human Services, chaired by Assemblyman Dave Jones (D), examined the impact federal health reform will have on Governor Arnold Schwarzenegger’s state budget proposal.

The subcommittee specifically focused on some of the programs and services Schwarzenegger threatened to eliminate in his “trigger” scenario, a proposal that would be “triggered” should the nearly $7 billion in additional federal funds that the Governor budgeted not materialize.

While agency heads were noncommital about how the governor’s budget fits with national health reform, saying they were still studying the matter, advocates stepped up to state clearly where the federal health reform prevents specific cuts.

LAYING DOWN THE LAW: Elizabeth Landsberg of Western Center of Law and Poverty told the subcommittee that, under the new law signed by President Obama, certain programs were protected from being dismantled or scaled back. These include Healthy Families, which insures nearly 1 million children in California from families that pay premiums according to their income, the AIM program for infants and mothers, and even the MRMIP high risk pool health insurance of last resort for those who are denied coverage in the individual insurance market. Beth Capell of Health Access added, “These would plainly violate the MOE,” in reference to a “maintenance of effort requirement” included in the new federal law that requires programs to provide the same level of services as before the reform passed into law.

A few weeks ago, Arizona became the first state to shut down its CHIP program — the same federal-state children’s health insurance program as Healthy Famillies — through state legislation. But Arizona lawmakers overshot their authority. The federal Centers for Medicaid Services “has indicated that this is in violation of federal health care reform,” a subcommittee staff report stated.

Amid the analysis of federal health reform requirements, a Department of Finance representative for the Administration suggested that the governor’s “trigger” proposals to eliminate these and other programs “are not budget proposals, although they may be in the May revise.” Jones indicated that statement was contrary to everything the governor said previously.

Even the Legislative Analyst’s Office representative said the trigger proposals “violate federal law.” Leslie Cummings, executive director of the Managed Risk Medical Insurance Program, said “there’s so much I can’t claim to know definitely yet.”

The Assembly Budget Subcommittee ended up, by a 4-1 vote (with one not voting), REJECTING the following budget proposals:
* Eliminating the Healthy Families program;
* Reducing eligibility in Healthy Families from 250% to 200% of the federal poverty level;
* Increasing premiums in the Healthy Families program
* Eliminating the vision benefit in Healthy Families
* Eliminating Prop 99 Funding for AIM

Besides running Healthy Families and AIM, the Managed Risk Medical Insurance Board (MRMIB) also administers the Major Risk Medical Insurane Program (MRMIP), the high-risk pool for those denied by private insurers for “pre-existing conditions.” Funding proposals were left open, as more information becomes available about the implementation of federal reform in this area.

As always, no budget decision is final until a full a final budget is signed into law.

The hearing focused only on the programs in MRMIB. Next week, Monday, April 26th, at 1:30pm, the Assembly Budget Subcommittee is scheduled to look at proposed Medi-Cal cuts. FYI, Medi-Cal enrollment eligibility has already been protected from cuts under an MOE, as a condition of getting additional Medicaid dollars in the federal recovery act. However, neither the enhanced Medicaid dollars nor federal health reform prevents state governments from cutting certain Medi-Cal benefits or provider rates. The hearing would be a time for health advocates to express their opposition to such Medi-Cal cuts.

Health Access California promotes quality, affordable health care for all Californians.

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