• Republicans legislators hold up state budget over funding to insure children.
  • ACTION ITEM: AB977 to limit out-of-pocket expenses on health insurance to be heard next week.

The predictions were too good to be true: an extra $7.5 billion, an on-time budget. June 15th, the constitutional deadline for the Legislature to pass a budget, has come and gone without one.


Since the budget needs to be passed by a two-thirds vote, it is often the case that the budget is held up. Even if the Democratic majorities are unanimous in their support, the budget would still require two Republican Senators and six Republican Assemblymembers for passage. Often, the Republicans hold out their votes for changes to the final document.

Republicans, this year, say they cannot support the budget because of a provision that amounts to .02 percent of the entire state spending plan.

Their beef: $1.8 million that would go toward the goal of providing health coverage to all California ’s children. That includes children of undocumented immigrants.

The specific proposal includes $23 million that Gov. Arnold Schwarzenegger set aside in his May Revise to provide coverage to 24,000 children on waiting lists at County Health Initiatives, often called Healthy Kids programs.

The additional proposal, which has Republicans up in arms, is $1.8 million that would fund seven state staff members to work toward the goal covering all children under the statewide Healthy Families program.

Beginning July 1 2007, children in families with incomes of up to 275 percent FPL ($55,000 for a family of four) would be qualified for Healthy Families. The following year, children in families earning up to 300 percent FPL ($60,000 for a family of four) would qualify for the state subsidized health program.

At issue is that toward the goal of covering *all* children, this may include children that are undocumented. Of the nearly 800,000 uninsured children, roughly 88% are citizens or holders of green cards.

Many of the statements critiquing this proposal are simply false. Sen. Dennis Hollingsworth is quoted in a press release as saying that the proposal would “ultimately provide comprehensive health insurance for all illegal immigrants….”

The truth is, both the governor’s original $23 million proposal, and the Healthy Families extension applies to only children, a fraction of whom may be undocumented.

While Schwarzenegger Republican colleagues blast coverage for undocumented children, the governor has, himself, supported the idea–even if he didn’t want to fund it.

KQED reporter Jon Myers asked Schwarzenegger Thursday about the issue of undocumented children, to which Schwarzenegger responded:

“For me, we should not politicize the children,” he said, as reported by Myers in his blog. But then, he went further. “Every child, if they are here legally or illegally, every child should have the right to some health care and to schooling. That’s where I’m coming from.”

He did however, state that he did not support the $1.7 million to start a full Healthy Families, because of budget concerns, despite his campaign pledge. When running for governor during the recall election in 2003, Schwarzenegger said, “We have to make sure that every child in California is insured. That is the most important thing.”

The status of the budget, and the children’s coverage provisions, are uncertain as of this writing.


A recently strengthened AB977 (Nava) will be vetted in the Senate Banking, Finance and Insurance Committee on Wednesday, June 21st.

As recently amended, AB977 would require that health plans have overall limits on annual out-of-pocket costs. Additionally, it would create a new process for obtaining state approval for health coverage plans, and their out-of-pocket cost strutures.

This is an attempt to have some public oversight over the trend of insurers and employers continuing to shift the cost and burden of health care to patients and families. Insurers are attempting to shift more costs onto their policyholders, leaving patients at financial risk. Consumers need public oversight to prevent health plans for imposing so many costs that people are not able to get the care they need. It’s not insurance if you can’t get the care you need. It’s not insurance if you still end up going bankrupt.

Under the bill, the Department of Insurance and Department of Managed Health Care would need to come up with five standardized health benefit plans, so that purchasers can better compare what is available to them. Insurers who wish to submit products that match one of these health benefit plans would go through a predictable regulatory process.

However, insurers who want to alter these plans — or create their own — would need to seek a higher level of approval. That would include a 60-day public comment period, during which there could be hearings. Additionally, regulators would review and could deny certain plans as they consider the plan’s out-of-pocket costs and their impact on:

  • Bankruptcy
  • Homelessness
  • Increased cost to public programs;
  • High out-of-pocket costs;
  • An enrollee delaying care;
  • An enrollee becoming sicker because of delayed care;
  • An enrollee’s ability to obtain timely care.

ACTION ITEM: Contact members of the Senate Banking, Finance and Insurance Committee and urge their support on AB977.

For sample letters, fact sheets, talking points or other materials on AB977, please contact Hanh Kim Quach, policy coordinator at Health Access, 916.497.0923 x 206 or hquach@health-access.org.

Members on the Senate Banking, Finance and Insurance committee include:

Sen. Jackie Speier, Chair
Senate Banking, Finance and Insurance Committee
State Capitol, Room 2032
Sacramento , CA 95814
916.651.4008; Fax: 916.327.2186

Sen. Dave Cox, Vice-Chair
Senate Banking, Finance and Insurance Committee
State Capitol, Room 2068
Sacramento , CA 95814
916.651.4001; Fax: 916.324.2680

Sen. Dean Florez
Senate Banking, Finance and Insurance Committee
State Capitol, Room 5061
Sacramento , CA 95814
916.651.4016; Fax: 916.327.5989

Sen. Alan Lowenthal
Senate Banking, Finance and Insurance Committee
State Capitol, Room 3048
Sacramento , CA 95814
916.651.4027; Fax: 916.327.9113

Sen. Mike Machado
Senate Banking, Finance and Insurance Committee
State Capitol, Room 5066
Sacramento , CA 95814
916.651.4005; Fax: 916.323.2304

Sen. Kevin Murray
Senate Banking, Finance and Insurance Committee
State Capitol, Room 5050
Sacramento , CA 95814
916.651.4026; Fax: 916.445.8899

Sen. Gloria Romero
Senate Banking, Finance and Insurance Committee
State Capitol, Room 313
Sacramento , CA 95814
916.651.4024; Fax: 916.445.0485

Sen. Jack Scott
Senate Banking, Finance and Insurance Committee
State Capitol, Room 2082
Sacramento , CA 95814
916.651.4021; Fax: 916.324.7543

For information on the state budget or AB977, please contact Hanh Kim Quach, policy coordinator, Health Access 916.497.0923 x 206 or hquach@health-access.org.

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