Last year’s legislation are this year’s budget items…

Tuesday, March 27th, 2007

* Implementation of new drug discount program for Californians underway
* New efforts to streamline enrollment into Healthy Families and Medi-Cal begins

New on the Health Access Weblog: Presidential Forum; The Illusion of Coverage; Weekend Care; Blue Cross’ Bad Behavior; Tonik; International Update; Rush and Arnold; Etc…

The first layer of decision-makers — among many — took a first look at the 2007-08 health budget on Monday, where Senate Budget Subcommittee members focused this hearing on programs under the Managed Risk Medical Insurance Board (MRMIB) as well as a few Medi-Cal items.


The Senate Budget Subcommittee on Health and Human Services, chaired by Senator Elaine Alquist, approved the full budget the state requested to implement AB2911 (Nunez/Perata), the landmark drug discount legislation, that will provide more affordable prescription medications to as many as 6 million uninsured or underinsured Californians without comprehensive drug coverage.

The Department of Health Services reported that it was in the process of negotiating with drug companies, and of hiring an independent contractor to help the state implement its program on time by January 2008. Senator Alex Padilla, of Los Angeles , questioned why department staff could not do it. Due to the complexity of the first-of-its kind program in California , and the short time frame to get it going, the Department of Health Services said it was crucial that the state contract out core functions of the program to begin the process, as well as have some added staff positions to manage the program.

Ultimately, the panel approved $8.8 million to hire 16 new positions, which was the request of the Department, but one more than what the Legislative Analyst’s Office recommended. Consumer advocacy groups that testified supported the full funding for the implementation.


The committee also approved $29.3 million in additional funding to help counties reach out to families whose children are eligible but not yet enrolled in either Healthy Families or Medi-Cal. While the amount is a bit less than the state had originally requested, the extra money would specifically help counties comply with streamlined processes passed in SB437 (Escutia) last year that aim to make it easier for children to become enrolled and stay enrolled, in a coverage program.

In California 428,000 children are poor enough and qualify for Healthy Families or Medi-Cal, but currently are not enrolled.

Specifically, the new rules under SB437 would allow some families to verify – on their own – that their incomes meet eligibility requirements for these programs, rather than having to submit proof of income. It also automatically enrolls children, who are no longer eligible for Medi-Cal, into Healthy Families, until the state decides whether or not they qualify or not. The new program would also automatically enroll children into public programs if they are receiving help from the federal Women, Infant and Children supplemental food program.

The committee, however, held off discussion of additional positions to help implement the new law until more is known about the federal government’s intentions to reauthorize the State Children’s Health Insurance Program (SCHIP), and at what funding level. SCHIP, which is called Healthy Families in California , is set to expire this year unless it is reauthorized.

While President Bush has announced his intention to continue the program, the funding level he has proposed — $5 billion a year – ($25 billion over 5 years) was stated to be too low. If Bush’s proposal becomes law, more than 400,000 California children could lose coverage next year.

Advocates are hoping that Congress will increase reauthorize at a level closer to $85 billion over five years.

With regular caseload growth, including the streamlining procedures outlined in SB437, Healthy Families is budgeted by the Schwarzenegger Administration to grow to a total enrollment of 915,598 children as of June 30, 2008, an 8.8% increase of 73,870 over current year levels.


The budget subcommittee also took the following actions:

* Agreed to fund 4 new positions for the Department of Health Services as it attempts to implement the new requirements under the 2005 Deficit Reduction Act.
* Approved $138.7 million for the Access for Infants and Mothers (AIM) Program
* Discussed the Managed Risk Medical Insurance Program (MRMIP), which provides some coverage to those who are “uninsurable” because of “pre-existing conditions.”

For more information, please contact the author of this report, Hanh Kim Quach, policy coordinator, Health Access, at 916.497.0923 x 206 or

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