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It's Too Good to Refuse

January 25, 2002

The Bush administration is expected to announce today that it will let California do something the state has long sought: use matching federal funds to offer health insurance to 300,000 poor kids and their parents. Now that the federal government has come around, Gov. Gray Davis, who last month proposed delaying this expansion, needs to show some flexibility. He needs to find alternative budget cuts fast--and not just because his main GOP rival in the governor's race, Richard Riordan, is already blasting his delay as "despicable."

California leads the nation in uninsured people; 2 million are children. The federal money would expand the state's Healthy Families program to include the low-income parents of eligible children. About 440,000 youngsters are enrolled in Healthy Families now, but the number of those who qualify is far higher. Research shows that more children enroll and health care overall improves when coverage in such programs is extended to parents.

Davis asked to expand this program more than a year ago, when the state budget was a lot healthier. Late in 2001, facing a $12.4-billion shortfall and in search of cuts, he proposed delaying the expansion. This would save the state the $200 million it had set aside to qualify for about $400 million in federal money. This made sense, since the feds hadn't agreed to come up with the money anyway.

It doesn't make sense now. Yes, the state's share of the costs, even with a federal 2-to-1 match, is considerable. But delaying the expansion doesn't make the need go away. It just passes the costs on to the providers of last resort, the state's already beleaguered county health departments and hospital emergency rooms. Patients without insurance tend to delay seeking care until they are sicker and their treatments more expensive. As it is, hospitals lost so much money last year that the state allocated $25 million to keep some from closing their emergency rooms altogether.

The federal money the state could receive between now and July 1, 2003--the date Davis has said he wants the program to start--would amount to $435 million. The state simply can't afford to turn down that kind of cash.

Despite Riordan's political hip-shooting, Davis' attempt to save the state money was the sort of hardheaded pragmatism a governor must display. But even more important is the ability to change quickly when circumstances change--especially when the right decision will so clearly help both constituents and, in the long run, the state's bottom line.

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