SACRAMENTO, Calif. -- California Health and Human Services Secretary Diana Dooley said she is confident the state can eliminate a health insurance program serving more than 860,000 children from low-income families without disrupting the quality of care.
The state is eliminating its Healthy Families program and moving those children into the state's Medicaid program to save a projected $73 million a year. A state Senate committee has scheduled a hearing Tuesday to examine the transition.
Dooley said in an interview Monday that the shift will help streamline children's health care and reduce government complexities. But state lawmakers and children's advocates are concerned about the possibility of having children's medical services disrupted.
Assemblyman Richard Pan, D-Sacramento, said he is concerned about the number of doctors willing to accept more Medi-Cal clients. State officials estimate that health providers will receive about 15 percent less under Medi-Cal, which is California's version of the federal Medicaid program for the poor.
"My main concern is that those children continue to have access to the care they need," Pan, a pediatrician, said in an interview Monday. "Ultimately it's about the quality of care."
The Department of Health Care Services has issued a strategic plan that proposes to move all 863,000 children enrolled in Healthy Families into Medi-Cal by Sept. 1, 2013. Families are expected to be moved in four phases, depending on whether their doctors and health plans already accept Medi-Cal. The state plans to start notifying parents next month.
According to the state, eliminating Healthy Families is projected to save the state $13 million this fiscal year and $73 million annually once the transition is completed.
"We recognize these are austere times. The state employees who took a 5 percent pay cut took the pay cut as loyal dedicated public servants," Dooley said. "I believe (health providers) will continue to serve even though there will be a reduction. It does require some sacrifice, not from the children, but will require sacrifice from the people who provide care."
Sen. Ed Hernandez, the Baldwin Park Democrat who is the chairman of the Senate Health Committee, said he questions whether the administration can ensure enough health providers and whether the state will receive the federal waiver it needs to make the change.
"What happens if the health plans don't meet network adequacy, but the notification letters go out? Then what?" Hernandez said.
Anthony Wright, executive director of Health Access California, a group that opposed eliminating Healthy Families, said his group wants to make sure the administration's transition timeline makes sense and that no child experiences a disruption in care.
A telephone message left for the California Medical Association, which represents doctors, was not immediately returned.
Dooley said the administration is confident its plan will work but acknowledged that "everything doesn't always go as smoothly as you hope."
She said the transition isn't just intended to save the state money. It's also to prepare the state for implementation of the federal health care law, she said.
As a result of the Affordable Health Act, the state is moving to expand Medi-Cal coverage and establish a health insurance exchange that will help people buy insurance, presumably at an affordable rate.
According to the state, 7.6 million people are on Medi-Cal, of which 3.8 million are children. Healthy Families is California's version of the federal Children's Health Insurance Program, which was created in 1997 under the Clinton administration to expand health care coverage for uninsured children whose families do not qualify for Medicaid. For example, a family of three that earns up to $47,725 annually can qualify for the low-cost insurance program.
According to the Legislative Analyst's Office, the two programs are similar in that they offer medical, dental and vision coverage. While Healthy Families offers more comprehensive vision care, Medi-Cal offers additional services, such as non-emergency medical transportation.
Medicaid is an ongoing entitlement program, but the Children's Health Insurance Program is scheduled to expire in 2015.