Healthy Families Program Changes Co-Pays, Delays Disenrollments
The California Managed Risk Medical Insurance Board (MRMIB), which oversees the state’s Healthy Families Program, met on August 27 to approve some increases in co-payments for select services. Additionally the Board adopted a resolution to move back the October disenrollment date for all participants.
MRMIB took four actions to modify the program:
Co-Pays: MRMIB adopted emergency regulations to levy $5 co-pays for all health, dental, and vision visits. Current participants now pay a $5 co-pay for office visits and are were required to make a co-payment for preventative services.
Emergency Room Co-Pays: MRMIB also increased the co-payment for emergency room visits from $5 to $15.
Prescription Drug Co-Pays. Co-payments for prescription drugs were raised from $5 for a two-tiered system: $10 for generic prescription drugs and $15 for brand-name prescription drugs, unless no generic version is available, at which time the co-pay would be $10 for a brand-name drug.
Dental Plan Choice. MRMIB adopted emergency regulations to require new enrollees to enroll in a dental maintenance organization for the first two years of participation, after which time they may choose any plan available in their service area. This proposal is similar to the benefit structure for new state employees, and MRMIB intends to designate one or more plans with the lowest subscriber costs in each service area. This change will take time to implement and may not result in immediate savings for the program, as new enrollment is currently closed.
These actions, coupled with an up to $81.4 million cash infusion from the California Children and Families Commission (also known as First 5 California) for children up to age five, will allow MRMIB to delay sending disenrollment notices to participants until October 1, which would result in disenrollments starting on November 1. The Board had previously approved the disenrollment notices to go out a month earlier – on September 1 – for October disenrollments.
MRMIB has struggled mightily to identify potential funding to backfill the nearly $194 million General Fund shortfall to the Healthy Families Program. The program utilizes federal and state funding to offer low-cost health insurance for children in families who do not qualify for Medi-Cal and whose family income falls below 250 percent of the federal poverty level. The program has been buffeted by a series of significant budget cuts, including a $124 million cut for fiscal year 2009-10 approved by the Legislature, an additional $50 million line item veto by the Governor last month, and a $20 million operating shortfall – for a total shortfall of $194 million.
Supporters of the program are now looking to state legislation, specifically AB 1422, by Assembly Speaker Karen Bass, to increase Healthy Families Program premiums and raise new revenue for the Healthy Families Program and Medi-Cal through a new “gross premiums tax” on Medi-Cal managed care plans. CSAC, along with a number of county affiliates, sent a letter of support for the bill, which was passed by the Senate Appropriations Committee on August 27 and now goes to the Senate floor.
AB 1422 raises Healthy Families Program premiums for families whose incomes fall between 150 and 199 percent of the federal poverty level from $9 to $13 per child, with the family maximum increasing from $27 to $39. For families between 200 and 250 percent, premiums would increase from $14 to $21 per child, with the family maximum increasing from $42 to $63.
The bill would also create the abovementioned new gross premiums tax, which is estimated to raise up to $150 million annually, to be split between Medi-Cal and the Healthy Families Program. Based on the $150 million estimate, the Healthy Families Program would stand to receive a total of about $92 million in revenue and federal matching funds, which would allow the program to operate in the 2009-10 fiscal year without disenrollments.
The fate of AB 1422 will be known by the end of the legislative session on September 11, and MRMIB will likely next meet on September 16 to review legislative actions and updated fiscal projections. In the meantime, the emergency regulations adopted on August 27 will go into effect immediately. A waiting list for the program continues to swell, with about 70,000 children waiting to enroll as of yesterday.
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