Heat Over Healthy Families Compromise Plan

Yesterday’s state budget compromise between legislative leaders and the governor includes a provision that 880,000 children in the Healthy Families program will complete the shift to Medi-Cal managed care within a year, beginning Jan. 1. State officials, who had been using an enrollment figure of 875,000, now say the Healthy Families programs serves 880,000 California children.

The timing of the shift ticks off Suzie Shupe, executive director of California Coverage and Health Initiatives (formerly known as the Children’s Health Initiative).

“We are really outraged over this deal that was struck,” Shupe said. “Despite both houses of the Legislature supporting the notion of transitioning just the bright-line kids, I can’t believe they decided to eliminate a popular and successful program in one fell swoop like this.”

According to state officials, the new deal provides a more gradual transition than the original plan by the governor — the new transition will go over one year, instead of nine months, as the governor proposed.

Shupe said the plan basically experiments with children’s lives.

“Medi-Cal already has significant access problems that have yet to be addressed,” Shupe said. “So putting so many additional children into that program is just inviting serious problems for those kids.”

Shupe and other advocates had pushed for the state to start the transition with roughly 200,000 “bright line” children — beneficiaries who are at or below 133% of federal poverty level — and then evaluate that process before expanding the program to the other Healthy Families children.

“When you put 875,000 children into that already-strained system all at once, it’s a real impact for these children,” Shupe said. “It’s a big strain on the system, and it’ll impact children.”

Still up in the air with the new plan is the status of the managed care organization tax extension, which is due to sunset in July. Managed care insurers in California pay the state a tax of 2.35% on premiums. Reauthorization of the tax would take an urgency measure, which means two-thirds approval by the Legislature. Republicans have said they won’t back the extension if Healthy Families is eliminated. That tax is estimated to bring in about $400 million over the next two years in federal matching money.

The state plan estimates overall savings of $13 million the first year by moving Healthy Families children to Medi-Cal managed care plans.

The transition will need CMS approval, and state officials said they were uncertain whether that would come in the form of a waiver or a state plan amendment (SPA).

Toby Douglas, director of the Department of Health Care Services, issued a written statement yesterday:

“This compromise ensures high quality care for Healthy Families children under one program, Medi-Cal. We will provide a coordinated, efficient and consumer-friendly delivery system with a wider array of health care benefits than is currently available under Healthy Families. Nearly all of the managed care plans in the Healthy Families network also contract with Medi-Cal, meaning most children will be able to keep their current plan and health care providers. This is an important step toward solving the state’s budget crisis, creating a better experience for beneficiaries, and laying important groundwork for health care reform in 2014.”

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