State may cut federally funded health insurance for children

by Lesley Politi on June 11, 2009

More news on cutting Childrens Health Care to save money for the State.


Thomas Bustos, who is 11, doesn’t understand what health insurance is. All he knows about the proposed elimination of the state program that covers him and his 9-year-old brother is his mother is scared.

In an avalanche of cuts to California’s budget, Gov. Arnold Schwarzenegger’s proposed elimination of the Healthy Families insurance program juts out like a razor-edged boulder. California would become the first in the nation to eliminate a program — funded by the federal government and individual states — providing medical, dental and vision care to children in families who don’t qualify for Medicaid. That encompasses about 910,167 children across the state and 20,632 in Ventura County.

To qualify, a single parent with two children ages 6 through 18, must make at least $18,324 and no more than $45,780.

Misty Navarro, Thomas’ mother, makes $18 an hour as an office supervisor in a pediatric clinic. In Healthy Families, her premium is $12 a month. Without the program, she could cover her kids through her employer but it would cost $300 a month.

She doesn’t have the money. She will barely make the $750 a month rent for the Santa Paula town home the family is moving into thanks to a government housing program.

Like many others in Healthy Families, if the program is cut she would likely end up on Medi-Cal’s shared cost program, meaning her kids might have to rack up as much as $1,500 in healthcare in a month before the government would pay.

Essentially, she’d be uninsured, scrambling to find ways to continue the treatment Thomas gets to control his weight and minimize his risk of diabetes. If he needed two $1,200 CT scans like he did after jumping off a table when he was 3, she’d be cooked.

“You’re putting yourself in debt,” she said. “It’s awful to have medical bills.”

Minimize the damage

The proposal is just that. Advocates expect Democratic legislative leaders to fight to keep at least part of the program but predict the possibility of significant cuts.

The early childhood program, First 5, bailed out Healthy Families a year ago when the state was considering freezing the program because of a $17 million shortfall. A First 5 Ventura County spokeswoman said officials are waiting to see final cuts to various children’s programs before deciding how to respond. But if the program that costs the state $400 million is eliminated, a complete rescue would be financially impossible.

“It’s way beyond our capacity,” said Robin Godfrey, local director of special projects.

Ventura County Health Care Agency officials are trying to make sure that even if families do lose insurance, they continue to bring their children to county clinics designed to serve as a safety net for the vulnerable. They cite other state programs that provide funding for immunizations, screenings and care for children with chronic conditions like diabetes. They said they work with parents in self-pay discount programs to keep care affordable.

Even without Healthy Families, children will still be able to get the care they need, said Dr. Michelle Laba, medical director of the county’s Mandalay Bay Women and Children’s Medical Group in Oxnard.

“Our focus and goal is to take care of a patient regardless of their ability to pay,” she said. “That’s what we work with on a day-to-day basis.”

Quitting jobs

Observers predict there would be increases not only at county clinics but also at other community clinics, urgent care centers and emergency rooms. The facilities are designed to deal with the growing number of people who have no place else to go, but higher traffic could eventually bring longer wait times and a heightened temptation to put off care.

There could be a dramatic increase in children who don’t get preventive care and end up fighting diabetes, asthma or obesity, said Dr. Heather Nichols, a Santa Paula pediatrician.

Parents might also pursue desperate ends. They might quit their jobs just so they qualify for full Medi-Cal benefits though eligibility could tighten in other budget cut proposals. Or married couples might get divorced to lower their income and give their children a better shot at care.

“I think they would find loopholes,” Nichols said.

Across the state, about 53 percent of the children covered by Healthy Families are Latino. Some providers predict some of those families would take their children south of the border to have tonsils or appendixes removed.

“They’re going to show up at emergency rooms. They’re going to show up at health centers and some are going to show up in Mexico, in Tijuana,” said Antonio Alatorre, chief operating officer for Clinicas Camino del Real, a group of community clinics in Ventura County.

Possible layoffs

Hospitals and clinics already face harsh budget cuts. Eliminating Healthy Families could cost the county about $8 million from lost revenues and the cost of providing uncompensated care.

If the proposed cut isn’t averted, there’s at least a possibility it could bring layoffs, said Mike Powers, director of the Health Care Agency. He wouldn’t speculate where jobs might be lost.

“What I’m also saying is we have to watch it unfold,” he said. “It’s a possibility. We don’t want to over-react to proposals. Layoffs are a last, last resort.”

Clinicas is suing the state to try to stop Medi-Cal cuts eliminating coverage for adult dental care, optometry, mental health and many other services. Officials of the community clinic group said the cuts could bring as many as 150 layoffs.

Eliminating Healthy Families would mean the loss of about $1 million in revenue for Clinicas and as much as another $1 million in added cost for caring for uninsured children. That could mean even more layoffs.

Advocates of Healthy Family talk of how cutting the program would eliminate as much as $800 million in matching money from the federal government. They talk of how eliminating the program jeopardizes preventive treatment that helps drive down the societal cost of healthcare. They talk most about children.

“We would basically just be punishing children for their parents’ poverty,” said Nichols.

No defense

What’s startling is the people proposing the cuts don’t challenge any of the assertions. H.D. Palmer, spokesman for the California Department of Finance, said eliminating Healthy Families would have been unthinkable as recently as four months ago.

But the state faces a projected $24 billion shortfall and voters rejected a tax increase extension and other proposed budget balancing measures.

“The fact that we can put this god-awful proposal on the table is a testament to how dramatically the recession has affected this state,” said Palmer, adding that state officials understand the consequences. “The governor is acutely aware of the impact. He gets up in the middle of the night worrying about it.”

The proposed budget hit list is long. It includes eliminating the state’s welfare program, closing nearly all state parks and eliminating home healthcare for hundreds of thousands of seniors and disabled people.

“It’s awfully tough choices and few alternatives,” said taxpayers advocate Jere Robings of Thousand Oaks, fielding questions about Healthy Families. “If there is no money, there is no money.”


Cutting such programs will leave about 910,000 children without any health care. Its nice to see what the Mandalay Bay Woman & Childrens center said, they would still provide care for the children even without Healthy Familes.



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