Gov. Jerry Brown apparently has persuaded Democratic lawmakers to fold Healthy Families, a successful program that provides health care for 900,000 children, into Medi-Cal, a program that is troubled.
On its face, the change makes little sense. The shift will save a modest $13 million this year and in essence end a program that for 15 years has worked. But in the context of other cuts, perhaps Brown, Senate President Pro Tem Darrell Steinberg and Assembly Speaker John A. Pérez had little choice.
There was no good option, as they saw it. They could merge Healthy Families with Medi-Cal, or make deeper cuts to child care for welfare recipients, and further reduce in-home supportive services for elderly and disabled people who are trying to avoid going into nursing homes.
An unusual coalition of critics emerged Thursday, after Brown, Steinberg and Pérez announced that they had reached the agreement. Health care advocates and Republican legislators, who generally don't agree on much of anything, blasted the deal.
The liberal labor-backed group Health Access California likes Healthy Families because it works. GOP legislators like it for that reason and also because Gov. Pete Wilson leveraged federal aid to create Healthy Families in 1997.
A major expansion of health care, Healthy Families initially provided medical services to children whose parents earned 200 percent of the federal poverty level, a level increased under Gray Davis to 250 percent of federal poverty, currently $47,700 a year for a family of three.
Wilson insisted that the program be a partnership between the state and private health insurance companies. He specifically did not want it to be part of the Medi-Cal system. Davis and Gov. Arnold Schwarzenegger concurred.
Seeing an opportunity to save money and perhaps simplify health care delivery for poor Californians, Brown began advocating for the merger last year. Lawmakers rejected that, but the governor persisted this year.
Senate and Assembly budget committees rejected the concept this year. But in a reflection of the increased power of the governor and the two Democratic legislative leaders, and the diminished stature of the budget committee system, Brown and the two Democratic leaders struck the Healthy Families deal in their final negotiations, behind closed doors.
The Legislature is expected to vote Tuesday on the change. Whether lawmakers will read the bill, or fully understand the implications is not clear.
Only one member of the Legislature was in office in 1997 when Healthy Families was created. As of Friday, the legislation that would implement the change was not publicly available.
Questions remain, not the least of which is how will the state ensure that Healthy Families children can continue to see their doctors.
The shift of 900,000 children would be phased in between now and the end of 2013. Counties would be required to provide assurances that health services would be available to any Healthy Families child who is moved onto Medi-Cal.
To help encourage more physicians to treat Medi-Cal patients, rates for some providers would be increased. But the overall savings seem small compared to the risk, $13.1 million this year, growing to $73 million two years from now.
Insurance companies pay a $183 million annual tax to help fund Healthy Families. That tax is due to expire this year, and Republicans might not provide the votes required to reach a two-thirds majority needed to approve a tax. Without the tax, it's questionable that any money would be saved. If the tax isn't extended, the shift should be put on hold.
Administration officials promise that health care services will not be interrupted and that children of low-income working parents will continue to receive medical care. That will be the test of the success of this change.
Legislators need to hold the administration to its word.