CALIFORNIA’S HEALTHY FAMILIES HEALTH INSURANCE PROGRAM LOOKS FOR FUNDS; First 5 may come to the rescue

 

AUTUMN CRUZ / acruz@sacbee.com  Amy Whittle, of the American Academy of Pediatrics, California Division, speaks at the Capitol on Thursday at a meeting of the Managed Risk Medical Insurance Board, which oversees the state's Healthy Families health care program.

AUTUMN CRUZ / acruz@sacbee.com Lilla Castro hugs sons Francisco, 4, and Jorge, 8, during the meeting on cutting Healthy Families, which provides low-cost medical insurance to low-income children.

By Susan Ferriss |Sacramento Bee

Friday, Jul. 31, 2009 - The task of shedding hundreds of thousands of children from the state's Healthy Families health insurance program was put off Thursday amid efforts to find more money that could ease the impact of budget cuts.

The Managed Risk Medical Insurance Board must come up with a plan to respond to deep budget cuts in state programs, including Healthy Families.

Gov. Arnold Schwarzenegger signed budget-balancing revisions Tuesday, using his line-item veto power to slash more funding for Healthy Families and other social programs.

The 12-year-old health care program provides low-cost medical insurance to kids in low-income families that don't qualify for Medi-Cal because they are not poor enough. Adults in many of the families are working, but their jobs don't provide health coverage or don't cover dependents.

The Legislature reduced the Healthy Families budget by $128.6 million, and on Tuesday the governor cut $50 million more. Such cuts could affect as many as 900,000 children statewide, reversing gains the state had made in expanding preventive care and reducing emergency room visits, program advocates warn.

The Managed Risk Medical Insurance Board froze new enrollment two weeks ago. With the most recent cuts, the board may have to remove from the program tens of thousands getting services now.

Disenrolling children from Healthy Families "is something we do not relish doing," said Cliff Allenby, board chairman, as members listened to speakers anticipate harm that could come from cutting so many from insurance rolls.

Allenby said the board "may have no choice" but is looking at ways to restructure the program to reduce costs and raise money for premiums from other sources.

One possibility to help backfill the premium costs for some children involves the First 5 California Commission. First 5 was established by Proposition 10 in 1998, which imposed a 50-cent tax on cigarettes to finance early childhood development programs.

An estimated $500 million will be collected in revenue from the cigarette tax this fiscal year. First 5 commissions also control an estimated $2.5 billion in revenue already collected.

Kris Perry, executive director of the state commission, told the Managed Risk Medical Insurance Board Thursday that First 5 will help Healthy Families. Meetings are set next week to discuss how First 5 money could be used.

Bill Madison, spokesman for the state First 5 commission, said, "We have committed to aid with funding, but we don't have an amount yet."

He said if county-level commissions want to be involved, the state First 5 commission will work with them and any other organizations that might want to contribute revenue to the health insurance program.

Last year, state and county First 5 commissions approved turning over up to $16.75 million to help pay premiums for Healthy Families.

A ballot measure that would have forced the First 5 commissions to turn over more money to the state to backfill cuts in health services for kids failed May 19. Proposition 1D, which was supported by Democratic leaders in the Legislature and Schwarzenegger, would have taken money from the estimated $2.5 billion in unspent revenue controlled by the First 5 commissions.

The commissions protested, opposing the measure and arguing that the money was earmarked for long-range plans.

The Managed Risk Medical Insurance Board also is considering various options developed by its staff to restructure Healthy Families. They include: merging vision and medical benefits to reduce administrative costs; eliminating vision coverage and other benefits; changing schedules for how fees are reimbursed to health providers; and increasing the co-payments that families have to absorb.

"We can't make it too expensive" for families to pay for the insurance, Allenby said. "That doesn't work."