Given the major hits that the Healthy Families program took in the last budget revision, it’s sort of good news that the program is trying to find ways to keep almost half a million kids from being dropped from the insurance rolls.  How did they manage to do that?

California legislators have apparently reached a bipartisan solution to prevent more than half a million children from being cut from the Healthy Families public health insurance program.

The Senate Appropriations Committee voted Thursday to send the proposal to the full Senate. All but two Republicans on the committee – one was absent – voted with Democrats to move it to the floor. Gov. Arnold Schwarzenegger also supports the measure, said spokeswoman Rachel Cameron.

The state board that manages the programs had planned to begin sending disenrollment notices next week to the first wave of children set to lose coverage but decided Thursday to delay the move for a month.

The bill, which surfaced this week, would raise money for Healthy Families by having participating families share more of the costs of coverage and extending a gross premiums tax on companies that manage Medi-Cal insurance plans.

What’s this now?  A tax?  On corporations?  Well, the tax already exists.  It was due to end October 1, but this measure would extend the tax, and also LOWER it, from 5% down to 2%.  The California Association of Health Plans (the state insurance lobby) supports the bill, and if my business’ taxation were going down while I got credit for saving children’s health care (a far higher sum of money to keep Healthy Families alive comes from the First Five Commission, not this lowered tax).  Also, dental insurers got an exemption from this tax because Dave Cox wanted it.  So anyone who thinks this vote, requiring 2/3 in both houses, will be smooth sailing, industry opposition or not, is dreaming.

As stated in the article, the bill would increase premiums and co-pays for participating families, who opt into the Healthy Families program because they cannot currently afford coverage.  The Managed Risk Medical Insurance Board (MRMIB) set out cost-saving measures that would force higher costs on low-income Californians.

MRMIB also adopted four emergency regulations to trim program spending, three of which increase families’ out-of-pocket costs for Healthy Families services. Beginning November 1, families will pay higher copays for non-preventive health, dental, and vision services; prescription drugs; and emergency room visits that do not result in hospitalization. For example, families will pay $15 for using the emergency room, up from the current $5. A fourth emergency regulation requires families to enroll in the lowest-cost dental plans for their first two years on the program, at which point families could shift to a higher-cost plan. These four changes will generate net savings of $12 million in 2009-10, according to MRMIB estimates. MRMIB did not take action on a staff proposal to increase families’ premiums for savings of $5.5 million in 2009-10, because the increases are included in a bill currently moving through the Legislature (AB 1422, Bass).

I’m pleased action is being taken so that low-income kids in this state can have health insurance coverage; in the long run, we save money by allowing them consistent and preventive care instead of paying for it collectively through ER visits.  But poor families may not be able to use the coverage they get through Healthy Families if the premiums go too high.  And really, we’re talking about $100 million dollars to cover kids when the state shoveled $1.5 billion annually to the largest corporations in America, none of whom are thinking of abandoning 38 million potential customers in the nation’s largest state.  It comes down to priorities.

P.S. The Legislature took action on some other health-related bills this week.  Some decent bills may get to the Governor’s desk, but others were killed.  Cynthia Craft of Health Access has a roundup.