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Bill gives health care back to kids

Healthy Families program receives $178 million funding boost

Posted: September 22, 2009 10:19 p.m.
Updated: September 23, 2009 4:55 a.m.

More than 700,000 kids in California were spared from deep cuts to health care when Gov. Arnold Schwarzenegger on Tuesday signed into law a bill to restore $178 million in funding to the Healthy Families program.

The move comes weeks after local lawmakers abstained from voting on the bill.

“This is ultimately a win-win for everybody,” said Nicole Kasabian Evans, spokeswoman for the California Association of Health Plans, an insurance industry trade organization. “Kids are going to get the health care they need, the state can maintain its commitment to kids, people won’t see an increase in their premiums and the health insurance companies won’t be financially impacted.”

California lawmakers gutted the Healthy Families program during the summer state budget negotiations. To make up for the cuts, Democratic state lawmakers proposed a 2.35 percent tax on health care companies.

California State Senator George Runner was lobbying against a prison release bill when the Healthy Families funding bill hit the floor of the State Senate. Runner missed the vote, but told The Signal earlier this month he would have voted against the bill.

“It doesn’t seem right to pay for this when everybody’s cutting back,” Runner said Tuesday.

The bill, he said, would add to an already growing federal debt.

“Under the plan, insurance companies agree to pay a tax on their policies,” Runner said. “The state uses that money to draw down federal dollars.”

Under the complex federal reimbursement formula, the insurance companies don’t get stuck with the increased tax bill, but the federal government does, he added.

The tax, which in a roundabout way ends up falling on taxpayers, was too much for state Assemblyman Cameron Smyth, R-Santa Clarita, to swallow. He abstained from voting on the Healthy Families bill.

“There is a tax component whether companies feel it or not,” Smyth said Tuesday. “This is a tax increase.”

Smyth was among a group of California lawmakers who signed a 2006 pledge to not raise taxes. Calling the pledge he signed in 2006 campaign a “hyperbole,” Smyth said the promise he made in 2006 had nothing to do with his abstention from voting on healthy families.

When the Healthy Families bill came to the State Assembly floor, Smyth said he had a “tough decision.”

He found himself wedged between supporting a government-sponsored health care initiative that would help poor children and not raising taxes.

He punted the ball to his colleagues to make the decision.

“This will help restore funding for health coverage for kids in California,” he said. “I think we should’ve found other ways to fund it.”

One portion of the bill does appeal to Runner.

Under the bill signed by Schwarzenegger, co-pays will increase from $5 to $10 for doctor visits and prescriptions and from $5 to $15 for emergency room visits. Enrollees will also incur premium increases ranging from $4 to $7 per child per month beginning November 1.

“It’s important to shift a portion of the responsibility to the families,” Runner said. “It’s only fair.”

The tax goes into effect retroactively — as of Jan. 1, 2009.


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