On January 9, in the last of a month-long series of coordinated leaks, Gov.
Arnold Schwarzenegger announced that his 2006-07 budget would include $72.2
million to increase outreach and enrollment in Medi-Cal and Healthy Families
“Right now more than 400,000 children in California eligible for state
health care programs are not enrolled,” Schwarzenegger said. “That is
But when the budget was released on January 10, health advocates were
dismayed to discover that one of the centerpieces of the governor’s
proposal, a $20.8 million grant to counties to perform outreach to uninsured
children, would be dwarfed by $42.4 million in budgetary “savings” achieved
by freezing county administrative and overhead costs.
“The governor is giving with one hand, and taking away twice as much with
the other,” said Anthony Wright, executive director of Health Access, a
nonprofit advocacy organization. “The $72 million is not even a full
restoration of what we were doing before the budget crisis.”
The administration defended the cuts as unrelated to the outreach.
“You are comparing apples and oranges,” said Sabrina Lockhardt, a
spokeswoman for the Department of Health and Human Services. “The freeze is
in administrative costs and does not impact direct services.”
But Frank Mecca, who is the executive director of the County Welfare
Directors Association of California, says that while cutting administrative
and overhead costs sounds benign enough, the reality is that such cuts
directly impact counties’ abilities to provide health coverage.
“The Department of Finance is characterizing the cuts as papers clips and
Xerox machines when really we are talking about the people that get children
health coverage,” says Mecca.
In California, most healthcare services are administered at the
county-level, from welfare assistance to hospital services to enrolling new
members in Medi-Cal and Healthy Families.
Advocates and administration officials alike characterize the Healthy
Families and Medi-Cal programs as a success, with the two combined providing
health insurance to nearly 4 million California children, nearly 90 percent
of those eligible for the programs.
Both programs are heavily subsidized by the federal government, with about
half of Medi-Cal’s and two-thirds of Healthy Families’ costs absorbed at the
federal level. Since 1998, when Healthy Families began, the program has
grown to an enrollment of more than three-quarters of a million children.
But the program’s very success makes reaching out to the approximately
400,000 eligible but uninsured kids all the more difficult.
“We are trying to get that last group enrolled,” said David Topp, an
assistant secretary at the Department of Health and Human Services. “Anytime
you are at a 90 percent plus success rate, you start getting a lower
Besides expressing frustration with what they call Schwarzenegger’s
sleight-of-hand budgeting, many Democrats argue that the current difficulty
in enrolling new kids is one reason the governor should consider expanding
Sen. Deborah Ortiz, D-Sacramento, chair of the health committee, argues that
the best way to reach out to the last group of the eligible but unenrolled
kids is simply to expand the eligibility of the programs.
“I am not convinced that the money going to outreach is going to result in
increased enrollment unless we also make the program easier to access,” said
But administration officials are dedicated to enrolling eligible children
first. And the governor’s $20 million for outreach, they say, is the first
“We absolutely believe enrollment will grow,” says Topp. “It is a key part
of the governor’s agenda for this year and it is something he is absolutely
Curiously, while the governor’s budget does account for expected enrollment
expansion from proposed application simplification (expecting 12,000 new
enrollees), it includes no new money for enrollment growth as a result of
the new outreach efforts.
Because both Medi-Cal and Healthy Families are entitlement programs, any
eligible child who enrolls would automatically be paid for by the state.
Topp says that the impact of outreach on enrollment was excluded from the
budget because such estimates are simply too difficult to make.
“It’s not like a typical budget process,” he says, “where you say we hereby
appropriate $100 million to fix potholes.”
For some Democrats, it is just one more reason they have lost faith in the
governor’s commitment to children’s healthcare.
“It is disappointing that the administration continues to look for cuts in
vital county services in health and human services,” laments Mecca,
“particularly in a year when clearly resources are allowing us to make
multi-million investment s in other segments of the budget.”