Governor Signs Legislation To Keep Kids in Healthy Families

On Tuesday, Gov. Arnold Schwarzenegger (R) signed a bill (AB 1422) designed to keep nearly 700,000 children enrolled in Healthy Families, California's Children's Health Insurance Program, the AP/Fresno Bee reports (AP/Fresno Bee, 9/22).

Schwarzenegger previously threatened to veto all bills because lawmakers did not meet his demands to resolve energy, prison and water issues. However, the governor said AB 1422 was too important not to sign (Yi, San Francisco Chronicle, 9/23).

Keeping Kids Enrolled

The bill, by Assembly Speaker Karen Bass (D-Los Angeles), will raise $196 million to help Healthy Families offset cuts from a July budget revision package.

The new funds will allow the program to continue providing health insurance for about 670,000 children scheduled to lose coverage beginning Oct. 1 (Robertson, Sacramento Business Journal, 9/22).

The bill also will allow Healthy Families to lift an enrollment freeze and begin processing applications to cover more than 80,000 waitlisted children (Van Oot, Sacramento Bee, 9/23).

Raising Funds

AB 1422 will restore funding to Healthy Families through:

• Contributions: The bill accounts for an $81.4 million donation from California's First 5 Commission, which administers state tobacco tax revenues for early childhood health and education programs (San Francisco Chronicle, 9/23).
• Cost-sharing: The measure would raise copayments for emergency department visits, physician visits and prescriptions. Monthly premiums also would increase by $4 to $7 per child. However, families earning less than 150% of the federal poverty level would not face premium increases (Office of the Governor release, 9/22).
• Health plan taxes: The bill would impose a 2.35% tax on insurers that administer benefits for Medi-Cal, California's Medicaid program. The new levy would replace the current 5.5% fee that is scheduled to expire in October (San Francisco Chronicle, 9/23). Officials plan to use the new tax to draw down nearly $100 million in federal matching funds (Bailey, "L.A. Now," Los Angeles Times, 9/22).

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