Health Plan for Children Holds Mixed Promise

Doctors, patients, consultants, parents--just about everyone connected with California’s health care industry likes the idea behind Healthy Families, a new program designed to make health insurance affordable for children of low-income workers.

That unanimous approval crumbles, however, when talk turns to the details.

As state officials finalize plans for Healthy Families, which is due to launch July 1, critics are asking whether the program will meet its ambitious goal: to improve the health of hundreds of thousands of young Californians by helping them see doctors and dentists at minimal cost.

Surely, the program will improve the lives of those who sign on. Few would dispute that.

But many analysts question whether Healthy Families will enroll enough children--and keep them enrolled--to fulfill its promise. They fear that the state may have squandered a precious opportunity for reform by adopting a program that will, even when fully implemented, leave hundreds of thousands of parents with no one to call when their sons’ coughs turn to bronchitis.

“We waited for a long time to get something, and I think this is a tremendous gain,” said E. Richard Brown, director of the UCLA Center for Health Policy Research. “But I’m finding a lot of problems.”

Problems, critics say, such as premiums that might scare off needy families. Or rules that could strip kids of coverage for months if their parents hit hard times. Problems such as the 1.1 million California children who will remain uninsured even if Healthy Families meets its enrollment goals.

“It’s a great next step. It’s not a panacea,” said Mandy Johnson, director of the Community Clinic Assn. of Los Angeles County.

$5 Co-Payment for Most Doctor Visits

Hailed by Gov. Pete Wilson’s administration as the most significant health-care advance in decades, Healthy Families will offer subsidized insurance to about 580,000 children whose parents earn too much to qualify for the subsidized care of Medi-Cal but too little to buy coverage on their own.

They are children such as Pasadena sixth-grader Jamilla Davis, whose mother, a nurse, works only part time and cannot afford insurance. When Jamilla came down with strep throat the other day, her mom had nowhere to take her but the emergency room. The bill: $600.

They are children too like Cesar Vigil of Long Beach. The 10-year-old has asthma. But his dad, an auto mechanic, has no money for regular care. “It would be better if we had health insurance,” says Cesar’s mother, Sylvia, who works part time in his school. “That would really take all the pressure off your head, all the worrying about where you can go when you’re sick.”

Healthy Families will be aimed at kids like Jamilla and Cesar, whose parents bring in earnings at, or up to double, the federal poverty line. (For a family of four, that’s an annual income of $16,050 to $32,100.) Illegal immigrant youngsters are not eligible.

Once their children qualify--and officials promise a simple, mail-in application--parents will have two choices.

They can get a voucher from the state to buy into a company health plan if their employer offers one. Or they can sign up for coverage through Healthy Families.

For a monthly premium of $4 to $27, depending on family size and income, Healthy Families will offer comprehensive benefits. Along with medical coverage and low-cost prescriptions, it will include dental care, vision checkups, counseling, physical therapy--even programs to help kids quit smoking.

Most doctor visits will require a $5 co-payment. But parents will not have to pay--beyond the premiums--for preventive care or hospitalizations. They will be able to choose from several plans, and will select their children’s primary care provider themselves.

“[Healthy Families] will ensure that low-income families have the same choices in health care that you and I enjoy,” said Sandra R. Smoley, secretary of the state Health and Welfare Agency. “It will send kids to school healthy and ready to learn.”

With that promise, Smoley opened a recent public forum at Childrens Hospital Los Angeles on the new program. Over the next two hours, she heard praise for the initiative--and plenty of pointed questions as well.

Speakers at the forum--mostly public-health workers--returned again and again to a central concern: Will the monthly premiums discourage enrollment among the very folks who need Healthy Families most?

To be sure, the premiums are modest compared to the cost of commercial health plans that can charge hundreds of dollars a month for family coverage. And, indeed, many parents in the target group have said they would eagerly pay $27 a month to cover their children’s medical needs.

Sandra Allvin of Hanford, south of Fresno, is one of them.

Her two boys recently enrolled in a low-cost insurance program through a nonprofit group called CaliforniaKids. But Allvin still remembers the constant dread she felt when her children had no insurance. She was always worried they would injure themselves. She hated the embarrassment of asking relatives for money to take her sons to a doctor.

Having insurance has wiped away all that fear and shame. Or, as she put it: “It takes a big, huge weight off our heads.” That’s why she and her husband, who makes his living repairing video games, are more than willing to pay $15 to $20 a month to keep the boys covered when Healthy Families kicks in. “We can manage that,” Allvin said.

Deep Discord Over Requiring Premiums

Though many low-income families, like the Allvins, pronounce themselves able to pay some premiums, the concept has drawn fierce fire from advocacy groups such as Children NOW, as well as from some of the doctors who treat uninsured patients. As Johnson put it: “There’s a lot of concern that this model will keep out some of the neediest kids.”

The problem, these critics say, is that families already stressed to the max to cover rent, bills and groceries may be afraid to sign up for yet another obligation. Or they may enroll, only to have trouble producing the cash when the premium comes due or a co-payment is required.

Consider the experience of Dr. Bronwen Anders, who directs several low-cost clinics in eastern San Diego County. Many of her uninsured patients could not come up with even minimal fees. “I’d get paid in chickens,” she recalled, “or with people saying, ‘I’d be happy to do the contracting on your farm.’ ”

Or consider the plight of Eve Fazekas, a Long Beach mother who runs a gift shop with her husband. She remembers one day last year when her 10-year-old son, Stephan Jr., was sobbing with an ear infection--and she had no money for treatment. Even a $10 fee, she said, would have forced her to default on her final-notice utility bill.

“I know that sounds so strange,” Fazekas said, apologetic about her plight. “But that would have been the light bill. . . . Pulling out $10 is hard for a lot of people.”

After several tearful phone calls, she finally discovered that the Long Beach Children’s Clinic would waive all fees for Stephan.

Logistically, too, premium payments might pose a problem, even for parents able to afford them. Many families in the targeted income group don’t have credit cards or checking accounts. Because Healthy Families has no plans to open offices for walk-in payment, parents will need to get money orders or cashier’s checks for the premiums each month.

State officials defend the premiums on two grounds: They will help defray costs, and they will ensure that working parents take some financial responsibility for their children’s health care.

Wilson Says Plan Is Not a New Entitlement

While other states have tried to increase coverage for children by expanding their Medicaid programs, Gov. Wilson has made it clear that he does not want Healthy Families to be viewed as a new entitlement. From the start, his view has prevailed. After he proposed Healthy Families in August, Wilson won ready backing from the Legislature’s Democrats and from all but the most conservative Republicans, who objected to any expansion of government subsidies for the poor.

“It’s a completely different mind-set,” said Peter Anderson, a spokesman for the Managed Risk Medical Insurance Board, which oversees Healthy Families. Instead of giving working parents a government freebie, he said, the state set up the program like a commercial health insurance plan: “You pay your premium, you get your coverage.”

The converse holds true as well: You miss your premium, you lose your coverage. Healthy Families’ draft regulations require children to be bumped from the insurance rolls for six months if their parents fail to pay two premiums in a row.

That penalty can be waived for good cause, such a parent’s layoff or catastrophic illness. And it’s retroactive to the first day of a missed payment, so kids really only lose out on four months of insurance.

Still, advocates for the poor worry that the provision may unfairly penalize children whose parents hit a few months of tough times. Especially if they are not used to the concept of health insurance, parents may hold off paying the premiums when their budgets are tight and their children are well--only to find that their kids are no longer eligible when illness strikes.

“Perhaps [officials] should suspend the insurance until they clarify why the parents didn’t pay the premium, but a six-months [ouster] seems particularly onerous,” said Amy Dominguez-Arms, director of policy for Children NOW, an advocacy and research group that focuses on the problems of California youngsters.

Though he defends the six-month rule as “standard insurance practice,” Anderson said the provision has not yet been finalized.

Other rules also remain in flux. Officials have not yet picked a subcontractor to manage the program. Nor have they received federal approval for the plan. The assent from Washington is critical: The U.S. government, after all, is providing the bulk of the funds for Healthy Families.

The money comes from a $24-billion five-year pot that federal lawmakers set aside to deal with the distressing fact that 15% of the nation’s children lack health insurance. (In California, that figure is 18%.) States can devise their own programs to attack the problem as long as they match the federal money with some of their cash. Healthy Families, for example, will be funded--once it reaches full enrollment--by $320 million a year from Washington and $166 million annually from Sacramento.

If they had wanted, California officials could have tapped Washington for many more dollars--as much as $855 million a year. Wilson, however, chose to request much less--and state legislators went along, approving the governor’s Healthy Families blueprint in September.

Advocates for the poor denounce that decision, indignant at losing a rare opportunity to get more money for children. Why not take every penny offered, they ask, and use it to cover more young people or to abolish the premiums?

Anderson has an answer for such questions. Parrying critics’ emotion with a patient and practiced recitation, he explains that most of the federal money must, by law, be used to insure children whose parents earn less than twice the amount that constitutes the poverty line. The money California has requested from Washington should be enough to cover all 580,000 kids in that target group, he adds. If it’s not, the state will simply ask for more.

True, Connecticut and a few other states have developed programs that go far beyond Healthy Families. By modifying Medicaid eligibility rules or by kicking in their own funds, they are able to cover children in slightly higher income brackets. But California decided to limit Healthy Families to those most in need.

Enrolling them will be a definite challenge.

A recent Urban Institute study of state-subsidized insurance programs found that when premiums amount to 1% of a family’s monthly income--as Healthy Families’ requirement would for some--57% of those eligible enroll. As premiums rise, participation falls. For that matter, “even if you charge nothing, a fair chunk of people won’t participate,” Urban Institute health policy researcher Leighton Ku said.

Even if Healthy Families does eventually cover all 580,000 eligible children, more than a million Californian young people will be left behind, still without insurance.

Some of those have parents who earn too much for any state-subsidized program. The majority, however, are so poor that they would qualify for Medi-Cal, as Medicaid is known in California, if only their parents applied for them.

Hoping to nudge this population into Medi-Cal, officials are trying to erase the stigma of the program. They are working on a simple mail-in application that would save families from what can be the humiliating and time-consuming ritual of trekking to a welfare office to establish eligibility.

Wilson has also ordered Medi-Cal to stop denying families coverage if they own assets such as a home or car. Starting Jan. 1, eligibility will be based solely on income.

Finally, Medi-Cal and Healthy Families will be conducting a joint $24-million promotional blitz starting this winter to encourage needy Californians to enroll.

Even with the aggressive advertising campaign, however, some families are bound to fall through the cracks. Several private insurance companies are reaching out to these children. Kaiser Permanente, for example, aims to subsidize insurance for about 50,000 low-income children. Blue Cross runs a pilot program in East Los Angeles offering limited coverage to the working poor.

And CaliforniaKids, the nonprofit Encino-based group that so helped the Allvins, has already insured 8,500 children from the same income bracket that Healthy Families will soon target. Once Healthy Families kicks in, CaliforniaKids plans to transfer its customers to that program and shift its focus, perhaps to children whose parents have slightly higher incomes, or illegal immigrants, or young adults just out of foster care.

One thing’s for sure: The nonprofit group does not expect to go out of business any time soon.

As Executive Director Michael J. Koch said: “Healthy Families is great, no doubt about it. But there’s still a lot of heavy lifting to do. There are still going to be uninsured children.”

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Help for the Uninsured

Medi-Cal: Insures poor children, including those on welfare. For information and applications, contact your local welfare office.

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Healthy Families: Will offer insurance with monthly premiums of $4 to $27 to low-income kids, starting July 1. (916) 324-4695

https://www.dhs.cahwnet.gov

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California Children’s Services: Provides insurance for disabled children.

L.A. County: (818) 858-2100

Orange County: (714) 834-8400

San Diego County: (619) 560-3400

San Bernardino Co.: (909) 388-4150

Riverside County: (909) 358-5401

https://www.dhs.cahwnet.gov

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CaliforniaKids: Offers low-cost insurance to low-income children. (800) 374-4543

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Kaiser Permanente Cares for Kids: Will offer low-cost insurance to children whose parents earn too much for Healthy Families, starting next year. (510) 987-2724

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Blue Cross MediFAM: Provides limited insurance to low-income families in East Los Angeles. (800) 903-0300

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Lions Club Eye Foundation: Will pay for eye exams, glasses and surgery for needy kids. (310) 377-1238

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CHDP clinics: Offer preventive care, including free physicals, to low-income children.

L.A. County: (800) 993-2437

Orange County: (714) 834-8440

Riverside County: (800) 346-6520

San Bernardino Co.: (909) 387-6302

San Diego County: (619) 692-8808

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Long Beach Children’s Clinic: Provides medical services to uninsured kids on sliding fee scale. (562) 933-3141

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Long Beach Children’s Dental Health Clinic: Provides low-cost dental services to uninsured kids. (562) 933-3141

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Fontana Schools Dental Clinic: Provides free preventive care and some treatment to students. (909) 357-5500, Ext. 6535

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Pasadena’s Young and Healthy program: Matches needy kids with volunteer doctors, dentists and therapists. (626) 795-5166

https://www.minspring.com~younghealthy

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Los Angeles County dental clinics: Provide dental care for sliding-scale fees, both by appointment and for emergencies.

East Los Angeles: Edward R. Roybal Center, (213) 780-2259

El Monte: (818) 579-8391

Downtown: H. Claude Hudson Center (213) 744-3621

South-Central: Hubert Humphrey Center (213) 846-4082

Long Beach: (310) 599-8651

https://www.dhs.co.la.us

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About This Series

The Times today presents the second in a two-part series looking at children without health insurance as California takes the first step toward helping them get regular care.

* Sunday: Nearly one in five children in California has no medical insurance, leaving working families in a desperate scramble for care.

* Today: A look at Healthy Families, the state’s new program offering low-cost coverage for children without insurance.