Dispute imperils California family planning program for the poor

The program saves federal and state taxpayers more than $1.4 billion annually, the officials say, by helping low-income women avoid unwanted pregnancies. The Bush administration wants the state to change the way it counts the illegal immigrants who use the service.

If not resolved in California's favor, the disagreement could create a new hole of at least $262 million in the state budget that just went into effect, the state officials say.

"We are . . . potentially dismantling a program that everybody believes has been highly effective," said Stan Rosenstein, who runs Medi-Cal, California's healthcare program for the poor.

California’s Family Planning, Access Care and Treatment Program, or Family PACT, provides counseling, education and birth-control services to nearly 1.7 million low-income Californians each year, including prenatal services, annual exams and education about sexually transmitted diseases. It does not provide abortion counseling.

The federal government pays $315 million of the program's $432-million annual cost. Because those federal funds can be spent only on legal residents, California picks up the tab for the services to undocumented immigrants.

Officials say the services cost far less than the state would pay in maternity care for the 170,000 women who avoid unplanned pregnancies through the program. Avoiding those births also saves the state welfare and public schooling costs.

Since it began receiving Medicaid money in 1998, the state has used a statistical method to estimate the number of illegal immigrants in the Family PACT program, currently calculated at 14%. But the Bush administration, which has been objecting to this method since 2004, last month told California it had 30 days to begin vetting every participant to determine if each is in the country legally, or lose all federal funding.

It is not clear why the ultimatum was issued now, just months before President Bush leaves office.

Gov. Arnold Schwarzenegger and congressional Democrats have strenuously objected to the demand. They say it would require the state to hire 2,800 more workers -- essentially doubling the staff of the Department of Health Care Services.

Vetting each program applicant would increase the state's costs by 40%, state officials said.