Republican Legislators Threaten to Blow Hole in Budget Over Healthy Families

The proposal to eliminate the Healthy Families program and shift all 875,000 children into Medi-Cal raises concerns for Health Access and many other advocates due to the transition and access to care. Will children be able to stay with their doctors? Will they be able to get the doctors and specialists they need? Healthy Families pays plans $100 per child per month; Medi-Cal would pay around $85 per child per month. With that reduction there’s an impact.

But in fact the elimination proposal never saved much money. It’s a cost-effective program, and gets a 2:1 federal match, so the state budget only gets 33% of any money saved. Put another way, for every dollar saved for the state general fund, it cuts child health care and our health system by $3.

But the kicker is that this effort to save $13 million in the budget year actually could cost the budget nearly $300 million. The GOP Republican leadership just put out the following letter this afternoon. They state that they won’t vote to extend an important managed care orgainzation fee if the Healthy Families program is eliminated. It’s not unusual for Republicans legislators to come out against a fee or tax, so it’s a believable threat. And this particular fee requires a 2/3 vote, and thus requires Republican votes to renew.

That tax, which was used to finance Healthy Families in the past few years, raised $183 million, and would grow in the next year, due to other expansions of Medicaid managed care. Senate Republican Leader Bob Huff, of Diamond Bar, and Assembly Republican Leader Connie Conway, of Tulare, say in the letter that they won’t renew that tax, unless the plan to eliminate Healthy Families is shelved.

We’ll see what happens tomorrow. The Senate convenes at 9am.

June 26, 2012

Hon. Jerry Brown
State Capitol, Room 1173
Sacramento, CA 95814

Dear Governor Brown:
It has come to our attention that the Legislative Democrats and your administration have negotiated to end the successful Healthy Families program and force over 880,000 children into Medi-Cal. In addition, the budget presented and your own budget proposal assumed the extension of the Managed Care Plan fee adopted as part of last year’s budget (AB 21X, Chapter 11, 2011).

Last year, members of our caucus supported the Managed Care Plan fee because it allowed the state to maintain funding for the Healthy Families program and was supported by the health plans that would pay the fee. We are writing today to tell you that there is no support in our caucuses for an extension of the fee if the Healthy Families program is eliminated.

We understand that fast growing health and welfare programs must be contained to balance our budget. However, this proposal to eliminate the Healthy Families program is estimated to save less than $13 million which be completely offset by the loss of the fee and the federal funds the fee generates.

Healthy Families has been a model of an effective children’s health insurance program. The program is run efficiently and has a low administrative cost compared to Medi-Cal ($50 per recipient compared to $395 per Medi-Cal recipient). Both providers and the children they serve value this program. There is simply no need to eliminate the program.

We stand ready to help you find the $13 million in budgetary savings but we will not support an extension of the fee in light of the proposal to eliminate Healthy Families which will jeopardize access to health care for almost 1 million California children.

Senator Bob Huff                Assemblywoman Connie Conway
Senate Republican Leader   Assembly Republican Leader

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