Starting today, California is offering low-cost health benefits to more than 400,000 children whose working parents fall in a no man's land--too poor to buy insurance and too well-off for welfare.
But the $500-million Healthy Families program, the government's most significant investment in children's health in three decades, is marred by some start-up woes and what critics consider structural flaws that may deter many needy people from participating.
Even as Gov. Pete Wilson's administration launched the program with fanfare Tuesday in Los Angeles, state officials acknowledged problems with a controversial 28-page application packet.
One health clinic manager said the packet reminds him of a "1040 long form" from the IRS. The Children's Defense Fund recently gave California's new program its lowest rating for "family friendliness." And even one of the governor's appointed advisory board members said the paperwork will frighten people away.
"I was raised . . . with a decent education, and you're asking me to multiply what I make by 4.33?" said Anne Roswell of Santa Monica, an uninsured single mother who is a member of the board.
"I couldn't do that on my best day," said Roswell, a secretarial business owner. "You're going to tell me [that] a woman with an infant in her arms and toddler clutching her legs is going to be able to do this? I don't understand why it isn't two pages."
The state has trained 3,500 people in daylong sessions, but some still are fumbling with rules and calculations.
On Tuesday, Health and Welfare Secretary Sandra Smoley acknowledged complaints about the "voluminous" application and said: "We will tinker with this. It is our intent to have it be a simple process."
The governor and some children's advocates tout the program's promise. With just nine months of planning time, "California has done an amazing job on a very tough issue that affects a large number of people's . . . well-being and their pocketbook," state health Director Kim Belshe said.
Modeled after private insurance and purposely designed not to mimic welfare, the program is the nation's largest to target children of poor workers.
Making use of federal and state dollars, the program will cover more than 400,000 children. It also seeks to enroll more than half a million other children for Medi-Cal benefits.
Critics complain about hurdles to enrollment in Healthy Families. A population accustomed to paying cash will be required to make insurance payments by cashier's check or money order. People who are wary of government must prove their citizenship or legal residence.
Others cite the dilemma of dual bureaucracies.
The federal government gave California the option of simply expanding Medi-Cal. Instead, the state created an entirely new system for uninsured families just above the Medi-Cal cutoff. These are families whose incomes are 100% to 200% of the federal poverty level, or $13,650 to $27,300 annually for a family of three.
The difficulty is that as their income changes, families may shift between eligibility for Medi-Cal and for Healthy Families--programs with different benefits, requirements and sometimes different health plans.
Some families simultaneously have young children in Medi-Cal and older children in Healthy Families because Medi-Cal restrictions are looser for younger children.
State officials say much of the criticism flows from philosophical differences over the state's decision not to expand the Medi-Cal welfare program. "We are insuring working people," Belshe stressed.
Consequently, she said, the program is similar to employer-based insurance plans. Coverage matches that offered to state workers. It features what the administration considers low-cost premiums ($7 to $27 a month) and has limited co-payments. Statewide, it offers 26 medical plans, nine in Los Angeles County.
The idea is to avoid the stigma of welfare. "When you buy something, you own it," said Sandra Shewry, executive director of the Managed Risk Medical Insurance Board, the state agency running Healthy Families. "It is an incredibly empowering phenomenon."
Nevertheless, "I think administratively it would have been much easier to expand Medi-Cal," said Mandy Johnson, executive director of the Community Clinic Assn. of Los Angeles County. She is skeptical of the administration's argument that it is trying to avoid stigma.
"Let's start with the 28-page application! You tell me how it does not smack of government bureaucracy and avoids the stigma of government services."
Georgia's application, for example, is one page, sometimes affixed to pizza boxes and placed in school cubbyholes.
California's benefits and scope of coverage, however, compare favorably to those of other states, according to a Children's Defense Fund report in May.
Still, the program fails to cover a large chunk of uninsured families. According to a recent UCLA study, more than 409,000 children whose family earnings are two to three times the poverty level are out of the program's reach.
Tensions over eligibility restrictions flared this spring when Wilson belatedly ruled out income deductions for day care, work and other expenses, meaning nearly 50,000 children would not make the cut.
Marina Fuentes, 22, fears that her daughter is one of those. She went to an educational forum Saturday in El Monte expecting to sign up her 4-year-old Maribel.
Fuentes, a receptionist, got stuck with a $400 emergency room bill for treatment of Maribel's early morning earache recently. That scared her into looking for an insurance policy.
But Fuentes didn't bring required proof of her family's income. And some preliminary calculations showed that she and her husband make 35 cents more than the $27,300 cutoff for a family of three. She couldn't deduct the $220 a month she pays for child care either.
Though urged to apply anyway, she left disappointed. "I guess I'm one of those unfortunate ones," she said on her way out of the auditorium.
The El Monte forum's sparse attendance suggested many families don't know about the program. After two hours, most chairs in the auditorium sat empty. The formal presentation was scrapped.
"I think that if the outreach had perhaps started a couple of months ago and built up to July 1, there would be more people to enroll," said Assemblyman Martin Gallegos (D-Baldwin Park), who organized the event.
Belshe expects that the state's $21-million education and outreach campaign will get the word out. She says no state has invested as much as California. And no state is spreading its resources out in the same innovative way, by paying a variety of community "assisters" $25 per successful application.
She said the timing of the advertising campaign--complete with billboards, radio and TV spots--had to be close enough to start up so that interested families had a program to sign up for.
Some children's advocates urge patience. "The pieces are not in place to be perfect yet," said Wendy Lazarus, director of the nonprofit Children's Partnership in Santa Monica. "But this is the best shot we've had in probably 30 years."