Proposal Heralds Shift in Policy for State’s Poor

Slipped into Gov. Gray Davis’ mammoth budget plans is a small expenditure that signals a major policy change for poor people by making government-subsidized medical insurance available to more low-income families.

The relatively tiny $2.7-million item, which already has the support of leaders of the Democrat-controlled Legislature, would make an additional 50,000 poor children eligible for low-cost medical insurance by allowing families with slightly higher incomes to qualify for the program.

It is one of several proposals scattered within the new Democratic governor’s spending plan that would dismantle key policies of former Republican Gov. Pete Wilson and shows a more sympathetic attitude toward the poor by the new administration. Other initiatives for the poor include a proposal for a 2.1% cost-of-living increase for welfare recipients. Wilson had steadfastly opposed cost-of-living increases although he agreed to one last year in exchange for Democratic approval of a tax cut for car owners.

The low-cost medical insurance program, known as Healthy Families, provides medical benefits to children whose working families earn too much to qualify for Medi-Cal, but not enough to afford private insurance coverage.

Wilson’s version of the program is restricted to those whose income is between 151% and 200% of the poverty level. Those under 151% qualify for Medi-Cal. For a family of four, 200% of the federal poverty level is an annual income of $32,900.

But the budget proposed by Davis would allow that ceiling to rise to 250% of the poverty level by permitting families to deduct child care and other work-related expenses when calculating their income.

A similar provision had been included in Wilson’s plan for the Healthy Families program, but after Assembly Republicans raised strong objections Wilson ordered it removed and contended that its inclusion had been a mistake. He said someone had used his automatic pen to sign the plan without his approval.

The Republicans argued that employers would be discouraged from providing health benefits unless the program was restricted to the poorest of the working poor.

But Lucy Quacinella, an attorney for the San Francisco-based National Center for Youth Law, said there was never any evidence that employers were providing any health benefits for the working poor. She noted that recent studies have shown that the percentage of uninsured families in California is among the highest in the nation.

“This [budget proposal] now allows California to realize the benefit of additional federal funds that have just been sitting in limbo and not been put to work for children and their families,” she said.

Assembly Speaker Antonio Villaraigosa (D-Los Angeles) said Davis’ budget proposal is one of several changes Democrats hope to make in an attempt to encourage more families to participate in the Healthy Families program.

The program went into effect in July with the expectation that 330,000 children would eventually enroll, but so far only 56,723 have. Critics blame the low enrollment on a cumbersome application process, which is being revised.