On the cutoff’s cusp

American dream scene: a gorgeous Southern California day. A car-free cul-de-sac on a hilltop overlooking a canyon. A boy and his father, shooting hoops.

But stark reality intruded for a brief moment last summer when 40-year-old Wes Wirkkala tripped, stumbled and almost fell. “Dad, what are you doing? Be careful!” his son Nicholas shouted. “We don’t have health insurance.”

At 8, Nicholas knows his family cannot risk any visits to the emergency room. He’s been told a hundred times, as he dashes out the door with his skateboard, to be careful, to fall on his butt if he has to fall at all because there’s no money for broken arms.

Wes Wirkkala, father of three, heard his son’s words in front of their Dana Point home and felt shot through with shame. He didn’t want this particular family deficiency broadcast through the neighborhood. “It was embarrassing,” Wes says. “It kind of makes me feel that I’m not providing everything I should be.”

The Wirkkalas, with an income that for five years has hovered around $70,000 and a home they bought in 2004 for $535,000, are a family many would call middle class. But they have been priced out of the private health insurance market, and their circumstances illustrate the core of a political battle over how much a family can earn for their children to qualify for a federal-state partnership called the State Children’s Health Insurance Program, or SCHIP. If the outcome of Washington politics goes one way, the children could remain uninsured. If it goes the other way, the children might get health insurance.

Sophia and Wes Wirkkala decided, despite his embarrassment, that they should tell their story of how difficult it can be for a family of modest, middle-class means to maintain health insurance. Sophia is not ashamed, just fearful for her children and angry at a system that has pushed health insurance premiums out of reach.

She lies awake at night, worrying about the health of her three perfectly healthy children. “We’re in the boat we’re in because I’m a stay-at-home mom,” she says. “We chose to have children, and we planned that I would stay home with them and home-school the kids. We want to raise kids that are going to grow up and be great adult citizens. We question that decision all the time. You look at your children sleeping, and you say, ‘I’m not providing healthcare for these kids.’ ”

The Wirkkalas are, by most definitions, doing all right. They live in a four-bedroom house in Dana Point that was starting to sag toward the canyon depths when they bought it three years ago. Because Wes knows what to do with a power saw and a nail gun, the house has been shored up and improved with beamed ceilings, antiques incorporated into bathroom vanities, and a granite-countered modern kitchen. An independent contractor, he says: “This home is my business card.”

From the patio that fronts the canyon, one can catch a glimpse of the Pacific. “You look at our home,” Sophia says, “and you think, ‘They probably have everything.’ ”

It does not look like the home of a family who cannot afford health insurance. And it’s only recently that their insurance has lapsed, canceled one month last year when they simply could not make the premium. They thought it would be temporary, but they haven’t had the money since to pick it up again.

Even without employer-sponsored health insurance, the couple managed, for most of their married life, to buy health coverage for the family.

At first, they bought a policy with a $2,500 annual deductible that cost them about $250 a month. As the premiums kept steadily rising, to more than $400 a month, they switched to a policy with a $5,000 deductible. The premiums were lower at first, but continued to rise, despite the fact that no one in the family had major health problems. And preventive care wasn’t covered. Every time a child needed a vaccination or a trip to the pediatrician for an earache, the fee came out of their pockets.

When the monthly premium reached $450 last year, the couple decided that the payments were unsustainable.

Sophia thinks herself in circles over medical care. Is it better to try to save up to buy health insurance by skimping on preventive visits to the pediatrician? Once Nicholas had an earache, and they went to an urgent-care center. He was treated, and their bill was about $200. He needed the care, but if the family could count on not having those kinds of outlays, they might put some money aside to pay for a policy.

“When you’re trying to save a lump amount to buy insurance, you don’t want to spend money on going to the doctor,” she says. So the youngest child, Vincent, 2, is behind in his immunizations. And when Nicholas or Olivia, 6, do typical kid things, their parents hold their breath. “When you see your son hop on a skateboard, or your daughter doing cartwheels, you’re a nervous wreck,” she says.

The children don’t qualify for SCHIP, the program now being debated in Congress. Under current rules, the family’s income is too high.

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A decade of progress

By most accounts, the SCHIP program has been a 10-year success story. The number of uninsured children dropped steadily from 11.1 million in 1998, the year after the program began, to its lowest level of 7.9 million in 2004, according to U.S. Census Bureau figures. But the number of kids without insurance grew by about 1 million from the beginning of 2004 through 2005, and according to the Kaiser Family Foundation, half of the newly uninsured children came from families earning from about $40,000 to about $80,000 a year (based on a family of four). “It increased in the last year, probably because both adults and kids are losing job-based coverage,” says E. Richard Brown, director of the UCLA Center for Health Policy Research.

Some of those newly uninsured children qualify for SCHIP but their families are unaware of the program. In some cases, states with budget shortfalls have stopped enrolling children. And when a family loses employer coverage, their children must go through a waiting period of a year, extended in August by the Department of Health and Human Services from three months, before being eligible.

What’s certain is that SCHIP-insured kids get their checkups. Children in the program are more likely to receive preventive healthcare, specialty care and dental care than uninsured children, and their parents report fewer financial burdens, unmet medical needs and less worry about their children, according to a report in the August 2007 journal Health Services Research. “It has provided access to kids who wouldn’t have had coverage,” says Brown. “It’s cheap, and it’ll help produce healthy and productive adults. I don’t know what more we could ask for.”

The total cost of insuring a child under SCHIP is about $85 a month. Families pay a portion, but no family, regardless of the number of children, pays more than $45 a month. The program insures children, not their parents, with rare state exceptions.

The political fight over its renewal for the next five years caught a lot of health policy experts by surprise, on both sides of the argument. “I think conservatives originally thought it was a good thing to expand coverage for children,” says Robert B. Helms, resident scholar at the American Enterprise Institute, a business-oriented think tank. “Children are relatively cheap to insure. They’re young and healthy.”

Yet both sides are duking it out ideologically. “Most people didn’t anticipate it would become this big political issue,” says Len Finocchio, a spokesman for the California HealthCare Foundation, a philanthropy that funds healthcare research and programs in the state.

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The ideological divide

On one side are mostly congressional Democrats and a number of Republican colleagues who want to insure additional children under SCHIP. (In California, both Gov. Arnold Schwarzenegger and a majority of the California Legislature want to expand the program.)

On the other side are some congressional Republicans, led by the Bush administration, who argue that it’s not the government’s responsibility to go beyond covering the poorest and most vulnerable children. “It’s kind of fundamental,” Helms says. “Conservatives see this as another way of expanding government health programs. Everyone agrees that this is a good program, but some people say that we’ve got to draw the line.” It’s a line that, if crossed under the most generous congressional proposals, could increase spending on the program by $47 billion, to a total of almost $72 billion, over five years.

“I think both parties are using this as an opportunity to put a stake in the ground,” Finocchio says. “Democrats are saying that we have to at least be responsible to provide healthcare for our children. Republicans are saying we shouldn’t be covering kids whose parents make a lot of money.”

The main point of contention is deciding who makes too much money for their children to get help, and the argument boils down to how many multiples of the federal poverty guidelines should entitle children to health insurance -- two (200%), 2 1/2 (250%), or three (300%). Current federal guidelines say that children whose families earn up to twice the poverty level qualify, and the Bush administration wants to largely hold it to that. Congressional plans would allow states to raise that level to up to 300% and, in a compromise provision, discourage states from going beyond that level by reducing federal matching funds if they did.

Federal guidelines define poverty for an individual, in 2007, as an income of less than $10,210. Except for Alaska and Hawaii, which have slightly higher numbers, the figures are national and don’t account for cost-of-living differences across the country. The income number rises with additional family members. A family of four, for example, is defined as poor if their income is below $20,650. Most of those children qualify for Medicaid, called MediCal in California, the health insurance program for the poor.

The intention behind SCHIP was to insure additional children, not just those at the very lowest poverty level. (Exceptions are the children of illegal immigrants. Children of legal immigrants qualify after living in the U.S. for five years.) Nineteen states cover children with higher family incomes and, in California, families can qualify for the SCHIP program if they earn 250% of poverty guidelines.

Funded at $25 billion over the last five years, the SCHIP program would be increased to $30 billion over the next five years under the Bush administration’s 2008 proposed budget. Theoretically, income levels could go up to 250% of the poverty level, or $51,625 for a family of four. But there are stiff conditions. Before approving higher-income children, the administration proposes that states first be required to prove that they have enrolled at least 95% of children below the 200% level. No voluntary health program, whether Medicaid or the Medicare drug benefit for seniors, has ever reached a 95% enrollment rate, Brown says.

If Congress fails to act, or even if funding is held to present levels, or increased to administration-recommended levels, the California HealthCare Foundation estimates that up to 600,000 children in California could lose their health insurance beginning in 2008. Because of healthcare inflation, California and many other states would have to begin closing off new enrollments and disenrolling some insured children, according to the foundation’s projections. “The funding wouldn’t allow California to maintain its present caseload, and keep up with inflation,” Finocchio says.

With Washington at a stalemate, the program, which expired in September, is being extended at current funding levels, month by month, with the latest program expiration deadline set at Dec. 14. Until politicians sort it out, a California family of five, under the SCHIP program called Healthy Families, can still earn up to $60,325.

The Wirkkalas make too much money.

But if the Democrats’ plan passes, and the governor’s and state’s legislative proposals are enacted, benefits could extend to children in California households earning up to 300% of poverty levels, or $72,390 for a family of five.

The Wirkkalas would squeak in under the wire.

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In search of a solution

For now, the family falls through what appears to be a comfortable crack, they say. They aren’t holding their breath waiting for government help. Wes spends hours at websites, plugging in income numbers, family demographics and preferences for the kind of care he might anticipate his family needing. “You punch in what’s important to you,” he says. “I’ve done that, and the number comes back $900 a month. That wouldn’t fit.”

What he’s looking for is more than just catastrophic coverage, which takes care of tragic illnesses or accidents. The family already knows that the high deductibles in such plans mean they end up paying for all routine visits to pediatricians and run-of-the-mill childhood illnesses in addition to the premiums. He has not been able to find what he believes the family needs -- coverage of major medical episodes as well as preventive care -- at a price they can afford.

So they go without, and they worry and feel guilty.

Their situation has a few similarities to that of the family of Graeme Frost, a 12-year-old Baltimore boy who delivered the Democratic response to a radio address by President Bush on Sept. 29. The Frosts, earning about $45,000 a year, easily qualified for SCHIP for their four children. Graeme, who along with his sister had suffered brain injuries in a car accident, talked about how much that coverage meant to him and his family. Opponents of an increase in coverage took issue, saying that with a nice house, and an income many would consider middle-class, the Frosts should not expect government help.

But like the Wirkkalas, the Frosts’ nice home reflected carpentry skills, not high income. And like the Wirkkalas, the Frosts made a decision that the husband would work for himself rather than a company while the wife would stay home with the children. As American dream-like as they appear, the decisions did not fit with the country’s health insurance system.

Already, the Wirkkalas have borrowed from the equity in their home for the $5,000 co-payment, when they still had insurance, for the birth of Vincent. “We’ve cut out everything. We’ve cut out cable, canceled magazine subscriptions, redone our auto insurance, cut up our credit cards,” Sophia says. “My budget for the week for gas, food, field trips for the kids, is $200. Look in the refrigerator. There’s fruit and yogurt. Not much extra there.”

Wes Wirkkala works six days a week -- weekdays on job sites and Saturdays on bids. But he’s home for breakfast and dinner every day, and for lunch most days. The couple has decided not only that Sophia would stay home with the children but also that Wes would work independently and spend as much time as he can with his family.

They’re still shocked to realize that family-focused decisions have cost them access to healthcare. At their sunny kitchen table with a view of the canyon and the ocean in the distance, Sophia Wirkkala ponders their dilemma. “This is America!” she says. “I grew up being told this was the greatest country in the world. I don’t think I can put ‘the greatest country in the world’ and ‘children without health insurance’ in the same sentence.”

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susan.brink@latimes.com

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(BEGIN TEXT OF INFOBOX)

Taking a closer look at SCHIP

* The rules for the State Children’s Health Insurance Program vary by state. To find out who is eligible for California’s SCHIP program, called Healthy Families, go to www.healthyfamilies.ca .gov, or call (800) 880-5305.

* To read an analysis of SCHIP by the California HealthCare Foundation, an independent philanthropy that funds research into the way healthcare is financed and delivered in the state, go to www.chcf.org.

* For an overview from the nonprofit, nonpartisan Alliance for Health Reform on how children in the U.S. are insured, go to www.allhealth.org/publications/child_health_insurance/child _health_coverage_76.asp.

-- Susan Brink

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Recipients by the numbers

The number of children who could be affected by the national political battle over the State Children’s Health Insurance Program depends on how close their family’s income is to the cutoff level. Overall, however, here are the most recent numbers of uninsured children.

In the United States

Number of children (up to age 18) who were uninsured all or part of the year: 8.7 million

Percentage of uninsured children with at least one worker in the household: 85%

Number of uninsured children with household income 2 1/2 times the federal poverty level ($50,000 based on a family of four): 2.9 million

Source: 2006 U.S. Census Bureau data

In California

Number of children (up to age 18) who were uninsured all or part of the year: 1.1 million

Percentage of uninsured children with at least one working parent: 83.6%

Percentage of uninsured children with household income three times the federal poverty level*: 17.9%

In Los Angeles County

Number of children (up to age 18) who were uninsured all or part of the year: 307,000

Percentage of uninsured children with at least one working parent: 84%

Percentage of uninsured children with household income three times the federal poverty level*: 12.2%

*Federal poverty level is calculated according to family size

Source: UCLA Center for

Health Policy Research analysis of 2005 California Health Interview Survey