Children’s Insurance Program Mired in Bureaucracy

Bruce Bertrand lost his job last fall, stranding his wife and two young sons--one of them autistic--without health insurance.

The children, Michael and Ryan, appeared to be perfect candidates for the state’s Healthy Families program, California’s version of a state- and federally funded insurance plan for children whose parents make too much money to qualify for Medi-Cal but too little to afford private coverage.

Despite rosy promises about the program in state-funded ads, and a continuing barrage of upbeat press releases from Gov. Gray Davis, it would require nearly three months of excruciating back-and-forth negotiations with state workers and the intervention of a Riverside County supervisor before the Bertrand children had coverage.

In the meantime, the Bertrands were forced to cancel a $3,000 autism evaluation for 8-year-old Michael, and had to pay $250 out-of-pocket for a neurological exam for him, said Patricia Bertrand, the boys’ mother.

When Ryan, who is 5, developed what appeared to be a bronchial infection, the Corona couple treated it with over-the-counter drugs because they couldn’t afford to go to the doctor, Patricia Bertrand said.

“My experience with this organization,” she wrote the state in December, “has been disastrous.”

Statewide, about half the children eligible for Healthy Families are actually enrolled, according to figures to be released next week by the UCLA Center for Health Policy Research.

According to the center, which gathered its information between December 1999 and March 2000, about 741,000 children qualify for the program. But as of last month, the state had only enrolled 375,000.

Indeed, so few children had been brought into the program by last summer that the federal government threatened to take back $590 million that had been allocated to help pay for it. Ultimately, the state was allowed to keep $360 million of that.

The Davis administration defends its handling of the program, pointing out that enrollment has increased exponentially since Republican Pete Wilson left office in 1998.

“Anybody who thinks that in a state like California you can do this overnight is simply failing to appreciate the challenge,” said Grantland Johnson, California’s secretary for health and human services. “You can’t just wave your hand with a magic wand.”

Still, many families and health care advocates say the system is unnecessarily difficult to navigate.

“I know how to work through the system, and I thought it was pretty difficult,” said Anne Stephens, the aide to Riverside County Supervisor John Tavaglione who eventually found someone to help the Bertrands. “If I didn’t know how to work the system, it would have been even worse.”

Nationwide, the Children’s Health Insurance program--of which Healthy Families is a part--has had mixed results. The federal government, which reimburses 65% to 84% of the cost of the program, allows states to administer it themselves.

Some states, including Wisconsin and Connecticut, have done well, integrating several programs aimed at helping families obtain health insurance and making the application process quick and easy. New York had signed up 530,000 children as of last month--a quarter of those enrolled in the entire nation--and was among the few states allowed to keep all of the money that had been allocated for the program.

But other states, including California, have struggled to sign up families. Despite efforts to simplify the cumbersome enrollment process, the state has been forced to train hundreds of workers to walk people through it.

Because eligibility is determined by age as well as income, children in the same family may be placed in different programs--some on Medi-Cal and others in Healthy Families. The mother may be in yet another program, aimed at assisting women, and the father may not be eligible for aid at all.

California and Texas, which have large immigrant populations, also must contend with powerful cultural barriers: Many eligible residents come from countries where it is customary to go to a public clinic or pharmacy. Private doctors are used as a last resort.

Some immigrants fear that they will be deported if they apply for public assistance, or that their own immigration status will be questioned if they apply on behalf of their children.

The state’s ability to attract and enroll eligible families will be tested even further over the next six months, as officials prepare to roll out a new arm of the program aimed at covering parents. This expansion, endorsed by Gov. Davis in December and slated to begin in July, is awaiting federal approval.

“Overall, it’s a wonderful thing,” said Lynn Kersey, director of the advocacy group Maternal and Child Health Access in Los Angeles, of the expansion. “But there are concerns about covering more people in a broken system.”

Johnson, who oversees Healthy Families, said he is working to fix glitches in enrollment. For example, he said, when the program expands to include parents, the state intends to ensure that a family can fill out one application for coverage under Medi-Cal or Healthy Families. State administrators, not families, will be responsible for sorting out who is eligible for which program, and for enrolling each accordingly.

The state is also working with a nonprofit foundation to develop a software program to allow people to apply online for both Healthy Families and Medi-Cal.

In his new budget proposal, Gov. Davis has requested $42.1 million for outreach for Healthy Families and Medi-Cal, up from $34.3 million for fiscal 2000. Of that, $9.9 million would go toward advertising, with $1.7 million for ads in immigrant communities. Another $6 million would go toward efforts to reach parents through their children’s schools.

Still, most people are expected to need assistance when filing their applications. Because most applicants will not have computers and Internet access, they will probably be able to use the online system only if they get help with their application at a public place such as a clinic, school or library.

Overall, Johnson said, the state has made great strides in signing up children since Healthy Families began three years ago. When Davis took office in January 1999, just 32,000 children had been enrolled in the program, out of an eligible pool of about 600,000.

By the end of last month, new children have been enrolled at the rate of about 20,000 per month, Johnson said.

Much of the enrollment problem, said E. Richard Brown, director of the UCLA Center for Health Policy Research, lies in the structure and focus of the program itself. Brown contended that the application process is designed to keep out those who are ineligible. As a result, applicants must apply in writing, provide proof of income and allow the state 10 days to respond.

In addition, if it appears that one or more family members ought to be in Medi-Cal instead of Healthy Families, the application is forwarded to the county government where the applicant lives--and then it can take weeks for that application to be processed.

If the paperwork sent to the Bertrands is any indication, most responses from the state come as form letters that are difficult to decipher.

In one letter, dated Nov. 15, administrators wrote in tiny print that the application for Michael and Ryan had been denied because the “reason for end of employer-sponsored insurance is missing or invalid” and that the reason for the family’s interest in the program was “not valid.”

The letter was not signed by an individual claims worker, and contact information was limited to a post office box and a fax number. There was no clear indication of what was missing and what the proper response might be.

Patricia Bertrand, who works in sales, faxed what she thought was an appropriate response. She included an earnings statement from her employer and explained that her husband had lost his job. She waited 10 days and, when there was no response, located a phone number for the program in Sacramento.

The fax, the customer service representative told her, must have been lost.

“We could make this far simpler,” Brown said. “We have to dump the philosophy . . . that we keep out all ineligible people. And we have to adopt a new attitude, which is to get in every eligible child.”