Joint Authors of Bill to Restore Healthy Families and Medi-Cal Managed Care Organization (MCO) Tax Stress Bill’s Importance

SB 301 will reinstate MCO Tax and protect access to health care for children
Wednesday, August 29, 2012

Democrats and Republicans have joined together to author a bill to reinstate the successful Healthy Families Program, while also renewing the MCO tax.  SB 301 (DeSaulnier, Cannella, Pavley, Rubio, Strickland and Yee) is currently in the Assembly Health Committee and is awaiting a hearing as the legislative deadline to send bills to Governor Brown’s desk fast approaches. 

The Healthy Families Program was created to provide critical health care coverage to children during the early stages in their lives. Since its inception over a decade ago, the Healthy Families program has been far more successful than Medi-Cal in ensuring timely access to care.  In June, as part of the budget, the Legislature voted to eliminate the program and move all 900,000 children to Medi-Cal. 

“Fifteen years ago, the Healthy Families Program was created through a bipartisan coalition.  Today, we have a bipartisan effort to save a highly successful program and at the same time fill a $180 million hole in the budget,” said Senator Mark DeSaulnier, Chair of the Senate Budget Subcommittee No. 3 on Health and Human Services. 

“I opposed the elimination of Healthy Families from the start. I am willing to do all I can to reinstate the program and protect the medical care of the 21,000 children from my district that are enrolled. We know Healthy Families works. The bipartisan support of the bill is testament to the program’s value,” said Senator Anthony Cannella (R-Ceres).

Senator Fran Pavley (D-Agoura Hills) said, “CA Healthy Families Program has been one of the best public health programs in the nation.  Moving nearly 900,000 kids to MediCal, an already underfunded health care program for the poor, will impede children’s access to care and continuation of treatment with pediatricians.  Shifting children out of a popular and exceedingly successful program, with no guarantee of better service and providers, is pennywise and pound foolish.”

“I am pleased that so many of my colleagues—both Democrats and Republicans—have agreed to author and co-author this important legislation to restore funding for Healthy Families,” Senator Michael J. Rubio (D-Shafter) said.  “The MCO tax is a natural avenue to help fund this successful public health insurance program for kids just above the federal poverty line.”

“Healthy Families has been incredibly successful and saves the state money, but more importantly, the program provides necessary and quality health care for some of our most vulnerable kids.  As someone who voted against the elimination of Healthy Families, I believe it is imperative that we approve SB 301 and save this critical program,” said Senator Leland Yee (D-San Francisco/San Mateo).

Moving all the Healthy Families children to the Medi-Cal program will severely impact access to health care for the 4.5 million children who are currently in both programs.  The elimination of the Healthy Families program will undoubtedly force families to find new physicians for their children.  Some in rural counties will have to travel tens of miles to find a physician able to accept new Medi-Cal patients. 

The budget savings in eliminating Healthy Families was only $13 million.  It has now become clear that with the elimination of Healthy Families, there are not sufficient votes to extend the MCO tax, a tax that generates over $180 million annually.  This money has already been scored as part of the budget passed earlier this summer. With the reinstatement of Healthy Families, there is bipartisan support to also reinstate the tax. 

The $180 million budget shortfall makes it even more imperative that SB 301 not only be heard in committee, but also be passed down to the Governor’s office for signature.  SB 301 is currently awaiting a hearing in the Assembly Health Committee. 

In addition to its bipartisan joint authors, SB 301 is also co-authored by Senator Emmerson, and Assembly Members Pan, Swanson, Perea, V. Manuel Pérez, Wieckowski, and Williams.  There is also an identical companion measure, AB 826 (Swanson, Williams and Perea), that is awaiting referral to a policy committee in the Senate.