California is planning to save oodles of money by moving 880,000 children into a Medi-Cal managed care program one year after transitioning 330,000 low-income seniors and disabled patients into one of their own. Advocates for kids fear the worst, and based on experiences of the older people those fears are justified.

The state’s goal in moving the seniors and disabled was not only to save money, but to better coordinate medical care, and prevent unnecessary procedures and hospital stays. However, according to the Los Angeles Times, the transition has been rocky at best, with severely ill patients suffering from diseases like multiple sclerosis, lupus and cancer being forced to give up their doctors and cope with a system unprepared to absorb their numbers.

The Times wrote of a 61-year-old woman, Maria Blancarte, who is stuck in a hospital bed about 22 hours a day because of painful rheumatoid arthritis and uses a wheelchair when she gets out of it. Her application to permanently remain with her doctor was denied, although she was given a one-year stay. Of the 8,963 patients who requested to stay with their doctors during a nine-month period, only 1,582 got the green light. Overall, 18% of the 19,684 patients who asked for exemptions from the transition got them. About 32% were rejected outright and half the requests were returned as incomplete.

The road to managed care for low-income children currently covered under the state’s popular and successful Healthy Families program begins January 1 following a budget agreement between legislators and Governor Jerry Brown that was signed this month. The administration hopes to save $13 million in 2012-13 and $75 million the following year, but some critics say the move could actually lose money.

The GOP opposed abandoning Healthy Families and have signaled their opposition to extension of a $183 million tax on managed care providers that the state is counting on to help balance the $91.3 billion budget. Republicans said they wouldn’t support the extension, which would bring in $400 million of matching federal funds over two years, if Healthy Families is eliminated.

Senate GOP leader Bob Huff, said, “This transfer of children from a popular and successful program like Healthy Families to the problem plagued Medi-Cal system is a reckless move that unnecessarily puts the health of California children at risk.”

Healthy Families is low cost insurance for children and teens that provides health, dental and vision coverage to those who do not have insurance and do not qualify for free Medi-Cal.

The program’s supporters were hoping to have a gradual transition to the cheaper, more constrained Medi-Cal managed care system, starting with 200,000 kids just above the poverty line and expanding their numbers if the process went smoothly. Legislators wanted to go slow, but Governor Brown wanted all the children in a single program and won the battle.

“Medi-Cal already has significant access problems that have yet to be addressed,” said Suzie Shupe, executive director of California Coverage and Health Initiatives. “When you put 875,000 children into that already-strained system all at once, it's a real impact for these children,” Shupe said.

–Ken Broder

To Learn More:

California Patients Struggle to Transition to Managed Care System (by Anna Gorman, Los Angeles Times)

Heat over Healthy Families Compromise Plan (by David Gorn, California Healthline)

Gov. Jerry Brown, Democratic Leaders Agree on Welfare Changes in California Budget (by Kevin Yamamura, Sacramento Bee)

Could Healthy Families Dissolution Cost California More Money? (by Kevin Yamamura, Sacramento Bee)