California Budget Proposal Would Move 880,000 Children Off Healthy Families

Jacqueline Dandeneau understands why children's health advocates are so upset.

The Humboldt County resident, and mother of a 12-year-old and a 6-year-old, was a longtime subscriber to Healthy Families. That's California's medical insurance program for kids whose parents make just too much to qualify for Medi-Cal, but struggle to afford private health insurance payments.

"We were a 'Healthy Families' family and very happy to be so. The paperwork was easy and we had great dental access," said Dandeneau.

Then, came the economic downturn, their fortunes changed for the worse and their coverage changed to Medi-Cal.

Dandeneau says in their county there are few providers and they are waiting up to a year for appointments.

"We have to drive 3 hours to go to Redding," said Dandeneau, pointing out it's a challenging system for working parents struggling to juggle commitments. "So I see right now the system is taxed as it is. We as a Medi-Cal family can’t get enough coverage as it is. Let alone if we have all the Healthy Families kids fall into that service.”

Wendy Lazarus with Children’s Partnership says the idea that all of the 880,000 children in Healthy Families would immediately be moved in Medi-Cal as part of the budget solution was a big surprise.

She says advocates had been working with the legislature to approve a slower transition, initially moving just one-quarter of the kids from Healthy Families into Medi-Cal.

“Everyone assumed that that was what the budget decision would reflect," Lazarus said. "And instead, after a meeting between the Governor and the head of the Senate and head of Assembly a deal was struck to do something very different. And to transition all 800,000 of the kids and that was not the budget that the legislature had sent to the governor.”

Lazarus says the slow transition would allow time to assess whether families had access to doctors, were able to continue with needed specialists, and didn't disrupt the strained Medi-Cal system.

Other advocates have expressed frustration about the change, citing the Healthy Family program's links to improved outcomes in schools. And Chad Silva with the Latino Coalition for a Healthy California says the sudden move would disproportionately affect Latino families.

"Recent LAO [Legislative Analyst Office] data show that 46 percent of Healthy Families kids are Latino," Silva said. "Eighty two percent of children enrolled in Healthy Families programs in Los Angeles are Latino, so this has a great impact on Latino kids.”

The Sacramento Bee reports that Governor Brown had been eyeing Healthy Family for cuts for a long time.

Since taking office, Brown has sought to eliminate Healthy Families, which provides low-cost care to 880,000 children in working poor households that lack health insurance. Brown has argued that all publicly insured patients should be in Medi-Cal as matter of efficiency and to eliminate the challenges patients face when switching between Medi-Cal and Healthy Families as their family income fluctuates.

State Senator Leland Yee said yesterday that legislators will make sure that the trailer bill approving the wholesale move will be worded so that "kids are not going to be harmed, there will  be services and there will a be a transition plan that needs to be approved. And if in fact the plan is insufficient then the transition will not in fact happen. We need to make sure that there is sufficient language in the transition bill to make sure that that happens.”

The Healthy Families program currently serves children whose families earn too much for Medi-Cal but might not otherwise access private insurance. HealthyCal.org lays out the details.

Medi-Cal serves adults and children from families at or below the poverty level. Some of those children get their care through managed care plans and others see doctors or go to hospitals that are reimbursed from a fee schedule set by the state. Families are not required to pay any premiums for their coverage.

Healthy Families is aimed at children up to 19 years old in families that don’t qualify for Medi-Cal and have incomes up to 250 percent of the poverty level, or about $46,000 for a family of three. Families are given private insurance and pay premiums on a sliding scale, according to their income.

Because the Medi-Cal program is cheaper, Brown's plan would save $73 million in 2013-2014 by shifting the children to that program. But advocates say this wouldn't be the case, because of a related tax that only gets political support because of the Healthy Families program. The Sacramento Bee reports that it is a tax collected on managed care plans.

Shifting those children to Healthy Families risks the loss of $183 million in taxes on managed care plans. The tax is set to expire at the end of this month, and managed care providers previously supported the tax because it came back to them through Healthy Families patients.

Democrats need a two-thirds supermajority vote with Republican support to keep the tax going. If the industry is opposed, it is difficult to see how Republicans will sign on to the tax this summer.

At a news conference announcing the budget framework last Wednesday night, though, State Senate leader Darrell Steinberg reiterated Governor Brown's position that one program serving the state's children is more efficient than two. The move has been blasted by at least one Republican, Senate leader Bob Huff.

This transfer of children from a popular and successful program like Healthy Families to the problem plagued Medi-Cal system is a reckless move that unnecessarily puts the health of California children at risk.

The statement suggests that Huff and Republicans would prefer moving the children to a free market health insurance exchange that could be part of any federal health care law. "If federal health care reform does moves forward," Huff wrote, "these Healthy Families Program children will be much better served in the California Health Benefits Exchange as opposed the state Medi-Cal program, which has a poor history regarding access to care."

The legislature is holding hearings on the issue today and is expected to make a final vote on the issue tomorrow.