The full Healthy Families report, with updated info…

Here’s our full treatment on AB1422 and Healthy Families. We previously reported a preliminary tally. The official tally is 62-5, with the following Republicans in support: Berryhill, Berryhill, Conway, Emmerson, Fletcher, Fuller, Gaines, Garrick, Gilmore, Nestande, Niello, Neilsen, and Villines.

Thursday, September 3rd, 2009

* Bi-Partisan Backing of AB1422 (Bass) Leads to a 62-5 Vote For New Tax
* Governor Vows to Sign Bill, Pleased No General Funds Involved
* AB119 (Jones) Passes, Banning Gender Bias in Health Insurance Pricing

More Updates on the Health Access Blog: Gov will sign, and no kids kicked off, but many cuts continue: Healthy Families: a resurrection; By any legislative means necessary; Public options all over the place; Seeing what the candidates do; Rallies this week for health reform!; New data on debt shows need for action; Get well soon, Rick!; Blue Cross is at it again; Video blogging by Biden; Change the channel and the health reform debate

Follow Health Access on Twitter, at @healthaccess, or for quick updates on budget and health reform issues. Followers were among the first to find out about key bill passage in the Legislature yesterday and big HCAN rally in LA!

SACRAMENTO — 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 working to ensure continued coverage for kids in Healthy Families were relieved Thursday at the reprieve negotiated in the Legislature. “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.

The legislation likely will reverse a decision by the state’s Managed Risk Medical Insurance Board to begin disenrolling children from the program in a matter of weeks. MRMIB members already voted to begin disenrollment, citing “insufficient funding” but also indicated they were holding out hope for an eleventh-hour funding solution. Now, the board appears to be well-positioned to reverse that vote.

In the Assembly on Thursday, a number of Republicans stood to deliver a series of dramatic, last-minute tributes to AB 1422, (Bass-D), throwing their support behind 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 successfully froze out several proposed budget solutions in the Legislature in the past year. 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 and stand up for 600,000 California children” who were at risk of being kicked off the program.

Bass also told lawmakers that California’s Taxpayer Association, traditionally an opponent of tax increases, saw enough merit in the deal to take a neutral stance on AB1422, and the California Chamber of Commerce supported the bill.

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

At least 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 a reduction from the expiring 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: Families enrolling in the program will share some of the cost burden, allowing a good fit with the Republican tenet of personal responsibility.

Democratic Assemblyman Charles Calderon (D) called the AB1422 proposal “a win-win. They (health plans) get a lower tax and they get the money back in the form of increases or higher payments.” Of the bi-partisanship exhibited by Assembly members, Calderon said, “This is one of our finest hours, if not our finest hour yet.”

Families will be charged nominally higher fees for premiums, ranging from $4 to $7 per child, with very low-income families exempt from the increase. Other cost-sharing will include co-pay increases from $5 to $15 for emergency room visits that do not result in hospitalization and co-pay increases from $5 to $10 for non-preventative health, dental and vision services. In addition, children’s options in choosing dental service providers will be limited.

Still, the increased costs for families are the lesser of several, more expensive options considered by the MRMIB staff. In the final analysis, staff embraced the more moderate proposals, hoping to spare families whose budgets already are stretched more financial pain than necessary.

“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 had 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, MRMIB is spared from having to drastically scale back the program — 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. On average, about 3,000 children per work day have been added to the list since MRMIB started taking names instead of enrolling more children in the health insurance program.

Also passing the Legislature on Thursday was AB119 by Assembly Health Committee Chair Dave Jones (D), which prohibits gender discrimination in pricing health care insurance.

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