Another Good News, Bad News Day for the Healthy Families Program

Children at risk of being dropped from the Healthy Families Program in October got a reprieve today. The Managed Risk Medical Insurance Board (MRMIB), which administers the program, voted to delay the start date for disenrollments by one month, to November 1, with tens of thousands of children removed every month. MRMIB estimates that more than 650,000 kids will be dropped from Healthy Families between November 2009 and June 2010, unless additional funds are found to help close the state funding shortfall that the program faces in 2009-10 largely due to state budget cuts. The shortfall exceeded $190 million until the state First 5 Commission voted earlier this month to provide $81 million to support enrollment of about 200,000 children from birth to age 5 in Healthy Families through June 2010. However, this contribution still leaves a shortfall of more than $110 million, which is why dropping children from the program remains on the table and why the waiting list implemented on July 17 continues to grow, with more than 70,000 kids on the list as of August 25.

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).

— Scott Graves

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