05/29/2012 01:06 pm ET

California Budget Cuts: Low-Income Children's Health Care In Danger

This article comes to us courtesy of California Watch

By Stephanie Snyder

Low-income children in rural California communities are in jeopardy of losing their doctors and health care plans under Gov. Jerry Brown's budget proposal, state lawmakers, doctors and health advocates say.

The governor is proposing to transfer nearly 900,000 children enrolled in Healthy Families, the state’s Children’s Health Insurance Program, to Medi-Cal – a program aimed at serving the state’s poorest families, seniors and disabled residents.

While combining the two programs might be a painless transition for children in urban areas with doctors who typically provide care to both Healthy Families and Medi-Cal patients, the transfer could severely limit access to health care for those on the outskirts.

“In the more rural areas or outlying areas, there would be quite a loss or quite a strain,” said Stuart Cohen, a San Diego pediatrician and California chairman-elect for the American Academy of Pediatrics. “Access to care would be a huge issue.”

And there would not be much incentive for rural doctors at full capacity to continue caring for their Healthy Families children if they have not already agreed to serve Medi-Cal patients, Cohen said.

The governor’s proposal not only forces Healthy Families patients to move to Medi-Cal, but it also would require doctors to accept Medi-Cal’s monthly reimbursement – an average cut of nearly 20 percent.

Healthy Families doctors receive a monthly average of $103 per patient. They would receive an average of $84 per patient if they decide to make the switch to Medi-Cal, but California Medical Association spokeswoman Molly Weedn said the reimbursement often can be much less.

“Rates that physicians are reimbursed for a Medi-Cal patient are less than what a large pizza costs,” she said. “It’s really incredible that a physician can be reimbursed $18, $20 (per month).”

A survey referenced by the Legislative Analyst’s Office asked pediatricians who now provide care to Healthy Families patients, but not Medi-Cal patients, if they would be willing to make the switch. The February report said 29 percent would not and 46 percent were not sure.

Anthony Wright, executive director at Health Access California, a health care advocacy group, said there likely would be a disruption of care for Healthy Families patients in rural areas when their doctors face the decision of whether they can accept a smaller payment.

“People have doctors, they have networks of physicians, children are getting care as we speak,” Wright said. “Will they have access to the same physicians if they’re in the middle of treatment?”

Assemblyman Bill Monning, D-Monterey, said the health department addressed questions about access to care during last week's budget subcommittee meetings.

“There’s no program that isn’t facing cuts or reductions and yet when you look in the area of health and human services we have to be mindful of the imminent consequences,” said Monning, who is a member of the health subcommittee. “We understand the need to achieve savings, but at what cost?”

Legislators hope to find some middle ground on the issue of children's health care as the governor attempts to reduce the state's $15.7 billion deficit. The Senate budget subcommittee on health voted last week to support an alternative plan, and the Assembly budget subcommittee is expected to follow suit, Monning said.

Opponents to the governor’s proposal say the state should transfer to Medi-Cal only the approximately 186,000 Healthy Families patients from families earning less than 133 percent of the federal poverty level. That switch already is expected under the federal Patient Protection and Affordable Care Act when state Medicaid programs are required to expand eligibility in 2014.

“We already face shortages in rural areas of providers – not only in primary care, but specialty services and providers,” Monning said. “We have to be very cautious that we don’t maneuver ourselves out of access for families. … You can’t move children who are currently in Healthy Families to an environment where there aren’t providers that accept Medi-Cal.”

In every county, Healthy Families provides a managed health care plan to children whose family income is too high to qualify for Medi-Cal. But Medi-Cal provides children with health care plans in only a little more than half of the state’s counties. The rest, mostly in rural areas along the northern and eastern borders, do not offer that option.

The governor plans to start expanding Medi-Cal managed health care plans to all counties, but not until June 2013 – six months after rural Healthy Families patients would be moved to Medi-Cal without a health plan, according to the report.

The proposal to move all 878,000 patients enrolled in Healthy Families to Medi-Cal creates several administrative concerns by transitioning too many kids too quickly, said Cohen, the San Diego pediatrician.

“We don’t think that the state has the capacity to smoothly transfer all of the patients at once,” Cohen said. “The only one that’s not in agreement is the governor’s office.”

But there would be some benefits to combining the programs, he said.

Medi-Cal patients are treated with a “richer benefits plan,” Cohen said. Unlike the Healthy Families program, children would be have greater access to free vaccinations and speech and developmental treatment, Cohen said.

Combining Healthy Families with Medi-Cal also could improve continuity of care for some families that have varying annual incomes or children of different ages, which can force a parent to have to float between programs or have children in different programs.

Age and family income are both considered in determining in which health care program a child can enroll, said Department of Health Care Services spokesman Anthony Cava. For children older than 6, their family of four would have to earn more than $22,350 per year but less than $55,875 to be enrolled in Healthy Families. Families earning less than $22,350 would receive care through Medi-Cal.

Access to care is a concern with such a large potential transition of patients, said Wright, of Health Access. But transitioning a smaller number of children to Medi-Cal would help “work out some kinks,” especially since “many of those families may have been or will be in Medi-Cal in the near future,” Wright said.

“We are going to make the transitions we need to make sure that access is protected,” he said. “The issue is there are some key questions that we need to find out about.”

Stephanie Snyder is an investigative reporter for California Watch, a project of the non-profit Center for Investigative reporting. Find more California Watch stories here.