Campaign Update
Friday, January 11, 2008

Governor’s Budget Undermines Children's Health

The 2008-2009 budget proposal is inconsistent with Governor Schwarzenegger's commitment to reform our health care system and to provide health insurance for all California children. For more than a year, the Governor has been actively negotiating a compromise health care reform plan that ensures affordable access to health insurance for all California children, and Californians for Healthy Kids has applauded those efforts. It simply doesn't make sense for California to move forward with a state budget that undermines the foundation of the health care reform plan and puts children's health at risk.

While the overall impact of the budget proposal is harmful to kids' coverage, one bright spot is the inclusion of funding to implement the reforms in SB 437 (Escutia, 2006) to streamline eligibility and enrollment for children's programs – a total of $17.8 million in Medi-Cal and $2.1 million in Healthy Families.

The Governor's budget proposals negatively impacting children's health coverage include:

• Reinstatement of quarterly status reports in Medi-Cal for children and parents:
  Children must currently prove eligibility for Medi-Cal on an annual basis, and parents on a semi-annual basis. The proposed budget would reinstate quarterly status reports, which would require children and parents to submit eligibility verification documents every three months. Previous state experience with quarterly reporting has demonstrated significant administrative burden and cost, as well as “churning” of children in and out of programs unnecessarily.

• Increases to Healthy Families premiums and co-pays:
  The budget proposes premium increases of $7 (a 78% increase) for children in families at 150-200% of federal poverty level (FPL) and $4 (a 27% increase) for children in families at 200-250% FPL. There is also a proposed increase in non-prevention copayments to $7.50 (a 50% increase) for those above 150% FPL. Research shows that any increase in cost-sharing in public programs negatively impacts enrollment in the program and can hinder a child's ability to receive the care and services they need.

• Limits on dental care for children in Healthy Families:
  The budget proposes a $1,000 cap on Healthy Families dental coverage per child per year, estimated to affect 5% of children enrolled in the program. Poor oral health can lead to missed school days and systemic health problems.

• Provider and plan cuts in the Medi-Cal and Healthy Families Programs:
  The Governor's budget proposes a 5% rate cut to Healthy Families health plan providers, and a total of $33.4 million in 07-08 and $602.4 million in 08-09 in Medi-Cal reimbursement rate reductions for physicians and other medical and service providers. These reimbursement rate decreases – compounding already very low reimbursement rates – are a disincentive for providers and plans to continue serving low-income children.

• County administrative cuts:
  A proposed 10% cut undermines county administration of many of the public programs so vital to children's health, at the same time that counties are being asked to implement quarterly status reporting.

• No reinstatement of funding for children's health county outreach grants:
  These grants – which were also cut in last year's budget – would have funded local efforts to reach tens of thousands of children currently eligible for, but not enrolled in, Medi-Cal and Healthy Families.

As we continue to urge our policymakers to push forward on health care reform, today's budget cuts are an unfortunate step backwards from the shared goal of covering all children in our state. In fact, the Governor's proposed cuts emphasize the importance of approving the health care reform proposal put forth by the Governor and Speaker Núñez, which would cover all children in California starting in 2009. While some would argue that we should not move forward with health care reform during this budget crisis, the reality is that the proposed reform does not add to our state's budget burdens and, in fact, would help to insulate vital health programs from future budget deficits with its creation of new, dedicated revenue sources.

• Click here for the press statement from Californians for Healthy Kids in response to the Governor's budget proposals.

Thank you for your continued efforts to ensure all California children have access to quality, affordable and comprehensive health insurance coverage!

For more information, please contact Krystal Moreno Lee at klee@childrennow.org or 916-443-1680.

The 100% Campaign, a collaborative effort of The Children's Partnership, Children Now and Children's Defense Fund, was created to ensure that all of California's children obtain the health insurance they need to grow up strong and healthy.
www.100percentcampaign.org

The PICO California Project is the united effort of 20 California congregation-community organizations affiliated with the PICO National Network. Collectively, we represent 350 congregations and 400,000 families statewide and are actively organizing in over 70 cities in Northern and Southern California.
www.picocalifornia.org