AM Alert: Considering cuts

Administrators of the Healthy Families program will consider a number of structural changes today in hopes of avoiding cutting coverage for children and teens.

"We have been doing analysis internally and with (audit and assurance advisers) PricewaterhouseCoopers to see which ideas would be feasible and when they could be implemented," said Ginny Puddefoot, deputy director for health policy legislation at the Managed Risk Medical Insurance Board, which runs the program.

Healthy Families, which provides low-cost health insurance to 900,000 children and teens whose families are too poor to qualify for MediCal, has been coping with how to cut costs without curtailing coverage since the Legislature and Gov. Arnold Schwarzenegger slashed $178 million of its funding in the budget revision package.

The 12-year-old program, which was already under financial strain, had to freeze new enrollments for the first time earlier this summer. More than 55,000 applicants had been added to a waiting list as of Aug. 11.

Even in light of an $81 million pledge from the First 5 Commission, MRMIB members said last week that they would have to begin disenrolling children Oct. 1 because of a remaining funding shortfall.

Staff members have been considering potential changes to the benefits, premium levels and co-payments to minimize the effect of the planned disenrollments, Puddefoot said. Several potential solutions will be presented at the board's 10 a.m. meeting today. (You can see the meeting agenda here.)

Some of the proposed changes could require approval from the Legislature. With notices of disenrollment set to go out starting Sept. 1, Puddefoot said administrators are doing all they can to find savings or additional funding in the coming weeks.

"We're all bumped up against the end of the legislative session in a couple of weeks, so that complicates things," Puddefoot said. "We're still hoping to find some way to avoid (disenrollment)."
 

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