Cutting Children’s Health Coverage Will Only Make California’s Budget Situation Worse

[courtesy of California Progress Report]

By Judy Darnell
State Advocacy Director
United Ways of California

When the May Revise is released, there is sure to be some bad budget news for everyone. But, even in tough budget times, the Legislature and Governor must set priorities and a top priority must be children’s health. Our leaders should work to ensure that this year’s budget decisions do not result in more children losing health coverage because it not only hurts kids, but will also make our state’s bottom line even worse.

While all the details of the May Revise are not yet known, current budget proposals put the health of more than 500,000 California children at risk and would increase the ranks of uninsured children by 60%. Two flawed policy proposals are responsible for these troublesome numbers.

First, current budget proposals would require families to fill out burdensome paperwork four times a year to retain their eligibility for Medi-Cal, rather than annually as is the case today. This unnecessary requirement would create a paperwork morass that is far cry from the annual reporting requirements of private health plans. These are eligible kids – the only reason for the Quarterly Status Reporting (QSRs) is to disenroll children from their health insurance. In fact, it is estimated that these stringent requirements would result in 471,500 eligible children being dropped from their health insurance simply because parents wouldn’t be able to keep up with the paperwork.

We could learn a lesson on unnecessary reporting from the State of Washington, who chose to address their 2002 budget crisis by instituting 6 month reporting requirements for children receiving Medicaid. In just two years, several million dollars were spent on the new administrative requirements. This was due in part because the state had to hire 160 new full-time employees to process the additional paperwork caused by the more stringent requirements. Those costs were for reporting twice a year in a much smaller state than California. Our cost to do quarterly reporting will surely be higher here. Washington ended up rescinding their bi-annual reporting requirements in 2005.