Healthy Families: a resurrection

In what one assemblyman called “our finest moment,” the Assembly on Thursday overcame its partisan differences long enough to pass a bill allowing 600,000 California children to keep their low-cost Healthy Families insurance coverage.

Healthy Families seemed destined for the chopping block before a bi-partisan, two-thirds Assembly majority rescued the program by voting 58-0 for a new tax that everyone — even those being taxed — agreed was worth bridging the ideological gulf.

Children’s advocates were relieved at the reprieve that was negotiated for Healthy Families.

“The parents of the nearly 1 million children enrolled in the program can sleep better tonight knowing that their kids will have health coverage as the school year starts,” said Children Now’s Tim Morrison.

A number of Republicans stood up on the Assembly floor to deliver a series of dramatic, last-minute statements of support for AB 1422 (Bass-D), throwing their backing to the measure estimated to generate $97 million.

They spoke passionately of the need to preserve the Healthy Families program, the struggles with poverty they see in their districts and the need to provide health care to children vulnerable to the swine flu, already making its rounds through California schools.

The result was surprising, breaking up the partisan iceberg that froze out several proposed budget solutions in the Legislature in the past year. Not a single Republican voted against the measure (although many declined to cast a vote). In the Senate, the measure had passed 27-8 on Wednesday, with somewhat less bi-partisan backing.

After the vote, Speaker Karen Bass (D), declared, “This is a memorable day when we can cross party lines in California and preserve health care for 600,000 children statewide.”

Gov. Arnold Schwarzenegger, whose severe budget cuts contributed to a $194 million shortfall in the Healthy Families program, reportedly said he looked forward to signing the bill.

Three key factors in the AB 1422 deal were instrumental in attracting Republican support:

First, the new 2.35 percent tax that AB 1422 imposes is but half the 5.5 percent fee that health plans contracted by the state to manage Medi-Cal and Healthy Families coverage were previously paying. Second: The health plans did not object to paying the new tax, if it drew down federal funding that went back to them to keep Healthy Families going. Third: A component of the deal was that low to middle-income families enrolling in Healthy Families share some of the cost burden, allowing a good fit with the Republican tenet of personal responsibility.

Families will be charged higher fees for premiums, ranging from $4 to $7 per child, with the lowest-income families exempt from the increase. And, they will pay $5 to $15 dollars more for medical services.

“This is a high-quality program,” Assemblyman Roger Niello (R) said of Healthy Families, California’s version of the national children’s insurance program known as SCHIP. “The tax is supported by the industry. I think we can all agree this is a good thing.”

Assemblyman Michael Villines (R) noted that the tax is a temporary fix-it, in place until 2010, to keep Healthy Families in operation, and it ends when enhanced federal funds are no longer available.

Part of the purpose of the funds generated by the tax is to secure the increased federal matching funds announced by President Obama last spring — $2 for every $1 the state spends on Healthy Families .

Republican Assemblyman Danny Gilmore said he hoped the floor vote would be 80-0 (which would have required participation by all Republicans).

“By golly, this is an opportunity where we can come together for the children of our state,” Gilmore said, citing a 40 percent jobless rate in agricultural parts of his district that have been hit severely by drought. “Get over to my district and look at some of those people standing in line waiting for food.”

With passage of AB1422, and the governor’s signature, the state’s Managed Risk Medical Insurance Board plan to disenroll children from Healthy Families coverage now appears moot – for this year at least.

The children’s health insurance program also is benefiting from a generous boost by the First Five Commission, which committed $81.4 million to cover 200,000 of the kids in Healthy Families, aged 0-5 for one year.

Meanwhile, the demand for Healthy Families coverage has never been higher, with the economic downturn lingering throughout California, and more than 70,000 families placing their children’s names on a waiting list for enrollment.

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