New America Media, News Report, Jonah Most, Posted: Jun 27, 2012

In a budget compromise announced last Thursday California Governor Jerry Brown plans to phase out the state’s Healthy Family’s program, a subsidized health insurance program that provides coverage for nearly 900,000 California youth.

Under Governor Brown’s plan, which will be voted on later this week, members of the Healthy Families program will be transferred to Medical, the state’s version of the federal Medicaid program.

The termination of this program is accompanied by cuts to a wide array of social services and entitlements and is part of a compromise deal with state Democrats to close this year’s $15.7 billion budget gap.

Eliminating the program will have a particularly strong impact on Latino residents, according to Chad Silva, policy director at the Latino Coalition for a Healthy California. Silva notes Latinos comprise 46 percent of Healthy Families beneficiaries statewide, and make up 82 percent of participants, or around 165,000 youth, in the Los Angels Area.

Healthy Families provides access to health care for young people whose families earn too much to qualify for Medical but cannot otherwise afford private insurance.

A coalition of 64 organizations, including the California Medical Association and the Children’s Health Coverage Coalition, is rallying this week to prevent this provision of the budget from becoming law.

“There is growing outrage with a budget deal reached by the Governor and legislative leaders last week. It jeopardizes access to health care for California's most vulnerable children,” the groups wrote in a joint statement.

Stuart Cohen, a California pediatrician and the Chairman-Elect for the American Academy of Pediatrics, warned of the drawbacks of the transition to Medical coverage, calling such a move “a possible nightmare.” Medical is already severely strained administratively and many doctors who accept Medical do not have room for new patients.

Particularly in rural areas it can be difficult to find doctors who accept Medical, which pays lower rates for services to care providers than Healthy Families. Many youth would have to switch doctors and the transition may result in an interruption of care.

Jacqueline Dandeneau, whose children have been covered by both Healthy Families and Medical, understand the limitations of the latter. A resident of rural Humboldt County, she said that few doctors accept Medical and she sometimes has to endure long waits for care or drive several hours to find a doctor for her children.

“I have not been able to get a dental appointment,” said Dandeneau, who participated in a teleconference Monday afternoon organized by several health advocacy organizations. “It’s not really set up as a system for a working family,” she said.

Cohen instead supports following a plan outlined in the Federal Affordable Care Act, which would provide a more modest transition of patients to Medical, a plan that could be derailed by a Supreme Court ruling on the law expected this Thursday.

Governor Brown, who campaigned for office promising to restore fiscal sanity to the state, contends that cuts to this and other valuable programs are necessary. The Governor’s office projects that cutting the program will save $13 million this year, and $50-70 million in following years.

“This agreement strongly positions the state to withstand the economic challenges and uncertainties ahead,” Governor Brown said in a statement released by his office. “We have restructured and downsized our prison system, moved government closer to the people, made billions in difficult cuts.”

Critics of the proposal contest Brown’s projections and argue the proposal makes little fiscal sense. Anthony Wright, director of Health Access, cited a $200 million tax on the insurance industry that is linked to the program, which the state may lose if Healthy Families is eliminated.

Healthy Families is also supported by a 2-1 federal match program, so the savings the would come from eliminating the program would have an negative effect on funding levels for youth by a factor of three.

“There are risks to the children with regard to the transition,” Wright said in the teleconference, “but there are also risks to our budget.”