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Sacramento Bee
By
Aurelio Rojas
October 7, 2007
President Bush's veto of a bill that would have allowed California to achieve near-universal health care for children comes at a critical juncture in the state.
Employer-based coverage is decreasing, enrollment in the state's Healthy Families program is increasing and efforts by Gov. Arnold Schwarzenegger and Democrats to overhaul the health care system have not yielded a solution a month into a special legislative session.
Moreover, new Bush administration rules would make it harder for California to enroll children from middle-income families in Healthy Families.
"For Schwarzenegger and (Democrats), Healthy Families is a big part of health reform," said Peter Harbage, a consultant who has prepared a study for the California Healthcare Foundation on the possible impact of reduced funding from the federal State Children's Health Insurance Program.
SCHIP provides $2 for every $1 the state spends on its Healthy Families program for children. But a $60 billion, five-year extension of SCHIP approved by Congress with bipartisan support was vetoed last week by the president.
Bush, who warned the legislation would lead to socialized medicine by expanding the program to higher-income families, has proposed spending $30 billion, a 20 percent increase over current levels. With increasing medical costs, analysts say that's not enough to maintain current enrollment levels.
Bush signaled a willingness Saturday in his weekly radio address to spend more than what he had recommended but provided no specifics on how much higher he would go, the Associated Press reported.
Although funding for SCHIP technically expired Sept. 30, Congress and the president have agreed on a temporary extension until Nov. 16 while they negotiate a compromise. The outcome will have a big impact in California, which accounts for nearly one of every six SCHIP recipients nationwide.
Healthy Families covers about 831,000 children in California. But another 800,000 children are uninsured, and the Schwarzenegger administration has been counting on an expansion of SCHIP to help cover them.
Schwarzenegger, who lobbied the White House to adopt the congressional proposal, said in a statement that "without additional funding, hundreds of thousands of California children could lose health care coverage."
According to the California Healthcare Foundation study, if SCHIP funding remains at current levels, Healthy Families will run out of money next summer.
Even if Congress and the president agree to an interim approach, the delay in full funding may force Healthy Families to limit enrollment this year.
Lesley Cummings, who runs the Healthy Families program, said that without additional funding, the administration is weighing several options that are all painful.
"We never expected this because the (SCHIP) re-authorization had such bipartisan support," Cummings said.
The timing could not be worse for the state. Between 2001 and 2005, the percentage of Californians who received coverage from private employers declined to 58 percent from 61 percent.
That has contributed to increasing reliance on Healthy Families, which experienced a 15 percent jump in enrollment between August 2006 and August 2007.
As part of their proposals to reduce the ranks of the 6.7 million Californians without coverage, Schwarzenegger and Democratic leaders want to expand eligibility in the program from 250 percent to 300 percent of the federal poverty level.
That would allow a family of four that earns $62,000 a year to enroll their children in Healthy Families.
But new regulations announced last month by the Bush administration would prevent states from enrolling children whose families earn more than 2 1/2 times the poverty level -- $51,625 for a family of four -- until the children have been uninsured for at least a year.
Cummings said the regulation would significantly disadvantage California because of the high cost of living in the state.
Another rule would prevent states from enrolling children in SCHIP programs unless they have enrolled at least 95 percent of eligible children from families earning less than double the poverty level -- $41,300 for a family of four.
The rule is designed to discourage employers from dropping coverage and "crowding out" private insurers.
But Harbage said California already has several regulations to stem this practice, including prohibiting children from being enrolled in Healthy Families until they have been without coverage for three months.
"There's no parent nor employer who is going to say, 'We're going to be uninsured for three months so we can get this free insurance,' " Harbage said.
Sabrina Lockhart, a spokeswoman for the governor, said the state will file a brief in support of a lawsuit that is being filed by six other states challenging the new regulations.
Meanwhile, the more than 30 local health initiatives that have helped reduce the number of uninsured children in the state are running out of money.
The programs are funded by local and state contributions as well as foundations and tobacco tax revenues.
"These programs have always been viewed as transitional and they can't keep going without a solution," said Wendy Lazarus, co-president of the Children's Partnership, an advocacy group. "Unless something is done, we're going to slide backward."
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