Saturday, December 08, 2012


Capitol Alert

The latest on California politics and government
  • SEE ALSO: KEEPING CALIFORNIA'S KIDS HEALTHY: Budget cuts forced the demise of the Healthy Families program, but children must have access to care.  here + here


Posted by Kevin Yamamura, The Sacramento Bee |

AOC_HealthFamily_059w.JPGNovember 30, 2012  ::  Senate President Pro Tem Darrell Steinberg asked Gov. Jerry Brown administration officials Thursday to preserve a children's health care program for now, asking the governor to backtrack on one of his June budget demands.

Legislative Democrats reluctantly agreed to phase out Healthy Families in 2013 to satisfy Brown in budget talks in exchange for softer cuts to other programs that serve low-income Californians. Healthy Families serves more than 860,000 lower middle class children whose families earn too much to qualify for Medi-Cal but struggle to afford health insurance.

It has been a popular program with bipartisan support, but Brown argued that California needs to move those children to Medi-Cal in preparation for the 2014 federal health care overhaul.

Steinberg said in his letter he does not believe there are enough Medi-Cal providers to serve Healthy Families children by January. He said that is particularly the case in his Sacramento-based district, where 11,160 Health Net enrollees lack assurances they will be able to see their same providers in Medi-Cal.

"This is of significant concern to me and it clearly illustrates the need to slow the transition," Steinberg wrote.

ADDITIONAL BACKGROUND: The Folding of Healthy Families into Medi-Cal

from the State-of-the-States Report: (The Annual Report of the States : The States Project    Medicaid (called Medi-Cal in California) recently surpassed K-12 education as the largest area of state spending when all funds, including federal funds, are considered; and Medicaid appears likely to continue to claim a growing share of state resources. During the worst part of the recession, states cut funds for education, adjusted for inflation. The Volcker-Ravitch report explains: “Since K-12 education is the largest program funded by state taxes, a relatively small percentage cut in spending for this purpose can provide enough funds to support large growth in Medicaid. In contrast, cuts in all other state programs would have to be very large to provide the same budgetary resources.”

As NASBO (National Association of School Business Officers)  warns, “Medicaid has steadily eaten up a growing share of state budgets over the past three years, while education has been getting a smaller slice of the pie.”29 Education used to make up a bigger share of state spending. In the 1980s, K-12 education made up the largest share of state spending, followed by higher education. Medicaid surpassed higher education as the secondbiggest state program in 1990, and in 2003 it became largest state program for the first time. In each of the last three fiscal years, Medicaid has taken the largest share of state spending.

A reduction in education spending at the state level means that cities and localities must chip in more of the pie to cover costs through property taxes. A reliance on local funding, however, comes with its share of problems. First, school funding based on local tax revenue may disadvantage low-income communities. The same tax rate in a low-income community will raise fewer funds than in a high-income community. There is a worry that funding will be unequal across counties. This was particularly true in two of our study states — New Jersey and Pennsylvania — both of which disproportionately rely on local property taxes to fund education. In addition, all of our states reported inequality of performance and funding across counties. In New Jersey there have been successful legal challenges to the way the state government funds education, with critics saying that the high spending skewed towards wealthier communities and was fundamentally unfair.

Healthy Families advocates say the state won't save much money from shifting children but will endanger their coverage because Medi-Cal lacks enough doctors and other providers to serve 860,000 new patients. Advocates believe Healthy Families has better providers in no small part because it has higher reimbursements than Medi-Cal, whose rates the state has cut dramatically to balance past budgets.

PHOTO CREDIT In July 2009, Liam Waring of Davis had health insurance through the Healthy Families program. Autumn Cruz / Sacramento Bee:

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