Health Programs Take a Hit in Legislature

The California Legislature yesterday passed two budget trailer bills calling for relatively rapid changes in California’s Healthy Families program.

Although many organizations and health advocates opposed the two bills, most Democratic legislators voted for them. The bills call for a four-phase, one-year transition of enrollees in the Healthy Families Program to Medi-Cal managed care plans. Children’s health advocates lobbied unsuccessfully for a slower transition.

The Healthy Families changes are part of the state’s plan to cut more than $1 billion from health related programs to pare down a $15.7 billion deficit.

Consumer health advocates expressed frustration over jeopardizing children’s health coverage in order to balance the budget.

“Our health system in California has taken a wallop,” said Anthony Wright, executive director of Health Access California, a statewide health care consumer advocacy coalition. “The cut to Healthy Families was not wise or appropriate and might not even save money in the long run.”  While Wright recognizes the constraints on the budget, he points a finger at Republicans who are not supporting tax increases.

At the root of the debate are growing pressure on Medi-Cal, which already provides health care services to 4.5 million children, and concerns that there will not be an adequate number of providers to treat the influx of new Medi-Cal members.  

The bills call for all 880,000 Healthy Families children to shift to Medi-Cal coverage within a year, starting Jan. 1. State officials estimate the move will save the state about $13 million in general fund savings in 2012-2013 and  $58 and $73 million during the following two years, respectively.

Wendy Lazarus, founder and co-president of The Children’s Partnership, a bipartisan, non-profit organization, said it is difficult to understand the logic in closing down a “highly successful” health program at the expense of sacrificing $200 million from the Managed Care Organization Assessment — a tax that might expire this month.

“Now it’s up to our governor and legislative leaders to follow through on what they pledged to kids — making sure not a single child is transferred from Healthy Families into Medi-Cal until there is an appropriate provider for that child nearby,” she said. 

Sixty four organizations signed a letter to the governor and Legislature opposing the Healthy Families transition, citing a lack of access as a major sore spot.

While Healthy Families cost much less to administer than Medi-Cal

($50 per recipient compared to $395 for Medi-Cal enrollees) and reimburses providers at a higher rate, bill supporters emphasized that there is no waiting list for Medi-Cal and that it covers children until age 21, compared to 18 in Hrealthy Families.

Sen. Mark Leno (D-San Francisco), who presented the Senate trailer bill on the Senate floor, assured his colleagues that a transition to Medi-Cal would not start until “there is a certainty of adequate medical services; otherwise, we keep children in Healthy Families.”

He stressed the importance of readiness and preparation as key to the bill’s success, adding that the legislature will monitor the transition monthly and make adjustments as needed.

Sen. Anthony Cannella (R-Ceres), an opponent the budget trailer bill, acknowledged that children might “technically” have an opportunity to see a physician under Medi-Cal but if they are not seen, they will not receive proper care. “Medi-Cal is overworked and understaffed and provides low reimbursement (15% to 20% less than in Healthy Families) to providers,” he said.

Sen. Elaine Alquist (D-Santa Clara) who supported the bill, concurred that one of the biggest barriers is whether there will be sufficient providers to serve the new Medi-Cal members.  “We need to conduct due diligence to ensure the transition is done correctly,” she said, emphasizing Leno’s earlier remarks.

Assembly members had much the same reactions as their colleagues in the Senate.

“There must be other ways to save money than transferring children to an inferior program (Medi-Cal),” said Sen. Tony Strickland (R-Thousand Oaks).

“If we need $13 million to support Healthy Families, we’ll find it,” said an adamant Assembly member Sandré Swanson (D-Oakland), one of the few Democrats to oppose the Assembly trailer bill.

“It’s a problem of revenue, not one of spending,” said Assembly member Gilbert Cedilla (D-Los Angeles).

(David Gorn is on vacation.)

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