Last week, California's Assembly voted 62-5 to approve a measure (AB 1422) designed to keep about 660,000 children enrolled in Healthy Families, the state's Children's Health Insurance Program, the Los Angeles Times reports.
The bill previously received Senate approval (McGreevy/Bailey, Los Angeles Times, 9/4). It now goes to Gov. Arnold Schwarzenegger (R), who pledged to sign the measure (Sanders, Sacramento Bee, 9/4).
Assembly Speaker Karen Bass (D-Los Angeles), who co-authored the bill, praised Democratic and Republican lawmakers for joining together to support the proposal (Los Angeles Times, 9/4).
Taxing Health Plans
The measure aims to restore funding losses after a July budget revision package and Schwarzenegger's line-item vetoes cut about $175 million from Healthy Families.
To offset those cuts, AB 1422 would impose a 2.35% tax on health plans that administer benefits for Medi-Cal, California's Medicaid program.
The new levy would replace the current 5.5% tax on insurers that is scheduled to expire in October (Steinhauer, New York Times, 9/4).
In addition to generating $157 million in revenue, the new tax will help the state draw down an additional $97 million in federal matching funds.
The new fees are scheduled to remain in place for two years (Herdt, Ventura County Star, 9/4).
Health insurers did not oppose the measure because it would help them obtain higher Medi-Cal reimbursements from the state (Yi, San Francisco Chronicle, 9/4).
Additional Funds
AB 1422 also aims to raise $17.6 million for Healthy Families by imposing higher premiums and copayments for participants.
The bill would increase monthly premiums by $4 to $7 per child for certain families. Families earning less than 150% of the federal poverty level would not face premium increases (New York Times, 9/4).
The First 5 California Commission, which oversees early childhood health and education programs in the state, also has pledged to contribute more than $81 million to keep Healthy Families afloat (Theriault, San Jose Mercury News, 9/3).
Disenrollment Plans Suspended
Officials say the new funding could help the Managed Risk Medical Insurance Board avoid dropping children from Healthy Families.
MRMIB previously planned to begin sending disenrollment notices at the beginning of September.
However, Ginny Puddefoot, MRMIB deputy director for health policy legislation, said the board would postpone the disenrollment process for at least another month (Van Oot, "Capitol Alert," Sacramento Bee, 8/28).
About 71,000 children have been placed on a wait list since MRMIB froze enrollment for Healthy Families in mid-July (New York Times, 9/4).
Editorial
AB 1422 is "better than doing nothing, but it is only a temporary solution that kicks the can down the road when the tax provisions sunset on Jan. 1, 2011," a Capitol Weekly editorial states.
The editorial continues, "By replacing definite state funding with time-limited dollars, the Legislature practically guarantees we'll be back having this discussion next year" (Capitol Weekly, 9/3).
Broadcast Coverage
Headlines and links for broadcast coverage of AB 1422 are provided below.
- "Healthy Families Bill Passes With Bipartisan Support" (Weiss, "KXJZ News," Capitol Public Radio, 9/3).
- "Funds for State's Health Insurance for Kids Replenished" (Small, "KPCC News," KPCC, 9/3).
- "'Healthy Families' Copays, Premiums Raised To Keep Program Afloat" (Small, "KPCC News," KPCC, 8/27).