Good News, Then Bad, for Healthy Families Program

The good news for the Healthy Families program on Thursday was an $81.4 million commitment from the First Five Commission to keep 200,000 children ages 0-5 enrolled in the program for the remainder of the fiscal year.

The bad news? Despite at first seeming to want to delay the decision, the Managed Risk Medical Insurance Board, or MRMIB, voted to begin kicking kids off the health care program this fall.

On advice of staff, MRMIB declared that insufficient funding forced the board to prepare to disenroll children from Healthy Families beginning October 1.

Families with kids getting health care through the program – those who don’t benefit from the First Five funding, that is — will get 30-day disenrollment notices as their annual re-enrollment dates approach. Those children can then be added to the end of a long wait list to get re-enrolled if the program’s finances improve.

Since the list was established July 17, an average of more than 3,000 children per work day have been signed up for the waiting list. Currently the list stands at 55,202 children of working families that can’t afford health insurance, but whose household incomes are higher than the threshold for MediCal.

Health care under the program is not free. The taxpaying, working families pay co-payments for services and prescriptions, as well as premiums to get their kids in Healthy Families, known nationally as SCHIP, a program expanded by President Obama earlier this year.

As California watched its fortunes dwindle this year, the Legislature and Governor Schwarzenegger ordered severe cutbacks in health and human services. Meanwhile, at least a dozen other states have managed to take the $2 in federal matching funds for every state dollar spent and use the augmentation to grow and expand their SCHIP programs.

Counting the forgone federal matching funds, California’s health care economy, not to mention children’s care, is losing a total of $533.4 million – thanks to the cuts made by the governor and Legislature.

This has left Healthy Families with a $194 million funding deficiency, staff members told the board, as well as an inability to continue serving the bulk of the program’s 921,787 child clients.

Even with the First Five’s $81.4 million, the California Budget Project estimates that nearly 800,000 kids will lose access to affordable health care because of Healthy Family’s decline. The cutbacks could not come at a worse time for working Californians trying to weather the persistent recessionary storm clouds that linger over the state.

Children’s advocates applauded and praised the generosity of the First Five Commission, which at first was expected to allocate around $30 million to help keep Healthy Families alive for kids through age 5. As it is, the much larger gift will allow for coverage of 200,000 children only through June 2010.

Wendy Lazarus, director of the Children’s Partnership, urged MRMIB members to exercise caution in making decisions about the future of the program.

“I ask that you consider that the next 45 days are going to be critical,” Lazarus said. “You’re going to have to look at what is safe, and what is riskier for children. At this point, we think that fewer kids will be served by the program than you do.”

Pending are lawsuits filed by several parties that specifically challenge the legality of the governor’s deep cuts, made through line-item vetoes after a budget deal was already negotiated with the Legislature.

MRMIB announced it will meet again August 20th, and August 27th. Among the decisions to be taken up is how much more money to charge families whose kids remain in Healthy Families, and what medical services can be eliminated or pared back.

The options currently before them are less severe than those listed as possibilities during last month’s MRMIB meeting. They now include:

• Increasing family co-pay maximums from $250 to $300.
• Increasing program co-pays for health services, drugs, dental services and vision care from $5 to $10 for non-preventative services.
• Increasing co-pays for name-brand drugs (when a generic version is available) to $10 to $15. The standard co-pay for generics would remain at $10.
• Increasing co-pays for emergency room visits from $5 to $25 unless hospitalization is required.
• Increasing subscriber premiums to $20 per child, with a maximum of $60 per family whose income falls within 150-200 percent of the federal poverty level.
• Increasing subscriber premiums to $30 per child, with a maximum of $90 per family whose income falls within 200-250 percent of the federal poverty level.
• Eliminating vision benefits.
• Eliminating mental health and substance abuse benefits.
• Scaling back dental benefit coverage.
• Eliminating benefits for biofeedback, acupuncture or chiropractic care.

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