Despite First 5 Funding, as Many as 800,000 Kids Could Lose Access to Healthy Families Coverage

Children who are eligible for low-cost health coverage through the Healthy Families Program got some good news and some bad news today.

First, the good news: Meeting in Sacramento, the First 5 California Children and Families Commission voted to provide up to $81.4 million of its own tobacco-tax dollars to support enrollment of approximately 200,000 children from birth through age 5 in Healthy Families between August 13, 2009 and June 30, 2010. These First 5 funds will partially close a $194 million state funding shortfall (which primarily stems from cuts included in the July budget agreement); reduce the number of children placed on the Healthy Families waiting list (which was implemented on July 17); and reduce the number of children who eventually could be removed from the program.

Which brings us to the bad news: The Managed Risk Medical Insurance Board (MRMIB), which oversees Healthy Families, voted today to remove children from Healthy Families starting October 1 in order to further reduce program spending and help close the state funding gap. Under this action, families would begin receiving notice of this change in early September. According to an analysis by MRMIB, nearly 670,000 children could be dropped from Healthy Families between October 1, 2009 and June 30, 2010, although it is not clear how many of those children will be supported with First 5 funds and thereby avoid being removed from the program. MRMIB also reviewed other cost-cutting strategies, including eliminating certain Healthy Families benefits and shifting more costs to families, but postponed action on those options pending further analysis. MRMIB is currently scheduled to meet again on August 20 and August 27, at which point the timing of or the need for disenrollment could be revisited.

The bottom line: First 5’s funding will allow about 200,000 children through age 5 who were at risk of losing access to Healthy Families coverage to enroll or remain in the program through next June. However, as many as 800,000 other children could end up on the Healthy Families waiting list or be removed from the program unless additional funds are found to help close the state funding shortfall.

— Scott Graves and Raul Macias

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