New Report Finds the State's Poorest Children Vulnerable to Being Dropped from Medi-Cal...

New Report Finds the State's Poorest Children Vulnerable to Being Dropped from Medi-Cal and Healthy Families Even Though They Remain Eligible

Report Examines Impact of Governor's Plan to Reinstate Quarterly
Status Reports for Enrollees
LOS ANGELES--(Business Wire)--
A new report that examines the impact of the Governor's plan to
require parents with children enrolled in Medi-Cal to prove their
children's eligibility every three months finds that the change could
dramatically affect the stability of their children's health coverage.
Furthermore, the report finds that health care costs are substantially
higher immediately after children experience a gap in their health
coverage, and the longer the gap, the higher the cost afterwards. The
report from the Child Policy Research Center, Stability and Churning
in Medi-Cal and Healthy Families, was commissioned by The California
Endowment.

Public insurance programs, such as Medi-Cal and Healthy Families
(the State Children's Health Insurance Program or SCHIP), have
built-in challenges to stability, namely their requirement for
families to show that they continue to meet income, residence and
other requirements every 12 months. However, in the face of
California's current budget shortfalls, the Governor has proposed to
have children enrolled in Medi-Cal renew every three months instead of
the current 12-month renewal requirement.

"The data clearly show that a more frequent renewal requirement
would result in more children losing their health coverage, which
causes lapses in health care that result in higher medical services
costs once the child is re-enrolled," said the report's author, Gerry
Fairbrother, Ph.D. "This erodes any short-term savings to Medi-Cal."

Findings of the report include:

-- Overall, only approximately 50 percent of newly-enrolled
children "survive" after 21 months of enrollment in both
Medi-Cal and Healthy Families;

-- The sharpest drop in enrollment is seen at the 12-month
renewal point, especially for children in Healthy Families and
those in the 1931(B) and children's percent programs in
Medi-Cal;

-- More frequent renewals will hit hardest children in the
1931(B) and percent programs of Medi-Cal. It is likely that
half the children in these programs will be dropped at every
renewal period.

-- These families are teetering on the brink of poverty, are
likely to be affected by an economic downturn, and may need
the support health coverage offers their children;

-- Costs of medical care are substantially higher immediately
after a child's gap in coverage. The longer the gap, the
higher the subsequent costs; and

-- In Medi-Cal, it is likely that costs saved in the short-term
by reducing enrollment using Quarterly Status Reports will be
offset by pent up needs later on (or transferred to the safety
net in the shorter term.)

"We must do better to ensure that California's kids - regardless
of family income - have access to quality, affordable and
comprehensive health care," said Robert K. Ross, M.D., president and
CEO of The California Endowment. "Eliminating the barriers to
retaining our children in these publicly funded programs should be a
primary goal for our state's leaders. We all benefit when our children
are healthy and ready to learn."

A much earlier study of SCHIP compared retention for children in
states with 12-month and 6-month renewal requirements, and found
roughly twice the drop-off for children with a 6-month renewal
requirement. In addition, an earlier churning report by Dr.
Fairbrother found that it cost the state from $120 to $160 to
re-enroll children who were dropped from Medi-Cal even though they
remained eligible.

The complete report can be downloaded here.

The California Endowment, a private, statewide health foundation,
was established in 1996 to expand access to affordable, quality health
care for underserved individuals and communities, and to promote
fundamental improvements in the health status of all Californians.
Headquartered in downtown Los Angeles, The Endowment has regional
offices in San Francisco, Sacramento, Fresno and San Diego, with
program staff working throughout the state. The Endowment makes grants
to organizations and institutions that directly benefit the health and
well-being of the people of California. To date, The Endowment has
awarded approximately 9,800 grants across California totaling nearly
$1.8 billion. For more information, visit The Endowment's Web site at
www.calendow.org.

The California Endowment
Jeff Okey
213-928-8622
jokey@calendow.org

Copyright Business Wire 2008