Health Care for Poor Kids Is No Place for Risk-Taking

California ought to be rejoicing at the prospect of receiving close to $1 billion from the federal government to help provide health care for uninsured children. After all, the state numbers 1.6 million children in this situation, one-sixth of the national total. Half reside in Los Angeles County.

Celebration, though, is not in order because Sacramento hasn’t done its homework. Unlike most other states, California has failed to meet Washington’s requirement to contribute one dollar for every two dollars of the expected $855 million a year in federal funding. The Legislature and Gov. Pete Wilson could still allocate the money. (The state’s anticipated $450-million windfall from revisions in federal tax law would be one source.)

But a more fundamental problem remains. A legislative commission was appointed earlier this summer to plan for using the federal dollars to extend care to uninsured children, most of them from poor working families. The deadline for delivering that plan to get the federal money right away is Sept. 12, two weeks away, and the commission is holding its first planning meeting just today. While other states will be able to begin their programs in a few weeks, California officials say they won’t be able to receive and allocate the money until next July. This is a shameful lapse.

The commission does have one plan on the table for consideration, from Wilson’s office. The plan, made public Wednesday, would funnel most of the federal funding into a newly created private insurance program. This form of privatization is untested and too risky to become the state’s principal means of caring for uninsured children.

The governor’s office says that its private plan is modeled after a state insurance system, actually three small pilot programs, begun in 1992. But these plans developed no information on the biggest challenge ahead, reaching and identifying the children eligible for the federal dollars. Children’s advocacy groups also dispute the plans’ overall efficiency and success.

One thing is certain: The proposed private plan would be more complicated and offer fewer benefits than Medi-Cal, and at higher out-of-pocket costs for poor families. Under the private program, low-income parents would have to pay $5 for a visit to the doctor (along with a $5 co-payment for each prescription). Medi-Cal currently charges $1 for such a visit and $1 for a prescription.

What the commission should embrace is a mixed model that tries out some new private insurance programs and at the same time expands Medi-Cal, which despite its many bureaucratic and other faults has a wealth of experience in reaching and caring for poor children. It is also up and running. Most states have already decided to spend the federal funds through Medicaid programs like California’s Medi-Cal, rather than reinvent the wheel. Wilson’s proposed private plan could indeed spur needed innovations. But it would be reckless to make a new and untested plan the state’s primary vehicle for reaching out to these children who have no other avenue to medical care.